Housing market shows classic recovery signs
Housing market shows classic recovery signs
Subsales and foreigner purchases up in Q2; HDB upgraders' share falls
(SINGAPORE) Three classic signs of a recovery have emerged in the Singapore housing market. Subsales and foreign buying have accelerated while the share of HDB upgraders in the private home buying pie has declined.
The number of subsale deals for private homes has more than doubled from 414 in Q1 this year to 1,041 in Q2 and the median subsale price has also risen 18.1 per cent over the same period to $959 psf, based on Jones Lang LaSalle's analysis of caveats lodged for private homes captured by URA's Realis system as at July 17.
HDB upgraders' share of total caveats, which had been increasing for six consecutive quarters since Q4 2007, slipped in Q2 this year as purchases by those with private addresses rose at a faster clip. This could be because Q2 saw more mid and mid-upper projects launched, compared with predominantly mass-market launches catering to upgraders in Q1, says Knight Frank chairman Tan Tiong Cheng.
The number of caveats for private homes lodged by foreigners, including PRs, nearly tripled - from 496 in Q1 to 1,418 in Q2. The increase outpaced a 103.9 per cent rise in Singaporean buying. As a result, foreigners' share of private home buying rose from 15.5 per cent in Q1 to 20.5 per cent in Q2.
The most popular districts among these buyers were Districts 9, 10 and 15 while the more sought-after projects included Rivergate and Martin Place Residences (district 9), The Arte (district 11), The Lakeshore in Jurong and Mi Casa in Choa Chu Kang.
'Singapore properties are more affordable today than they were during the peak. Foreigners, like local buyers, are finding value in the local property market and looking at the upside potential,' says JLL's head of South-east Asia and Singapore research Chua Yang Liang, adding that the positive economic growth in China, India and Indonesia had nudged their citizens into investing here. He also observed a rise in purchases by Myanmar buyers.
Malaysians were the top buyers of homes in Singapore in Q2, making up 29.3 per cent of total caveats lodged by foreigners, followed by Indonesians (20.3 per cent share), mainland Chinese (14.9 per cent) and Indians (12.1 per cent).
Foreigners were drawn to prime district projects like Martin Place Residences in the primary market and Rivergate and Seaview in the secondary market in Q2, said CB Richard Ellis executive director (residential) Joseph Tan.
JLL's head of residential Jacqueline Wong has seen more high networth individuals from India, Hong Kong and China looking to make their maiden property investments here. 'They are not PRs and are looking at apartments 3,000 sq ft and above in the Orchard Road belt. They're drawn by value; prices in the luxury sector are today about 15 to 25 per cent below the 2007 peak levels,' she said.
Going ahead, foreign buying is expected to gain momentum, if the property recovery and regional economic upturn continue.
In the subsale market, the most popular projects transacted in Q2 were Rivergate (95 units), The Centris (46 units) and City Square Residences (45 units). Rivergate and Phase 2 of City Square Residences obtained Temporary Occupation Permit (TOP) in March, and Centris, this month.
The median subsale price in Rivergate has risen from $1,200 psf in Q1 to $1,400 psf in Q2 and that for The Centris increased from $587.50 psf to $625 psf. City Square Residences' median subsale price rose from $791 psf to $893 psf and that for The Sail @ Marina Bay, from $1,321 to $1,623 psf.
Subsales are secondary market deals in projects that have yet to obtain Certificate of Statutory Completion. This could be three to 12 months after the project gets TOP. Market watchers note that there's typically more sales activity around the time that projects receive TOP.
'There are buyers who like to have the finished product because it's ready for immediate occupation or renting out,' says Knight Frank chairman Tan Tiong Cheng. Sellers who bought for investment, especially on Deferred Payment Scheme, can also cash out.
Analysts reckon that with a significant number of private homes heading for completion in the next 18 months, more subsale transactions can be expected.
Buyers with HDB addresses accounted for 44 per cent of total caveats lodged for private homes in Q2, down from the 56 per cent share in the preceding quarter.
