NEWS & VIEWS Friday, 11 July, 2014 RESIDENTIAL MARKET HDB resale prices dip 0.6% in June to hit a two-year low HDB resale prices continued to slip for the fifth consecutive month, registering a 0.6 per cent dip in June from May and marking a fresh two-year low since April 2012. This translates to a 6.1 per cent drop from a year ago and a 3 per cent fall year-to-date, going by data from the Singapore Real Estate Exchange (SRX), which looks at pre-caveat resale transactions and unit rental information. Softness in resale prices last month was seen in three, four and five-room resale flats. Resale prices for HDB executive flats, however, rebounded with a 1.3 per cent month-on-month increase in June. Property consultants are expecting HDB resale prices to soften by up to 8 per cent over the whole of this year. Eugene Lim, key executive officer of ERA Realty, said: Prices could continue to fall a bit further before stabilising as the measures continue to bite. However, a steep fall is not expected, as economic fundamentals are sound. A total of 1,315 HDB flats were sold in the resale market last month, compared to Mays 1,320 transacted units, SRX data shows. But this is still 64 per cent lower than the peak in May 2010, when 3,649 flats changed hands. For now, the same factors are still plaguing the HDB resale market. A reduction of the mortgage servicing ratio (MSR) to 30 per cent of borrowers monthly income and a three-year waiting period for newly-minted permanent residents to buy resale flats have shrunk the pool of eligible buyers, while the large supply of built-to-order (BTO) flats has ratcheted up competition. There were fewer rental transactions last month than the month before. About 1,590 HDB flats were rented out in June, down from 1,622 units in May. Overall HDB rental prices fell 1.1 per cent in June from the preceding month, reaching a new low since January 2012, according to SRX. Rents and volumes may stay low as curbs on foreign workers mean lower rental demand, Mr Lim said. There will be more competition in the rental market as more BTO flats reach the five-year minimum occupation period (MOP) and can start to be rented out, he added. This means increased available supply in a season where demand is slowing. Source: Business Times – 11 July 2014 Sembawang EC tender result reflects softer market A state tender for an executive condominium (EC) site in Sembawang Avenue has drawn just four bids, reflecting the soft sentiment for ECs following Decembers introduction of a mortgage service ratio cap for EC purchases from developers. The top bid of $320.11 per square foot per plot ratio (psf ppr) is lower than the $350 psf ppr that another EC site in Sembawang fetched at a tender in January. In fact, the earlier site, along Canberra Drive, is further from Sembawang MRT Station and it drew six bids. The top bid at yesterdays tender closing is from a tie-up between units of Frasers Centrepoint and Keong Hong Holdings. ECs are a public-private housing hybrid with initial buyer eligibility and resale conditions that are fully lifted 10 years after the completion of the project. On an islandwide basis, too, including the latest site, there would be 13 EC projects in the launch pipeline that would yield more than 7,000 units till 2015 - which is a significant supply that would temper bidding for sites. Adjacent to yesterdays Sembawang Avenue plot, an earlier EC site - being developed into the SkyPark Residences project - garnered eight bids back in December 2012. The winning bid was $324 psf ppr. SkyPark Residences was released last November and achieved a median sale price of $800 psf in that month. As at end-May, 205 of its 506 units remained unsold, based on data released by Urban Redevelopment Authority. Frasers Centrepoint and Keong Hong are planning to build about 660 units on the Sembawang Avenue site. Their bid was just a tad higher than the next highest offer of $315.50 psf ppr from a partnership between City Developments unit Verwood Holdings and TID Residential. The remaining bids came from Chip Eng Seng unit CEL Residential Development at $282.44 psf ppr, and Sim Lian Land with $270.64 psf ppr. Source: Business Times – 11 July 2014 Fewer new flats this year as demand falls The supply of new Housing Board flats has been further reduced amid declining demand, as the resale market continues to cool for the fifth consecutive month. About 1,900 flats, or 8 per cent, have been cut from an original supply of 24,300 units this year. This is in order to respond appropriately to shrinking demand, the authorities told The Straits Times late on Wednesday. The reduction is in the bigger flats: three-roomers and larger. Instead of 18,600 units, as announced last December, there will be only 16,700 flats. But this is still more than the estimated 15,000 new Singaporean family formations annually, said a Ministry of National Development (MND) spokesman. In a written Parliament reply, National Development Minister Khaw Boon Wan said MND has cleared the backlog of first-timer applicants. He was responding to Nee Soon GRC MP Lee Bee Wah on Tuesday, after she had asked for the number of upcoming flats for the next two years. The number of two-room flats and studio apartments remains unchanged, at 5,000 and 700 units respectively, to cater to demand from low-income families, singles and the elderly. An MND spokesman said the first-timer application rate had eased to an average of 1.7 applicants a flat last year, and ranged between 1.0 and 1.7 for the first half of this year. The reduction, said Mr Khaw on Tuesday, is also in anticipation of more buyers returning to the resale market. Indeed, for the fifth consecutive month, resale prices dropped last month, a new low since April 2012, according to Singapore Real Estate Exchange flash figures yesterday. Overall prices slipped by 0.6 per cent last month from May, and 6.1 per cent from June last year. Resale volume stayed relatively constant with 1,315 flats sold last month, compared with the 1,320 transacted units in May, and the 1,325 units resold in June last year. ERA Realty key executive officer Eugene Lim is less optimistic: Prices could continue to fall a bit further before stabilising as the measures continue to bite. Resale flat prices have been increasingly attractive for photographer Ted Chen, 30, who was unsuccessful in three Build-To-Order (BTO) applications over two years. Of the declining applicant-to-BTO ratio, he said: I wouldnt raise my hopes up, because it hasnt flatlined to a one-to-one ratio yet. Source: The Straits Times – 11 July 2014.*
Posted on: Sat, 12 Jul 2014 01:33:38 +0000
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