View Full Version : Prices of private homes in Singapore likely to stay depressed
http://www.straitstimes.com/business/property/prices-of-private-homes-likely-to-stay-depressed
Prices of private homes in Singapore likely to stay depressed
Dec 10, 2015
Over-supply a key factor and analysts expect cooling measures to stay in the near term
Rennie Whang
SINGAPORE - There will not be a major correction next year but factors from oversupply to lending curbs will keep prices of private homes and executive condominiums (EC) depressed, say analysts. They also warn that any let up on cooling measures seems unlikely in the near term as the price falls have not affected most owners.
Mr Desmond Sim, CBRE research head for South-east Asia, told The Straits Times yesterday: "Most developers are still propped up by holding power as well as land prices, which continued to be quite high over the past year.
"Unless developers are willing to take a big cut in profits, new sale prices should be quite stubborn."
Prices of new homes could fall 3 to 5 per cent next year although projects with many unsold units may cut even more, according to Ms Alice Tan, head of research at Knight Frank Singapore.
The prospects are no better for ECs, with average prices coming down from a high of over $800 per sq ft (psf) in the first half of this year to $780 psf in this half, said R'ST Research director Ong Kah Seng. Average EC pricing next year should be lower, at $750 to $780 psf, he added.
Unsold stock is a key issue bedevilling the private market, with around 24,000 new units languishing in the market. Apart from the amount of unsold units, developers will be under increasing pressure to sell due to Qualifying Certificate penalties and the Additional Buyers' Stamp Duty (ABSD), he added.
Developers have been trimming prices all year as market realities began to bite. Median prices at The Panorama, for example, fell from $1,343 psf at initial launch in January last year to $1,226 psf in October, noted Mr Wong Xian Yang, OrangeTee research manager.
Sims Urban Oasis prices were down from $1,397 psf at the February launch to $1,285 psf in October.
It is clear that buyers - governed by both the Total Debt Servicing Ratio (TDSR) and ABSD - are being more selective.
Mr Elson Poo, general manager of marketing and sales at Frasers Centrepoint Homes, said they are focusing on projects that offer attractive pricing as well as other value propositions such as lifestyle concepts or prime locations.
Frasers Centrepoint has sold around 760 units so far this year, largely thanks to the popular North Park Residences.
Developer MCC Land has also chalked up a tidy number of sales this year, up 55 per cent from last year to 354 units. If MCC Land includes development projects that it manages for Hao Yuan Investment, its total sales would be 487, similar to 470 units sold last year.
While slightly fewer new private home sales took place this year - the tally of 6,619 units in the first 10 months was 4 per cent lower than last year's - the unsold stock of private homes has been falling. There were 24,149 units unsold in the third quarter, an 18 per cent fall from the same time last year and 25 per cent down compared with two years ago, noted Ms Tan of Knight Frank. "The adjustment of prices, albeit at a moderate level from about 2 to 3 per cent discount, coupled with pent-up demand, especially from local homebuyers, has helped improve take-up rates in the last two quarters," she added.
In the resale market, prices at the top five projects this year have fallen between 6 and 11 per cent from 2013, according to OrangeTee, although prices rose at one of the developments.
Resale volumes may have increased but rents are still expected to remain soft due to the many completions expected next year and limited growth in foreign labour numbers, said Mr Wong of OrangeTee.
EC developers could get more desperate to sell where there are more than 300 unsold units at a project, such as Sol Acres, The Criterion and The Terrace, said Mr Ku Swee Yong, Century 21 chief executive officer.
"The raised income ceiling of $14,000 (earlier this year) does not seem to have brought in many buyers," he said.
Overall, private home prices are down about 8 per cent from their last peak in the third quarter of 2013.
"Overall, private home prices are down about 8 per cent from their last peak in the third quarter of 2013."
Above statement is really misleading indeed!
If we really dive into the details, you can see that CCR private property prices has already dropped by >20% to even 35% since 2013 peak (or close to 2010 prices).
Meanwhile, OCR private property prices are still hovering at close to 2013 peak..........
So, the property cooling measures so far has failed miserably to achieve the aim of "cooling" on OCR private property prices. However, until now, there is no further action.............
Is "cooling measures" meant to cool property prices or not?
If yes, why no further action after it has failed to cool OCR property prices for so long?
If No then it also failed terribly, because it caused CCR property prices to crash!
So is the property "cooling measures" really meant to cool property prices????????????????????
http://www.straitstimes.com/business/property/prices-of-private-homes-likely-to-stay-depressed
Prices of private homes in Singapore likely to stay depressed
Dec 10, 2015
Over-supply a key factor and analysts expect cooling measures to stay in the near term
Rennie Whang
SINGAPORE - There will not be a major correction next year but factors from oversupply to lending curbs will keep prices of private homes and executive condominiums (EC) depressed, say analysts. They also warn that any let up on cooling measures seems unlikely in the near term as the price falls have not affected most owners.
