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31-07-13, 14:33
http://www.businesstimes.com.sg/archive/thursday/specials/property/srpi-central-region-down-15-june-20130730
Published July 30, 2013
SRPI for central region down 1.5% in June
The drop follows increases of 1.5% in May, 1.9% in April and 2.8% in March
By Kalpana Rashiwala
AFTER rising for three consecutive months, NUS' Singapore Residential Price Index (SRPI) for Central Region (excluding small units) slipped 1.5 per cent in June over the preceding month.
The SRPI series tracks the prices of completed non-landed private homes excluding executive condominiums.
Lum Sau Kim, associate professor at the Institute of Real Estate Studies (Ires) at the National University of Singapore, attributes last month's drop in the index to a deleveraging effect arising from US Federal Reserve chairman Ben Bernanke's statement in late May of a potential tapering of the quantitative easing programme.
"From our observation, the projects that contributed to the marked decline in the Central Region index in June include Alessandrea, Visioncrest and Watermark Robertson Quay. Some of the units in these projects have been transacted multiple times over the past few years," said Assoc Prof Lum.
Mr Bernanke's pronouncement "could have led some investors in projects such as these to sell off their units in anticipation of interest rate hikes", she added.
Ires, which minted the SRPI series, defines Central Region as districts 1-4 (including the financial district and Sentosa Cove) and the traditional prime districts 9, 10 and 11.
The 1.5 per cent month-on-month drop in the SRPI for Central Region (excluding small units) follows increases of 1.5 per cent in May, 1.9 per cent in April and 2.8 per cent in March.
SRPI for Non-Central Region, again excluding small units, rose 0.5 per cent last month over the preceding month. This contrasts with a 1.5 per cent month-on-month drop in May.
SRPI for small apartments and condo units (up to 506 sq ft) islandwide eased one per cent month on month in June after sliding 1.3 per cent in May.
The Overall SRPI for June was down 0.4 per cent from the previous month. In May, it fell 0.2 per cent.
Year to date, the four SRPI values are all in positive territory - to the tune of 1.9 per cent for the Overall Index, 1.8 per cent for Central Region, 1.9 per cent for Non-Central Region and 3.2 per cent for small units.
SLP International executive director Nicholas Mak argues that the Overall Index may be reaching a plateau. And although SRPI for small units enjoyed the biggest gain in the first half of this year, it suffered two consecutive months of contraction in May and June.
"The price index for completed shoebox apartments appears to have peaked in April this year and is slowly retreating as some investors are increasingly cautious about the future investment potential of such small units," Mr Mak said.
DTZ's head of Singapore research Lee Lay Keng reckons that an index such as SRPI which entails a month-on-month comparison could be inherently more volatile as the readings would depend on the transactions that took place during the respective months.
"Going forward, overall property sentiment and transaction volumes could be weaker as the market starts to feel the impact of stricter financing rules under the total debt servicing ratio framework, which took effect from June 29," she added.
Published July 30, 2013
SRPI for central region down 1.5% in June
The drop follows increases of 1.5% in May, 1.9% in April and 2.8% in March
By Kalpana Rashiwala
AFTER rising for three consecutive months, NUS' Singapore Residential Price Index (SRPI) for Central Region (excluding small units) slipped 1.5 per cent in June over the preceding month.
The SRPI series tracks the prices of completed non-landed private homes excluding executive condominiums.
Lum Sau Kim, associate professor at the Institute of Real Estate Studies (Ires) at the National University of Singapore, attributes last month's drop in the index to a deleveraging effect arising from US Federal Reserve chairman Ben Bernanke's statement in late May of a potential tapering of the quantitative easing programme.
"From our observation, the projects that contributed to the marked decline in the Central Region index in June include Alessandrea, Visioncrest and Watermark Robertson Quay. Some of the units in these projects have been transacted multiple times over the past few years," said Assoc Prof Lum.
Mr Bernanke's pronouncement "could have led some investors in projects such as these to sell off their units in anticipation of interest rate hikes", she added.
Ires, which minted the SRPI series, defines Central Region as districts 1-4 (including the financial district and Sentosa Cove) and the traditional prime districts 9, 10 and 11.
The 1.5 per cent month-on-month drop in the SRPI for Central Region (excluding small units) follows increases of 1.5 per cent in May, 1.9 per cent in April and 2.8 per cent in March.
SRPI for Non-Central Region, again excluding small units, rose 0.5 per cent last month over the preceding month. This contrasts with a 1.5 per cent month-on-month drop in May.
SRPI for small apartments and condo units (up to 506 sq ft) islandwide eased one per cent month on month in June after sliding 1.3 per cent in May.
The Overall SRPI for June was down 0.4 per cent from the previous month. In May, it fell 0.2 per cent.
Year to date, the four SRPI values are all in positive territory - to the tune of 1.9 per cent for the Overall Index, 1.8 per cent for Central Region, 1.9 per cent for Non-Central Region and 3.2 per cent for small units.
SLP International executive director Nicholas Mak argues that the Overall Index may be reaching a plateau. And although SRPI for small units enjoyed the biggest gain in the first half of this year, it suffered two consecutive months of contraction in May and June.
"The price index for completed shoebox apartments appears to have peaked in April this year and is slowly retreating as some investors are increasingly cautious about the future investment potential of such small units," Mr Mak said.
DTZ's head of Singapore research Lee Lay Keng reckons that an index such as SRPI which entails a month-on-month comparison could be inherently more volatile as the readings would depend on the transactions that took place during the respective months.
"Going forward, overall property sentiment and transaction volumes could be weaker as the market starts to feel the impact of stricter financing rules under the total debt servicing ratio framework, which took effect from June 29," she added.