The fall in proportion of purchases by HDB ugpraders was due to a bigger Q-on-Q jump of 174 per cent in Q2 in caveats lodged by those with private addresses, compared with a 70.8 per cent increase in caveats lodged by those with HDB addresses.
The most popular projects among HDB upgraders in Q2 were Mi Casa, with 145 caveats at a median price of $630 psf, followed by Double Bay Residences (106 units changed hands at a median price of $665 psf) and The Arte, (87 units transacted at $899 psf median price).
The share of HDB upgraders may slip further in coming months as the proportion of mass-market developments among project launches lessens as developers release more upper-end condos.
Primary market Launch vs TOP vs Resale Market
Does this mean that the main sale transactions and interest are in newly launched properties or recently TOP properties.
How about secondary market in the prime areas (9,10,11) of older resale properties? Are upgraders or investors avoiding these and why?
Per capita income means improved affordability of condo for the rich
The rich simply become richer in Singapore
Recorded in 2005 in parliament:
Mr Steve Chia Kiah Hong (Non-Constituency Member): Sir, I find it hard to reconcile the statistics given by the Prime Minister at the Debate on the President's Speech this year that Singapore's per capita income has risen over the last 10 years. Considering the fact that there is record unemployment, high number of retrenchments, constant pay cuts, CPF cuts and, at the same time, problems of those above 40 who find it hard to get a decent job, many Singaporeans, including myself, wonder how the Ministry of Trade and Industry had arrived at the reported statistical figures. I hope that the statistical calculations do not take into account the earnings of PRs, expatriate staff and foreign workers working and earning good pay in Singapore into the average income calculation and computation. Otherwise, we will be giving a false impression to our citizens that our income is indeed rising faster than imagined.
Finally, of what benefit or good in showing an increase in the per capita income to Singaporean men who have been retrenched and unemployed for more than half a year? What we need is finding more good jobs for them, not about how the average income of Singaporeans has risen because of foreign talent contribution to the GDP.
Mr Lim Hng Kiang: Sir, let me take Mr Steve Chia's question. First, he must understand how to interpret statistics. When the statistics show that the incomes have risen, it does not mean that there will not be 3% people who are unemployed, and therefore their incomes have dropped. This is the per capita gross national income which looks at the average numbers.
The Prime Minister, in his speech on 19th January 2005, mentioned that the overall per capita income has increased since 1998, and indeed it has increased. The per capita income is a widely used benchmark in international comparisons. So we are using internationally accepted statistics and the method of measuring such statistics.
The per capita income is obtained by dividing the gross national income (GNI) by the population. Therefore, the gross national income which is the income receivable by all residents of the economy will include both Singaporeans and foreigners. Mr Steve Chia claimed that this will distort the numbers because it will include the high-earning expatriates. I think he will realise that the number of expatriates and people with employment pass is, in fact, a smaller percentage compared to the larger pool of other types of foreign workers. If anything, the foreigners' element of the calculation in Singapore's context would tend to drag the number down. Anyway, even if we exclude foreigners, the latest statistics show that the average income of Singaporeans in 2004 was 10.1% higher than in 1998. And compared to 10 years ago, the average income of Singaporeans has increased by 25.1%. As I have explained, this is the average number. We all realise that over the last five years, the unemployment in Singapore has risen. The latest number is 3.7%. So if we look at 3.7%, this means over 80,000 Singaporeans are unemployed, which means nearly 1,000 per constituency, and these are the people who come and visit us every other week, and all of us as MPs realise that. But that does not change the hard facts of the ground, which is that the average Singaporean, the 90 over per cent who retain their jobs, have had good income. And for most of them, their incomes have grown even in the most difficult years that we faced in the last five years (2000-2005)
Look at per capita income at:
http://www.singstat.gov.sg/stats/the.../hist/gdp.html
Compared to the previous property market peak in 1996, per capita income in SG is up by a whopping 49% in 2008 !!!