Mr Desmond Sim, CBRE research head for South-east Asia, told The Straits Times yesterday: "Most developers are still propped up by holding power as well as land prices, which continued to be quite high over the past year.
"Unless developers are willing to take a big cut in profits, new sale prices should be quite stubborn."
Prices of new homes could fall 3 to 5 per cent next year although projects with many unsold units may cut even more, according to Ms Alice Tan, head of research at Knight Frank Singapore.
The prospects are no better for ECs, with average prices coming down from a high of over $800 per sq ft (psf) in the first half of this year to $780 psf in this half, said R'ST Research director Ong Kah Seng. Average EC pricing next year should be lower, at $750 to $780 psf, he added.
Unsold stock is a key issue bedevilling the private market, with around 24,000 new units languishing in the market. Apart from the amount of unsold units, developers will be under increasing pressure to sell due to Qualifying Certificate penalties and the Additional Buyers' Stamp Duty (ABSD), he added.
Developers have been trimming prices all year as market realities began to bite. Median prices at The Panorama, for example, fell from $1,343 psf at initial launch in January last year to $1,226 psf in October, noted Mr Wong Xian Yang, OrangeTee research manager.
Sims Urban Oasis prices were down from $1,397 psf at the February launch to $1,285 psf in October.
It is clear that buyers - governed by both the Total Debt Servicing Ratio (TDSR) and ABSD - are being more selective.
Mr Elson Poo, general manager of marketing and sales at Frasers Centrepoint Homes, said they are focusing on projects that offer attractive pricing as well as other value propositions such as lifestyle concepts or prime locations.
Frasers Centrepoint has sold around 760 units so far this year, largely thanks to the popular North Park Residences.
Developer MCC Land has also chalked up a tidy number of sales this year, up 55 per cent from last year to 354 units. If MCC Land includes development projects that it manages for Hao Yuan Investment, its total sales would be 487, similar to 470 units sold last year.
While slightly fewer new private home sales took place this year - the tally of 6,619 units in the first 10 months was 4 per cent lower than last year's - the unsold stock of private homes has been falling. There were 24,149 units unsold in the third quarter, an 18 per cent fall from the same time last year and 25 per cent down compared with two years ago, noted Ms Tan of Knight Frank. "The adjustment of prices, albeit at a moderate level from about 2 to 3 per cent discount, coupled with pent-up demand, especially from local homebuyers, has helped improve take-up rates in the last two quarters," she added.
In the resale market, prices at the top five projects this year have fallen between 6 and 11 per cent from 2013, according to OrangeTee, although prices rose at one of the developments.
Resale volumes may have increased but rents are still expected to remain soft due to the many completions expected next year and limited growth in foreign labour numbers, said Mr Wong of OrangeTee.
EC developers could get more desperate to sell where there are more than 300 unsold units at a project, such as Sol Acres, The Criterion and The Terrace, said Mr Ku Swee Yong, Century 21 chief executive officer.
"The raised income ceiling of $14,000 (earlier this year) does not seem to have brought in many buyers," he said.
Overall, private home prices are down about 8 per cent from their last peak in the third quarter of 2013.
"Overall, private home prices are down about 8 per cent from their last peak in the third quarter of 2013."
Above statement is really misleading indeed!
If we really dive into the details, you can see that CCR private property prices has already dropped by >20% to even 35% since 2013 peak (or close to 2010 prices).
Meanwhile, OCR private property prices are still hovering at close to 2013 peak..........
So, the property cooling measures so far has failed miserably to achieve the aim of "cooling" on OCR private property prices. However, until now, there is no further action.............
Is "cooling measures" meant to cool property prices or not?
If yes, why no further action after it has failed to cool OCR property prices for so long?
If No then it also failed terribly, because it caused CCR property prices to crash!
So is the property "cooling measures" really meant to cool property prices????????????????????
MAS already said effective. Let put it this way , presume no CMs implemented the CCR price will be stagnant and OCR will surge 30 %. So after the implement of CMs , CCR dropped > 20 % and OCR dropped 8%. Conclusion CMs are more effective on OCR then CCR. In case you say how come CCR stagnant and OCR will surge. Maybe many residents like to stay in neighbor house which maintenance and expenses much lower. And most of the rural towns are getting regional
What lame and contradictory excuse you trying to cook up when you said "Conclusion CMs are more effective on OCR then CCR"?
