Jul 2, 2010
Prices of private homes hit new peak
Experts expect more rises this year but at a slower rate
By Joyce Teo
PRIVATE home prices in Singapore are now at their highest level ever, eclipsing even the previous 1996 peak.
Official estimates show prices rose a higher-than-expected 5.2 per cent in the second quarter after a 5.6 per cent jump in the first. That means private home prices have risen 11.1 per cent so far this year.
Prices, now 1.5 per cent above the 1996 high, are expected to continue to edge up this year given the positive economic outlook, property experts forecast.
But the rises should moderate as the market is no longer feverish, having slowed to a more sustainable level with many more sites on the way, they said.
CB Richard Ellis' executive director, residential, Mr Joseph Tan, said the ample supply of residential land to be released by the Government will ensure a more stable supply in the longer term. 'As sales momentum becomes less frenzied, home prices will stabilise,' he said.
The Government has lined up a record amount of land for sale in the second half of the year and yesterday released three sites for sale.
One is an executive condominium site in Jurong West which can yield about 460 units. The other two sites are in Miltonia Close and Bedok Town Centre. Together, they can yield about 1,300 homes.
Other data out yesterday showed that Housing Board resale prices rose 3.8 per cent to a new record high in the same period, giving strong support to 'mass market' private homes - generally the less expensive private homes. This came after HDB this week offered 2,696 build-to-order flats in its largest ever single launch.
In the private mass market, buyers such as HDB upgraders are increasingly reluctant to pay sky-high prices, noted Colliers International's director of research and advisory, Ms Tay Huey Ying.
Preliminary estimates released yesterday by the Urban Redevelopment Authority (URA) showed that mass market non- landed private homes rose at a faster clip of 5.7 per cent to a new high, compared with 4.3 per cent in the first quarter.
These prices are now a hefty 14.2 per cent above the previous 2008 peak.
Mr Tan said this could be attributed to higher price levels set at new launches such as Tree House and The Minton, as well as rising prices of resale deals in areas where several government sites had been sold in the past six to nine months.
In central Singapore, non-landed home prices moved up 5.1 per cent, from 4.4 per cent in the first quarter. It was only in city fringe areas that prices of non-landed homes rose at a slower 4.5 per cent, compared with a furious 7.9 per cent first-quarter jump.
'Individual sellers on the resale front, especially those who had bought their properties before the 2007 boom, are now making capital gains in the region of 80-90 per cent,' noted ERA Asia Pacific associate director Eugene Lim.
Since late May, there has been a sales slowdown owing to the euro zone crisis, a lacklustre stock market and high asking prices, but home prices have generally remained firm. Sales of new, private homes halved to 1,078 units in May, from April.
Mr Lim said developers are unlikely to cut prices for new launches to sell more units as most have strong balance sheets.
Still, the slower sales will affect sentiment, said Cushman and Wakefield managing director Donald Han. The pace of price rises will slow down with the resale market first to be hit. The full effects will be felt from this quarter, he said.
For the whole year, property experts are mostly looking at price increases of about 15 per cent. Estimates range from 12 per cent to as much as 20 per cent.
'After the football World Cup season, people will look at whether the West is coping well and Singapore's economic growth and policies. Economists revising higher their growth estimates means that prices are likely to rise,' said Knight Frank chairman Tan Tiong Cheng.
'On the other hand, ample supply has translated to developers being more selective in bidding for sites. Land costs would come off and that would mitigate price rises six months down the road.'
Looking further ahead, Ngee Ann Polytechnic real estate lecturer Nicholas Mak said the risk of a price correction could grow if uncertainties in global financial markets hurt market sentiment, and if the large impending supply of government land leads to a private home glut.
URA will update its second quarter price data in four weeks.
joyceteo@sph.com.sg
Friday, July 2, 2010
ST : HDB resale prices rising faster
Jul 2, 2010
HDB resale prices rising faster
Preliminary figures show a 3.8 per cent Q2 rise; analysts revising full-year estimates
By Jessica Cheam
THE rise in Housing Board resale flat prices is accelerating again - after taking a slight breather early this year.
Preliminary estimates released by the HDB yesterday show resale HDB flat prices rose 3.8 per cent to a fresh record in the second quarter compared to the first quarter.
This is the eighth straight quarter that resale flat prices have broken records since 2008 when they surpassed the levels of the 1996 property peak.
Property analysts are now dramatically revising their full-year estimates for resale flat price rises - from 5 to 8 per cent previously, to 12 to 15 per cent.
Earlier this year, analysts had expected resale flat price increases to moderate when HDB figures showed prices rising 2.8 per cent in the first quarter over the previous quarter.
This rate of increase was slower than the 3.9 per cent in the fourth quarter of last year, and led industry observers to predict a moderation in price growth.
But the economic environment has changed. ERA Asia-Pacific associate director Eugene Lim said the outlook for the local economy 'is strong and the jobs market has picked up significantly'.
This has sustained the high level of demand for resale flats, and as supply is still tight for resale flats, prices have continued to grow, said Mr Lim.
