Singapore Property News This Week #231

Residential

Q3 Private home index fall by 3.2% year-on-year

According to URA’s private home index, prices have fallen by 3.2% year-on-year in Q3 this year. HDB’s resale price index also showed a 1.8% fall in prices from the start of the year to date. Market experts believe that HDB prices are stabilising, however Wong Xian Yang cautions that resale prices may still fall. Eugene Lim from ERA said that as the income ceiling for BTO flats increases, the resale market may shrink due to a switch in demand for BTO flats. Ong Teck Hui from JLL said that with a smaller Government Land Sales quantum, development sales have slowed in the private residential property market. Thus, there are fewer new projects, which could explain the fall in number of unsold uncompleted private housing units to 22,456 at end-Q3 from 24,435 units in the previous quarter.

(Source: Business Times)

HDB resale price index falls by a total of 9.9% since Q2 2013

Based on the HDB resale price index, resale prices have eased by a total of 9.9% since Q2 2013. In Q3 this year, the HDB resale price index fell by 0.3% quarter-on-quarter, the smallest fall in prices in 9 quarters. Not only so, there was a 27.8% increase in the number of resale flat applications in Q2 from the previous quarter. According to the Business Times, the increase in income ceiling and the introduction of the Proximity Housing Grant, whilst keeping the Mortgage Servicing Ratio cap at 30%, is likely to increase resale transaction volumes. While sellers may feel inclined to sell off their properties now, high asking prices may discourage sales, said market experts. In the leasing market, a bumper crop of private homes slated for completion is expected to threaten the HDB rental market. Market experts recommend keeping rental prices reasonable and also giving the flat a makeover to attract potential tenants.

(Source: Business Times)

Average EC prices trimmed to $780 psf in H2 2015

According to the Business Times, a cut in the average EC price to $780 psf in H2 2015 has boosted sales, thus mitigating the problem of an oversupply. Market experts believe that the prolonged sluggish sales in 2014 were due to high EC prices which could no longer be supported by the Mortgage Servicing Ratio. According to URA, 752 uncompleted ECs were sold by developers in H1 this year and the estimated median price was at $810 psf. As median prices were subsequently cut to an estimated $785 psf in Q3, about 1,250 units were sold. This showed that buyers were still very price-sensitive. To attract buyers, market experts believe that developers should engage in product innovation, in addition to a competitive pricing strategy.

(Source: Business Times)

Private residential site in Clementi expected to attract high bids

A 99-year leasehold private residential site at Clementi is expected to garner strong response from developers due to its location in a mature estate and its proximity to several good schools. The site, which is about 1.3 ha, is expected to yield about 460 units. Placed on the confirmed list for H2 2015 Government Land Sales Programme, market experts estimate that the site will attract about 5 to 16 bids with the winning bid falling between $480 and $692 psf ppr. Nicholas Mak from SLP International said that a lack of competition from new launches in the neighbourhood may also increase the site’s appeal to bidders.

(Source: Business Times)

Q3 property developer sentiment worsens

The Real Estate Sentiment Index showed that in Q3 this year, sentiment among developers has weakened, most likely due to the expected slowdown in the economy and also higher interest rates. Respondents of the survey believe that the government should lift or tweak existing cooling measures in the coming 6 months. The Current Sentiment Index, which tracks developer sentiments in the past 6 months, had fallen by 0.2 points to 3.7 in Q3 from the previous quarter. Similarly, the Future Sentiment Index had also fallen by 0.3 points to 3.7 in the same time period.

(Source: Business Times)

Commercial

Industrial space prices and rents fall in Q3

According to JTC, overall industrial prices fell 0.3% year-on-year in Q3 this year while rents fell by 1.6% year-on-year in Q3 this year. This fall in prices is likely to be due to a weak manufacturing outlook and an oversupply of industrial space. Furthermore, occupancy rates have fallen 0.2% in Q3 from Q2. The fall in occupancy rates was led by business parks where occupancies fell by 1.7% year-on-year in Q3. Tan Boon Leong from Colliers said that weaker economic growth and the anticipation that interest rates may increase have dampened buying and renting sentiments.

(Source: Business Times)