Tag Archives: RCR

Private home prices will not decline in Q3, says Knight Frank

A total of 8,247 new private residential units were launched by developers from January to May this year. Of these, a total of 8,368 units (excluding executive condominiums) were sold, according to Knight Frank’s latest Residential Bulletin.

In Core Central Region (CCR), prices of high-end non-landed properties fell 0.2 percent in Q2 compared to Q1’s increase of 0.6 percent. However, the sales proportion in RCR rose by 14.3 percent in Q3 2012, 22.7 percent in Q4 2012 and 24.9 percent in Q1 2013.

In addition, property prices in Outside Central Region (OCR) set a new benchmark as it rose 0.3 percent in Q2. Notably, private home prices in Singapore rose 0.8 percent quarter-on-quarter and 3.9 percent year-on-year in Q2, or the highest increase since Q4 2011, based on flash estimates from the URA.

Meanwhile, average rents of high-end and mid-market homes declined by 1.8 percent and 0.2 percent to S$5.79 psf and S$5.12 psf per month, respectively, in Q2. Rents of mass market homes slightly inched up by 0.1 percent on average to S$3.34 per sq ft a month.

Sales volume of new sale and resale private residential properties will likely decline by 10 percent to 15 percent in Q3, due to “the existing property cooling measures and the latest MAS ruling on debt servicing framework that was announced on 28 June 2013.”

However, Knight Frank noted that overall prices are not expected “to decline at least for Q3 2013, as long as the housing market is supported by genuine demand from local buyers in particular first-time home buyers with no major existing loans, and should low interest rates continue to prevail in the near term.”

Source – PropertyGuru – 5 Jul 2013

Owners of private non-landed homes profit from resales

Owners of non-landed private homes earned a gross profit of S$107 million from quick resales over the five quarters of Q1 2012 to Q1 2013, according to a report from OrangeTee.

It stated that high home prices contributed largely to the profit in this segment, adding that the overall private residential price index “rebounded very strongly”, and is now 60 percent higher compared to levels in 2009.

“In the current bull run, newly completed homes that were resold upon receipt of Temporary Occupation Permit (TOP) yielded good returns for purchasers.”

According to the Urban Redevelopment Authority (URA) and Building and Construction Authority (BCA), 103 projects obtained TOP from Q1 2012 to Q1 2013, of which 68 recorded 348 transactions in the same quarter upon completion.

Sellers of newly completed units saw an average return of 33 percent. The most profitable non-landed private homes were in the Outside Central Region (OCR), where average profit stood at 41 percent compared to 31 percent in the Rest of Central Region (RCR) and 25 percent in the Core Central Region (CCR).

Units measuring 50 sq m or below (shoebox apartments) in all three regions were less profitable than larger units.

“Contrary to common belief, profitability of shoebox units underperformed the general market across all segments. Average profitability per unit was S$132,000 or 25 percent in the last five quarters, lower than that of the overall market,” noted OrangeTee.

Moving forward, the non-landed private housing market is expected to remain strong due to low interest rates, sustained foreign capital inflow and “record land prices” in recent Government Land Sales (GLS).

Source – PropertyGuru – 30 Apr 2013