Now, please tell us:
1) Is Property cooling measures meant to "cool" property prices?
2) Is property cooling measures meant to "crash" property prices?
As we know, OCR private property prices did not cool, so property "cooling measures" if indeed meant to cool property prices means it FAILED! How can "cooling measures" be effective?
As we know, MAS and MND already re-iterated that property cooling measures is NOT MEANT to crash property prices.
Since CCR property prices crashed, then the "cooling measures" obviously FAILED!
Many residents?
Either you are IGNORANT, or you trying to lie because it should be "many foreigners" buying private properties in OCR.
Why so? because the policy failed!
When you comment, please show us facts and don't lie; and if ignorant, please don't comment.....
MAS already said effective. Let put it this way , presume no CMs implemented the CCR price will be stagnant and OCR will surge 30 %. So after the implement of CMs , CCR dropped > 20 % and OCR dropped 8%. Conclusion CMs are more effective on OCR then CCR. In case you say how come CCR stagnant and OCR will surge. Maybe many residents like to stay in neighbor house which maintenance and expenses much lower. And most of the rural towns are getting regional
I have been telling him for years by now that SG is just 1 red dot. Technically living anywhere on it is about the same. With the infrastructure (e.g. transport or amenities) lag, it used to be much better to live nearer to or within CCR. But with all the decentralisation and infrastructure build up which should be obvious by now, the differential has gotten narrower and narrower. Plus all the CMs have greater impact on the higher quantum units. What to do?
Once a bear, always a bear.
Don't understand what you trying to say since what you said does not make any sense.
You seem to be telling us that OCR prices should go up and be similar to CCR, given all you explanations.
However, too bad, firstly, your words can't be believed, and is not believed by MAS. Below is what MAS said (which totally contradicted what you said):
Source: http://www.todayonline.com/business/mas-will-monitor-property-market-risks-financial-stability
"
...Monetary Authority of Singapore (MAS) said today (Nov 27)...
Private home prices have fallen 8 per cent in the third quarter this year from its peak in the third quarter of 2013, but the central bank said it is watching for signs of renewed froth in the housing market given still-elevated prices in certain segments. Prices of homes in the Outside Central Region, or suburbs, for example, remain at 30 per cent above levels before the global financial crisis, it said....
The MAS today reiterated it will continue to watch the property market carefully and take appropriate measures to maintain a stable and sustainable market.
"
So, based on the above news, we can conclude that:
1) MAS believes OCR property prices are still-elevated.
2) Property cooling measures has not been effective on OCR property prices (which explains why MAS mentioned that OCR property prices are "still-elevated". MAS never mention CCR, since CCR property prices already crashed >20% and some even >35%!)
3) MAS is still watching OCR property prices since it is still >30% above levels before 2009 global financial crisis and is considered "still elevated".
4) MAS said that it is watching the property market carefully (i.e. the "still-elevated" prices of OCR) and will take appropriate measures if necessary. (But alas, nothing has been done so far, Say only?)
The MAS conclusions also tell us that what you said is just bull-shit since MAS don't believe that OCR property prices is justified to be "still-elevated" given all your reasons/excuses....... :doh:
I have been telling him for years by now that SG is just 1 red dot. Technically living anywhere on it is about the same. With the infrastructure (e.g. transport or amenities) lag, it used to be much better to live nearer to or within CCR. But with all the decentralisation and infrastructure build up which should be obvious by now, the differential has gotten narrower and narrower. Plus all the CMs have greater impact on the higher quantum units. What to do?
Once a bear, always a bear.
How would you read the report if the report reads "MAS believes that OCR property prices have already corrected"?
"Watching for renewed froth" is not the same thing as "asking for dip". It means the worry that bubbles may most likely start to emerge again from that sector.
Again, looks like you are trying to extract a small segment of the texts and interpret it as though you are right!
Now, Let's look at the relevant full sentences of the texts again:
"central bank said it is watching for signs of renewed froth in the housing market given still-elevated prices in certain segments. Prices of homes in the Outside Central Region, or suburbs, for example, remain at 30 per cent above levels before the global financial crisis, it said..."
It is clear as blue sky that MAS is saying that OCR property has "still-elevated prices" and they are watching out very carefully for any signs of renewed froth!
Come on, just tell a goat a "goat" and not a "horse"! Like that also need to twist and turn? Please don't treat other forumers here like idiots?! :smiley_simmons:
How would you read the report if the report reads "MAS believes that OCR property prices have already corrected"?
"Watching for renewed froth" is not the same thing as "asking for dip". It means the worry that bubbles may most likely start to emerge again from that sector.
What is not elevated today?
