reporter2
02-08-13, 13:51
http://www.businesstimes.com.sg/archive/saturday/premium/top-stories/pockets-weakness-appear-firm-property-market-20130727
Published July 27, 2013
Pockets of weakness appear in firm property market
By Kalpana Rashiwala
[email protected]
POCKETS of price falls have surfaced in the latest official stats on the state of Singapore's private property markets. These include industrial space and some residential categories, which slipped although the property market, as a whole, still remains firm.
The once-hot industrial space has taken a hit. For example, the price index for multiple-user warehouse space fell 5.9 per cent in the second quarter from the first quarter. This is a sharp swing from the 10.6 per cent quarter-on-quarter increase in Q1 and marks the end of a rally that had spanned 14 consecutive quarters after the index bottomed in Q3 2009.
As a result, URA's All Industrial price index eased 0.6 per cent in Q2, in contrast to the 4.5 per cent gain in Q1.
Market watchers attributed the price contraction to a slowdown in transactions following the imposition of seller's stamp duty under the January cooling package to deter speculation of industrial properties.
In residential, the price index for detached homes dipped 0.3 per cent, after rising 0.4 per cent in Q1. URA's price index for semi-detached houses also slipped, by 0.5 per cent, erasing Q1's 0.1 per cent rise.
RealStar Premier managing director William Wong confirmed that transaction volumes for bungalows and semi-detached houses slowed down drastically from April to June following the imposition of higher additional buyer's stamp duty in January.
With the rollout of the total debt servicing ratio framework late last month, sales have weakened further.
"If this continues for the next couple of quarters, we'll see more significant price drops as those who genuinely need to let go their properties will have to adjust their prices downwards to meet buyers' expectations," said Mr Wong.
URA's price index for non-landed private homes in Core Central Region (CCR) eased 0.2 per cent in Q2 - its first slide in five quarters. In Q1, the index rose 0.6 per cent. More specifically, the sub-index for completed non-landed homes in CCR declined 0.5 per cent in Q2, against a 0.4 per cent hike in Q1.
Colliers International director of research and advisory Chia Siew Chuin said: "This could indicate that developers and individual home owners in the high-end condo/apartment market are starting to succumb to the pressure of persistent weak demand by adjusting prices to move sales."
Alan Cheong, research head of Savills Singapore, suggests that CapitaLand's price cuts at its d'Leedon condo, which is under construction, could be a factor behind the drop in the CCR sub-index.
CCR covers the prime districts 9, 10 and 11 in addition to the financial district and Sentosa Cove.
Jones Lang LaSalle national director Ong Teck Hui said: "If we start having some price dips in the diffferent categories of the URA data, then we have to consider whether the market could be peaking out.
"Potential buyers will increasingly feel the cumulative effect of all the property cooling measures over the past few years, combined with the recently rolled out total debt servicing ratio framework.
As well, the spectre of rising interest rates may eventually affect sentiment and impact demand."
Still, prices in most property categories continued to climb in Q2. These include a 3.8 per cent hike in the index for non-landed residential properties in Outside Central Region (OCR) - where mass market homes are located. This was steeper than the 3 per cent increase for this sub-index as reflected in URA's Q2 flash estimate released on July 1.
This pushed up URA's overall private home price index for Q2 by one per cent, instead of the 0.8 per cent shown in the flash estimate. Analysts attribute the higher final reading to the inclusion of J Gateway condo, which sold at an average of nearly $1,500 per square foot - a record for the Jurong area - on June 28. Price data for the project was not included for the flash estimate.
Prices of uncompleted non-landed homes in OCR climbed 4.6 per cent in Q2. This was not only much bigger than Q1's 1.1 per cent gain but the biggest increase since Q2 2010, notes Knight Frank's consultancy and research head Alice Tan.
The 3.8 per cent gain in the overall price index for non-landed homes in OCR in Q2 also surpassed the 1.4 per cent increase in Q1.
URA's price index for office space appreciated 1.5 per cent in Q2 and that for shop space, 1.7 per cent. In Q1, both had risen 2.1 per cent. The index measuring prices of multiple-user factory space inched up 0.5 per cent in the April-June quarter, slower than Q1's 2.9 per cent.
Meanwhile, the islandwide office rental index rose 0.2 per cent, contrasting with a dip of the same quantum in Q1. This marked a bottoming-out in office rents after five consecutive quarters of declines, declared Colliers' Ms Chia. The trend was in tandem with a strengthening in islandwide average occupancy rates for office space for five consecutive quarters.
