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Thread: Private home resale prices slide 0.7%

  1. #1
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    Default Private home resale prices slide 0.7%

    http://www.straitstimes.com/archive/...de-07-20140129

    Private home resale prices slide 0.7%

    Published on Jan 29, 2014

    By Melissa Tan


    PRIVATE home resale prices in Singapore fell even faster last month, dragged down by home prices in the suburban areas.

    Analysts said resale prices would likely slide further this year as buyers remain choosy.

    However, some added that the drop could be cushioned by delays in new project completions, which would lower the threat of a private home glut.

    Overall resale prices fell 0.7 per cent in December from November, according to Singapore Residential Price Index (SRPI) flash estimates released yesterday.

    The slide was steeper than the 0.5 per cent fall in November from the month before. Initial figures had estimated a 0.1 per cent gain from October to November.

    Property consultants said that the broad-based decline in resale prices in December was partly caused by the festive season.

    Restrictions on home loans that took effect in June last year also played a big role, they said.

    R'ST Research director Ong Kah Seng said that even though resale homes tend to be about 20 per cent cheaper than new units, they require almost immediate financing whereas new units tend to allow payment to be made progressively over time.

    He added that since developers have started to cut new launch prices, home owners who want to resell their flats also have to lower their asking prices in tandem.

    The biggest resale price drop in December was in suburban areas, where homes recorded a 0.9 per cent drop from the preceding month. They had dipped 0.1 per cent in November from October.

    Prices of private homes in the central area slipped 0.3 per cent in December, a milder decline than the revised 0.9 per cent tumble in November from October.

    These figures exclude shoebox units, which saw a 0.6 per cent decrease in prices from November to December. This came after their prices fell a revised 0.5 per cent from October to November.

    Mr Ong said he expected demand for resale homes to be "fairly modest" this year, with homes in central areas being harder hit because of a large unsold stock.

    SLP International research head Nicholas Mak added: "As home buyers will become in- creasingly selective and price sensitive, the suburban property market will benefit as most of the affordable homes are located in the suburbs".

    He thinks that overall resale prices could fall by 5 per cent to 10 per cent this year.

    However, Credit Suisse analyst Yvonne Voon said in a note yesterday that prices in the overall private residential market - which includes new sales and resales - could hover at current levels this year.

    "We expect overall prices to be relatively flattish as we do not anticipate a severe oversupply situation."

    Delays in new project completions could mean that the risk of oversupply "may not be as bad as expected", she said.

    There were 13,150 private homes completed last year, excluding executive condominiums.

    This was 21.5 per cent lower than the 16,742 completed private homes that the Urban Redevelopment Authority (URA) initially estimated for 2013 in its first-quarter report last year.

    Ms Voon said this was "similar to what we saw in 2012" when the URA said 13,801 private homes would be completed but only 10,329 were, meaning that 25.2 per cent of the predicted unit completions were delayed.

    The SRPI is compiled every month by the National University of Singapore, which monitors a basket of completed non-landed projects excluding executive condominiums.

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    Default Completed condo prices fell 0.6% last year: NUS

    http://www.businesstimes.com.sg/arch...r-nus-20140129

    Published January 29, 2014

    Completed condo prices fell 0.6% last year: NUS

    Resale price drop to continue due to loan curbs, say analysts

    By Kalpana Rashiwala [email protected]


    FOLLOWING five consecutive month-on-month declines, prices of completed non-landed private homes eased 0.6 per cent for the whole of last year, compared with an increase of 4.2 per cent in 2012, show flash estimates for National University of Singapore's Overall Singapore Residential Price Index (SRPI).

    The index had risen 8.7 per cent in 2011, 11.7 per cent in 2010 and 22.7 per cent in 2009.

    Last year, the biggest drop of 2.5 per cent was posted by the SRPI for Central Region (excluding small units). Central Region is defined as districts 1-4 (including the financial district and Sentosa Cove) and the traditional prime districts 9, 10 and 11 by the university's Institute of Real Estate Studies (IRES), which minted the SRPI series tracking prices of completed private apartments and condos (excluding executive condos).

    In contrast, the subindex for Non-Central Region (again excluding small units) rose 0.9 per cent, while that for small apartments (up to 506 sq ft) islandwide climbed 2.8 per cent in 2013.

    On a month-on-month basis for December, however, the Non-Central Region posted the biggest price drop, of 0.9 per cent, based on the flash estimates, after dipping 0.1 per cent month-on-month in November.

    NUS' Central Region subindex eased 0.3 per cent last month, after shedding 0.9 per cent in November. The SRPI for small apartments islandwide fell 0.6 per cent last month. In November, it slipped 0.5 per cent. NUS' Overall SRPI lost 0.7 per cent in December, after easing 0.5 per cent in November.

    Ong Teck Hui, national director at Jones Lang LaSalle, said the Total Debt Servicing Ratio (TDSR) framework, which came into effect last June, has also impacted the resale market significantly, with the number of completed, non-landed private homes that changed hands in the secondary market slipping 35 per cent in the second half of last year compared with the first half, based on caveats lodged.

    "The last two months of 2013 saw a more pronounced decline as buying sentiments softened and this would have contributed to the slide in resale prices as reflected in the NUS' SRPI," said Mr Ong.

    Going forward, it is likely that resale prices will continue to slide if resale volumes remain muted due to the borrowing restrictions as well as some buyers withholding their purchases and adopting a wait-and-see attitude, he added.

    Knight Frank chairman Tan Tiong Cheng said: "Developer sales have fallen, so have resale deals. And as primary market prices have eased, so have prices for resale deals."

    The pick-up in momentum of private housing completions is expected to cause downward pressure on both private home prices and rents.

    Last year, 13,150 private homes were completed, up 27.3 per cent from 2012. Completions are expected to pick up further to 17,540 private homes this year, 21,299 units next year and 27,321 units in 2016. URA's overall rental index for private homes decreased 0.5 per cent in Q4 over the preceding quarter - the first decline since Q3 2009.

    Savills Singapore research head Alan Cheong predicts an up to 5 per cent fall in private housing rents in general this year.

    Knight Frank's Mr Tan said: "Right now it is a tenant's market." Because, tenants will behave like buyers, properties that are nearer MRT stations will probably see rents holding better.

    "Landlords will have to follow the market. If in fact whatever demand there is, the preference is going to locations with MRT, the only way to compete with such units is to be more realistic in rent expectation."

    "Most expats prefer to lease a brand new apartment rather than an older one. All the completions spell competition . . . If your unit is older and not so accessible, your rent will have to come off more significantly. There's no lack of choices."

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