NEWS & VIEWS - Wednesday, 2 July, 2014 RESIDENTIAL MARKET Home prices seen dipping further for rest of 2014 Amid the current supply-demand imbalance, the gradual decline in private home prices is set to continue for the rest of the year after three quarters of decreases, say property consultants. Including the 1.1 per cent quarter-on-quarter drop in the second quarter based on Urban Redevelopment Authoritys (URA) latest flash estimate, the official private home price index has shed 3.2 per cent in three straight quarters of declines after peaking in Q3 last year. In the first half, the index has eased 2.3 per cent (comparing the latest Q2 number with that for Q4 2013) and consultants expect a 4-8 per cent full-year decline. Property consultants are forecasting a moderate price erosion - barring a recession or external shocks. ERAs key executive officer Eugene Lim reckons the softening rental market - which has been under pressure on the back of rising private housing completions and a slowdown in new demand due to reduced expat inflow - is also contributing to sliding home prices. The 1.1 per cent drop in Q2 is smaller than Q1s 1.3 per cent fall. That was probably due to prices of non-landed homes in the city fringe, or Rest of Central Region (RCR), easing at a slower clip of 0.6 per cent in the April-June quarter compared with the 3.3 per cent slide in the first three months. Market watchers believe the RCR subindex in Q2 was probably supported by the launch of Kallang Riverside and Commonwealth Towers, with respective median prices of $2,111 per square foot and $1,626 psf achieved in their first month of launch. In all other categories - non-landed private homes in Core Central Region (CCR) and Outside Central Region (OCR), as well as landed properties - the latest flash estimate Q2 price declines were bigger than in Q1 . The 1.1 per cent contraction in suburban locations or OCR in Q2 (compared with a 0.1 per cent dip in Q1) is thought to be due to lower-priced units transacted at a number of projects - most notably The Panorama in Ang Mo Kio but also to a lesser extent, Vue 8 Residence in Pasir Ris, Riverbank @ Fernvale, The Tembusu in Kovan and The Skywoods in the Dairy Farm area. The pace of price decline also gathered momentum for non-landed homes in CCR - which includes the traditional prime districts 9, 10 and 11, Downtown Core Planning Area and Sentosa. The subindex shrank 1.5 per cent in Q2 after falling 1.1 per cent in Q1. This segment has posted the sharpest drop of 5 per cent after five consecutive quarters of decline since its recent peak (in Q1 2013), amid a slowdown in purchases by foreign buyers and investors due to the additional buyers stamp duty (ABSD). Landed homes - long regarded as a bastion of strength in the Singapore property landscape due to their more limited supply - have also been seeing their prices crumble. URAs subindex for this category eased 1.5 per cent in Q2, double the 0.7 per cent fall in Q1. Source: Business Times – 2 July 2014 HDB resale flat prices continue to cool in Q2 Resale prices in the public housing market fell for a fourth straight quarter, down 1.3 per cent in Q2, according to HDBs flash estimates released yesterday. This follows a 1.6 per cent decline in the first quarter. Property consultants invariably pinned the reason on recent cooling measures, particularly the reduction of the mortgage servicing ratio (MSR) cap to 30 per cent of borrowers monthly income. Other government interventions that have curtailed resale activity include the lowering of the maximum mortgage loan term to 25 years, as well as a three-year wait imposed on new permanent residents before they can buy resale flats. Coupled with a ruling allowing first-timer singles to buy new two-room build-to-order (BTO) flats in non-mature estates, the increased supply and reduced demand have continued to exert downward pressure on resale prices. Analysts expect prices for resale flats to continue falling in the second half - though not steeply, given sound economic fundamentals. The consensus is a price drop of 4 to 8 per cent for the whole of this year. The fates are not equal across districts, he believes. Better located flats in mature estates such as Bishan, Toa Payoh and Queenstown are expected to hold firm in their pricing as buyers of such flats tend to be more affluent and better able to withstand the impact of the MSR cap. Far-flung places such as Jurong West, Sembawang, Marsiling and Bukit Gombak are more likely to see greater price falls. Households moving to a BTO flat are required to sell off their existing flat six months prior to the move. The imminent flood in supply of HDB resale homes from owners collecting the keys to their new BTO flats and private properties will further pressure resale prices, even though transaction volume may also improve slightly as a result. HDB will release more detailed public housing data for the full second quarter on July 25. Source: Business Times – 2 July 2014 Potong Pasir HUDC estate goes private but price spikes unlikely The Potong Pasir Avenue 1 HUDC estate was privatised yesterday, but analysts are not expecting a significant rise in prices for units there because of the cooling property market. The Housing and Urban Development Company (HUDC) estate next to the Kallang River comprises 175 flats in Blocks 110 to 112. It was converted to strata-titled property under the Land Titles (Strata) Act, the Housing Board said in a statement. This is the 17th of Singapores 18 former public housing estates to go private, and the fourth since May this