Tag Archives: Singapore Property Market

Singapore property prices vulnerable

Posted on 28 Jun 2013 | Comments Off on Singapore property prices vulnerable

After three years of super-low interest rates and 60% price growth Barclays believes Singapore property prices could be vulnerable to a sharp rate increase.

“Our current base case is flat private home prices to FY16E, but we estimate these could fall up to 23% should mortgage rates increase by 200 bps within a short period, all things remaining constant,” it says.

The outcome could be worse if a mortgage rate increase coincides with bumper supply. However, it notes “Drastic price collapses could be mitigated if there were a more gradual increase in interest rates, accompanied by income growth, some expansion of the mortgage-servicing ratio and given more prudent owners and investors who have been taking a longer-term view after seven rounds of measures since September 2009.”

The house continues to like Overweight-rated CapitaLand (C31.SG) for its more diversified profile and recovering ROE.

Source – TheEdge – 28 Jun 2013

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Posted in Property Market / Real Estate

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Weak demand for resale property to continue

Posted on 22 May 2013 | Comments Off on Weak demand for resale property to continue

Singapore saw a sharp decline in residential resale volumes across all segments in the first quarter of 2013, according to a DTZ report.

The quarterly and year-on-year drop is a “stark contrast” to 2012, when resale deals rebounded following the introduction of the additional buyer’s stamp duty (ABSD).

“The recovery in resale volume last year was due to buyers finding better value in the resale market after some projects in the primary market set benchmark prices. In comparison, developers were more competitive in their pricing strategies this year and the latest round of cooling measures in January 2013 were more comprehensive than that in December 2011. The mismatch in the expectations between buyers and sellers could also have contributed to the weak resale volume,” said DTZ.

In terms of buyer profiles, foreigners accounted for 9.9 percent of all transactions in Q1 this year, up from an average of 6.4 percent in 2012.

However, demand from local buyers fell as they are now required to pay ABSD for their second and subsequent properties.

“Buying behaviour varied among non-Singaporean groups in the resale market. Firstly, purchases by USA nationals remained resilient, especially so in the high-end segment, as they are not subject to the 15 percent ABSD for foreigners. Transactions by Indonesian buyers in the high-end segment however fell. In comparison, demand from mainland Chinese buyers held up well across most price segments, except for those costing below S$1 million.”

Moving forward, DTZ expects the resale market to underperform as there are no discounts being offered unlike in the primary market. Buyer activity is also expected to be lower due to higher stamp duties, weaker rental growth and stricter financing regulations.

Source – PropGuru – 22 May 2013

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Posted in Cooling Measures, Property Market / Real Estate

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