Private home, industrial space markets feeling squeeze from double whammy Official statistics show that the private residential property and factory space markets have turned under the weight of supply on the one hand, and property cooling measures and the total debt servicing ratio (TDSR) framework on the other. However, a gradual rent recovery appears to be in place for the office market. Nearly all indicators in the Urban Redevelopment Authoritys (URA) fourth-quarter 2013 figures for the private housing market point towards weakening. The overall private home price index dipped 0.9 per cent in Q4 from the preceding quarter after inching up 0.4 per cent in Q3. With the exception of the subindex for prices of completed non-landed private homes, which remained unchanged in Q4, the other sub-indices fared worse in Q4 than they did in Q3. It was a similar story for URAs private residential rental indices. The overall rental index dipped 0.5 per cent in Q4, on the back of rising supply and moderating demand - marking the first decline since Q3 2009. Prior to this fall, the index had climbed 27.5 per cent between Q3 2009 and Q3 2013. In Q4 last year, 3,631 private homes received a Temporary Occupation Permit (TOP), taking the full-year tally to 13,150 units - the highest level since 14,000-plus units completed in each of 1997 and 1998. The ramp-up in housing completions is expected to continue, with 17,540 units this year, 21,299 next year and 27,321 in 2016. Some market watchers say that prospects for rental demand are unclear as it is not certain whether tightening in expat hiring will continue. As Singapores economy scales up, the demand for skilled labour especially for higher-value services will grow. We may have to take in more expats for these roles, suggested an analyst. URA figures yesterday showed that developers sold 3,854 private homes in the October to December period last year in both primary and secondary markets - the lowest volume since Q4 2008, when only 1,639 units were transacted during the global financial crisis. Transaction volumes halved from 14,755 units in the first half of last year to 7,873 in the second half after the rollout of the TDSR framework made it difficult for buyers to obtain financing. In the primary market, developers sold 14,948 private homes last year, one-third below 2012s record volume of 22,197 units. An interesting trend in Q4 is that across all three regions - Core Central, Rest of Central and Outside Central - prices of uncompleted non-landed private homes fared worse than completed ones, perhaps a reflection of developers trimming prices in their projects to move units. In contrast, individual owners of completed properties may be less inclined to do so. For the full year, URAs overall private home price index ended 1.1 per cent higher - a smaller gain than 2012s 2.8 per cent. This year, most market watchers are betting on a price fall, with developers sales hovering at 10,000-14,500 units. Figures from JTC - which has taken over URAs role on compiling and releasing statistics on industrial properties - showed a 3.3 per cent quarter-on-quarter decline for the All Industrial price index in Q4, compared with a 2.8 per cent rise in Q3. For the full year, the index climbed 3.2 per cent, significantly slower than a 25.8 per cent hike in 2012. JTCs multi-user factory rent index dipped 1.4 per cent in Q4, against a 4.4 per cent rise in the previous quarter. URAs office rental index climbed 0.5 per cent in Q4, a slight moderation from the 0.8 per cent increase in Q3. Source: Business Times – 25 January 2014
Posted on: Mon, 27 Jan 2014 06:19:27 +0000
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