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Thread: Private home prices fall for 14th straight quarter

  1. #1
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    Default Private home prices fall for 14th straight quarter

    Private home prices fall for 14th straight quarter

    Apr 4, 2017

    But pace of decline has slowed, signalling that end of market funk could be in sight: Analysts

    Lee Xin En


    Private home prices here have posted a 14th straight quarter of decline, but analysts say the end of the market funk could be in sight as the pace of falls has slowed - and suburban condo prices even rose a tad.

    Urban Redevelopment Authority estimates out yesterday show that overall prices fell by 0.5 per cent from the last quarter of last year to the first quarter this year. This was the same pace as the drop from the third quarter last year to the fourth.

    Prices of landed properties fell more steeply than those of non-landed properties in the first quarter ended March 31.

    Non-landed property prices were flat for the first time after 13 quarters of decline. The star performer was non-landed property in the suburbs, posting price growth of 0.1 per cent after 13 quarters of falls.

    The flash estimates are compiled based on sale prices given in contracts submitted for stamp duty payment and data on units sold by developers up until mid-last month.

    JLL's national director of research and consultancy Ong Teck Hui attributed the slight rise to successful projects in the suburbs. He said: "During the quarter, we saw strong responses to launches such as The Clement Canopy and Grandeur Park Residences, while projects from previous launches such as Parc Riviera and The Santorini also garnered substantial sales."

    Recent tweaks to property market curbs boosted buying sentiment a little, but this is not regarded by analysts as a major factor in the market.

    The proportion of primary market sales for non-landed homes in the suburbs rose to 74 per cent in the first quarter, well up on the 2016 average of 59 per cent, Mr Ong said.

    In contrast, landed property prices slid 2.8 per cent, after rising 0.8 per cent in the previous quarter.

    Mr Desmond Sim, head of CBRE research for Singapore and South- east Asia, said the fall was a "function of the price of the projects transacted", mainly in the suburbs.

    Ms Tricia Song, head of research at Colliers International Singapore, said: "We expect the market will still soften in the first half of this year by 1 to 3 per cent, due to economic uncertainty and the historic high level of home completions in 2016. With supply tapering off, we could see prices begin to stabilise by end-2017."

    Mr Ong said positive buying sentiment in the first quarter and healthy sales volumes would "eventually lead to prices stabilising, especially in the non-landed market".

    The outlook was more gloomy for the public housing sector, where resale flat prices were estimated to have fallen by 0.6 per cent from the fourth quarter last year to the first quarter this year, said the HDB.

    While prices had been fairly unchanged for five quarters, Mr Nicholas Mak, head of research and consultancy at SLP International Property Consultants, said the "fall could signal a new round of price weakness", but could also be due to a lull over Chinese New Year.

    The fall was within forecasts, he said, adding that government plans not to cut the Build-to-Order flat supply for this year could add to price weakness. "The much-awaited recovery in the HDB resale price index may not occur this year," he said.

  2. #2
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    Default 2 positive signals from URA's Q1 private home flash estimates

    2 positive signals from URA's Q1 private home flash estimates

    Index for non-landed private homes stays flat, sub-index for suburbs turns positive

    Tuesday, April 4, 2017

    by Kalpana Rashiwala
    [email protected]
    @KalpanaBT


    THE Urban Redevelopment Authority's flash estimate for its first quarter 2017 private home price index provided a couple of positive signals for the market, at least for the condo and private apartment segment.

    For the first time after 13 quarters of decline, the price index for non-landed private homes remained flat. It had eased 0.8 per cent quarter-on-quarter in Q4 2016.

    It was also the first time that the sub-index tracking prices of non-landed private homes in the suburbs or Outside Central Region (OCR) turned positive, with a 0.1 per cent rise, after 13 quarters of decline.

    That said, the URA's index for landed homes slipped 2.8 per cent q-o-q in the first quarter after climbing 0.8 per cent in the previous quarter.

    "The high absolute prices of landed homes remain a challenge in the current market which has trended towards an affordability play, with smaller-sized condo and apartment units in greater demand," noted JLL national director Ong Teck Hui.