Even though HDB has aggressively ramped up the supply of new flats - it launched 2,696 flats on Wednesday, the largest ever single launch - these cater to first-time buyers and those who are able to wait three years for the flats to be built, he said.
'For upgraders, permanent residents and those with immediate housing needs, the resale market is the only source.'
Associate Professor Sing Tien Foo of the National University of Singapore's real estate department says rising prices will hit new home-buyers hardest. 'For existing HDB homeowners, however, there is a 'wealth' effect, which may induce them to upgrade to bigger or private flats,' he said.
Analysts said yesterday the price increase was also likely due to higher cash-over-valuation (COV) premiums. COV refers to the cash paid upfront by buyers above the valuation of a flat.
While HDB will release full figures - including COV numbers - only in a few weeks, two top property agencies ERA and PropNex said the median COV for second quarter sales shot up to $30,000.
This is up from the median COV of $25,000 seen in the first quarter, according to HDB's figures.
HDB said yesterday it would continue to release adequate supply to meet housing demand. It has so far offered 8,828 new flats in the first half of the year - equivalent to the supply for all of last year.
But Prof Sing noted that the new supply would take even longer to enter the resale market, due to the five-year minimum occupation requirement before an owner can sell.
He added, however, that the 3.8 per cent rise in resale prices is still relatively small compared to private property prices, which shot up 5.2 per cent this quarter, and 5.6 per cent in the first quarter.
'In the public market, where supply is regulated, prices will respond more slowly than the private markets. The price increases in HDB resale will lag private market price increases.'
jcheam@sph.com.sg
HDB resale prices rising faster
Preliminary figures show a 3.8 per cent Q2 rise; analysts revising full-year estimates
By Jessica Cheam
THE rise in Housing Board resale flat prices is accelerating again - after taking a slight breather early this year.
Preliminary estimates released by the HDB yesterday show resale HDB flat prices rose 3.8 per cent to a fresh record in the second quarter compared to the first quarter.
This is the eighth straight quarter that resale flat prices have broken records since 2008 when they surpassed the levels of the 1996 property peak.
Property analysts are now dramatically revising their full-year estimates for resale flat price rises - from 5 to 8 per cent previously, to 12 to 15 per cent.
Earlier this year, analysts had expected resale flat price increases to moderate when HDB figures showed prices rising 2.8 per cent in the first quarter over the previous quarter.
This rate of increase was slower than the 3.9 per cent in the fourth quarter of last year, and led industry observers to predict a moderation in price growth.
But the economic environment has changed. ERA Asia-Pacific associate director Eugene Lim said the outlook for the local economy 'is strong and the jobs market has picked up significantly'.
This has sustained the high level of demand for resale flats, and as supply is still tight for resale flats, prices have continued to grow, said Mr Lim.
Even though HDB has aggressively ramped up the supply of new flats - it launched 2,696 flats on Wednesday, the largest ever single launch - these cater to first-time buyers and those who are able to wait three years for the flats to be built, he said.
'For upgraders, permanent residents and those with immediate housing needs, the resale market is the only source.'
Associate Professor Sing Tien Foo of the National University of Singapore's real estate department says rising prices will hit new home-buyers hardest. 'For existing HDB homeowners, however, there is a 'wealth' effect, which may induce them to upgrade to bigger or private flats,' he said.
Analysts said yesterday the price increase was also likely due to higher cash-over-valuation (COV) premiums. COV refers to the cash paid upfront by buyers above the valuation of a flat.
While HDB will release full figures - including COV numbers - only in a few weeks, two top property agencies ERA and PropNex said the median COV for second quarter sales shot up to $30,000.
This is up from the median COV of $25,000 seen in the first quarter, according to HDB's figures.
HDB said yesterday it would continue to release adequate supply to meet housing demand. It has so far offered 8,828 new flats in the first half of the year - equivalent to the supply for all of last year.
But Prof Sing noted that the new supply would take even longer to enter the resale market, due to the five-year minimum occupation requirement before an owner can sell.
He added, however, that the 3.8 per cent rise in resale prices is still relatively small compared to private property prices, which shot up 5.2 per cent this quarter, and 5.6 per cent in the first quarter.
'In the public market, where supply is regulated, prices will respond more slowly than the private markets. The price increases in HDB resale will lag private market price increases.'
jcheam@sph.com.sg
ST : Big demand for Punggol flats
Jul 2, 2010
Big demand for Punggol flats
A couple checking out artists' impressions of new build-to-order (BTO) flats at HDB Hub in Toa Payoh yesterday. The Housing Board received a deluge of applications just one day after the launch of BTO project Waterway Terraces in Punggol, which will feature waterfront units.
As of yesterday, five-room flats had been almost six times oversubscribed, with 1,755 applications received for the 306 flats available. Demand was also high for four-roomers, with 2,461 applications received - more than four times the 588 available units.
Big demand for Punggol flats
A couple checking out artists' impressions of new build-to-order (BTO) flats at HDB Hub in Toa Payoh yesterday. The Housing Board received a deluge of applications just one day after the launch of BTO project Waterway Terraces in Punggol, which will feature waterfront units.
