Singapore private housing prices down 3% in 2016

[reporter2]

http://www.businesstimes.com.sg/real...down-3-in-2016

Singapore private housing prices down 3% in 2016

But no quick turnaround expected as economy slows; bright spot in landed segment perceived as a blip

Wednesday, January 4, 2017

by Lynette Khoo

[email protected]

@LynetteKhooBT


THE residential market is showing signs of stabilising even as private home prices slipped for the 13th consecutive quarter, going by the government's flash estimates for the fourth quarter.

For the full year, the estimated 3 per cent fall in private home prices and the 0.15 per cent decline in HDB resale prices were smaller than their respective 3.7 per cent and 1.6 per cent declines in 2015. The 0.4 per cent decline in private home prices during the fourth quarter was also milder than the 1.5 per cent fall in the preceding quarter.

Despite the moderating price declines, consultants are not expecting a quick turnaround given a slowing economy, rising interest rates and uncertainty in the jobs market. Some housing brokers also perceive the quarterly price uptick for landed homes in the fourth-quarter flash data as a statistical blip that does not signal the start of a price recovery.

Landed homes bucked the overall downward trend with a 0.9 per cent quarter-on-quarter price increase in the fourth quarter, after posting a steep 2.7 per cent drop in the preceding quarter. For the whole of 2016, prices of landed properties fell by 4.4 per cent, according to the Urban Redevelopment Authority's (URA) flash estimates released on Tuesday.

URA flash estimates

Surprised by the quarterly uptick in landed home prices, Realstar Premier Group managing director William Wong said: "Quite a number of units were transacted at prices lower than expected in Central and the East. At most, I would say prices have flattened out."

The landed property specialist is expecting more landed transactions this year while prices will ease further by no more than 5 per cent. This is because a price equilibrium is being reached between buyers and sellers, "coupled with the fact that there will unlikely be any more negative property measures being introduced", he said.

SLP International executive director Nicholas Mak reckons that the quarterly rise in the landed price index was a technical rebound caused by the significant 2.7 per cent quarter-on-quarter drop in the third quarter, having fallen an average 1.2 per cent over each quarter from Q4 2013 to Q2 2016. "Hence, the rise in the price index could be a temporary statistical blip and it is still a bit early to conclude that the landed residential market is recovering," he said.

Non-landed home prices in the prime or Core Central Region (CCR) were flat in the fourth quarter, after falling 1.9 per cent in the third quarter, URA flash estimates show.

Based on SRX Property data collated from property agencies, about 80 per cent of the over 600 transactions in the CCR in the fourth quarter were resale transactions which - under URA's terminology for resale - also include units in delicensed projects sold by developers.

PropNex Realty's branch district director Dominic Lee, who specialises in prime non-landed properties, said that he had expected the price index for the CCR region to perform even better as the high-end projects that he was involved in such as OUE Twin Peaks have seen fairly good sales, with prices surpassing that of the previous quarter.

ERA Realty key executive officer Eugene Lim believes that luxury property prices have started to find their support level, with an estimated transaction volume of 2,709 units in the CCR - a 45.7 per cent jump from 2015's 1,859 units.

The Q4 flash estimates by URA are compiled based on transaction prices given in contracts submitted for stamp duty payment, and data on units sold by developers (both licensed and de-licensed) up till Dec 15.

The main drag in the fourth quarter came from the city-fringe or Rest of Central Region (RCR), where non-landed homes slipped by a steeper 2 per cent after falling one per cent in the third quarter. Prices in the suburban or Outside Central Region (OCR) dipped a moderate 0.3 per cent after dropping one per cent in the third quarter. For the whole of 2016, prices in CCR, RCR and OCR have fallen by 1.3 per cent, 2.8 per cent and 3.1 per cent respectively.

Projecting a prolonged U-shape recovery, CBRE head of research for Singapore and South-east Asia Desmond Sim noted that it would require a major macro stimulus in the form of stronger global economic prospects and jobs market to fuel a swift market recovery.

While developers with relatively healthy balance sheets and shrinking unsold inventory are still able to maintain prices in their projects, owners looking to sell their units in the secondary market will have lower holding power amid rising mortgage costs, Mr Sim said.

