Prices for public and private housing fall in first quarter

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http://www.straitstimes.com/archive/...arter-20150402

Prices for public and private housing fall in first quarter

Sales are down in both markets but private homes see biggest drop

Published on Apr 2, 2015 12:57 AM

By Rennie Whang


PUBLIC and private home prices across Singapore kept falling in the first quarter of this year, with further declines expected.

Sales have thinned in both markets as well, market watchers say, though the biggest drop has been among private homes.

The market is now so moribund it could start hurting jobs in the real estate industry, they said.

Savills Singapore research head Alan Cheong noted overall private market transactions nearly halved last year. In the first quarter of this year, new sales slid 42.3 per cent year on year, and secondary market sales fell 8.2 per cent.

"Given transaction volumes have declined significantly since June 2013, the multiplier effects on those directly and indirectly employed in the residential property market (is a concern)," he said.

Prices of Housing Board resale flats fell 1 per cent quarter on quarter, slightly up from a 1.5 per cent dip in the fourth quarter, HDB flash estimates showed yesterday. It was the seventh straight quarter of decline for the segment, which has fallen about 9.2 per cent from its peak in the second quarter of 2013.

Prices of private homes fell 1.1 per cent from the fourth quarter according to Urban Redevelopment Authority (URA) flash estimates, roughly in line with the average drop of 1.03 per cent for each quarter last year.

The estimate of the private residential property price index was done using an improved method. The HDB had revised the computation for its resale price index from the fourth quarter of last year.

It was the sixth straight quarter of decline for private homes, for which prices have fallen about 6 per cent from their peak in the third quarter of 2013. The slide in HDB resale prices has been more pronounced as cooling measures have been more effective in curbing demand, and developers are holding prices in the new sales market, said Mr Cheong.

A boost in Build-to-Order (BTO) flat supply has weighed on the HDB market as well. More than 90,000 BTO flats were launched between 2011 and last year. A further 16,900 BTO flats will be offered this year.

HDB said yesterday it will be offering 4,040 BTO flats in Clementi, Punggol North, Sembawang and Tampines next month with another 5,000 flats on offer in a sale of balance flats at the same time.

In all, 3,681 resale HDB flats were sold in the first quarter, down 20.5 per cent quarter on quarter and 2.6 per cent year on year, noted PropNex research. But transactions may increase with the draw of falling prices.

In the private market, prices in the central region fell an estimated 0.6 per cent quarter on quarter. While it was the lowest quarterly drop in six quarters, it cannot be read as a sign the sub-market is bottoming out given the low sales volume, said SLP International executive director Nicholas Mak. Sales in the sub-market fell 60 per cent quarter on quarter.

Private home prices on the city fringe fell 1.8 per cent, after a 1.6 per cent dip the previous quarter.

"Of the three market segments, the (city fringe) has registered the largest fall of 7.5 per cent in its index from its peak in the second quarter of 2013, more than the declines of 7.2 per cent for the central region and 4 per cent for (the suburbs)," said JLL national research director Ong Teck Hui.

Private home prices in the suburbs fell 1 per cent for the quarter, up from a 0.1 per cent drop the previous quarter.

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http://www.businesstimes.com.sg/real...p-11-in-q1-ura

Private home prices slip 1.1% in Q1: URA

Flash estimates show sixth straight quarter of decline from the peak in the third quarter of 2013; further declines likely

By Lynette Khoo

[email protected]@LynetteKhooBT

2 Apr


PRIVATE home prices remained on a slide in the first three months of this year as the stalemate between buyers and sellers ensued, signalling a sluggish start for the year.

Flash estimates from the Urban Redevelopment Authority (URA) showed its overall private residential property price index (PPI) slipped 1.1 per cent in the first quarter this year from the preceding quarter.

This marked a sixth straight quarter of decline from the peak in the third quarter of 2013 and followed a similar 1.1 per cent fall in the fourth quarter of 2014.

URA's flash estimates showed landed properties posted a 1.1 per cent drop in prices in the first quarter, after falling by 1.3 per cent in the fourth quarter of 2014.

Non-landed residential properties marked a 1.1 per cent price fall in the first quarter after a one per cent drop in the fourth quarter of 2014, with the fall seen accelerating in the city fringe or otherwise known as the Rest of Central Region (RCR).

JLL national research director Ong Teck Hui noted that gauging by caveats lodged, transaction volumes in the first quarter that encompassed the Chinese New Year holiday were about half that of Q4 2014.

"Based on the overall index, prices are likely to decline between 1-2 per cent per quarter for 2015," he said. "Pressured selling is not widespread but if sellers' position weaken, it is possible for prices to fall a little faster."

ERA Realty key executive officer Eugene Lim noted that so far, buyers have been conservative in making offers while sellers are holding out on significant price cuts.

But as housing loan interests continue to rise, more sellers may cut losses and exit the market in the months ahead and if this trend festers, more significant price declines may take place in the second half of this year. "Going forward, we may be looking at a 5-8 per cent decline for the whole year," Mr Lim said.

Non-landed homes in the city fringe (RCR) saw the steepest fall in the first quarter by 1.8 per cent quarter on quarter, followed by 0.9 per cent in the Outside Central Region (OCR) and 0.6 per cent in the Core Central Region (CCR).

Earlier in the fourth quarter of 2014, prices in RCR also fell the most by 1.3 per cent, followed by prices in CCR and OCR that fell 0.9 per cent and 0.8 per cent, respectively.

Mr Ong noted that the RCR market is recently experiencing a more rapid unwinding of prices, after prices there narrowed towards the lower-end prime market during the property market run-up to 2013. While the CCR recorded a 48.9 per cent rise in its price index from the trough in the Q2 2009 to its peak in the Q1 2013, RCR saw its price index surging 62.8 per cent from the Q2 2009 to Q2 2013.

While the OCR market saw the largest jump in its price index by 74.9 per cent from Q2 2009 to Q3 2013, its subsequent fall of 4 per cent over six quarters was cushioned by a large proportion of owner-occupation buyers and HDB upgraders, Mr Ong said.

The lack of an acceleration in overall price decline, however, came as a surprise or even disappointment for Nomura Research analyst Sai Min Chow. He said in a report on Wednesday that he had expected an acceleration in price declines in the first quarter, "which could pave the way for the potential relaxation of some cooling measures later this year".

But he added that considering how prime luxury homes have corrected 20 per cent or more from their 2007 peak, a slower price decline in the high-end segment may not necessarily dissuade the government from easing property cooling measures later this year. In fact, some developers may become proactive in lowering prices to bring about that policy easing, he reckoned.

The PPI flash estimates for the first quarter are compiled based on transaction prices given in contracts submitted for stamp duty payment, caveats lodged and survey on new units sold by developers during the first 10 weeks of the quarter. Previously, URA used caveats and survey on developers only.

URA's revised index approach also adopts a more sophisticated methodology to better control for property attributes so that a purer change in price is measured.

The price indices will be updated four weeks later when it releases the full real estate statistics for the first quarter of 2015, which captures more data from the caveats lodged, stamp duty records and the take-up of new projects.