Median COV in Q4 doubles to $24,000
January 25, 2010
SINGAPORE - Many of those who sold their HDB flats in the fourth quarter of last year had plenty to cheer about: Not only were they able to sell their flats at even higher prices; the owners also received more cash upfront from their buyers.
Prices of resale HDB flats rose 3.9 per cent between October and December, bringing the full year increase to 8.2 per cent.
The latest statistics from the Housing Board show that 93 per cent of resale transactions in the fourth quarter were above valuation.
And the median cash-over-valuation (COV) paid by home buyers jumped by 100 per cent - from $12,000 in Q3 to $24,000 in Q4.
Real Estate lecturer at Ngee Ann Polytechnic, Mr Nicholas Mak, said the increase may be due to more sales involving larger flats.
“There seems to be more families that are going in to buy larger flats — your four-room and five-room flats. As a result, these larger flats also come with higher cash-over-valuation amount which, in a way, pulls up that median cash-over-valuation.”
But this increase is unlikely to continue indefinitely.
The HDB noted that the median COV amount had stabilised in recent months.
The cash premium for the first half of this month (subs: Jan) has come down slightly to $22,000.
Some analysts believe this may indicate that the market is approaching a limit.
Mr Mak said: “Our salary is still not catching up at such a high rate, there will be a certain time when the affordability issue will come into play.
“As the sellers start to demand higher and higher COV … there may come a stage when there will be some buyer resistance.”
Efforts by the Government to raise the supply of new homes will also gradually help to cool the market once the flats are completed, said Mr Colin Tan, head of Research for Chesterton Suntec International.
“The Government’s efforts at pushing out the BTOs (build-to-order) and DBSS (Design, Build and Sell Scheme), and all the executive condos, that may have helped to allay some of the panic buying. And this probably resulted in some people actually shifting the demand from the resale market to the new flats,” Mr Tan added.
To meet demand, the HDB said that it will be offering nearly 7,000 new flats in the first half of this year. The flats will be built in areas such as Sengkang, Sembawang, Punggol, Yishun and Jurong West.
Source: http://www.todayonline.com/Singapore/EDC100123-0000259/Median-COV-in-Q4-doubles-to-$24,000
Property prices in Singapore to continue to move upwards in 2010
January 17, 2010
SINGAPORE: The luxury housing sector is expected to lead the way for the Singapore property market this year, according to real estate broker Savills.
Savills is forecasting that prices in the luxury segment will rise 15 per cent in the year ahead.
However, prices in the mass market and mid-end properties could see values move up by about five per cent.
Last year, despite the deep economic recession, private property transactions nearly surpassed the highs of 2007.
Going into 2010, Savills believes the rising trend will continue, but at a more moderate pace.
Savills said the underlying demand would come from the completion of the two integrated resorts as well as attractive office rentals which are expected to bring in more overseas investments.
Michael Ng, managing director, Savills Singapore, said: “We do see strong demand because of the population growth. Again a lot more foreign workers are expected to come in over the next 12 months, so I don’t think there will be a correction downwards in that sense. But certainly not the same kind of growth as seen last year, more moderated, but healthier.”
“I think the prices in terms of luxury is still some 20 to 25 per cent off the peak. In terms of the high net worth individuals, I think a lot of confidence is coming back to the market. There is a lot of liquidity around that’s pushing them back into real estate.” - CNA/vm
Source: channelnewsasia.com - Property prices in S’pore to continue to move upwards in 2010
Private home sales down 29% in October to 811 units
November 16, 2009
SINGAPORE: Sales of uncompleted private homes continued to fall in October, making it the third month of decline in a row. Just 811 units were sold last month, a 29 per cent slide compared to September.
This is also the first time since January that private home sales have dipped below 1,000 units. However, October saw a pickup in the number of high-end units being sold.
While mass market homes have been dominating the sales records since February, more than a third of the units sold in October had median prices above S$1,500 per square feet.
