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Thread: Prices of private homes up 3.5% in Q2: URA

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    Default Prices of private homes up 3.5% in Q2: URA

    Prices of private homes up 3.5% in Q2: URA

    Jul 22, 2022

    PRICES of private residential properties rose 3.5 per cent in the second quarter versus the previous quarter, higher than the 3.2 per cent flash estimate released earlier this month, as well as the 0.7 per cent increase chalked up in Q1.

    Data from the Urban Redevelopment Authority (URA) released on Friday (22 Jul) showed that prices of landed properties went up 2.9 per cent in Q2 after a 4.2 per cent increase in the prior quarter, while prices of non-landed homes climbed 3.6 per cent, reversing from a 0.3 per cent decrease previously.

    The 3.5 per cent gain came on the back of 2 successful property launches in the city-fringe in Q2, which prompted prices of non-landed properties in the Rest of Central Region (RCR) to climb 6.4 per cent. Piccadilly Grand, which is next to Farrer Park MRT station, and LIV@MB in Mountbatten were both launched at record prices for 99-year leasehold properties in their respective areas. In contrast, prices of non-landed homes in the RCR retreated 2.7 per cent in Q1.

    Meanwhile, prices of non-landed properties in the Core Central Region (CCR) rose 1.9 per cent in Q2 - versus a 0.1 per cent decrease in the previous quarter - while prices in the Outside Central Region (OCR) increased 2.1 per cent, compared with a 2.2 per cent gain in Q1.

    In the rental market, rents of private homes continued to march north, with a bigger gain of 6.7 per cent in Q2 versus 4.2 per cent in Q1. This was led by non-landed properties, where rentals jumped 7.1 per cent, vis-à-vis a 4.1 per cent increase in the previous quarter. Rentals of landed properties climbed 3.2 per cent in Q2, slowing from the 5.3 per cent increase chalked up in Q1.

    By region, rents were up across the board, although the CCR and OCR saw the biggest jumps. Rents of non-landed private homes in the CCR went up 7.7 per cent after rising 3.8 per cent in the previous quarter. Similarly, rentals in the OCR gained 7.7 per cent, versus 4 per cent in Q1, while rents in the RCR were up 5.9 per cent, compared with 4.7 per cent previously. Developers launched 1,956 uncompleted private residential units (excluding executive condominiums or ECs) for sale in Q2, more than the 613 units released in Q1. ECs are a public-private housing hybrid.

    They sold 2,397 private residential units (excluding ECs), higher than the 1,825 units sold in Q1.

    Developers launched 616 EC units for sale in Q2 and sold 193 EC units. In comparison, developers did not launch any EC units for sale and sold 131 EC units in the previous quarter.

    There were 4,236 resale transactions in Q2, compared with 3,377 units in Q1. Resale transactions accounted for nearly two thirds (62.2 per cent) of all sale transactions in Q2.

    As at the end of Q2, there was a total supply of 48,836 uncompleted private residential units (excluding ECs) in the pipeline with planning approvals, up slightly from 47,415 units in the previous quarter. Of this number, 15,805 units remained unsold at the end of Q2, up from 14,087 units in the previous quarter.

    After adding the supply of 5,333 EC units in the pipeline, there were 54,169 units in the pipeline with planning approvals. Of the EC units in the pipeline, 1,701 units remained unsold. In total, 17,506 units with planning approvals (including ECs) remained unsold.

    Based on the expected completion dates reported by developers, 7,195 units (including ECs) are expected to be completed in H2 2022. Another 19,958 units (including ECs) are expected to be completed in 2023.

    URA added that apart from the 17,506 unsold units (including ECs) with planning approvals, there is a potential supply of around 8,000 units (including ECs) from Government Land Sales (GLS) sites and awarded en-bloc sale sites that have not been granted planning approval as yet. In total, around 25,500 units (including ECs) could be made available for sale later this year or next.

