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Thread: DTZ expects 2009 to echo property price plunge of 2008

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    Default DTZ expects 2009 to echo property price plunge of 2008

    DTZ expects 2009 to echo property price plunge of 2008
    Prime district property prices fall by 20%; similar decline seen in 2009


    (SINGAPORE) Prices of condominiums and apartments in the prime districts have fallen by more than 20 per cent in 2008 on a year-on-year basis, says DTZ.

    DTZ is also forecasting a further decline of 15-20 per cent for this segment of the market in 2009.

    Based on its preliminary analysis of official data, DTZ said that prices of non-landed freehold private homes in the prime districts fell by 14 per cent quarter-on-quarter (qoq) in the fourth quarter of 2008.

    This follows two consecutive quarters of declines of around 4.5 per cent each.

    The prime districts include District 9, 10 and 11.

    Overall average prime prices fell 21.6 per cent year-on-year (yoy) to $1,160 per square foot (psf), below the level of $1,200 psf registered in Q207.

    Freehold non-landed homes outside the prime districts fell in Q408 but at a lower rate of 9.3 per cent qoq or 10.5 per cent yoy.

    Landed housing prices also fell 5.7 per cent qoq, or 2.9 per cent yoy, islandwide in Q408.

    The fall in prices follows dismal developer sales in October and November with only 112 and 192 units sold in the primary market respectively, compared to the monthly average of 444 units sold in the first nine months of the year.

    DTZ said that based on caveats lodged, preliminary data from URA's REALIS showed that the number of transactions in the year is only about 35 per cent of last year's 38,100 units.

    On the upside, the percentage of HDB upgraders continued to grow. In 2008, a higher proportion of purchasers with HDB addresses was registered with 37 per cent of all buyers expected to be HDB upgraders in 2008 compared to 22 per cent in 2007.

    Based on available caveats in URA's REALIS, the number of buyers with HDB addresses in Q408 is 582. While this is a preliminary number, it represents 43 per cent of total caveats lodged so far in the fourth quarter. DTZ noted that this is higher than the 41 per cent in Q308, 36 per cent in Q208, and 28 per cent in Q108.

    'HDB upgraders buy mainly for owner occupation, so falling private home prices is a good opportunity for them to upgrade with greater affordability,' said DTZ senior director (research), Chua Chor Hoon.

    But DTZ said that the downturn in the economy will deter buyers from committing to property purchases and sales are expected to continue to remain low in 2009.

    Lower rental returns will not help either.

    DTZ said that average monthly rents of prime non-landed homes decreased in Q408 by 9.4 per cent qoq or 9.2 per cent yoy to $4.36 psf.

    Outside the prime districts, rents held up better with an increase of 2 per cent yoy, despite a fall of 1.2 per cent qoq.

    The extent of price corrections is still uncertain but Nomura has already adjusted its forecasts. In March, it forecast average prices in the luxury sector to fall by 32.3 per cent from the 2007 peak over 2008-2010 - 16.9 per cent in 2008, 10.3 per cent in 2009 and 9.3 per cent in 2010.

    It now expects luxury prices to fall 43.8 per cent from the peak, and mass residential prices to fall 32.1 per cent as yields move out by an additional 25-50 basis-points.

    OCBC analysts also believe that high-end property prices could decline by 15-20 per cent in 2009 due to weak sentiment, unsold inventories and potential risks of buyers' default and fire-sales.

    OCBC expects mass market property prices to remain resilient, supported by the stability in HDB prices. For the mid-market properties, it expects prices to fall further in 2009, with a projected decline of 5-10 per cent.


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    http://www.businesstimes.com.sg/sub/...67140,00.html?

    Published December 30, 2008

    DTZ expects 2009 to echo property price plunge of 2008

    Prime district property prices fall by 20%; similar decline seen in 2009

    By ARTHUR SIM


    (SINGAPORE) Prices of condominiums and apartments in the prime districts have fallen by more than 20 per cent in 2008 on a year-on-year basis, says DTZ.

    DTZ is also forecasting a further decline of 15-20 per cent for this segment of the market in 2009.

    Based on its preliminary analysis of official data, DTZ said that prices of non-landed freehold private homes in the prime districts fell by 14 per cent quarter-on-quarter (qoq) in the fourth quarter of 2008.

    This follows two consecutive quarters of declines of around 4.5 per cent each.

    The prime districts include District 9, 10 and 11.

    Overall average prime prices fell 21.6 per cent year-on-year (yoy) to $1,160 per square foot (psf), below the level of $1,200 psf registered in Q207.

    Freehold non-landed homes outside the prime districts fell in Q408 but at a lower rate of 9.3 per cent qoq or 10.5 per cent yoy.

    Landed housing prices also fell 5.7 per cent qoq, or 2.9 per cent yoy, islandwide in Q408.