In fact, the top-selling property last month was Cyan at Bukit Timah Road, where 80 units were picked up by buyers at a median price of S$1,821 per square foot.
The most expensive unit sold was at Boulevard Vue at Cuscaden Walk, which went for S$4,150 per square foot.
Source: Channelnewsasia.com
S’pore private home prices dip 6.1% in Q4 as recession continues
January 23, 2009
SINGAPORE: Private home prices fell by 6.1 per cent in the fourth quarter of 2008 as Singapore continues to face recession woes.
The decrease marked the second quarterly decline in residential property prices following a 2.4 per cent fall in the third quarter ended September.
The latest decline, announced in data released by the Urban Redevelopment Authority (URA) on Friday, was worse than expected. Initial estimates earlier this month had forecast a 5.7 per cent drop.
The URA also said that rents in the fourth quarter slipped 5.3 per cent.
Analysts said the trending down in prices came as no surprise as demand for new homes has been softening amid the economic downturn.
For 2008 as a whole, prices of private residential properties fell by 4.7 per cent. This is a turnaround from the 31.2 per cent jump in the previous year.
According to URA, 706 uncompleted units were launched for sale by developers in the fourth quarter, down from 2,244 units in the previous three months.
Sales also slipped, with 407 deals done compared to 1,452 units sold in the previous quarter.
Meanwhile, the public housing sector remains more resilient. Resale prices of HDB flats in the fourth quarter rose by 1.4 per cent, albeit lower than the 4.2 per cent increase recorded in the third quarter.
Resale transactions fell by 24 per cent to about 6,190 units, while the median cash-over-valuation amount dropped by S$4,000 to S$15,000 in the fourth quarter.
Source: Channelnewsasia.com
Private home launches in Dec 2008 at record low
January 16, 2009
SINGAPORE: Islandwide launches of new private homes in December 2008 slumped to a record low since the Urban Redevelopment Authority (URA) started releasing the monthly figures in June 2007.
Developers placed just 157 units for sale last month, down by 59 per cent from November.
Analysts said there has been softening demand for homes. But the low launch volume could also be due to seasonal adjustment and developers holding out for the government’s Budget announcement next Thursday.
Analysts, however, said that not all developers can afford to delay projects.
Donald Han, managing director, Cushman & Wakefield, said: “Smaller developers may decide to sell in order to move assets and move their inventory. So, price cutting may happen at a strategic level for smaller developments… and also the secondary markets where there will be fiercer price cuts.”
Overall, market watchers said they expect property prices to erode by another 5 to 7 per cent in the first quarter this year.
They said prices in the luxury home segment could see a 25 per cent drop, while suburban and mid-tier properties may be 10 to 20 per cent cheaper over the next 12 months.
December sales volume also fell, dropping 32 per cent on-month to 131 units, as home buyers continued to be cautious.
Analysts said that even the fairly resilient mass market segment is starting to feel the strain of the economic downturn. However, data also showed that home hunters are still in the market for good buys.
Dr Chua Yang Liang, head of research & consultancy at Jones Lang LaSalle, said: “The Ritz Carlton Residences, back in December 2007, some 3 transactions were reported at a median price of some S$5,000 per square foot. Now, some 8 transactions were reported by the developer at a median price of some S$3,000 per square foot.”
Projects in prime areas like Newton Edge also saw good take-up, with 40 units sold in December at an average price of S$1,200 per square foot. Analysts said this translates to less than S$1 million for a unit, which is the threshold for most buyers in the current market.
For the whole of 2008, developers sold an estimated total of 4,287 units, 71 per cent shy of the 14,811 new units sold in 2007, bringing developers’ sales volume to a nine-year low.
Industry players expect the property market to remain quiet over the next six months until there is a clearer indication of where the economy is heading.
They hope the Budget statement, to be announced next Thursday, will provide measures to support companies and save jobs, which will have an impact on the property market.
The items on their wish-list include vouchers to boost domestic spending and tax cuts to lower business costs.
