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Thread: Private apartment resale prices dip again

  1. #1
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    Default Private apartment resale prices dip again

    http://www.straitstimes.com/archive/...again-20150331

    Private apartment resale prices dip again

    But 0.3% decline in Feb an improvement over Jan fall

    Published on Mar 31, 2015 2:06 AM

    By Cheryl Ong


    RESALE prices of private apartments continued their slide last month, though they fell at a slower pace compared with January.

    The Singapore Residential Price Index (SRPI) declined 0.3 per cent last month compared with January, flash estimates out yesterday showed.

    It was, however, a slight improvement over January's dip of 0.9 per cent from December.

    Earlier estimates had indicated a 1.6 per cent drop in January prices.

    The SRPI, which is compiled by the National University of Singapore's Institute of Real Estate Studies, comprises sub-indices covering prices in the central and suburban regions, along with small units.

    Softer demand for condominium units in the city centre dragged the index down, with the steepest drop of 0.7 per cent last month, following a 1.2 per cent slip in January.

    Prices of suburban units remained unchanged, after falling 0.7 per cent in January.

    Shoebox units - defined as those with floor areas of up to 506 sq ft - shed 0.2 per cent last month, giving back some gains after eking out a 0.2 per cent increase in January.

    While the figures were a reflection of the slow buying activity brought on by the Chinese New Year holidays last month, buyers were patently more cautious in the luxury segment, said Mr Ong Kah Seng, director of R'ST Research.

    The fewer new property launches during the festive season could have led buyers to "consider resale units more actively" too, Mr Ong added, lending some support to prices.

    Compared with the same period a year ago, resale prices of private condominiums have fallen by 5 per cent.

    In the last 12 months, the index has recorded price slips of about 0.4 per cent each month, said Mr Nicholas Mak, executive director at SLP Research.

    He expects the pace of decline to be similar for the rest of the year, bringing the full year's dip to between 4 per cent and 6 per cent.

    Property cooling measures have created an "environment" of cautious buying, experts said, as tougher mortgage financing rules have dampened sentiments.

    "But it has also created the expectation among buyers that prices will continue to slip. Whatever sellers are asking for, buyers will counter-offer with a lower price," added Mr Mak.

    Compared with the same period a year ago, units in the prime central districts have suffered the biggest fall of 6.3 per cent, while suburban units slipped by a smaller 3.8 per cent.

    Prices of shoebox units have softened by 3 per cent from the same period a year ago, but experts believe that it remains an "untested" segment of the market as a significant number are still being completed in suburban projects.

    "The only draw for tenants renting small apartments is that they don't have to (form a group to share it), but this comes at a high price as shoebox apartment rents are excessively high.

    "In some cases, all it requires is for the tenant to pay slightly more, or even a similar rent, for a slightly less conveniently located two-bedroom apartment," noted Mr Ong.

    Intense leasing competition from a mounting number of newly-completed units - particularly in areas which are farther afield - could also lead to investors offloading units, he added.

    "Investors of newly-completed units cannot afford to leave their units vacant for too long, so they will ultimately sell their suburban condominium at realistic prices."

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  2. #2
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    Default Prices of completed condos down 0.3% in February: NUS

    http://www.businesstimes.com.sg/real...n-february-nus

    Prices of completed condos down 0.3% in February: NUS

    Residential price index also falls due to slide in central region, including financial district and Sentosa Cove

    By Lynette Khoo

    [email protected]@LynetteKhooBT

    31 Mar


    PRICES of completed private non-landed homes in Singapore dipped 0.3 per cent in February from January, going by flash estimates of the National University of Singapore (NUS) Institute of Real Estate Studies.

    This signalled a 5 per cent drop in NUS Singapore Residential Price Index (SRPI) from a year ago and a 9.4 per cent fall from the peak in July 2013.

    The main drag to the NUS SRPI in February published on Monday came from the Central Region, which NUS defines as covering districts 1-4 (including the financial district and Sentosa Cove) and the traditional prime districts 9, 10 and 11.

    The sub-index for Central Region (excluding small units of up to 506 square feet) fell 0.7 per cent month-on-month in February. The NUS sub-index for small units of up to 506 sq ft showed a 0.2 per cent decline in prices.

    ERA Realty key executive officer Eugene Lim said: "There is still some holding power on the part of sellers because the interest rate increase is not painful yet."

    But any rebound in sales volumes in March after a muted month that encompassed the Chinese New Year holiday is unlikely to buck up prices, Mr Lim said, projecting a 5-8 per cent drop in prices for the whole of this year.

    The post-Chinese New Year period before the Lunar seventh month in August typically marks a window of buying interest, Mr Lim said. These are critical months to watch, he added.

    Observations from Century21 Singapore chief executive Ku Swee Yong were more sullen. Mr Ku believes that as the Sibor (Singapore interbank offer rate) continues to trend up, more sellers will find themselves in a tight spot and may let go of their units at lower profits.

    "If developers are willing to be moderate in pricing their new units, sellers of completed homes will take the cue even though resale prices are already typically 10-20 per cent lower than the new sales market," he said.

    NUS on Monday also published the revised index values for January 2015 as more data became available, showing the overall price index fell 0.9 per cent month on month, smaller than its earlier reported 1.6 per cent fall.

    Consultants note that monthly reporting of non-landed residential prices is becoming more volatile amid sharply reduced market transactions.

    This rings even more true for the NUS shoebox sub-index as fewer data points tend to increase the degree of error in an index, Mr Ku observed.

    The number of sales transactions involving units in the fixed basket tracked by NUS was 273 units in February, of which only three were shoebox units.

    But under NUS SRPI methodology, prices for untraded units in the basket are marked-to-market based on sales signals observed in the vicinity. Each month, the values of the properties tracked are estimated using regression analysis of transacted prices observed.

    Its pre-determined basket comprises private condominium projects that received their temporary occupation permit in the past 10 years, and projects with fewer than 40 units are left out since they are less liquid.

    Mr Ku said, however, that in a market with thin transactions and few data points, users of property price indices should take note of the broader trend over time, "but we cannot take the face value of the index of each month on which to base our conclusions".

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