    The stock of completed private residential units (excluding ECs) increased by 2,551 units in Q2, more than the increase of 783 units in the previous quarter.

    The stock of occupied private residential units (excluding ECs) increased 2,085 units in Q2, compared with the increase of 3,544 units in the previous quarter. As a result, the vacancy rate of completed private housing units (excluding ECs) increased slightly to 5.4 per cent at the end of the second quarter, from 5.3 per cent at end-Q1.

    https://www.businesstimes.com.sg/rea...p-35-in-q2-ura

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    Default Re: Prices of private homes up 3.5% in Q2: URA

    Private home prices up 3.5% in Q2 as market rebounds on record launch prices, increased volume

    Jul 22, 2022

    PRICES of private residential properties rose 3.5 per cent in the second quarter from the previous quarter, by more than the 3.2 per cent flash estimate released earlier this month, as well as the 0.7 per cent increase chalked up in Q1.

    Analysts said that the gain in the price index for private homes — which came despite headwinds such as inflation, rising interest rates and the prospect of a potential recession — was a result of new launches in the city-fringe, the return of foreign buyers as well as firm demand.

    Data from the Urban Redevelopment Authority (URA) released on Friday (22 Jul) showed that prices of landed properties went up 2.9 per cent in Q2 after a 4.2 per cent increase in the prior quarter; prices of non-landed homes climbed 3.6 per cent, reversing from a 0.3 per cent decline previously.

    The 3.5 per cent gain came on the back of two successful property launches in the city-fringe in Q2, which prompted prices of non-landed properties in the Rest of Central Region (RCR) to climb 6.4 per cent. Piccadilly Grand, next to Farrer Park MRT station, and LIV@MB in Mountbatten were both launched at record prices for 99-year leasehold properties in their respective areas. In contrast, prices of non-landed homes in the RCR retreated 2.7 per cent in Q1.

    Meanwhile, prices of non-landed properties in the Core Central Region (CCR) rose 1.9 per cent in Q2 — versus a 0.1 per cent decrease in the previous quarter — while prices in the Outside Central Region (OCR) increased 2.1 per cent, compared with a 2.2 per cent gain in Q1.

    ERA’s key executive officer Eugene Lim pointed out that the immediate pull-back after December 2021’s property curbs appears to be easing. According to URA data, developers launched 1,956 uncompleted private residential units (excluding executive condominiums or ECs) for sale in Q2, more than 3 times the 613 units released in Q1. They sold 2,397 private homes (excluding ECs), more than the 1,825 units sold in Q1.

    Lim said: “The cooling measures brought some knee-jerk reactions to the market as the number of units launched, and transaction volume dropped in Q1. However, in Q2, it seemed like the market had recovered from the initial shock.”

    However, JLL’s senior director for research and consultancy Ong Teck Hui pointed out that while the total volume of transactions in the primary and secondary markets rose 27.5 per cent quarter on quarter to 6,811 units, the volume has yet to return to the levels recorded before December’s cooling measures. Last year, transaction volumes ranged from 7,925 units to 9,083 units per quarter.

    Ong went on to say: “This is probably due to the continued effect of the cooling measures as well as headwinds setting in from rising interest rates.”



    Lee Sze Teck, Huttons’ senior director for research, noted that the loosening of border curbs has beefed up sales of projects in the CCR and RCR. “There were 296 purchases by foreigners in Q2, an increase of more than 100 per cent from Q1’s 147 purchases, based on caveats lodged,” he said. In particular, 592 homes in the CCR were transacted in Q2, or 64 per cent more quarter on quarter.

    Facing with elevated land prices and construction costs, developers are unlikely to reduce prices of upcoming launches, suggested Edmund Tie’s head of research and consulting, Lam Chern Woon. He also noted the dwindling inventory of unsold units. Upcoming launches include AMO Residence in Ang Mo Kio, integrated mixed-use development Lentor Modern and Sky Eden @ Bedok.

