Thursday, February 10, 2011
Thursday, January 27, 2011
Unlikely to have Significant Drop in Property Prices
Jan 27
SINGAPORE : The recent government cooling measures in Singapore's property market will bring down sales volume, but not to the extent of causing a significant fall in prices.
According to a report by DTZ Research, sales volume is expected to fall as short-term speculators will be weeded out by the hefty seller's stamp duty of up to 16 per cent within the first year of purchase.
However, the property consultancy said not all investors will withdraw from the market.
Some may find the 4 per cent stamp duty by the fourth year of sale to be surmountable and shift their focus to buying uncompleted units with completion dates three to four years later.
DTZ's Executive Director for Residential, Margaret Thean said landed homes, small apartments and high-end apartments will be less affected by the measures. That's because small units with their low price quantum will continue to attract investors with spare cash or singles wanting their own units.
Thean added that the 4-year seller's stamp duty will have little impact on landed homes as most purchase them for long-term owner-occupation.
Meanwhile, high-end apartments will likely continue to see foreign interest.
DTZ added that prices in 2011 are expected to be largely stable with a decline of not more than 5 per cent.
This is underpinned by economic growth, low interest rates, strong holding power of developers, the appreciation of the Singapore dollar and inflow of foreign purchasers due to the property market clampdown in mainland China and Hong Kong.
The property consultancy does not rule out the possibility of more government measures should demand remain at a high level after a period of cooling-off.
The report also noted other challenges in the form of a spike in the number of completed units in a few years' time as the government is putting out a record high amount of units through the public housing and government land sales programmes.
There is also uncertainty over the strength of recovery of the major western economies.
If they recover well, interest rates will move up and reduce the affordability of mortgage payments.
On the other hand, if they continue to languish, this will have an effect on the Singapore economy and optimism in the property market eventually.
With the residential market facing numerous challenges, DTZ said investors are likely to take the extra effort to identify opportunities in other property sectors and alternative investment products.
Wednesday, January 19, 2011
For more information, go to MarketWatch www.marketwatch.com
Thursday, January 13, 2011
Latest round of cooling measures
1. Sellers SSD increased from 3 to 4 years on sliding scale at 16% of selling price 12%, 8%, and 4%.
2. LTV lowered from 70 to 60% for 2nd and subsequent loans
3. 50% LTV for non individual buyers (exclude developers buying en bloc for redevelopment), e.g. corporations, trusts and collective investment schemes.
Full information can be found at: http://www.mas.gov.sg/news_room/press_releases/2011/Measures_To_Maintain_A_Stable_And_Sustainable_Property_Market.html
Pricier new launches ahead
By EMILYN YAP
Developers' outlook for the property sector turned rosier in the fourth quarter last year, with a larger proportion of them predicting higher prices for new residential launches.
Preliminary findings from the Real Estate Sentiment Index (RESI) point to improved sentiment from the third quarter, when the industry was still coming to terms with the impact of property market cooling measures introduced on Aug 30.
Based on survey responses so far, the Current Sentiment Index stood at 5.6 in Q4, up from 4.8 in Q3. For this category, respondents rate overall Singapore real estate market conditions now compared with six months ago.
The Future Sentiment Index - where respondents rate overall property market conditions over the next six months - rose to 5.7 in Q4 from 4.8 in Q3.
While the index readings rose in Q4, they did not surpass the levels seen in Q1 and Q2.
Developers were also asked for their take on the primary residential market, and a majority of the respondents thought more launches and moderate price increases were possible.
In Q4, 60 per cent of respondents believed that unit prices would be moderately higher. In Q3, just 12 per cent thought so.
Spottiswoode Residences, Waterview and Robinson Suites were some which reported strong sales.
Some industry watchers also reckoned that the sector's confidence grew as the impact of the tightening measures became clearer.
A Hong Leong spokesman told BT: 'While we took a cautious outlook immediately following the August 2010 cooling measures, buyer demand continued to remain strong for the group's various projects.' Low interest rates and liquidity in the market contributed to the demand, he said.
In the ongoing Q4 RESI survey, 69 per cent of respondents identified demand-side measures from the government as a potential risk to market sentiment.
Although this proportion is less than Q3's 83 per cent, it is still big enough to make state intervention the second most feared risk.
A possible slowdown in the global economy was the industry's top worry - 70 per cent of respondents said in Q4 that this was a potential risk. This is markedly higher than the 56 per cent a quarter ago.
