New Reporter
04-08-23, 10:11
Private home prices slip 0.2% in Q2, rental increase slows
Some property consultants are predicting a correction in rents in H2
Jul 28, 2023
THERE was some buzz on Friday (Jul 28) morning from Urban Redevelopment Authority (URA) data showing that the official private home price index in the second quarter had slipped 0.2 per cent, less than the 0.4 per cent decline shown in the flash estimate released earlier this month.
But arguably the bigger takeaway from the latest URA data on the Singapore private housing market is the significant slowdown in the pace of rental increase. URA’s overall rental index for private homes rose 2.8 per cent in Q2 2023 over the previous quarter. This was a smaller pace of increase than the 7.2 per cent quarter-on-quarter (qoq) rise in the first quarter this year.
Overall private residential rents have risen 10.2 per cent from the fourth quarter last year and are up 57.2 per cent since bottoming in the third quarter of 2020.
Some property consultants are predicting a correction in rents in the second half. CBRE Research expects property rents to decline 5 per cent in H2 2023, with a full-year increase of 5 per cent.
In similar vein, Edmund Tie’s head of research and consulting Lam Chern Woon said: “Rents are likely to correct in the second half of this year, but will still post growth of 5 per cent to 10 per cent for the whole year, after the steep 29.7 per cent increase in 2022.”
Tricia Song, head of research for South-east Asia at CBRE, said: “Based on URA Realis rental data downloaded in mid-July, we note that island-wide private non-landed residential median rents peaked in April 2023, thereafter declining by 3.9 per cent by June. The drop was led by the Core Central Region (CCR).”
https://i.imgur.com/oQ3clu2.png
URA data showed that the pace of private housing completions picked up in Q2 2023, with 4,401 homes being completed, higher than the 2,965 units completed in the preceding quarter.
The pick-up in completions contributed to a 0.3-percentage point qoq increase in the vacancy rate to 6.3 per cent, the highest in almost two years, said Lam of Edmund Tie.
According to URA data based on the expected completion dates reported by developers, some 11,810 private homes are projected to be completed in H2 this year, followed by a further 8,959 units next year.
“This would inject a significant amount of stock into the market and alleviate the tight supply situation. In addition, we note expatriate demand has slowed and temporarily displaced owners are moving into their newly completed homes,” said Song.
URA’s data also showed that rentals of landed homes climbed 6.7 per cent qoq in Q2, moderating from the 14.5 per cent increase in Q1.
The increase in the rentals of non-landed properties slowed to 2.3 per cent, from the 6.2 per cent gain previously. The rental momentum for non-landed private homes eased across all regions, URA said.
About that price-index drop
On the URA’s overall private home price index posting a smaller decline on Friday than the flash figure four weeks earlier, Knight Frank Singapore’s research head Leonard Tay said: “This showed that the take-up at the new launches in the intervening weeks created some upward support, as demand from local homebuyers remained firm.”
The 0.2 per cent qoq decline in the price index snapped a three-year growth streak, as Wong Siew Ying of PropNex noted.
Overall private home prices in Q2 this year were up 3.1 per cent from Q4 last year and property consultants expect the full-year 2023 increase to be in the range of 2 per cent to 6 per cent.
The price decline in Q2 was led by a 2.5 per cent qoq fall in prices of non-landed private homes in the city fringe or Rest of Central Region (RCR). This contrasted with an increase of 4.4 per cent in the previous quarter.
Wong Xian Yang, the head of research for Singapore and South-east Asia at Cushman & Wakefield, said: “We opine that the sharp fall in RCR prices is not a signal of weaker market demand but due to fluctuations in RCR new sales prices, which can vary according to the volume and mix of new launches launched during the quarter.”
In the aftermath of the late-April property cooling measures which doubled to 60 per cent the Additional Buyer’s Stamp Duty rate on foreigners acquiring any residential property in Singapore, foreign buying has declined.
PropNex Realty CEO Ismail Gafoor said that the proportion of non-landed new private homes bought by foreigners has fallen to the lowest level in over a year at about 5.2 per cent in Q2 2023. Conversely, the proportion of new homes bought by Singaporeans was almost at a two-year high at 84.6 per cent in Q2 2023, according to URA Realis caveat data.
“In absolute terms, 109 new non-landed homes were purchased by foreigners in Q2 2023; of these, 26 are buyers from the US, and 19 are from China,” he added.
In the primary market, developers’ private home sales volume rose by 69 per cent qoq to 2,127 units in Q2 2023, continuing the 82 per cent qoq growth recorded in Q1 2023, said Lam of Edmund Tie.
The volume of subsale deals rose for the second straight quarter to 285 units, the highest in a decade (since Q2 2013) and accounted for over 5 per cent of total private residential sales for the third straight quarter, he noted.
The total volume of secondary sales (resales and subsales combined) in Q2 2023 rose by 13.8 per cent qoq to 3,261 units. This was the first qoq increase in four quarters and also marked a reversal from the 1.1 per cent qoq decline in the previous quarter.
The increase in secondary sales was fuelled by the suburbs or Outside Central Region (OCR), which accounted for 51 per cent of overall secondary sales as homebuyers favoured affordable mass-market properties amid the tight financing climate.
