Price gap between mass market, city homes narrowing

[Naruto]

Price gap between mass market, city homes narrowing (http://www.propertyguru.com.sg/property-management-news/2012/4/32790/price-gap-between-mass-market-city-homes-narrowing)



Apr 12, 2012 - PropertyGuru.com.sg
By Romesh Navaratnarajah

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http://www.propertyguru.com.sg/images/thumb/d/7/a/a/d7aa7219499206_1_V235.jpg The price gap between private homes (http://www.propertyguru.com.sg/condo-directory) in the mass market and Core Central Region (CCR) is narrowing, with market watchers saying the gap has narrowed to just above 60 percent in Q1 2012 compared to 108 percent in Q2 last year.

This is due to mass market homes recording price increases at a much faster pace.

According to a report by Channel NewsAsia, the average price of city homes in the second quarter last year hit S$1,850 psf while mass market homes recorded a median price of S$895 psf. However, mass market home prices have since climbed to around S$1,000 psf while prices of city homes have dropped to about S$1,660 psf.

“Long-term sustainable level is about 50-60 percent gap in the two markets,” said Chua Yang Liang, Head of Research at Jones Lang LaSalle (JLL).

“The price will have to slow down by that time. It will be driven by buyers moving out from the mass market into the high end. At that point in time, buyers will be saying ‘why do I buy in the suburbs when for just a bit more I can buy somewhere downtown?’.”

Several analysts noted that the strength in prices of mass market homes has been boosted by healthy growth of resale flat prices, which has risen more than 80 percent in the past few years.

However, analysts expect to see a decline in the resale flat market (http://www.propertyguru.com.sg/singapore-property-listing/hdb) in the next two to three quarters.

“We are going to see a plateauing of HDB resale mainly due to the contraction of your cash-over-valuation… In the first quarter we saw a contraction of about 12 percent. The mass market cannot continue to move upwards without seeing some stabilisation,” noted Donald Han, Special Advisor at HSR International Realtors.

[Homefinder]

Seems like the latest cooling measure has failed and has no effect at all.
The buying sentient has switched to mass market instead and does not deter buyer (Singaporean) from buying property in the mass market……….

I only can said the government has failed to intervene in a correct approach and the situation is forming bubbles exactly like the subprime situation we see in US.
Ironically, Singaporean just want to see the property price keep increasing in a way subpass their income increment...... i am so disappointed.... why are we still supporting this and never ask who will benefit from this.

I wonder if the situation will continue to escalate further……….. very very sad....

[DC33_2008]

Mass market is bought at the expected future price. Hence, it is closer to the current CCR price.

[hyenergix]

Mass market is bought at the expected future price. Hence, it is closer to the current CCR price.

To me they are all current prices. The properties are sold and bought at the price today.

[DC33_2008]

Yup! Buyer thought it is today's price but developer is selling them the the future price.
To me they are all current prices. The properties are sold and bought at the price today.

[RE_Owner]

OCR is closing gap with CCR means OCR =RCR? In future there will only two group OCR n CCR

[carbuncle]

Seems like the latest cooling measure has failed and has no effect at all.
The buying sentient has switched to mass market instead and does not deter buyer (Singaporean) from buying property in the mass market……….

I only can said the government has failed to intervene in a correct approach and the situation is forming bubbles exactly like the subprime situation we see in US.
Ironically, Singaporean just want to see the property price keep increasing in a way subpass their income increment...... i am so disappointed.... why are we still supporting this and never ask who will benefit from this.

I wonder if the situation will continue to escalate further……….. very very sad....
Over 80% home ownership in sg... If govt policy result in stagnant or god forbid falling prices, it is political suicide. Nobody likes to see their asset falling in value.

[HP65]

To me they are all current prices. The properties are sold and bought at the price today.

We buy ppty either for own stay or for investment (rental collection). For new sales, the utility will only kick in after the project TOP in future. For resale, you enjoy the utility now. Thus, developer is selling future price IMO too. Those who buy for capital appreciation, applies to new and resale ppty.

[HP65]

Over 80% home ownership in sg... If govt policy result in stagnant or god forbid falling prices, it is political suicide. Nobody likes to see their asset falling in value.

It has happened before, prices has fallen many times before.....and last I checked, we are ruled by the same party since I was born. So I dun see how will it be a political suicide.

[ysyap]

OCR is closing gap with CCR means OCR =RCR? In future there will only two group OCR n CCRRCR and OCR boundaries are getting increasingly blurred!

[eng81157]

RCR and OCR boundaries are getting increasingly blurred!

how are they getting blurred physically? now OCR developments in far flung places, e.g. punggol, bukit panjang, pasir ris.

[carbuncle]

It has happened before, prices has fallen many times before.....and last I checked, we are ruled by the same party since I was born. So I dun see how will it be a political suicide.
Past price drops were not highly attributed to govt policy. Now any tom dick hairy investment consultant will name policy risk as one of the likely negative factor to invest in sg property.

[amk]

I dun know why you all are getting so excited on this so-called "analysis".

the psf gap is looking to be narrower, the quantum gap is not. :cool:

nothing has changed

[DaytonaSS]

I dun know why you all are getting so excited on this so-called "analysis".

the psf gap is looking to be narrower, the quantum gap is not. :cool:

nothing has changed

u r so wrg bro amk. the gap have super widen. GCB is even more expensive now. Super lux condo is at even higher quantum now. CCR quantum are out of reach of 90% of singaporeans le