    Still, Knight Frank’s head of research, Leonard Tay, flagged that price increases could start to moderate in the months ahead as higher interest rates crimp homebuyers’ purchasing power. The price index went up 4.2 per cent in the first half of this year, despite the cooling measures.

    Analysts’ forecasts for 2022 sales volumes for the primary market range from 8,000 to 10,000 units, while price increase projections for the year range from 5 to 8 per cent.

    In the rental market, rents of private homes hit a record high, helped by a bigger gain of 6.7 per cent in Q2 versus 4.2 per cent in Q1, marking the sharpest quarterly increase since Q4 2007, as landlords passed on the spike in interest to tenants. This was led by non-landed properties, where rentals jumped 7.1 per cent after a 4.1 per cent increase in the previous quarter. Rentals of landed properties climbed 3.2 per cent in Q2, slowing from the 5.3 per cent increase chalked up in Q1.

    By region, rents were up across the board, although properties in the CCR and OCR made the biggest jumps. Rents of non-landed private homes in the CCR went up 7.7 per cent after having risen 3.8 per cent in the previous quarter. Similarly, rentals in the OCR gained 7.7 per cent, versus 4 per cent in Q1; rents in the RCR were up 5.9 per cent, compared with 4.7 per cent previously.

    CBRE’s head of research Tricia Song highlighted that while rents rose 11.2 per cent in H1 2022, the growth momentum should moderate in H2 2022 as a projected supply of 7,195 new homes are injected into the market. Song said: “Transitional rental demand is set to moderate with the increase in the number of completions. 2,644 private homes were completed in Q2, compared to 819 in the previous quarter, as construction delays eased and the pace of construction resumed.” CBRE Research estimates rents for private homes will increase 15 per cent this year, after having gone up 9.9 per cent last year.

    The URA report noted that developers launched 1,956 uncompleted private residential units (excluding executive condominiums or ECs) for sale in Q2, and sold 2,397 private residential units. They also launched 616 EC units for sale in Q2 and sold 193 such units. In the previous quarter, developers did not launch any EC units for sale and sold 131 such units.

    There were 4,236 resale transactions in Q2, up from 3,377 units in Q1. Resale transactions accounted for nearly two thirds (62.2 per cent) of all sale transactions in Q2. This was slightly lower than 63.2 per cent in the previous quarter.

    As at the end of Q2, there were, in all, 48,836 uncompleted private residential units (excluding ECs) in the pipeline with planning approvals, up slightly from 47,415 units in the previous quarter.

    Supply remains tight as 15,805 units remained unsold at the end of Q2, although this is higher than the 14,087 units in the previous quarter. Including 274 completed units, 16,079 units remain unsold. JLL’s Ong said: “Despite the increase in unsold inventory in Q2, it is still 17.2 per cent lower year on year and 57.5 per cent below the last peak of 37,799 units in Q1 2019. Therefore, the market is still under-supplied, which is contributing to the increase in prices.”

    However, this could improve, because the government is releasing more private homes under the H2 2022 Government Land Sales (GLS) programme, he added.

    After adding the supply of 5,333 EC units in the pipeline, there were 54,169 units in the pipeline with planning approvals. Of the EC units in the pipeline, 1,701 units remained unsold. In total, 17,506 units with planning approvals (including ECs) remained unsold.

    In addition, there is a potential supply of around 8,000 units (including ECs) from GLS sites and sites undergoing en-bloc sale that have not been granted planning approval yet, URA added. In total, around 25,500 units (including ECs) could be made available for sale later this year or next.

    Based on the expected completion dates reported by developers, 7,195 units (including ECs) are expected to be completed in H2 2022, while another 19,958 units (including ECs) are expected to be completed in 2023. In total, around 30,700 units in total will be completed in 2022 and 2023 — nearly thrice the 10,400 units completed in 2020 and 2021.

    “This will help to cater to housing needs in the immediate term,” URA said.

    https://www.businesstimes.com.sg/rea...ices-increased

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