Published July 27, 2013
Pockets of weakness appear in firm property market
By Kalpana Rashiwala
[email protected]
POCKETS of price falls have surfaced in the latest official stats on the state of Singapore's private property markets. These include industrial space and some residential categories, which slipped although the property market, as a whole, still remains firm.
The once-hot industrial space has taken a hit. For example, the price index for multiple-user warehouse space fell 5.9 per cent in the second quarter from the first quarter. This is a sharp swing from the 10.6 per cent quarter-on-quarter increase in Q1 and marks the end of a rally that had spanned 14 consecutive quarters after the index bottomed in Q3 2009.
As a result, URA's All Industrial price index eased 0.6 per cent in Q2, in contrast to the 4.5 per cent gain in Q1.
Market watchers attributed the price contraction to a slowdown in transactions following the imposition of seller's stamp duty under the January cooling package to deter speculation of industrial properties.
In residential, the price index for detached homes dipped 0.3 per cent, after rising 0.4 per cent in Q1. URA's price index for semi-detached houses also slipped, by 0.5 per cent, erasing Q1's 0.1 per cent rise.
RealStar Premier managing director William Wong confirmed that transaction volumes for bungalows and semi-detached houses slowed down drastically from April to June following the imposition of higher additional buyer's stamp duty in January.
With the rollout of the total debt servicing ratio framework late last month, sales have weakened further.
"If this continues for the next couple of quarters, we'll see more significant price drops as those who genuinely need to let go their properties will have to adjust their prices downwards to meet buyers' expectations," said Mr Wong.
URA's price index for non-landed private homes in Core Central Region (CCR) eased 0.2 per cent in Q2 - its first slide in five quarters. In Q1, the index rose 0.6 per cent. More specifically, the sub-index for completed non-landed homes in CCR declined 0.5 per cent in Q2, against a 0.4 per cent hike in Q1.
Colliers International director of research and advisory Chia Siew Chuin said: "This could indicate that developers and individual home owners in the high-end condo/apartment market are starting to succumb to the pressure of persistent weak demand by adjusting prices to move sales."
Alan Cheong, research head of Savills Singapore, suggests that CapitaLand's price cuts at its d'Leedon condo, which is under construction, could be a factor behind the drop in the CCR sub-index.
CCR covers the prime districts 9, 10 and 11 in addition to the financial district and Sentosa Cove.
Jones Lang LaSalle national director Ong Teck Hui said: "If we start having some price dips in the diffferent categories of the URA data, then we have to consider whether the market could be peaking out.
"Potential buyers will increasingly feel the cumulative effect of all the property cooling measures over the past few years, combined with the recently rolled out total debt servicing ratio framework.
As well, the spectre of rising interest rates may eventually affect sentiment and impact demand."
Still, prices in most property categories continued to climb in Q2. These include a 3.8 per cent hike in the index for non-landed residential properties in Outside Central Region (OCR) - where mass market homes are located. This was steeper than the 3 per cent increase for this sub-index as reflected in URA's Q2 flash estimate released on July 1.
This pushed up URA's overall private home price index for Q2 by one per cent, instead of the 0.8 per cent shown in the flash estimate. Analysts attribute the higher final reading to the inclusion of J Gateway condo, which sold at an average of nearly $1,500 per square foot - a record for the Jurong area - on June 28. Price data for the project was not included for the flash estimate.
Prices of uncompleted non-landed homes in OCR climbed 4.6 per cent in Q2. This was not only much bigger than Q1's 1.1 per cent gain but the biggest increase since Q2 2010, notes Knight Frank's consultancy and research head Alice Tan.
The 3.8 per cent gain in the overall price index for non-landed homes in OCR in Q2 also surpassed the 1.4 per cent increase in Q1.
URA's price index for office space appreciated 1.5 per cent in Q2 and that for shop space, 1.7 per cent. In Q1, both had risen 2.1 per cent. The index measuring prices of multiple-user factory space inched up 0.5 per cent in the April-June quarter, slower than Q1's 2.9 per cent.
Meanwhile, the islandwide office rental index rose 0.2 per cent, contrasting with a dip of the same quantum in Q1. This marked a bottoming-out in office rents after five consecutive quarters of declines, declared Colliers' Ms Chia. The trend was in tandem with a strengthening in islandwide average occupancy rates for office space for five consecutive quarters.