    The fall in prices follows dismal developer sales in October and November with only 112 and 192 units sold in the primary market respectively, compared to the monthly average of 444 units sold in the first nine months of the year.

    DTZ said that based on caveats lodged, preliminary data from URA's REALIS showed that the number of transactions in the year is only about 35 per cent of last year's 38,100 units.

    On the upside, the percentage of HDB upgraders continued to grow. In 2008, a higher proportion of purchasers with HDB addresses was registered with 37 per cent of all buyers expected to be HDB upgraders in 2008 compared to 22 per cent in 2007.

    Based on available caveats in URA's REALIS, the number of buyers with HDB addresses in Q408 is 582. While this is a preliminary number, it represents 43 per cent of total caveats lodged so far in the fourth quarter. DTZ noted that this is higher than the 41 per cent in Q308, 36 per cent in Q208, and 28 per cent in Q108.

    'HDB upgraders buy mainly for owner occupation, so falling private home prices is a good opportunity for them to upgrade with greater affordability,' said DTZ senior director (research), Chua Chor Hoon.

    But DTZ said that the downturn in the economy will deter buyers from committing to property purchases and sales are expected to continue to remain low in 2009.

    Lower rental returns will not help either.

    DTZ said that average monthly rents of prime non-landed homes decreased in Q408 by 9.4 per cent qoq or 9.2 per cent yoy to $4.36 psf.

    Outside the prime districts, rents held up better with an increase of 2 per cent yoy, despite a fall of 1.2 per cent qoq.

    The extent of price corrections is still uncertain but Nomura has already adjusted its forecasts. In March, it forecast average prices in the luxury sector to fall by 32.3 per cent from the 2007 peak over 2008-2010 - 16.9 per cent in 2008, 10.3 per cent in 2009 and 9.3 per cent in 2010.

    It now expects luxury prices to fall 43.8 per cent from the peak, and mass residential prices to fall 32.1 per cent as yields move out by an additional 25-50 basis-points.

    OCBC analysts also believe that high-end property prices could decline by 15-20 per cent in 2009 due to weak sentiment, unsold inventories and potential risks of buyers' default and fire-sales.

    OCBC expects mass market property prices to remain resilient, supported by the stability in HDB prices. For the mid-market properties, it expects prices to fall further in 2009, with a projected decline of 5-10 per cent.

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    http://www.straitstimes.com/Money/St...ry_319915.html

    December 30, 2008 Tuesday

    Home sales 'to stay weak next year'

    Job insecurity will deter buyers, says DTZ, as economic gloom prevails

    By Michelle Tay


    AMID difficult economic conditions, home sales are expected to remain weak next year, said real estate firm DTZ in a research report yesterday.

    Job insecurity and further weakness in the market will deter buyers from committing to property purchases, it added.

    This will weigh on consumer spending and create a 'contagion effect on the property market'.

    Already, residential sales in the past two months have been 'dismal', said DTZ, adding that only 112 units were sold in October. This was the lowest figure since the Urban Redevelopment Authority (URA) started releasing monthly sales data in June last year.

    Last month was slightly better with 192 units sold, but it was still a dramatic drop from the monthly average of 444 units sold in the first nine months of the year.

    URA data showed that while 38,100 units were sold last year, only a third or so of this figure changed hands this year.

    DTZ called these results a 'complete reversal of the trend in the private residential market', and said the fall in home prices gathered pace in the fourth quarter 'on the back of worsening sentiment'.

    Non-landed properties were hit hardest, as prices of non-landed freehold private homes in the prime districts fell by 14 per cent in the fourth quarter from the quarter before. This was after the sector had already fallen by 4.5 per cent in each of the previous two quarters.

    Overall, average prices fell 21.6 per cent from the year before, to $1,160 per sqft - a level not seen since the second quarter of last year.

    Even landed housing prices, which had held firm up to the third quarter, 'succumbed to the weak conditions' and fell in the fourth quarter, said DTZ.

    However, these did not fall as drastically as other sectors, with freehold prices slipping between 3.8 and 5.7per cent from the third quarter.

    Rents have also been dropping.

    DTZ said rents of non-landed private residential properties, which first corrected in the third quarter, 'continued to head southwards as more expatriates are being repatriated'.

    It added that tenants, possessing lower housing budgets, are increasingly moving from prime locations to the suburbs, or downgrading to smaller units.

    Average monthly rents of prime non-landed homes fell 9.4per cent from the previous quarter to $4.36 per sqft.

    There is, however, a silver lining amid the gloom, observed DTZ.

    Ms Margaret Thean, the firm's executive director, said: 'Housing loan rates are low despite more cautious lending from banks, and there are investors waiting to enter the market when prices have fallen to attractive levels.'

    [email protected]

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