As of yesterday, five-room flats had been almost six times oversubscribed, with 1,755 applications received for the 306 flats available. Demand was also high for four-roomers, with 2,461 applications received - more than four times the 588 available units.
ST : Admiral Hill developer dropped
Jul 2, 2010
Admiral Hill developer dropped
SLA to look for new developer, gives Yess' sub-tenants until early next year to move out
By Jessica Lim
ADMIRAL Hill was to have been the Dempsey Hill of northern Singapore, a lifestyle hub with a country club, rock-climbing facilities, a golf driving range and beauty and health businesses, among other attractions.
But the future of the project is in doubt: The landlord of the site, the Singapore Land Authority (SLA), has terminated the contract of developer Yess Resorts & Country Club (Yess) for failing to pay the rent.
The SLA will shop for a new developer, and Yess' sub-tenants have until early next year to clear out.
The jury is out, however, on whether there will be new takers for this 4ha site in far-flung Sembawang. Admiral Hill was to have come up around Old Admiralty House, which was built in 1939 to accommodate Royal Navy officers and declared a national monument in 2002.
The project was dogged by problems from the get-go.
Yess clinched the SLA tender to develop the place in 2007 by offering to pay $40,000 a month in rent and on the strength of its proposed plans.
But instead of a 'lifestyle hub', an illegal school and a workers' dormitory came up. Both were ordered shut last year.
When The Straits Times visited the site this week, it was in a state of neglect. Units sat empty and weeds had overrun the place.
Sub-tenants there now were apparently given the impression that Yess was forging ahead with the lifestyle hub.
Mr Al Lim, 39, who owns Chinese restaurant House Kitchen, said Yess claimed it had the SLA's clearance to take on more sub-tenants, so he signed a two-year lease in March and poured more than $100,000 into renovations.
He was thus shocked when the SLA told him two months later that he had to move out this month. He appealed and was given a reprieve until early next year.
He said that when he met Yess last month, it claimed to have been in the dark about the SLA's plans to terminate its contract.
Mr Alan Poh, who opened steamboat restaurant Fat Fish there a year ago on a two-year lease, has a similar tale - and some regrets to go with it, since his business is just starting to take off following an advertising campaign, he said.
A third sub-tenant, Sembawang Family Enrichment Network, signed up for a three-year lease in April last year and put $200,000 into renovations. Its manager Daniel Sum, 56, is now looking for another site. 'It has happened and there's nothing we can do about it,' he said.
The Straits Times understands Yess signed agreements with these new sub-tenants without first asking the SLA for consent, which is illegal.
They are only the latest ones to feel short-changed. Two former sub-tenants who signed contracts with Yess in 2007 have sought legal advice.
Yess refused to comment yesterday.
The Accounting & Corporate Regulatory Authority (Acra) lists it as a 'live company' and names a Mr Lee Kiang Hong as its director. The company is fully owned by the Yess Group.
An SLA spokesman said the Government was not party to sub-tenancy agreements between Yess and its sub-tenants, and that the parties would have to sort out the disputes among themselves.
She urged prospective sub-tenants of state properties to run checks on the tenant. They should also ask the tenant to produce the SLA's written consent for sub-tenancy agreements and seek legal advice before signing a contract.
The spokesman said this is to avoid the scenario in which sub-tenants commit themselves, only to find that their intended business activity is not an approved one for the property, or that the tenure falls outside that of the main tenancy.
With Yess out, the future of Admiral Hill looks none too certain, going by the assessment of Country City Investment, which successfully developed Dempsey Hill in Tanglin Village.
Admiral Hill's problem is its lack of drawing power, said Country City's general manager Nicholas Ng.
Still, how successful it can be will depend on the uses for the plot and the rental, he said; its rundown state, short tenancy agreement and its inaccessibility are factors against it. He said: 'It's not impossible, but it would take a lot of work and capital to make it successful.'
City Country, which lost the 2007 bid to Yess, has no plans to put in a bid again, he added.
limjess@sph.com.sg
Admiral Hill developer dropped
SLA to look for new developer, gives Yess' sub-tenants until early next year to move out
By Jessica Lim
ADMIRAL Hill was to have been the Dempsey Hill of northern Singapore, a lifestyle hub with a country club, rock-climbing facilities, a golf driving range and beauty and health businesses, among other attractions.
But the future of the project is in doubt: The landlord of the site, the Singapore Land Authority (SLA), has terminated the contract of developer Yess Resorts & Country Club (Yess) for failing to pay the rent.
The SLA will shop for a new developer, and Yess' sub-tenants have until early next year to clear out.
The jury is out, however, on whether there will be new takers for this 4ha site in far-flung Sembawang. Admiral Hill was to have come up around Old Admiralty House, which was built in 1939 to accommodate Royal Navy officers and declared a national monument in 2002.
The project was dogged by problems from the get-go.
Yess clinched the SLA tender to develop the place in 2007 by offering to pay $40,000 a month in rent and on the strength of its proposed plans.