Is the kopi you buy today not elevated in price?
Income not elevated?
Infrastructure not elevated?
Relative to 1980, which sector is not elevated?
You can treat elevation as a symptom to be corrected, and you can also treat it as a consequence of where the demand and affordability lies.
Again, looks like you are trying to extract a small segment of the texts and interpret it as though you are right!
Now, Let's look at the relevant full sentences of the texts again:
"central bank said it is watching for signs of renewed froth in the housing market given still-elevated prices in certain segments. Prices of homes in the Outside Central Region, or suburbs, for example, remain at 30 per cent above levels before the global financial crisis, it said..."
It is clear as blue sky that MAS is saying that OCR property has "still-elevated prices" and they are watching out very carefully for any signs of renewed froth!
Come on, just tell a goat a "goat" and not a "horse"! Like that also need to twist and turn? Please don't treat other forumers here like idiots?! :smiley_simmons:
"Overall, private home prices are down about 8 per cent from their last peak in the third quarter of 2013."
Above statement is really misleading indeed!
If we really dive into the details, you can see that CCR private property prices has already dropped by >20% to even 35% since 2013 peak (or close to 2010 prices).
Meanwhile, OCR private property prices are still hovering at close to 2013 peak..........
So, the property cooling measures so far has failed miserably to achieve the aim of "cooling" on OCR private property prices. However, until now, there is no further action.............
Is "cooling measures" meant to cool property prices or not?
If yes, why no further action after it has failed to cool OCR property prices for so long?
If No then it also failed terribly, because it caused CCR property prices to crash!
So is the property "cooling measures" really meant to cool property prices????????????????????
If I have to do the guessing, I have 2 guess:
1. People that cannot afford to buy Central and CCR decide to use the money to buy OCR
2. Government decision to start de-centralise business district, help to improve OCR price.
Any way why the OCR owner not deserve to get lucky some times :)
Govt land sales mostly ocr. Wat u think???
Amber Woods
18-12-15, 20:36
Local home prices feared to plunge by up to 15% until 2017
Sales are likely to stay subdued, as well.
Private residential prices are feared to dip by 5% to 15% over 2016 to 2017, according to a report by OCBC. Further, primary residential sales next year are seen to stay subdued at between 6 to 9k units.
OCBC also sees residential rentals levels tumbling 8 to 15%, and vacancy levels spiking from the current 7.8% to about 10% by end-2017.
Given the high price elasticity of demand in the housing marking, however, a price crash of 20% is improbable—significant buyer demand will likely come into the market’s lower price points.
For 2016 to 2017, Singapore home prices will likely be driven by sustained oversupply, rising floating mortgage rates, and possible curbs reversals.
The report asserts that the current significant physical oversupply situation is likely to persist in the coming year, and that it will impact rental levels and vacancy rates.
Also, floating mortgage rates—typically pegged to short-end SIBOR or SOR—are likely to surge in line with higher US interest rates, and this will add pressure on rental carry and housing affordability.
On the other hand, there remains a potential for curbs reversals after price pullbacks reach double-digits in the latter half of 2016 and after.
“However, we believe these will only soften the magnitude of price declines and are unlikely to reverse the general bear market trend,” stated OCBC
- See more at: http://sbr.com.sg/commercial-property/news/local-home-prices-feared-plunge-15-until-2017#sthash.UUdSR1Oe.dpuf
You mean the government's property cooling measures is purposely designed to cool CCR property prices while still holding up OCR property prices (hence the OCR owners deserve to be lucky)?
I hope not! :onthego:
Furthermore didn't MAS said property cooling measures is supposed to "cool" property prices and that OCR property prices are "still elevated" (to them meaning still "over-priced")?
And can't deny the fact that now % wise many more foreigners now are buying OCR (while in the past most foreigners are buying CCR) after the property cooling measures (and not because of start to de-centralise business district).
Therefore, it looks most likely a ill side-effect of the property cooling measure (causing foreigners to switch to buy much cheaper OCR property so as to save on ABSD) than purpose attempt right?
May be some journalist can ask the government about this to clarify (rather than you all guessing here and there)?
If I have to do the guessing, I have 2 guess:
1. People that cannot afford to buy Central and CCR decide to use the money to buy OCR
2. Government decision to start de-centralise business district, help to improve OCR price.
Any way why the OCR owner not deserve to get lucky some times :)
Whether you think the prices are elevated or not are NOT important, since you can't dictate the policy.
What we should be concerned is whether the government, the MAS, MND think the prices are elevated.
As we know, it is a fact that MAS think that OCR property prices are "still elevated" (over-priced)!
This knowledge is MUCH more important to all property owners/investors/buyers/sellers!
