Prices rise, with a hint of unease

[mr funny]

http://www.businesstimes.com.sg/sub/...38340,00.html?

Published April 2, 2010

Prices rise, with a hint of unease

Price resistance may be setting in as private homes, resale flats register small increases

By KALPANA RASHIWALA


PRICES of private homes as well as public housing resale flats registered smaller quarter-on-quarter increases in the first quarter of this year compared with Q4 last year, government flash estimates show. Market watchers say this could reflect price resistance starting to set in following non-stop increases for several quarters. Behind the rosy picture of brisk developer home sales and price gains, a quiet unease seems to be setting in the market, with uncertainty looming for the second half of this year.

There are concerns about how sustainable the recovery in the housing market is given worries about the US and European economies, among other factors. On the other hand, if the home buyer fever in Singapore does not abate, there are fears of further government measures to cool the property market. Urban Redevelopment Authority's official price index for private homes appreciated 5.1 per cent in Q1 2010 over the preceding quarter, slower than the 7.4 per cent quarter-on-quarter rise in Q4 last year.

The latest flash estimate also reflects an increase of 24.5 per cent year on year.

URA's price indices for non-landed private homes in the three geographical sectors too rose at a slower clip. Quarter-on-quarter increases of 4.5 per cent in Core Central Region, 7.2 per cent in Rest of Central Region and 3.9 per cent in Outside Central Region were posted in Q1 - against respective Q-on-Q hikes of 7.3 per cent, 9.5 per cent and 6.3 per cent in the fourth quarter of last year.

Housing & Development Board's resale flat price index rose 2.7 per cent Q-on-Q in Q1, a smaller gain compared with the 3.9 per cent Q-on-Q rise in Q4 2009. The latest Q1 flash estimate reflects a 12 per cent year-on- year increase and takes the index to a new high.

HDB stressed that seen over a 10-year period (Q1 2000 to Q1 2010, the index has risen at a more modest pace of 3.5 per cent per annum on average.

It also revealed that the number of resale applications for Q1 2010 is about 8,500, about 5 per cent lower than the Q4 figure. The median cash over valuation (COV) amount for Q1 2010 (up to March 21) 'has stabilised' at $25,000, an increase of $1,000 over Q4 2009. In contrast, the figure of $24,000 for Q4 last year was double the $12,000 for Q3 2009, it said.

HDB also revealed it is launching a total 12,300 Build-To-Order (BTO) flats in the first nine months of this year, and promised to launch more BTO projects in the fourth quarter if demand remains strong. Last year, the board launched 9,000 BTO flats.

HDB offered 3,700 BTO flats in Q1 this year and will release a further 1,200 flats in Punggol in April. From May to September, it will launch another 7,400 BTO flats in a 'good geographical spread, covering areas such as Sengkang, Jurong West, Yishun, Bukit Panjang and Woodlands'.

HDB reiterated that the BTO supply will be supplemented by flats under the Design, Build and Sell Scheme as well as executive condos (a hybrid of public and private housing) for higher-income buyers.

ERA associate director Eugene Lim said: 'The number of BTO flats to be launched by HDB this year in a variety of locations is expected to take some steam off the resale market. It simply makes more sense for first-timers to buy direct from HDB as most, if not all, resale transactions involve COV.' He predicts that resale price increases for the subsequent quarters of 2010 will be marginally less, resulting in the HDB resale price index rising 5 to 8 per cent for the year.

PropNex is also forecasting 5-8 per cent growth in HDB's resale price index this year.

In the private residential segment, developers have achieved brisk sales in Q1 - of about 4,000 units or double the preceding quarter's numbers, according to CB Richard Ellis' estimates.

Industry players expect developers to continue launching projects to try and ride the current wave of home buying.

Knight Frank chairman Tan Tiong Cheng explains: 'Is the global economy out of the woods? Nobody can say. If you're a developer, and you're assured of profits if you launch your projects now, it makes sense to sell now.'

Agreeing, Ho Bee Investment's executive director Ong Chong Hua says: 'During 2008, it was very tough, prices kept coming down and there was no way for sites bought at higher prices, developers would be able to sell and make a return. Even if they had chopped prices at that point, the sentiment for buying was just not there.'

The price recovery over the past year and resurgence in home buying sentiment have presented an opportunity for developers to roll out projects they had held back, he added.

Knight Frank's Mr Tan observes that in some instances, developers are choosing to launch projects sooner rather than later to beat their competition. 'If you know another site or project is coming up in your location, and the captive audience in that location is only X number of buyers, it's better to try and release your project ahead of the pack.'

However, prices are expected to remain firm. As an industry observer put it: 'It's better to maintain prices even if that means taking a longer time to sell than to sell quickly and then rush to replace land at much higher prices, at tomorrow's prices, on the basis that prices will continue to rise at the same pace as we've seen in the past 12 months. The fundamentals are not sustainable.'

