Private home prices up 0.2% in Q2, slower than earlier estimate
July 28, 2008
SINGAPORE: Prices of private homes in Singapore grew at a slower pace in the second quarter than initially projected – climbing at just 0.2 per cent against an earlier estimate of 0.4 per cent.
This is a far cry from the 3.7 per cent growth in the previous three months.
Analysts said this is the first time that final numbers have come in lower than flash estimates, suggesting that home prices are finally softening.
Mass market homes are carrying the overall price increase in the private residential property sphere as luxury home prices nudge downwards.
Prices outside the central region were up by 0.9 per cent, compared to a 0.1 per cent dip in the core central region.
Leonard Tay, director of Research, CB Richard Ellis, said: “Overall, we see a return of volume in (the) residential market in second quarter as quite encouraging.
“In the next two quarters, at least for the whole of 2008, we think volume will be sustainable and we expect transaction volumes for new home sales to finish the year at 4,000 to 5,000 units.”
In the second quarter, 70 per cent of new home sales were from the non-central areas. Colliers said Singapore’s positive mid-term prospects on the back of the completion of its two integrated resorts and Marina Bay Financial Centre will help to hold prices steady, and ensure that they do not decline by more than 3 per cent in the third quarter.
Overall, analysts said the residential property sector fared reasonably well in the first half of 2008, given the difficult external environment.
Ku Swee Yong, director of Marketing and Business Development, Savills (Singapore), said: “Transaction levels, price levels have held up pretty well. Most people have forgotten that the transaction in the first half of 2005 is similar to that of today. So it’s not as bad as what the market thinks.”
In the public housing market, resale prices continued to increase on the back of strong demand. They rose by 4.5 per cent, up from 3.7 per cent in the first quarter.
Meanwhile, office rentals went up by 6.3 per cent in the second quarter – the lowest increase in the past two years.
Analysts said they expect rents to remain flat for most of 2009 before trending downwards in 2010 to what they call more sustainable levels of S$12 to S$15 psf per month in the core business district.
In the next six to 12 months, landlords are expected to shift from profit focus to tenant retention as tenants start resisting further rental price increases.
In the industrial property sector, strong demand has pushed the average occupancy rate for factories to its highest since 2000, at 93.1 per cent. The take-up for warehouses also increased by 0.4 percentage point in the second quarter.
Despite the healthy take-up for both types of industrial space, the rental index for warehouses has remained unchanged for the quarter, while the index for factories rose by only 2.3 per cent quarter-on-quarter in the second quarter, compared to a quarter-on-quarter increase of 5.7 per cent in the first quarter.
As such, demand for industrial space is expected to remain healthy in the third quarter, but rents may only see a slight increase.
Source: Channelnewsasia.com
Public housing hots up while private cools
July 28, 2008
SINGAPORE : Prices for public housing on the resale market have risen, while those for private property have moderated for the second quarter of 2008.
According to latest official figures, there has also been little upward movement in the private property rental market.
Data for the HDB resale and rental markets based on transactions in Q2 saw HDB’s Resale Price Index (RPI) up 4.5 per cent, compared to the 3.7 per cent increase for the previous quarter.
Reflective of the interest in public housing was the rise in resale transactions, from about 6,360 cases in the first quarter to about 7,760 cases in the second quarter, an increase by about 22 per cent.
Meanwhile, subletting transactions in HDB flats increased by about 15 per cent to about 4,120 cases in the second quarter from about 3,580 cases in the first quarter.
In contrast, the private property market was a little more subdued, with home prices increasing 0.2 per cent, the third straight quarter of slower growth, signalling a definite slowing of the four-year housing boom.
Prices for non-landed properties saw a modest 0.1 per cent rise compared with 3.7 per cent in the previous quarter as prices for condominium and apartments in districts 9, 10, 11, downtown district and Sentosa fell 0.1 per cent compared to similar properties in areas outside of the region which rose between 0.7 and 0.9 per cent.
As for landed property, prices rose 0.6 per cent compared with 3.9 per cent in the previous quarter.
Indicative of the cooling in the property market are the 43,473 new units still unsold from a total supply of 67,569 uncompleted units from private housing projects.
This number includes more than 12,000 which developers have held back from launch and another 28,282 which are pending approval.
Source: Channelnewsasia.com