But instead of a 'lifestyle hub', an illegal school and a workers' dormitory came up. Both were ordered shut last year.
When The Straits Times visited the site this week, it was in a state of neglect. Units sat empty and weeds had overrun the place.
Sub-tenants there now were apparently given the impression that Yess was forging ahead with the lifestyle hub.
Mr Al Lim, 39, who owns Chinese restaurant House Kitchen, said Yess claimed it had the SLA's clearance to take on more sub-tenants, so he signed a two-year lease in March and poured more than $100,000 into renovations.
He was thus shocked when the SLA told him two months later that he had to move out this month. He appealed and was given a reprieve until early next year.
He said that when he met Yess last month, it claimed to have been in the dark about the SLA's plans to terminate its contract.
Mr Alan Poh, who opened steamboat restaurant Fat Fish there a year ago on a two-year lease, has a similar tale - and some regrets to go with it, since his business is just starting to take off following an advertising campaign, he said.
A third sub-tenant, Sembawang Family Enrichment Network, signed up for a three-year lease in April last year and put $200,000 into renovations. Its manager Daniel Sum, 56, is now looking for another site. 'It has happened and there's nothing we can do about it,' he said.
The Straits Times understands Yess signed agreements with these new sub-tenants without first asking the SLA for consent, which is illegal.
They are only the latest ones to feel short-changed. Two former sub-tenants who signed contracts with Yess in 2007 have sought legal advice.
Yess refused to comment yesterday.
The Accounting & Corporate Regulatory Authority (Acra) lists it as a 'live company' and names a Mr Lee Kiang Hong as its director. The company is fully owned by the Yess Group.
An SLA spokesman said the Government was not party to sub-tenancy agreements between Yess and its sub-tenants, and that the parties would have to sort out the disputes among themselves.
She urged prospective sub-tenants of state properties to run checks on the tenant. They should also ask the tenant to produce the SLA's written consent for sub-tenancy agreements and seek legal advice before signing a contract.
The spokesman said this is to avoid the scenario in which sub-tenants commit themselves, only to find that their intended business activity is not an approved one for the property, or that the tenure falls outside that of the main tenancy.
With Yess out, the future of Admiral Hill looks none too certain, going by the assessment of Country City Investment, which successfully developed Dempsey Hill in Tanglin Village.
Admiral Hill's problem is its lack of drawing power, said Country City's general manager Nicholas Ng.
Still, how successful it can be will depend on the uses for the plot and the rental, he said; its rundown state, short tenancy agreement and its inaccessibility are factors against it. He said: 'It's not impossible, but it would take a lot of work and capital to make it successful.'
City Country, which lost the 2007 bid to Yess, has no plans to put in a bid again, he added.
limjess@sph.com.sg
BT : Three land plots put up for sale
Business Times - 02 Jul 2010
Three land plots put up for sale
99-year-lease sites located at Bedok, Yishun, Jurong West
By EMILYN YAP
(SINGAPORE) The government yesterday rolled out for sale three plots of land across the island, potentially adding some 1,300 units to the residential supply pipeline.
The blitz of sites followed the release of new data showing public and private home prices continuing their ascent in the second quarter.
The three sites at Bedok, Yishun and Jurong West are from the confirmed list under the government land sales (GLS) programme in the second half of the year. The Housing & Development Board (HDB) is handling the tenders.
Of these sites, the 99-year-lease one at New Upper Changi Road/Bedok North Drive attracted the most attention because it can house a commercial-residential development which will be integrated with a bus interchange.
The 2.49 hectare site is at Bedok Town Centre, next to Bedok MRT Station, and is surrounded by amenities such as supermarkets and a library. It has a maximum permissible gross floor area (GFA) of 938,157 square feet and can yield an estimated 475 dwelling units.
DTZ South-east Asia research head Chua Chor Hoon believes this plot is the most attractive of the three because it is centrally located in a well populated town. Also, 'there are only a few mixed sites available at the heart of HDB estates in the GLS programme', she said.
Cushman & Wakefield managing director Donald Han added that Bedok still lacks a major retail centre, so there could be fairly fierce bidding for the site, in the range of $500-580 per sq ft per plot ratio (psf ppr).
Colliers International investment sales executive director Ho Eng Joo expects to see bids coming in at $500-550 psf ppr. The tender for the site will close on Aug 17.
Another 99-year-lease land parcel at Miltonia Close can be developed into a strata housing community, or a condominium project with 345 units and a maximum permissible GFA of 406,875 sq ft. It lies at the fringe of Yishun Town Centre and is next to The Shaughnessy terrace house project.
While the plot may not be near an MRT station, its views of Lower Seletar Reservoir and Orchid Country Club's golf course may be a selling point, Mr Ho said. He projects bids of $300-350 psf ppr, while Mr Han is anticipating $270-320 psf ppr. The tender for this land parcel closes on Aug 24.
There was little hype over the third site at Jurong West Street 42, which is for an executive condominium project and is some distance from Lakeside MRT Station. It has a 99-year lease and can yield an estimated 460 units with a maximum permissible GFA of 542,988 sq ft.
