http://business.asiaone.com/Business...-326719/3.html

Thursday, Feb 09, 2012

my paper

Private-property prices fall sharply in core area

By Reico Wong


THE property cooling measures introduced late last year have started to show a significant impact on the housing market.

Prices of private apartments and condominiums have dropped by as much as 10.2 per cent in the Core Central Region since the fourth quarter, suggesting that home buyers became more cautious after the additional buyer's stamp duty took effect in December.

The average selling price of such units has fallen to $1,600 per sq ft (psf) from $1,781 psf in the fourth quarter, according to data released yesterday by the Singapore Real Estate Exchange (SRX).

The rental prices of apartments and condominiums have also been affected, with those of properties in the non-central areas hit the hardest.

The rental rates of units outside the central region have fallen 2.3 per cent since the fourth quarter, from $2.99 psf to $2.92 psf.

However, rents for apartments and condominiums in the Core Central Region are still climbing. They have risen 1.3 per cent since the fourth quarter, from $4.68 psf to $4.74 psf.

This is likely to be just the start of a downtrend, the heads of property agencies said yesterday at a housing forum organised by SRX. They added, however, that a price crash is unlikely.

Private-property prices are expected to drop between 10 and 15 per cent this year, said Dennis Wee Group, HSR Property Group, PropNex, DTZ, ERA Realty and C&H Properties.

Prices of Housing Board resale flats are likely to ease between 3 and 5 per cent this year, but could also fall by as much as 10 per cent if the euro-zone debt crisis worsens, the companies said.

Mr Albert Lu, chief executive of C&H, said population growth - especially that of permanent residents and new citizens - is slowing, leading to a fall in housing demand.

He added that HDB prices have doubled over the past six years and are unlikely to climb steeply soon, given the large number of Build-To-Order (BTO) flats being pumped into the market.

He said the attractive prices of BTOs would draw buyers from the resale market following remarks by National Development Minister Khaw Boon Wan that he is looking into letting second- timers buy BTO flats.

When second-timers buy BTO flats, they will have to sell their flats, which would further "dampen demand", said Mr Lu.

PropNex CEO Mohamed Ismail said buyers now enjoy more choice, with some 5,000 executive-condominium (EC) units slated for construction this year and "a continued supply of government land sales".

There will be "supply, supply and more supply, be it of HDB flats, EC units or mass-market properties", he said.

"I would not be surprised if public- housing prices remain the same, five years from now," he said, adding that they might be only about 10 per cent higher at most.

Purchases of private property by foreigners reached historic highs last year, hitting 31 per cent, a two-fold increase from 10 years ago, according to another report released yesterday by Savills.

Mainland Chinese were the top buyers, making up 28 per cent of all purchases by foreigners, with Indonesians accounting for just 18 per cent of all foreign purchases.

Mr Lee Sze Teck, senior manager of research and consultancy at Dennis Wee, said: "Singapore is still one of the best cities in Asia to put your money. If prices drop about 10 per cent and conditions are favourable, buyers will definitely come back."

[email protected]