Source: Channelnewsasia.com
Private home prices down 5.7% in Q4, HDB resale flat prices still up
January 3, 2009
SINGAPORE: Prices of private, non-landed residential properties in Singapore fell 5.7 per cent in the last quarter of 2008.
The quarter-on-quarter drop in private home prices is more than double the 2.4 per cent decrease in the July-September quarter.
Experts said the steep fall is fuelled by deteriorating sentiment. Market players are also matching prices to falling valuations.
Nicholas Mak, consultancy and research, Knight Frank, said: “The individual sellers are being more realistic in their offer price, though there are some segments of sellers who are still resisting, or still hoping to sell at break-even (prices) or at a profit.”
In contrast to the decline in private home prices, new HDB data on Friday showed HDB resale flats continued to buck the trend, climbing 1.5 per cent in the fourth quarter - following a 4.2 per cent increase in the third quarter.
Experts said this resistance to downward pressure in the HDB resale market is expected to continue despite the economic downturn.
Eugene Lim, associate director, ERA Asia Pacific, said: “Buyers are coming from people who are upgrading (and) people who are downgrading… also, from the increase in the population of PRs (permanent residents). So the (demand for) HDB resale flats is very strong.”
Observers said they expect flat or slow declines for public housing prices compared to steeper devaluations in the private home sector. They added this is the trend during times of uncertainty when home buyers opt for the safer option of HDB flats.
Knight Frank estimated that by the end of 2009, private home prices could come down as much as 20 per cent, while HDB flat prices could decline by 5 to 10 per cent.
In a statement released on Friday, the Urban Redevelopment Authority (URA) also reported price changes in three geographical regions for the fourth quarter.
Non-landed private residential property came down by 6.3 per cent in the Core Central Region, while it dipped 5.5 per cent in the rest of the Central area. In areas outside the Central Region, prices slid by about 4.7 per cent.
Source: Channelnewsasia.com
Singapore’s Q3 private home prices down 2.4% on-quarter
October 25, 2008
SINGAPORE: Private home prices in Singapore came in weaker than expected for the third quarter, dropping by 2.4 per cent - worse than an earlier estimate of 1.8 per cent. The quarter-on-quarter drop was the first decline in more than four years.
Data from the Urban Redevelopment Authority (URA) showed prices fell across the board, with prices for high-end homes in prime areas seeing the biggest drop of 2.7 per cent.
Analysts said there has not been panic selling yet, but they expect prices to drop by about 3 to 5 per cent in the quarters to come.
Donald Han, managing director of Cushman & Wakefield, said: “We don’t know what’s going to happen in the next 2 to 3 months. There will be people who’ve been affected by the stock market (declines), who might be late in their payment, and that might eventually translate to more pressurised selling.”
The mass-market and mid-tier segments, which have shown some resilience in previous quarters, have also not been spared.
Prices for mass-market homes fell by 1.5 per cent, while those for the mid-tier segment declined by 2.4 per cent.
URA said there are over 66,000 units of private homes in the pipeline - of these more than 37,000 units will be completed by 2011.
Some property consultants said developers may choose to launch their projects before the market gets worse.
Tan Huey Ying, Colliers International’s director for research & advisory, said: “Now that the market is firmly on a downward path, I think there are some developers who may take this opportunity to launch their projects instead of waiting for prices to drop even further.
“On the other hand, there might be some developers with strong financial standing who may want to continue to develop their properties, but launch at a later date when the market recovers.”
Sub-sales accounted for about 11.6 per cent of all sales transactions in the third quarter.
Ms Tan expects this segment to hold steady for the next six to nine months. And it is likely to be dominated by purchasers for properties that are nearing completion or speculators who opt to take profit now.
Rentals of private residential properties also fell in the third quarter, dropping by about one per cent.
Meanwhile, Housing and Development Board (HDB) data showed prices of resale flats rose by 4.2 per cent in the third quarter compared to the previous quarter.