Mr Ho and Mr Han expect to see bids of $230-280 and $250-300 psf ppr respectively. The tender for this site closes on Aug 12.
With more land parcels to be released, Mr Ho believes developers will be less aggressive in their bids. This month, the Urban Redevelopment Authority (URA) will be launching another two sites from the confirmed list, and making one from the reserve list available for application.
Mr Han added that the Miltonia Close and Jurong West sites just released by HDB are right next to other plots which can be launched for sale in future. The presence of such potential competition may make developers more price-sensitive when submitting their bids, he said.
The government has been ramping up land supply in the last few months to temper sentiment in the property market. Flash estimates yesterday showed private home prices rising 5.2 per cent in Q2 from Q1, and HDB resale flat prices increasing 3.8 per cent.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Three land plots put up for sale
99-year-lease sites located at Bedok, Yishun, Jurong West
By EMILYN YAP
(SINGAPORE) The government yesterday rolled out for sale three plots of land across the island, potentially adding some 1,300 units to the residential supply pipeline.
The blitz of sites followed the release of new data showing public and private home prices continuing their ascent in the second quarter.
The three sites at Bedok, Yishun and Jurong West are from the confirmed list under the government land sales (GLS) programme in the second half of the year. The Housing & Development Board (HDB) is handling the tenders.
Of these sites, the 99-year-lease one at New Upper Changi Road/Bedok North Drive attracted the most attention because it can house a commercial-residential development which will be integrated with a bus interchange.
The 2.49 hectare site is at Bedok Town Centre, next to Bedok MRT Station, and is surrounded by amenities such as supermarkets and a library. It has a maximum permissible gross floor area (GFA) of 938,157 square feet and can yield an estimated 475 dwelling units.
DTZ South-east Asia research head Chua Chor Hoon believes this plot is the most attractive of the three because it is centrally located in a well populated town. Also, 'there are only a few mixed sites available at the heart of HDB estates in the GLS programme', she said.
Cushman & Wakefield managing director Donald Han added that Bedok still lacks a major retail centre, so there could be fairly fierce bidding for the site, in the range of $500-580 per sq ft per plot ratio (psf ppr).
Colliers International investment sales executive director Ho Eng Joo expects to see bids coming in at $500-550 psf ppr. The tender for the site will close on Aug 17.
Another 99-year-lease land parcel at Miltonia Close can be developed into a strata housing community, or a condominium project with 345 units and a maximum permissible GFA of 406,875 sq ft. It lies at the fringe of Yishun Town Centre and is next to The Shaughnessy terrace house project.
While the plot may not be near an MRT station, its views of Lower Seletar Reservoir and Orchid Country Club's golf course may be a selling point, Mr Ho said. He projects bids of $300-350 psf ppr, while Mr Han is anticipating $270-320 psf ppr. The tender for this land parcel closes on Aug 24.
There was little hype over the third site at Jurong West Street 42, which is for an executive condominium project and is some distance from Lakeside MRT Station. It has a 99-year lease and can yield an estimated 460 units with a maximum permissible GFA of 542,988 sq ft.
Mr Ho and Mr Han expect to see bids of $230-280 and $250-300 psf ppr respectively. The tender for this site closes on Aug 12.
With more land parcels to be released, Mr Ho believes developers will be less aggressive in their bids. This month, the Urban Redevelopment Authority (URA) will be launching another two sites from the confirmed list, and making one from the reserve list available for application.
Mr Han added that the Miltonia Close and Jurong West sites just released by HDB are right next to other plots which can be launched for sale in future. The presence of such potential competition may make developers more price-sensitive when submitting their bids, he said.
The government has been ramping up land supply in the last few months to temper sentiment in the property market. Flash estimates yesterday showed private home prices rising 5.2 per cent in Q2 from Q1, and HDB resale flat prices increasing 3.8 per cent.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Private home prices outstrip peak of '96
Business Times - 02 Jul 2010
Private home prices outstrip peak of '96
But govt cooling measures expected to mitigate hikes; resale HDB prices continue to climb
By UMA SHANKARI
(SINGAPORE) Private home prices in Singapore have now surpassed the former all-time peak they achieved in 1996, official data shows.
Flash estimates released yesterday said that private home prices in Singapore rose 5.2 per cent in Q2 2010 after climbing 5.6 per cent in the first three months of the year.
This brings the Urban Redevelopment Authority's (URA) price index for private residential property to 184.1 points - 1.5 per cent higher than the previous pre-Asian crisis peak of 181.4 points in Q2 1996.
Prices of resale HDB flats also continued to climb and set another record in the second quarter. Resale prices rose a steeper 3.8 per cent in Q2, higher than the 2.8 per cent climb seen in Q1.
For the private residential market, homes in the 'outside central region' (a proxy for suburban mass- market locations) led the price increase with a 5.7 per cent quarter-on-quarter climb in Q2.
Prices in the 'core central region' (which includes the prime Districts 9 and 10, the financial district and Sentosa Cove) rose 5.1 per cent while prices in the 'rest of central region' rose 4.5 per cent.