year. The last remaining HUDC estate, Braddell View, has already garnered the required 75 per cent support to proceed with privatisation. The 18 HUDC estates were introduced from 1974 to meet the demand for homes from middle-income households priced out of private property. The scheme was phased out in 1987 when more housing choices were introduced. Privatisation of HUDC estates was announced in 1995 to meet rising aspirations of Singaporeans to own private housing, and to enable owners to have more control over their estates. By going private, the Potong Pasir Avenue 1 estates common properties will no longer be maintained and managed by the Potong Pasir Town Council. Instead, the Management Corporation Strata Title (MCST) Plan No. 4010 has been constituted to do this. Flat owners will also own their respective units, and have a share in common properties such as carparks and open landscaped areas. Pro tem committee member and Block 110 resident Mathew Mathai told The Straits Times that an annual general meeting will be held by the end of September to elect the MCST members. The 56-year-old marine manager added that a carpark barrier and fence are on the cards, but it will be left to the MCST to decide that in consultation with the residents. I would like to see a fence, said financial service consultant Linda Ng, 44, who lives in Block 110. Right now a lot of strangers come in to use our carpark and resting tables and leave their litter behind. Source: The Straits Times – 2 July 2014 Mixed views on easing property curbs Property prices may be on the slide but opinions are mixed over whether the cooling measures should be rolled back. Investors are firmly behind a revision and developers tend to want some tweaks to the main policies, although market watchers and consultants believe prices have not adjusted enough to warrant changes. That view dovetails with the Ministry of National Development, which said on Monday that as prices have remained largely unchanged, the time is not ripe to lift policies targeting runaway prices. The range of measures include the Additional Buyers Stamp Duty (ABSD), which is aimed at curbing speculative buying, and the Total Debt Servicing Ratio (TDSR), which prevents borrowers from piling up too much debt. These policies and others have dented demand over the past year, with flash estimates yesterday showing a further 1.1 per cent slide in prices for the second quarter. Some developers have backed prominent industry veteran Kwek Leng Beng, executive chairman of City Developments (CDL), who wants the measures reviewed as he believes they have diverted foreign investment from Singapore to other countries. They acknowledge that stable property prices are a worthwhile objective but believe policies should be balanced with maintaining Singapores global standing. The measures have already weeded out speculation, and I believe they were intended to just cool the market, not prevent genuine buyers from investing, said a spokesman for developer Sysma Holdings. He said some foreigners can afford to pay with cash but are deterred by the 15 per cent ABSD on each purchase. Local buyers aspiring to invest in property also called for the measures to be reviewed. Businessman Don Poh, 26, owns a condominium unit but hesitates to get a $550,000 one-bedder because of the ABSD of $38,500 on it. Mr Dilshad Ahmad, 35, a manager in the shipping industry, has set his sights on foreign property instead. Source: The Straits Times – 2 July 2014 INDUSTRIAL MARKET Lower-than-expected bids at Woodlands industrial plot The industrial plot at Woodlands Avenue 12 garnered conservative bids which fell below consultants already-modest expectations at its tender close yesterday. Wee Hur Development, the property development arm of Wee Hur Holdings, trumped four other bids with its offer of $76.9 million, which works out to $72.85 per sq ft per plot ratio (psf ppr). Consultants had estimated a winning bid of $80 to slightly below $100 psf ppr. Most of the consultants had taken reference from the 1.4-hectare Gambas Crescent (Parcel 3) site which Far East Organization clinched for $102.20 psf ppr in December last year. Expectations had not been high to begin with due to the plots sheer size. The site can yield about 1 million sq ft of industrial space and can be potentially developed into 550 to 650 strata units. The scale of this site could have deterred developers from submitting aggressive bids as it would require a fairly long period to sell all the strata units in this project. Another factor is there is already an ample supply of similarly Business-1 zoned light industrial space in the North region. The third reason for the caution among developers was the recent slow sales at some industrial projects, for instance at Nordcom I which Far East is developing at Gambas Crescent. Elsewhere, the tenders for two smaller Tuas plots also closed yesterday. The first, located at Tuas Avenue 11, received the highest bid of $14.4 million from Soon Hock Realty out of eight bids altogether. This translates to a price of $107.01 psf ppr. The site is 8,922 sq m with a leasehold of 30 years. The second, located at Tuas South Street 11 (Plot 39), yielded the highest bid of $8.1 million ($75 psf ppr) from Tiong Aik Construction from six bids submitted altogether. This 10,000 sq m site has a shorter tenure of 20 years 10 months. Both sites are zoned Business-2 for heavy and more pollutive industrial use. Source: Business Times – 2 July 2014
Posted on: Wed, 02 Jul 2014 03:24:12 +0000
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