Source: http://www.channelnewsasia.com/stories/singaporebusinessnews/view/385086/1/.html
September figures show continued softness in private home sales
October 22, 2008
SINGAPORE: Sales of private homes in Singapore improved 17.5 per cent in September, compared to the previous month.
But analysts said the pickup fell short of expectations, given the low base in August caused by the Hungry Ghost Festival. The seventh month of the Lunar calendar is traditionally regarded as an inauspicious period and buyers usually refrain from making purchases during that time.
Almost 300 per cent more units were launched for sale in September, compared to August. Property developers sold 376 units in September, just 51 units more than the preceding month. Nonetheless, some analysts see something to cheer about in the data.
Ku Swee Yong, director, Marketing & Business Development, Savills (Singapore), said: “I already see that as a positive (sign) because in September, the stock market beat the whole market down, so many investors were spooked.”
The stock of private residential properties has been building up in the past year and was compounded by a large oversupply in September.
As buyers become more cautious in light of the economic downturn, prices are expected to fall.
Nicholas Mak, director, Consultancy & Research, Knight Frank, said: “Whatever gains made in the first half of this year will probably be lost by Christmas. Depending on how the global economic and financial situation plays out, I think there’s still a lot of uncertainty and turmoil out there.
“There is a possibility we could see further weakness in home prices in 2009, especially if the Singapore economy were to slip into a prolonged recession.
“At the moment, we haven’t seen some of the major bad news like massive retrenchments or fall in salary levels. If such a thing were to happen, we could see people giving up homes or downgrading.”
Knight Frank said bad economic outlook could result in a double-digit fall in home prices in 2009. But others are not as pessimistic.
Ku said: “Private residential prices in mass market will still hold up very well, probably for the next 18 months… we believe so because the demand for public housing is still strong.
“In the third quarter, HDB price index for resale HDB (flats) still managed to climb 4.2 per cent. That should support mass market prices for HDB upgraders very well.”
However, all agree that within the private residential sphere, luxury properties will bear the brunt of price pressures.
“For luxury and mid-tier residential market, we think that over the next 18 months, we might see about 5, 10 per cent drop. For the very luxurious properties, about 15 per cent drop in prices,” Ku added.
Luxury properties tend to attract speculators who have retreated from the market in the current unpredictable financial environment.
Source: http://www.channelnewsasia.com/cna/cgi-bin/search/search_7days.pl?status=&search=property&id=383073
Sales of new private residential homes fall by 64% in August 2008
September 20, 2008
SINGAPORE: Sales of new private residential homes slipped 64 per cent to 320 units in August, as compared to over 890 units sold in July. Market watchers say this is the weakest transaction volume since April 2008.
At the peak of the property boom in August 2007, over 1,700 units of private homes were sold, and the 320 units sold in August 2008 was 81 per cent lower year-on-year.
However, the low take-up was not unexpected as the Hungry Ghosts’ Festival fell during that month - a season typically marked by sluggish demand.
Supply was also tight, with only 194 new units launched by developers in August, mainly in the central regions.
Head of research & consultancy at Jones Lang LaSalle, Dr Chua Yang Liang, said: “There is a latent demand out there which we estimate is between 350 to 400 units per month.
“The number of launches are incidentally quite good in the rest of central and the core central regions as these are largely foreign-based markets, so there is a lot more transactions there.”
Industry watchers are predicting more mass market projects to be launched in the fourth quarter, with some good quality units and attractive prices expected.
The recent reduction in development charges by the government could also rally the property sector.
Managing director of Cushman & Wakefield, Donald Han, said: “In the next six months, we probably expect some of the land (the) government tenders to be able to record lower prices.
“That may help developers to start creeping into the market on the basis of slight savings of land prices, (and it) may go a long way in subsidising the increase in terms of your construction cost.”
Price-wise, observers say the numbers have remained fairly stable in August. Moving forward, they project a slight downward correction in overall home prices of between 3 and 8 per cent.
Analysts say the weakening global financial markets and inflation have cast a shadow over consumer confidence. Still, they expect the current market trend to hold, over the next few months.