Home prices in the outside central region and rest of central region are higher than they were during the recent 2008 peaks. But prices in the high-end core central region are still about 2 per cent below the 2008 peak.
While prices climbed across all three regions, analysts pointed out that recent government measures to cool the market have worked to some extent as the price growth has now slowed down for three consecutive quarters - although the deceleration in growth has been slower than what was hoped for, particularly in the mass- market segment.
'There will be a time lag before we will see a more moderate increase in prices,' said Knight Frank chairman Tan Tiong Cheng. 'The market has been positive but the government has mitigated this by providing a lot of land. But the supply needs some time to come onto the market.'
There is also increasing price resistance, as demonstrated by the more than 50 per cent drop in sales of new homes in May. This should help to further moderate price increases - especially in the mass-market segment - to within 5 per cent for each of the next two quarters, said Tay Huey Ying, Colliers International's director of research and advisory.
Jones Lang LaSalle's head of research for South-east Asia, Chua Yang Liang, added: 'Overall, the falling sales volume in both primary and secondary markets suggests that the overall URA property price index, a lagging indicator of demand, may soften in the next few months.'
Developers sold just 1,078 private homes in May - about half the 2,208 units they transacted in April.
Analysts also said that further anti-speculation measures are unlikely as prices in the primary market, which are thought to be a better reflection of current market sentiment, are pointing towards a slowdown. Most analysts expect private home prices to rise a total of 12-15 per cent for the whole of 2010.
But for the HDB resale market, it is a very different story. The rate of price growth seems to be increasing.
Eugene Lim, associate director of ERA Asia-Pacific, pointed out that on average, HDB resale prices are increasing at a rate of 3.3 per cent per quarter this year, compared to just 2 per cent per quarter last year.
The 3.8 per cent increase in prices in Q2 to another new high can be attributed to higher cash- over-valuation (COV) amounts, industry players said.
'Our Q2 2010 transactions show a median COV of $30,000 for all flat types across all estates, while HDB's Q1 2010 results showed an overall median COV of $25,000,' said PropNex chief executive Mohamed Ismail.
ERA's transactions also show that the median COV has increased across all flat types. For three-room flats, the median COV is now $29,000 compared to $22,000 in Q1; four-room flats $32,000 ($25,000 in Q1); five-room flats $36,000 ($28,000); and executive flats $40,000 ($30,000).
HDB on Wednesday said it has launched 2,696 new build-to-order (BTO) flats to ensure that there is an adequate supply of new flats to meet housing demand - the largest number of such flats ever offered at one go.
But this might not satisfy demand from all corners.
'Though HDB has increased the supply of new flats, these cater predominantly to the first-timers and those who can wait three years for these new flats to be built,' said ERA's Mr Lim.
'For upgraders, permanent residents and those who have immediate housing needs, the resale market is the only source.'
He expects HDB resale prices to increase 12-15 per cent for the whole year.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Private home prices outstrip peak of '96
But govt cooling measures expected to mitigate hikes; resale HDB prices continue to climb
By UMA SHANKARI
(SINGAPORE) Private home prices in Singapore have now surpassed the former all-time peak they achieved in 1996, official data shows.
Flash estimates released yesterday said that private home prices in Singapore rose 5.2 per cent in Q2 2010 after climbing 5.6 per cent in the first three months of the year.
This brings the Urban Redevelopment Authority's (URA) price index for private residential property to 184.1 points - 1.5 per cent higher than the previous pre-Asian crisis peak of 181.4 points in Q2 1996.
Prices of resale HDB flats also continued to climb and set another record in the second quarter. Resale prices rose a steeper 3.8 per cent in Q2, higher than the 2.8 per cent climb seen in Q1.
For the private residential market, homes in the 'outside central region' (a proxy for suburban mass- market locations) led the price increase with a 5.7 per cent quarter-on-quarter climb in Q2.
Prices in the 'core central region' (which includes the prime Districts 9 and 10, the financial district and Sentosa Cove) rose 5.1 per cent while prices in the 'rest of central region' rose 4.5 per cent.
Home prices in the outside central region and rest of central region are higher than they were during the recent 2008 peaks. But prices in the high-end core central region are still about 2 per cent below the 2008 peak.
While prices climbed across all three regions, analysts pointed out that recent government measures to cool the market have worked to some extent as the price growth has now slowed down for three consecutive quarters - although the deceleration in growth has been slower than what was hoped for, particularly in the mass- market segment.
'There will be a time lag before we will see a more moderate increase in prices,' said Knight Frank chairman Tan Tiong Cheng. 'The market has been positive but the government has mitigated this by providing a lot of land. But the supply needs some time to come onto the market.'
There is also increasing price resistance, as demonstrated by the more than 50 per cent drop in sales of new homes in May. This should help to further moderate price increases - especially in the mass-market segment - to within 5 per cent for each of the next two quarters, said Tay Huey Ying, Colliers International's director of research and advisory.