(This is only an excerpt, for the full article please subscribe at http://businesstimes.com.sg)
Thursday, December 16, 2010
Straits Times: Luxury homes reeling in buyers at attractive prices
The property boom has still not lifted luxury home prices back to their 2007 levels, although units in up market projects are attracting buyers.
It is far from a bargain-basement situation but developers are having to keep their expectations in check, and having to offer attractive prices.
Take Bukit Sembawang's Paterson Suites, which was completed in the third quarter. There were 41 new units sold at a median price of $2,661 per sq ft (psf) last month.
In July a 2,164 sq ft flat went for $7 million - or $3,232 psf.
Yet in July 2007, five units were sold at a median price of $3,369 psf.
The Straits Times understands that 38 of the 41 units were sold to a handful of private investors, mostly foreigners. Each bought several units and received a slight discount.
Three units of Hasetrale Holdings' 8 Napier in Napier Road fetched a median price of $3,348 psf last month. In 2007, some flats went at close to $4,000 psf.
In 2007, Macquarie Global Property Advisors paid $136 million for 19 units at 8 Napier at an average price of $3,550 psf.
Experts said luxury home prices are about 5 per cent shy of their 2007 peak.
Colliers International's director of research and advisory, Ms Tay Huey Ying, said that if prices continue to strengthen, even at a moderate pace, developers will be encouraged to gradually off load more units.
'But this will probably not be on a massive scale because developers are conscious of the strength of the high-end market and are likely to space out their launches evenly and in small volumes,' she added.
Some investors have also opted to buy landed homes instead, as the limited supply of such property means the sector is more resilient to volatility.
Experts added that while it is still early days, there could be increasing pressure on developers to lower prices should the high-end segment continue to languish below its peak - both in terms of price and volume.
Jones Lang LaSalle's head of research for South-east Asia, Dr Chua Yang Liang, said smaller developers with reduced holding power and completed projects on hand would be most affected.
Larger developers could always lease out unsold units, he added.
Urban Redevelopment Authority data for private home sales last month showed that 213 homes in the core city centre region were sold, out of 338 launched - the highest number launched for the segment since March.
This brought total home sales in the city centre this year to 3,741 out of 3,867 units launched as of the end of last month.
These numbers are in line with last year's 3,825 units for the entire year but short of 2007's 5,454 units sold.
Wednesday, December 15, 2010
CNA: Private home sales up in November
Dec 15
SINGAPORE: Private home sales in November rebounded about 80 percent on-month to hit 1,909 units - the second highest in 11 months.
That brings the total number of homes sold so far this year, to 15,025, surpassing the 2007 sales record of 14,811 units.
The surge in November sales comes just three months after the government introduced its latest round of measures to cool the property market.
Lakefront Residences in Jurong was the most popular property selling over 437 units at $1,075 per square foot last month.
Coming in second was Waterview in Tampines, which sold 376 units at $903 per square foot, while Spottiswoode Residences followed with 258 units sold at $1,853 per square foot.
This buying fever in November caught many analysts by surprise.
Tay Huey Ying, Director (Research and Advisory), Colliers International, said: "It just goes to show or prove that a lot of investors are still viewing property as a safe place to park their wealth in spite of the high exposure to policy risks.
And I think another driving factor for November's high sales volume could also be foreign purchases, diverted from the HDB resale market, as well as from Hong Kong and China, in light of their recent property curbs.
With high sales volume, with feverish buying fever, there is bound to be some upward pressure on prices although the ramped up government land sales programme could put a check on the rate of price growth.
If what is driving the November sales happens to be foreign purchases, who may not be too bothered about potential launches, potential supply, then I think it does warrant certain further measures to cool the buying fever."
Industry watchers say the government may end up introducing another harsher set of cooling measures, such as a tax on profits from property sales in the next few months.
Colin Tan, Head (Research and Consultancy), Chesterton Suntec International, said: "What's going to happen if the buying doesn't stop and while we may not feel the impact now, but the consequences may come maybe a year or two later and it can be pretty adverse.
We'll have a lot of units up for rental, then the rentals could collapse especially when there's a lot vested buying.
The worse is of course when rentals come down, and holding cost go up as well, so that will reduce the yield and when yield is miserable, some investors may opt to sell or are forced to sell and that may start a domino effect."
Analysts say the latest figures also show that properties with strong branding and good locations remain the most attractive.
Although the November statistics came as a surprise, many believe the number for December will come back down as developers launch fewer properties over Christmas and New Year.
For the month of December, property watchers expect between 800 and 1,300 units to be sold. - CNA/wk/ch