Although the credit and housing troubles in the US show no sign of bottoming out, observers say Singapore’s property sector will be able to weather the storm in the near term.
Source: Channelnewsasia.com
Who wins with no agent fee rules?
August 18, 2008
Jessica Cheam speculates on real estate… guidelines.
HOW much should you pay your property agent?
This has been the talk of the town this week, and no surprise, given how home ownership issues are tied so closely to the hearts of Singaporeans.
When the Institute of Estate Agents (IEA) first announced the Compeition Commission of Singapore’s (CCS) request to abolish a decade-old fee struture at a press conference: the initial mood all around was: “no biggie”.
IEA’s guidelines were non-binding anyway, said agency bosses. It was never compulsory, so its abolishment should have minimal impact. Many agencies, such as ERA, PropNex, C&H Realty told The Straits Times they will adopt IEA’s fee recommendations as their own agency guidelines anyway so the status quo is maintained.
But as the industry digests the news, it seems that the removal of these guidelines will have far-reaching effects.
Already, the CCS and consumer watchdog Consumer Association of Singapore (Case) has issued statements to alert consumers to their rights.
Consumers should not accept agents “that are harping on the old fee practices” and should be free to bargain, Case said. It encouraged consumers to report any evidence of collusion on the part of the agencies, and advised consumers not to give agents exclusivity to sell their houses.
Already, home buyers and sellers that The Straits Times spoke to said that with the wide publicity of the guidelines removal, they feel their bargaining power has been enhanced.
House-hunter Vivan Wong, for example, said agents used to wave the guidelines in front of her, to justify collecting a 1 per cent fee for HDB transactions. “Now I can wave the CCS statements back at them,” she said. She doesn’t see why she has to pay 1 per cent to the sellers’ agents. “Unless I specifically engaged a agent to hunt for a house for me, then I’ll be happy to pay.”
Generally, the mood on the ground is people are expecting fees in to dip in favour of the consumer. It’ll be interesting to see if agencies’ records on commission amounts will go down. PropNex agents collected $126 million in commission last year; ERA Asia-Pacific agents raked in $166 million. Both agencies are major players in the local property market. This was in the boom-time, of course, so any change in this year’s earnings will be a combination of factors due to market conditions and the removal of fee guidelines.
Agents, however, are quite adamant that they will stick to their rates. PropNex agent Damien Goh, who sells an average of five properties a month, said 2 per cent was “already a very reasonable rate”. Marketing just one property costs about $500 a month in advertisement costs, and another $100 in transportation costs, not to mention phone bills and overhead costs such as renting an office cubicle etc.
“I will show by actions and service, that I deserve that commission. If buyers or sellers still demand lower rates, I’ll have to decide on a case by case basis. But if the fees are too low, I’ll just look for another buyer and seller. I believe people will pay for good service,” he said.
Other agents are less optimistic. Some say Singaporeans, known for their haggling, will demand the same level of service at low prices. “This may lead to more errant agents, who have less loyalty to their customers,” said one agent who declined to be named. Complaints about agents to Case might even go up, he suggested.
PropNex chief executive Mohamed Ismail pointed out that the fees removal comes at a time where the industry is moving towards greater self-regulation, and agents are encouraged to move towards professionalism. “The impact of the fees removal can have two effects: agents will start to up their quality to be able to charge higher fees. Or two, a consumer-led dip in fees might lead to more irresponsible actions, if agents don’t feel they’re being paid enough.”
On the other hand, home-buyer Tania Goh said unscrupulous agents who have a gem of a property could also jack up commissions if they know buyers or sellers are desperate.
Ultimately, the onus is on the consumer to be informed and educated about what the market rates and decide for themselves what are reasonable rates they should pay their agents.
The CCS move encourages competition in the market, and if agencies or agents can offer the same services for less money, there’s no reason why market-based rates cannot prevail.
Time will soon tell who will be the real winners: consumers, or agents - or perhaps, both.
Source: Straits Times