Jones Lang LaSalle's head of research for South-east Asia, Chua Yang Liang, added: 'Overall, the falling sales volume in both primary and secondary markets suggests that the overall URA property price index, a lagging indicator of demand, may soften in the next few months.'
Developers sold just 1,078 private homes in May - about half the 2,208 units they transacted in April.
Analysts also said that further anti-speculation measures are unlikely as prices in the primary market, which are thought to be a better reflection of current market sentiment, are pointing towards a slowdown. Most analysts expect private home prices to rise a total of 12-15 per cent for the whole of 2010.
But for the HDB resale market, it is a very different story. The rate of price growth seems to be increasing.
Eugene Lim, associate director of ERA Asia-Pacific, pointed out that on average, HDB resale prices are increasing at a rate of 3.3 per cent per quarter this year, compared to just 2 per cent per quarter last year.
The 3.8 per cent increase in prices in Q2 to another new high can be attributed to higher cash- over-valuation (COV) amounts, industry players said.
'Our Q2 2010 transactions show a median COV of $30,000 for all flat types across all estates, while HDB's Q1 2010 results showed an overall median COV of $25,000,' said PropNex chief executive Mohamed Ismail.
ERA's transactions also show that the median COV has increased across all flat types. For three-room flats, the median COV is now $29,000 compared to $22,000 in Q1; four-room flats $32,000 ($25,000 in Q1); five-room flats $36,000 ($28,000); and executive flats $40,000 ($30,000).
HDB on Wednesday said it has launched 2,696 new build-to-order (BTO) flats to ensure that there is an adequate supply of new flats to meet housing demand - the largest number of such flats ever offered at one go.
But this might not satisfy demand from all corners.
'Though HDB has increased the supply of new flats, these cater predominantly to the first-timers and those who can wait three years for these new flats to be built,' said ERA's Mr Lim.
'For upgraders, permanent residents and those who have immediate housing needs, the resale market is the only source.'
He expects HDB resale prices to increase 12-15 per cent for the whole year.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
TODAY ONLINE : Older units more affordable for some
Older units more affordable for some
05:55 AM Jul 02, 2010
With private property prices hitting their highest levels in the last two years, young professionals are feeling the pinch when it comes to buying their first home.
Mr John Ng, a newly-wed entrepreneur, said he is looking only at options that are within his means.
"We won't be looking at brand new units because they are very expensive, we will be looking at 10 to 15 year-old units because they are still within our budget," said Mr Ng, who has allocated $600,000 to $700,000 for a property in the suburbs.
Mr Colin Tan, head of research and consultancy at Chesteron Suntec International, suggested that someone like Mr Ng should consider older properties such as those with 10 to 15 years to the expiry of their lease tenure.
Properties without facilities, such as an old walk-up apartment, are also an option.
For someone with Mr Ng's budget, some condo developments that remain affordable include: Double Bay Residences, Simei, $565 psf with unit sizes from 538 square feet; Rosewood Suites, Woodlands, $586 psf with unit sizes from 678 square feet; Elliot at the East Coast, Marine Parade, $842 psf with unit sizes from 506 square feet.
Jo-ann Huang
05:55 AM Jul 02, 2010
With private property prices hitting their highest levels in the last two years, young professionals are feeling the pinch when it comes to buying their first home.
Mr John Ng, a newly-wed entrepreneur, said he is looking only at options that are within his means.
"We won't be looking at brand new units because they are very expensive, we will be looking at 10 to 15 year-old units because they are still within our budget," said Mr Ng, who has allocated $600,000 to $700,000 for a property in the suburbs.
Mr Colin Tan, head of research and consultancy at Chesteron Suntec International, suggested that someone like Mr Ng should consider older properties such as those with 10 to 15 years to the expiry of their lease tenure.
Properties without facilities, such as an old walk-up apartment, are also an option.
For someone with Mr Ng's budget, some condo developments that remain affordable include: Double Bay Residences, Simei, $565 psf with unit sizes from 538 square feet; Rosewood Suites, Woodlands, $586 psf with unit sizes from 678 square feet; Elliot at the East Coast, Marine Parade, $842 psf with unit sizes from 506 square feet.
Jo-ann Huang
TODAY ONLINE : Oversupply looming?
Oversupply looming?
There's an insatiable demand for owner-occupied property now, but what happens later?
05:55 AM Jul 02, 2010
by Colin Tan
The spectre of a possible looming oversupply in Singapore's housing market - including both the private and public sectors - in the not-to-distant future was again brought back to the fore when the HDB announced on Wednesday its biggest launch ever of new Build To Order (BTO) flats.
The 2,696 flats offered brings the total number of new BTO flats launched to 8,828 flats for the first six months of this year. This is equivalent to the BTO supply for the whole of last year.
At this rate, the HDB will likely double the number of BTO flats by the end of the year to about 17,000 units.
For the time being, demand for BTO flats appear insatiable. Unlike most purchases of private homes, this is real demand for owner occupation. It is just that rising resale prices and fears of further increases in flat prices drove many to book their flats many years in advance.