“In the public housing market, resale prices of HDB flats grew by 1.5 per cent qoq in Q2 2023, picking up pace up from the 1.0 per cent qoq growth in the previous quarter, and helped sustain upgrader demand for private homes, especially in the suburbs,” added Lam.
https://www.businesstimes.com.sg/property/private-home-prices-slip-02-q2-rental-increase-slows
Some property consultants are predicting a correction in rents in H2
Jul 28, 2023
THERE was some buzz on Friday (Jul 28) morning from Urban Redevelopment Authority (URA) data showing that the official private home price index in the second quarter had slipped 0.2 per cent, less than the 0.4 per cent decline shown in the flash estimate released earlier this month.
But arguably the bigger takeaway from the latest URA data on the Singapore private housing market is the significant slowdown in the pace of rental increase. URA’s overall rental index for private homes rose 2.8 per cent in Q2 2023 over the previous quarter. This was a smaller pace of increase than the 7.2 per cent quarter-on-quarter (qoq) rise in the first quarter this year.
Overall private residential rents have risen 10.2 per cent from the fourth quarter last year and are up 57.2 per cent since bottoming in the third quarter of 2020.
Some property consultants are predicting a correction in rents in the second half. CBRE Research expects property rents to decline 5 per cent in H2 2023, with a full-year increase of 5 per cent.
In similar vein, Edmund Tie’s head of research and consulting Lam Chern Woon said: “Rents are likely to correct in the second half of this year, but will still post growth of 5 per cent to 10 per cent for the whole year, after the steep 29.7 per cent increase in 2022.”
Tricia Song, head of research for South-east Asia at CBRE, said: “Based on URA Realis rental data downloaded in mid-July, we note that island-wide private non-landed residential median rents peaked in April 2023, thereafter declining by 3.9 per cent by June. The drop was led by the Core Central Region (CCR).”
https://i.imgur.com/oQ3clu2.png
URA data showed that the pace of private housing completions picked up in Q2 2023, with 4,401 homes being completed, higher than the 2,965 units completed in the preceding quarter.
The pick-up in completions contributed to a 0.3-percentage point qoq increase in the vacancy rate to 6.3 per cent, the highest in almost two years, said Lam of Edmund Tie.
According to URA data based on the expected completion dates reported by developers, some 11,810 private homes are projected to be completed in H2 this year, followed by a further 8,959 units next year.
“This would inject a significant amount of stock into the market and alleviate the tight supply situation. In addition, we note expatriate demand has slowed and temporarily displaced owners are moving into their newly completed homes,” said Song.
URA’s data also showed that rentals of landed homes climbed 6.7 per cent qoq in Q2, moderating from the 14.5 per cent increase in Q1.
The increase in the rentals of non-landed properties slowed to 2.3 per cent, from the 6.2 per cent gain previously. The rental momentum for non-landed private homes eased across all regions, URA said.
About that price-index drop
On the URA’s overall private home price index posting a smaller decline on Friday than the flash figure four weeks earlier, Knight Frank Singapore’s research head Leonard Tay said: “This showed that the take-up at the new launches in the intervening weeks created some upward support, as demand from local homebuyers remained firm.”
The 0.2 per cent qoq decline in the price index snapped a three-year growth streak, as Wong Siew Ying of PropNex noted.
Overall private home prices in Q2 this year were up 3.1 per cent from Q4 last year and property consultants expect the full-year 2023 increase to be in the range of 2 per cent to 6 per cent.
The price decline in Q2 was led by a 2.5 per cent qoq fall in prices of non-landed private homes in the city fringe or Rest of Central Region (RCR). This contrasted with an increase of 4.4 per cent in the previous quarter.
Wong Xian Yang, the head of research for Singapore and South-east Asia at Cushman & Wakefield, said: “We opine that the sharp fall in RCR prices is not a signal of weaker market demand but due to fluctuations in RCR new sales prices, which can vary according to the volume and mix of new launches launched during the quarter.”
In the aftermath of the late-April property cooling measures which doubled to 60 per cent the Additional Buyer’s Stamp Duty rate on foreigners acquiring any residential property in Singapore, foreign buying has declined.
PropNex Realty CEO Ismail Gafoor said that the proportion of non-landed new private homes bought by foreigners has fallen to the lowest level in over a year at about 5.2 per cent in Q2 2023. Conversely, the proportion of new homes bought by Singaporeans was almost at a two-year high at 84.6 per cent in Q2 2023, according to URA Realis caveat data.
“In absolute terms, 109 new non-landed homes were purchased by foreigners in Q2 2023; of these, 26 are buyers from the US, and 19 are from China,” he added.
In the primary market, developers’ private home sales volume rose by 69 per cent qoq to 2,127 units in Q2 2023, continuing the 82 per cent qoq growth recorded in Q1 2023, said Lam of Edmund Tie.
The volume of subsale deals rose for the second straight quarter to 285 units, the highest in a decade (since Q2 2013) and accounted for over 5 per cent of total private residential sales for the third straight quarter, he noted.
The total volume of secondary sales (resales and subsales combined) in Q2 2023 rose by 13.8 per cent qoq to 3,261 units. This was the first qoq increase in four quarters and also marked a reversal from the 1.1 per cent qoq decline in the previous quarter.
The increase in secondary sales was fuelled by the suburbs or Outside Central Region (OCR), which accounted for 51 per cent of overall secondary sales as homebuyers favoured affordable mass-market properties amid the tight financing climate.
“In the public housing market, resale prices of HDB flats grew by 1.5 per cent qoq in Q2 2023, picking up pace up from the 1.0 per cent qoq growth in the previous quarter, and helped sustain upgrader demand for private homes, especially in the suburbs,” added Lam.
https://www.businesstimes.com.sg/property/private-home-prices-slip-02-q2-rental-increase-slows