JLL national director of research and consultancy Ong Teck Hui felt that the perception of prices bottoming and realistic pricing are likely to spur demand in 2017, hence buffering the price fall. "Rising interest rates and expected slow economic growth in 2017 will, however, be an impediment to a quick turnaround in the market," he added.

Various projects will face the risk of having their additional buyer's stamp duty (ABSD) remission being clawed back from this year onwards. Under the ABSD conditions, developers are required to finish building and selling a project on a residential site within five years or pay ABSD on land cost with interest.

But Mr Sim reckoned the market impact to be minimal as most developers are more likely to cough out that one-off payment - which could be offset with better pricing of the units when the market recovers - than to slash prices that will put a lid on valuations for the overall market.

Projects that may face ABSD remission claw-back this year include The Trilinq by IOI Properties; Mon Jervois, Pollen & Bleu and Alex Residences by Singapore Land; The Glades by Keppel Land and China Vanke; Kingsford Hillview Peak by Kingsford Development; as well as The Crest by a Wing Tai-led consortium. Among them, The Crest and The Trilinq have the most number of leftover units, with 323 units and 278 units still unsold as of end-November.

[reporter2]

http://www.todayonline.com/singapore...falling-streak

Private home prices fall for 13th straight quarter

Overall private housing prices expected to remain under the shadow of economic worries

By Lee Yen Nee

[email protected]

Published: 9:03 AM, January 3, 2017
Updated: 10:06 PM, January 3, 2017


SINGAPORE — Private home prices in Singapore softened further in the last three months of 2016 to hit their lowest level in six years, as the longest falling streak on record was extended to 13 consecutive quarters, with analysts warning that the decline could extend this year.

The private residential property index fell 0.4 per cent quarter-on-quarter in the October-to-December period, slowing from the 1.5 per cent decline registered in the previous three months, flash estimates from the Urban Redevelopment Authority (URA) showed on Tuesday (Jan 3).

The latest drop brings Singapore’s private home prices to levels last seen in 2010. From the recent peak in the third quarter of 2013, prices have fallen 11.2 per cent. For the full year of 2016, prices fell 3 per cent, narrowing from the 3.7 per cent decrease in 2015, the URA data showed.

“This could indicate that the private residential property price is approaching the bottom. However, worries over a weaker economy, the poor labour market and concerns about rising interest rates will continue to cast a shadow over the Singapore property market,” said Mr Nicholas Mak, research and consultancy head at SLP International Property Consultants.

The fourth-quarter price fall was led by the non-landed private residences segment, with the city fringes, or Rest of Central Region (RCR), registering the biggest decline at 2 per cent, compared to a decrease of 1 per cent in the previous quarter. Prices in the suburbs, or Outside Central Region (OCR), declined by 0.3 per cent, after a 1 per cent decline in the previous quarter.

Prices in the city centre, or Core Central Region (CCR), were unchanged after the 1.9 per cent decline in the previous quarter.

For the whole of 2016, prices in the CCR, RCR and OCR fell 1.3 per cent, 2.8 per cent and 3.1 per cent, respectively, the URA data showed.

Prices of landed properties recorded the first increase in three years, rising 0.9 per cent in fourth quarter of 2016 after the 2.7 per cent decline in the previous quarter. For the whole of 2016, prices of landed properties fell 4.4 per cent — the largest drop among all market segments.

However, Mr Mak said: “We believe that the increase in the landed housing price index does not signal the start of a price recovery. This housing segment will continue to face weak demand and downward price pressure this year.”

Analysts expect overall private housing prices to continue falling this year amid a lack of positive economic catalysts, but they added that a further moderation in prices could attract more buyers into the market and lift transaction volume.

“We are expecting a 3 to 3.5 per cent decrease in prices for 2017, while transaction volume may see an increase to between 16,000 and 18,000, up from the 15,000 to 16,000 estimate for 2016,” said Mr Eugene Lim, key executive of ERA Realty Network.

The URA flash estimates were compiled based on transaction prices given in contracts submitted for stamp duty payment, and data on units sold by developers up to mid-December 2016. URA will release the full statistics for the fourth quarter on Jan 26.