The widening price gap between new and resale flats coupled with many more innovative schemes such as the new eco-friendly Waterway Terraces have also added to the attraction of BTO flats.
If we tag these numbers to the robust sales of over 14,000 private homes each in 2007 and last year with a strong possibility that these numbers may yet be matched this year, are we looking at a looming housing oversupply within the next two to three years or even earlier?
The current strong demand for BTO flats is not sustainable. There will come a time when demand will drop off as those wanting to buy would have already secured their flats or have already booked theirs.
The rise in HDB resale flat prices may then plateau off. This may act as a cap on the future number of upgraders to the lower end of the private housing market particularly if private home prices continue to rise.
Do we then depend on foreigners to make up this shortfall? The percentage of foreign and permanent residents buying has certainly gone up in recent months but they are fair weather market participants. They can go as quickly as they come.
While discussing property at a recent business lunch, a few Hong Kong professionals told me laughingly that some of their friends are no longer able to visit Singapore as they are "wanted" people.
It transpired that these friends bought high-end properties in 2007 and chose to walk away when prices turned south.
Will recent buyers walk away again when things do not go their way?
If I were the owner who recently sold off his Sentosa Cove detached house for $36 million, I will put off celebrations until I actually have my hands on the money. Anything can happen between now and sale completion.
The greatest drawback in attacking the real estate bubble from the supply side is that it places a huge strain on the limited industry resources.
Lest we forget, the ramping up of supply in recent months have yet to make a dent in demand. If demand does not abate due to excessive liquidity, what happens then?
With the total number of homes - both private and public - sold having more than double in recent years, is the real estate industry particularly the construction sector able to similarly doubled its capacity.
Let us say we have the labour capacity, what about material costs? Even if we are prepared to pay more, are we able to get them? The problem of sand imports comes quickly to mind.
With such nagging problems, it is possible that we will see the return of ever rising construction costs and project delays.
It was not so long ago that skyrocketing construction prices and the credit crunch led to a indefinite postponement in the development of our Kallang Sports Hub.
It has since been revived but it had better take off quickly before the same problems resurface once again.
The writer is the head of research and consultancy at Chesterton Suntec International.
There's an insatiable demand for owner-occupied property now, but what happens later?
05:55 AM Jul 02, 2010
by Colin Tan
The spectre of a possible looming oversupply in Singapore's housing market - including both the private and public sectors - in the not-to-distant future was again brought back to the fore when the HDB announced on Wednesday its biggest launch ever of new Build To Order (BTO) flats.
The 2,696 flats offered brings the total number of new BTO flats launched to 8,828 flats for the first six months of this year. This is equivalent to the BTO supply for the whole of last year.
At this rate, the HDB will likely double the number of BTO flats by the end of the year to about 17,000 units.
For the time being, demand for BTO flats appear insatiable. Unlike most purchases of private homes, this is real demand for owner occupation. It is just that rising resale prices and fears of further increases in flat prices drove many to book their flats many years in advance.
The widening price gap between new and resale flats coupled with many more innovative schemes such as the new eco-friendly Waterway Terraces have also added to the attraction of BTO flats.
If we tag these numbers to the robust sales of over 14,000 private homes each in 2007 and last year with a strong possibility that these numbers may yet be matched this year, are we looking at a looming housing oversupply within the next two to three years or even earlier?
The current strong demand for BTO flats is not sustainable. There will come a time when demand will drop off as those wanting to buy would have already secured their flats or have already booked theirs.
The rise in HDB resale flat prices may then plateau off. This may act as a cap on the future number of upgraders to the lower end of the private housing market particularly if private home prices continue to rise.
Do we then depend on foreigners to make up this shortfall? The percentage of foreign and permanent residents buying has certainly gone up in recent months but they are fair weather market participants. They can go as quickly as they come.
While discussing property at a recent business lunch, a few Hong Kong professionals told me laughingly that some of their friends are no longer able to visit Singapore as they are "wanted" people.
It transpired that these friends bought high-end properties in 2007 and chose to walk away when prices turned south.
Will recent buyers walk away again when things do not go their way?
If I were the owner who recently sold off his Sentosa Cove detached house for $36 million, I will put off celebrations until I actually have my hands on the money. Anything can happen between now and sale completion.
The greatest drawback in attacking the real estate bubble from the supply side is that it places a huge strain on the limited industry resources.
Lest we forget, the ramping up of supply in recent months have yet to make a dent in demand. If demand does not abate due to excessive liquidity, what happens then?
With the total number of homes - both private and public - sold having more than double in recent years, is the real estate industry particularly the construction sector able to similarly doubled its capacity.
Let us say we have the labour capacity, what about material costs? Even if we are prepared to pay more, are we able to get them? The problem of sand imports comes quickly to mind.
With such nagging problems, it is possible that we will see the return of ever rising construction costs and project delays.
It was not so long ago that skyrocketing construction prices and the credit crunch led to a indefinite postponement in the development of our Kallang Sports Hub.
It has since been revived but it had better take off quickly before the same problems resurface once again.
The writer is the head of research and consultancy at Chesterton Suntec International.
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