    Agreeing, Savills Singapore research head Alan Cheong said: "The landed segment, being the abode of upper middle income professionals and SME bosses, is feeling the chill winds of structural unemployment and challenging business conditions respectively."

    URA's overall private home price index eased 0.5 per cent q-o-q in Q1 2017 - the same magnitude of decline registered in the previous quarter. Against the same period last year, the benchmark index has eased 2.9 per cent.

    From its recent peak in Q3 2013, the index is down 11.7 per cent.

    Amid general comments about the market stabilising, most property consultants polled by BT on Monday, predict a full-year decline in the index. The decreases forecast are up to 3 per cent.

    However, JLL is more sanguine forecasting a -1.5 per cent to +0.5 per cent change in URA's overall private home price index this year, with the non-landed segment faring relatively better with a change of -0.5 per cent to +1.5 per cent.

    Mr Cheong of Savills predicts the non-landed segment may see a rise of between one per cent and 3 per cent while the landed segment posts zero per cent to -2 per cent change in 2017.

    URA's flash estimates also showed that the subindex for prices of non-landed homes in the city fringe or Rest of Central Region (RCR) was unchanged in Q1 this year, after retreating 2 per cent in Q4 last year.

    The firm prices for private apartments and condo units during the first three months of this year in OCR and RCR were amid strong primary market sales by developers - in new launches such as The Clement Canopy, Grandeur Park Residences and Park Place Residences at PLQ, as well as substantial sales in earlier-released projects such as Parc Riviera, The Santorini, Principal Garden, Commonwealth Towers and Sims Urban Oasis, noted Mr Ong.

    However, in the prime areas or Core Central Region (CCR), the price index for non-landed homes eased 0.2 per cent in Q1 2017, after inching up 0.1 per cent in Q4 2016.

    Some market watchers believe that within the non-landed segment, the CCR could fare worse this year than the other two regions. PropNex Realty chief executive Ismail Gafoor predicts a 3 to 4 per cent full-year price drop in CCR.

    This is because more units in CCR projects may come into the market for sale on individual-units basis - as bulk sales have become harder after the government shut a loophole last month that some Singaporean investors had been using to enjoy substantial savings in stamp duties, when they acquired unsold units in private residential projects here developed by foreign housing developers via a sale of shares in the company that developed the project.

    Foreign housing developers were eager to enter into such deals with Singaporean investors in order to meet strict sales deadlines set as part of the government's Qualifying Certificate (QC) rules. Otherwise hefty extension charges are payable to the state.

    The tax loophole was shut through the introduction of the Additional Conveyance Duties (ACD) effective March 11.

    Knight Frank Singapore research head Alice Tan said that with the ACD's rollout, developers are likely to trim prices in the short term to pare down their unsold inventory.

    Agreeing, Mr Ong of JLL said: "It remains uncertain as to how this could protract the turnaround in prices."

    While the ACD is a dampener on bulk sales of private homes, another change the government announced at the same time is seen as putting more people in the mood to invest in property - the tweaking of the seller's stamp duty on residential properties bought on or after March 11. The holding period as well as the stamp duty rate have been reduced.

    However, observers cautioned that weak household income growth and interest rate hikes will help to rein in excessive demand for private homes.

    Moreover, noted SLP International executive director Nicholas Mak, for those thinking of buying a residential property, the "major pillars of the cooling measures - the additional buyer's stamp duty, loan-to-value ratios and the total debt servicing ratio - remain unchanged".

    The residential leasing market will also remain weak for the rest of the year. In this regard, it is the OCR which will fare worst in coming quarters due to the significant supply of newly completed private homes coupled with lacklustre demand for rental homes in the suburbs, he argues.

    On a more positive note, CBRE Research head of South-East Asia, Desmond Sim, said: "The market should prepare itself for a landing very soon. The private residential market is reaching its trough - supported by relatively strong land pricing as well as strong balance sheets of developers.

    "However, among projects, there may be differences in price declines, or even increases - depending on the project's attributes and the developer's profile."

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