Ringo33
11-03-14, 07:55
Non-landed resale homes market remains soft in Feb
SRX flash figures show transactions down 18.5% m-o-m
[SINGAPORE] Cooling measures and the Total Debt Servicing Ratio framework continued to send non-landed private home resale volume on a controlled descent to a level not seen since December 2008 during the global financial crisis.
Flash figures released yesterday by the Singapore Real Estate Exchange (SRX) showed resale transactions down 18.5 per cent month-on-month to an estimated 242 transactions last month.
The drop was a more pronounced 22.2 per cent on a year-on-year basis, from 311 resale deals closed in February 2013.
Meanwhile, resale prices reversed consecutive price gains in December and January to dip 2 per cent, which consultants say shows a "natural" pullback from "unsustainable" price increases in the previous two months.
Ong Kah Seng, director at R'ST Research, believes that December and January's higher prices were driven by investors looking to buy resale units to latch on to the perceived wave of better leasing activity in the first half of the year when more expatriates usually come to Asia, including Singapore.
By February, it would have been too late, given that a resale transaction takes a couple of months to complete, he said.
This would explain the reversion of February prices to negative territory in the Core Central Region (CCR) or city area, and the Outside Central Region (OCR) or city fringes, which remain expats' preferred locations to lease.
Prices in the CCR fell 3.9 per cent month-on-month in February, after climbing 1.8 per cent in January, while those in the OCR fell 1.8 per cent, after climbing 2.6 per cent the month prior.
Only the suburban Rest of Central Region (RCR) bucked the downward trend, with resale prices climbing 0.4 per cent in February, after falling 3 per cent in January - itself also a correction, Alan Cheong, director for research and consultancy at Savills Singapore, said.
"The resale market remains soft, but is still holding up quite well and has not gone into any flat spin," he concluded.
SLP International executive director Nicholas Mak agreed, saying: "The gradual price decline indicates an absence of panic selling, as many property owners are still able to sustain their real estate investments due to the current low interest rate environment."
Sam Baker, co-founder and CEO of SRX also noted that for the last 15 months, the price indices for non-landed resale homes have been bouncing between the 170 and 180 bands.
"Prices have been unable to break through the 180 ceiling, yet at the same time, prices are resisting the pressure from the cooling measures to fall below the 170 support level," he said.
Consultants BT spoke to expect prices to drop by 4 to 10 per cent in the private resale market for the whole of 2014 amid weak demand, with the greatest signs of distress in the CCR, which may see prices fall by 10 to 12 per cent.
This is due to companies' cutting back on expats' housing allowance, as well as the deterrence of the hefty additional stamp duty buyers have to pay, since most already own a residential property.
Leasing activity also stayed weak in February, with rental prices falling one per cent islandwide despite a temporary rebound in January.
All three regions saw rental prices decline in February. Rents in the RCR fell the most, down 1.9 per cent, while rents in the CCR and OCR fell by 0.6 per cent and 1.3 per cent, respectively.
Some 2,442 rental contracts were signed in February, 6.6 per cent fewer than in January.
While consultants expect rental prices in the private market to fall by up to 8 per cent this year, Savills' Mr Cheong said that it is hard to tell how the rental market will perform as more shoebox apartments get completed and rented out in the OCR and RCR.
"Shoebox rents are softer now than a year ago, but tend to have higher per-square-foot prices. The heavier weightage of shoeboxes on the rental price index going forward will more greatly influence the index. It may also interfere with it and give a false reading," he said.
SRX flash figures show transactions down 18.5% m-o-m
[SINGAPORE] Cooling measures and the Total Debt Servicing Ratio framework continued to send non-landed private home resale volume on a controlled descent to a level not seen since December 2008 during the global financial crisis.
Flash figures released yesterday by the Singapore Real Estate Exchange (SRX) showed resale transactions down 18.5 per cent month-on-month to an estimated 242 transactions last month.
The drop was a more pronounced 22.2 per cent on a year-on-year basis, from 311 resale deals closed in February 2013.
Meanwhile, resale prices reversed consecutive price gains in December and January to dip 2 per cent, which consultants say shows a "natural" pullback from "unsustainable" price increases in the previous two months.
Ong Kah Seng, director at R'ST Research, believes that December and January's higher prices were driven by investors looking to buy resale units to latch on to the perceived wave of better leasing activity in the first half of the year when more expatriates usually come to Asia, including Singapore.
By February, it would have been too late, given that a resale transaction takes a couple of months to complete, he said.
This would explain the reversion of February prices to negative territory in the Core Central Region (CCR) or city area, and the Outside Central Region (OCR) or city fringes, which remain expats' preferred locations to lease.
Prices in the CCR fell 3.9 per cent month-on-month in February, after climbing 1.8 per cent in January, while those in the OCR fell 1.8 per cent, after climbing 2.6 per cent the month prior.
Only the suburban Rest of Central Region (RCR) bucked the downward trend, with resale prices climbing 0.4 per cent in February, after falling 3 per cent in January - itself also a correction, Alan Cheong, director for research and consultancy at Savills Singapore, said.
"The resale market remains soft, but is still holding up quite well and has not gone into any flat spin," he concluded.
SLP International executive director Nicholas Mak agreed, saying: "The gradual price decline indicates an absence of panic selling, as many property owners are still able to sustain their real estate investments due to the current low interest rate environment."
Sam Baker, co-founder and CEO of SRX also noted that for the last 15 months, the price indices for non-landed resale homes have been bouncing between the 170 and 180 bands.
"Prices have been unable to break through the 180 ceiling, yet at the same time, prices are resisting the pressure from the cooling measures to fall below the 170 support level," he said.
Consultants BT spoke to expect prices to drop by 4 to 10 per cent in the private resale market for the whole of 2014 amid weak demand, with the greatest signs of distress in the CCR, which may see prices fall by 10 to 12 per cent.
This is due to companies' cutting back on expats' housing allowance, as well as the deterrence of the hefty additional stamp duty buyers have to pay, since most already own a residential property.
Leasing activity also stayed weak in February, with rental prices falling one per cent islandwide despite a temporary rebound in January.
All three regions saw rental prices decline in February. Rents in the RCR fell the most, down 1.9 per cent, while rents in the CCR and OCR fell by 0.6 per cent and 1.3 per cent, respectively.
Some 2,442 rental contracts were signed in February, 6.6 per cent fewer than in January.
While consultants expect rental prices in the private market to fall by up to 8 per cent this year, Savills' Mr Cheong said that it is hard to tell how the rental market will perform as more shoebox apartments get completed and rented out in the OCR and RCR.
"Shoebox rents are softer now than a year ago, but tend to have higher per-square-foot prices. The heavier weightage of shoeboxes on the rental price index going forward will more greatly influence the index. It may also interfere with it and give a false reading," he said.