CBRE said yesterday that as the government releases more residential sites and supply begins to catch up with demand, price increases for private homes may assume a more moderate level in the second-half this year.

[mr funny]

[mr funny]

http://www.straitstimes.com/PrimeNew...ry_509505.html

Apr 2, 2010

Home prices show signs of stabilising

By Jessica Cheam


SINGAPORE'S residential property prices kept climbing in the first quarter, but recent frenetic increases in both private and public home prices are showing signs of moderating.

Preliminary estimates released by the Housing Board (HDB) yesterday showed resale HDB flat prices rose 2.7 per cent to a fresh record in the first quarter compared to the previous three months.

But the rate of increase was slower than the 3.9 per cent recorded in the fourth quarter of last year.

Another sign that things might be levelling off was the cash paid upfront by buyers above the valuation of a flat, known as cash-over-valuation (COV).

This figure stabilised at a median of $25,000 for the first quarter - up just $1,000 from the median of $24,000 in the previous quarter.

That rise was far more modest than the $12,000 leap in median COV amount from the third to fourth quarter last year.

Figures from the Urban Redevelopment Authority (URA) also showed private home prices climbing - but at a slower rate for the second straight quarter.

These prices were up 5.1 per cent in the first quarter, down from a 7.4 per cent increase in the previous quarter.

Industry analysts said yesterday the latest statistics suggest that current prices are encountering buyer resistance.

Further evidence of this trend: The number of resale flats that were sold slid 5 per cent to about 8,500 in the first quarter from the previous quarter.

ERA Asia-Pacific associate director Eugene Lim said his agency is experiencing a similar drop in sales volume.

Recent new launches by the HDB have taken some steam out of the resale market, he said. 'It simply makes more sense for first-timers to buy direct from the HDB as most, if not all, resale transactions involve COV.'

Although resale flat prices are expected to trend upwards for the rest of the year, the increases are expected to be marginally less, he added.

He estimates that this year could see a full year rise in prices of 5 per cent to 8 per cent.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said the dip in sales volume could have been due to the Chinese New Year holiday and the effects of recent government cooling measures.

These included:

# Buyers of non-subsidised HDB resale flats must now occupy their property for at least three years before they can sell it. This is up from 2.5 years or one year previously, depending on the financing.

# The HDB has also imposed limits on the number of HDB flats in each block and neighbourhood that can be sold to non-Malaysian permanent residents to prevent foreigner enclaves from developing.

Chesterton Suntec International research and consultancy director Colin Tan said that the upcoming supply of new flats may continue to ease buying pressure in the resale market.

The HDB has so far offered 3,700 new flats for sale under its build-to-order system this quarter in a move to address supply concerns.

Another 1,200 flats in Punggol will be launched for sale this month, and the HDB said it will launch yet another 7,400 flats from next month to September.

The upcoming projects will be in areas such as Sengkang, Jurong West, Yishun, Bukit Panjang and Woodlands.

The HDB said if demand remains strong, it will launch more projects in the fourth quarter of the year.

Mr Mak noted that in the longer term, if HDB resale flat prices continue to moderate downwards, 'it could deflate the HDB upgraders' demand for private properties beyond the second half of 2010'.

CBRE Research executive director Li Hiaw Ho said that positive sentiment, a recovering economy and low interest rates 'will combine to sustain a favourable home-buying market'.

'But as supply begins to catch up with demand, (private home) price increases may assume a more moderate level in the second half of the year,' he said.

HDB also said that although resale prices have risen to a greater extent in recent years, the average annual increase for the whole decade is a moderate 3.5 per cent per year, which is in tandem with Singapore's economic growth.

Estimates by HDB and URA are compiled based on transactions lodged in the first 10 weeks of the quarter.

The statistics will be updated in four weeks' time.

[mr funny]

http://www.straitstimes.com/Money/St...ry_509645.html

Apr 2, 2010

Private home prices up 5.1% in first quarter

Index 1.9% below 2008 peak, but level will be breached soon: Experts

By Joyce Teo


FOR private home hunters looking for some respite in the relentless rise in prices, there was mixed news yesterday.

On the plus side, prices are estimated to have risen 5.1 per cent in the first quarter, moderating a little from the previous quarter's 7.4 per cent sharp rebound.

But the flash estimates from the Urban Redevelopment Authority (URA) also confirmed that - other than in the central prime areas - homes are now pricier than during the 2008 peak.

A URA spokesman said private home prices on the city fringes - officially 'the rest of the central region' - are 1.1 per cent above the last peak in 2008's second quarter.

Those in suburban areas or outside the central region areas are a heftier 7.6 per cent higher than levels in that previous peak, he said.

Overall, the URA index is just 1.9 per cent below the 2008 peak - after rising nearly 31 per cent since the third quarter of last year. It is likely to exceed that level as early as the next quarter, property experts predict.