Don't understand why you keep wanting to insist that OCR property prices are not over-priced (despite what MAS said)? :doh:
What is not elevated today?
Is the kopi you buy today not elevated in price?
Income not elevated?
Infrastructure not elevated?
Relative to 1980, which sector is not elevated?
You can treat elevation as a symptom to be corrected, and you can also treat it as a consequence of where the demand and affordability lies.
Sorry, what does that mean?
Govt land sales mostly ocr. Wat u think???
Reading the news below, so looks like OCR property prices looking towards crashing that is why govt no action?
Mortgagee listings reach 7-year high
Dec 18, 2015
Mortgagee listings in Singapore hit a seven-year high in 2015, with the number of repossessed properties put up for auction soaring by almost 52 percent to 241 from 159 in 2014, reported Channel NewsAsia citing Colliers International.
Owner listings, on the other hand, stood at 555, taking the total number of auction listings to a six-year high of 796. Last year, there were 529 auction listings.
Colliers attributed the increase to the difficulty faced by borrowers in default to sell their properties.
.............................
Looking ahead, Colliers expects the number of mortgagee sales to continue increasing next year as higher interest rates put more pressure on borrowers struggling to service their bank loans.
If I have to do the guessing, I have 2 guess:
1. People that cannot afford to buy Central and CCR decide to use the money to buy OCR
2. Government decision to start de-centralise business district, help to improve OCR price.
Any way why the OCR owner not deserve to get lucky some times :)
propertycarrots
18-12-15, 21:45
Depends on how low PSF you are looking at. OCR 99LH HDB old resale $4xx psf < OCR 99LH brand new EC $750 psf < OCR 99LH brand new PC $900-$1000 psf.
Construction cost min $300 psf and up, Land cost min $300 psf and up.
Local home prices feared to plunge by up to 15% until 2017
Sales are likely to stay subdued, as well.
Private residential prices are feared to dip by 5% to 15% over 2016 to 2017, according to a report by OCBC. Further, primary residential sales next year are seen to stay subdued at between 6 to 9k units.
OCBC also sees residential rentals levels tumbling 8 to 15%, and vacancy levels spiking from the current 7.8% to about 10% by end-2017.
Given the high price elasticity of demand in the housing marking, however, a price crash of 20% is improbable—significant buyer demand will likely come into the market’s lower price points.
For 2016 to 2017, Singapore home prices will likely be driven by sustained oversupply, rising floating mortgage rates, and possible curbs reversals.
The report asserts that the current significant physical oversupply situation is likely to persist in the coming year, and that it will impact rental levels and vacancy rates.
Also, floating mortgage rates—typically pegged to short-end SIBOR or SOR—are likely to surge in line with higher US interest rates, and this will add pressure on rental carry and housing affordability.
On the other hand, there remains a potential for curbs reversals after price pullbacks reach double-digits in the latter half of 2016 and after.
“However, we believe these will only soften the magnitude of price declines and are unlikely to reverse the general bear market trend,” stated OCBC
- See more at: http://sbr.com.sg/commercial-property/news/local-home-prices-feared-plunge-15-until-2017#sthash.UUdSR1Oe.dpuf
Everything must go: Home prices to plummet by 20% in 2015
- See more at: http://sbr.com.sg/residential-property/in-focus/everything-must-go-home-prices-plummet-20-in-2015#sthash.9nWV1DNK.dpuf
Please hor, in 2015 not 2016 to 2017
Actually, it has materialised in CCR property prices, crashing >20% and some even >35%!
Now, it is going to be OCR property prices turn to crash in 2016? :onthego:
Anyway, MAS already said that they think OCR property prices are "still-elevated" (i.e. over-priced)!
Everything must go: Home prices to plummet by 20% in 2015
- See more at: http://sbr.com.sg/residential-property/in-focus/everything-must-go-home-prices-plummet-20-in-2015#sthash.9nWV1DNK.dpuf
Please hor, in 2015 not 2016 to 2017
Actually, it has materialised in CCR property prices, crashing >20% and some even >35%!
Now, it is going to be OCR property prices turn to crash in 2016? :onthego:
Anyway, MAS already said that they think OCR property prices are "still-elevated" (i.e. over-priced)!
If ocr crash 20%, ccr will crash another 30%. Nobody will be upgrading.
HDB also needs to crash by 10%.
If ocr crash 20%, ccr will crash another 30%. Nobody will be upgrading.
Those who got bidadari flats will bang chest. But still find it unbelievable. Crash for foreigners to buy?
Powered by vBulletin® Version 4.2.2 Copyright © 2024 vBulletin Solutions, Inc. All rights reserved.