With prices seen to be rising about 4 to 5 per cent each quarter, the index will also easily surpass the all-time peak in 1996 by the end of this year, said PropNex CEO Mohamed Ismail.

Ngee Ann Polytechnic lecturer Nicholas Mak projects a rise of 12 to 22 per cent for private homes this year.

The URA flash data is based on caveats lodged in the quarter's first 10 weeks.

On Tuesday, CBRE issued a report estimating first-quarter sales of new private homes at close to 4,000 units, more than double the number for the fourth quarter.

Resale home prices also rose in the first quarter, DTZ Research data showed.

ECG Property chief executive Eric Cheng said some home hunters are making panic buys as they are afraid of missing out.

In the first quarter, the URA said prices of non-landed private homes rose by 4.5 per cent in the city centre - the 'core central region', down from 7.3 per cent in the previous quarter.

On the city fringes, the rise was 7.2 per cent, down from 9.5 per cent in the previous quarter. Out in the suburbs, prices edged up 3.9 per cent, compared with 6.3 per cent in the previous quarter.

'The property market is still strong, but the 5.1 per cent rise is largely within expectations,' said Cushman & Wakefield managing director Donald Han.

Government cooling measures unveiled in February did not appear to have curtailed demand, though they would have led some developers and sellers to control their prices, he said.

CBRE Research executive director Li Hiaw Ho expects the momentum of new home take-ups and price growth to continue in the second quarter, especially with expected launches of projects in Dakota Crescent, Serangoon Avenue 3 and Chestnut Avenue. The home-buying market, he said, is favourable, supported by positive sentiment, a recovering economy and a low interest rate environment.

'The index lags the market, so it is actually reflecting what was happening in the fourth quarter. Going by the manner the market has moved so far this year, the second-quarter data will likely be higher,' said Credo Real Estate managing director Karamjit Singh.

But a strong HDB market is underpinning the private market. 'The HDB resale market has been on a one-way trajectory from 2007, totally oblivious to the crisis in 2008, rising 47.5 per cent since then,' said Mr Singh. 'This closes the gap between HDB and mass market homes, making the latter more affordable.'

Said Jones Lang LaSalle's associate director, research and consultancy, Mr Desmond Sim: 'The price increase is still cause for concern. But we are seeing a retraction of the rate of price growth, which shows that recent government measures have had some impact.'

The URA index looks at prices on a per sq ft basis but that does not mean mass market homes are unaffordable, as smaller homes can mean lower total prices. 'If price growth stays below 5 per cent, there may not be a need for more government measures,' said Mr Sim.

Also, more new sites are on the way, pointed out Mr Li. 'As supply begins to catch up with demand, price increases may assume a more moderate level in the second half of the year,' he said.

[email protected]

[mcmlxxvi]

So guys, from this chart above, isn't it obvious which market the govt should be stepping in hard to control??? (notwithstanding absolute gains - public housing is 'non-profit' and subsidized vs private = money making)

And trust whichever (stupid) idiot who wrote the article to quote a figure NOT VISIBLE on the chart (i.e. Q2 96 peak).

[Squall8888]

That is why, the figures are mis-understood. It takes someone with moral to report true facts. I mean, the figures are not wrong but like what you said, having 1995/1996 figures will probably give a better analysis. I mean it is better to let HDB prices go up rather than going down. That part I have no argument. My old parents benefit from rising HDB prices so I guess most of our parents do.

So guys, from this chart above, isn't it obvious which market the govt should be stepping in hard to control??? (notwithstanding absolute gains - public housing is 'non-profit' and subsidized vs private = money making)

And trust whichever (stupid) idiot who wrote the article to quote a figure NOT VISIBLE on the chart (i.e. Q2 96 peak).

[mcmlxxvi]

That is why, the figures are mis-understood. It takes someone with moral to report true facts. I mean, the figures are not wrong but like what you said, having 1995/1996 figures will probably give a better analysis. I mean it is better to let HDB prices go up rather than going down. That part I have no argument. My old parents benefit from rising HDB prices so I guess most of our parents do.

Yeah, but parents being parents, the traditionalist in them simply refuses to let go. They talk about sentimental value, about being too old to move (mine just turned 70), granma still around how to 'downgrade' to smaller etc... so how will they ever cash in and enjoy?

[jlrx]

So guys, from this chart above, isn't it obvious which market the govt should be stepping in hard to control??? (notwithstanding absolute gains - public housing is 'non-profit' and subsidized vs private = money making)

The statement in green does not seem to agree with the Government's stand.

http://www.asiaone.com/Business/My+M...14-185849.html

MM Lee said: 'From the 1980s, we moved towards a market-based system. By liberalising the resale market and allowing HDB prices to move in tandem with the economy, we unlocked the value of HDB flats to allow citizens to share in the fruits of the nation's growth. Home ownership of a HDB flat is a store of value that can be monetised when need be.'