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29-12-15, 14:04
http://www.businesstimes.com.sg/real-estate/prices-of-completed-small-condos-down-in-november
Prices of completed small condos down in November
By Lee Meixian
[email protected]
@LeeMeixianBT
Dec 29, 2015
PRICES of completed small condo units and apartments (up to 506 square feet) islandwide slipped 1.2 per cent in November over October.
This was based on the latest flash estimates from the National University of Singapore for its Singapore Residential Price Index (SRPI) series.
It followed a price drop of 0.4 per cent in October. Year-to-date, the SRPI for small units islandwide has fallen 4.1 per cent.
This was not surprising given the increase in completed small units in suburban areas since 2014, R'ST Research director Ong Kah Seng said.
"Leasing demand for small units has been fairly soft, so some of the HDB flat owners who found it too small for their families' occupation and couldn't find tenants who are willing to pay the rent they are looking for will let go of the units at lower prices," he added.
Transaction wise, since the start of 2014, small condo apartments have never crossed 20 units in a month. The highest was 19 units each in June and August this year.
Mr Ong said this is still "fairly on the low side". Shoebox units still have relevance, but to a select group of buyers comprising mainly the singles, he said.
From 2010 to 2012, there was heated buying for this housing asset class, which had mushroomed beyond the city centre where they were typically bought to be rented out to expatriates working nearby, to the suburbs.
This eventually prompted the government to rein the market in by controlling the proportion of shoebox units allowed in suburban areas from September 2012.
NUS SRPI also showed an increase in the number of shoebox units sold this year. At 158 from January to November 2015, this is 40 per cent higher than the 111 units sold in the whole of 2014.
OrangeTee senior manager for research and consultancy Wong Xian Yang added that the outlook on small units remains gloomy, especially with interest rates expected to rise further.
"Many small units were bought for investment purposes, and though sentiments have dimmed, many investors are still sitting on profits and are willing to negotiate and transact at lower prices.
"Based on matched caveats, most of the small units sold in 2015 year-to-date still remain profitable, excluding stamp duties and other costs."
The SRPI for Central Region (excluding small units) eased 0.8 per cent month on month in November, after rising 0.5 per cent in October.
The Central Region is defined as Districts 1-4 (including the financial district and Sentosa Cove) and the traditional prime residential districts of 9, 10 and 11 by the NUS' Institute of Real Estate Studies, which minted the SRPI series tracking prices of completed non-landed private homes.
Prices in the Non-Central Region (again excluding small units) retreated 0.4 per cent last month after easing 0.3 per cent in October.
The Overall SRPI shed 0.6 per cent in November; in October it had inched up 0.1 per cent. ERA Realty key executive officer Eugene Lim said this is just "month-on-month fluctuations".
Prices of completed small condos down in November
By Lee Meixian
[email protected]
@LeeMeixianBT
Dec 29, 2015
PRICES of completed small condo units and apartments (up to 506 square feet) islandwide slipped 1.2 per cent in November over October.
This was based on the latest flash estimates from the National University of Singapore for its Singapore Residential Price Index (SRPI) series.
It followed a price drop of 0.4 per cent in October. Year-to-date, the SRPI for small units islandwide has fallen 4.1 per cent.
This was not surprising given the increase in completed small units in suburban areas since 2014, R'ST Research director Ong Kah Seng said.
"Leasing demand for small units has been fairly soft, so some of the HDB flat owners who found it too small for their families' occupation and couldn't find tenants who are willing to pay the rent they are looking for will let go of the units at lower prices," he added.
Transaction wise, since the start of 2014, small condo apartments have never crossed 20 units in a month. The highest was 19 units each in June and August this year.
Mr Ong said this is still "fairly on the low side". Shoebox units still have relevance, but to a select group of buyers comprising mainly the singles, he said.
From 2010 to 2012, there was heated buying for this housing asset class, which had mushroomed beyond the city centre where they were typically bought to be rented out to expatriates working nearby, to the suburbs.
This eventually prompted the government to rein the market in by controlling the proportion of shoebox units allowed in suburban areas from September 2012.
NUS SRPI also showed an increase in the number of shoebox units sold this year. At 158 from January to November 2015, this is 40 per cent higher than the 111 units sold in the whole of 2014.
OrangeTee senior manager for research and consultancy Wong Xian Yang added that the outlook on small units remains gloomy, especially with interest rates expected to rise further.
"Many small units were bought for investment purposes, and though sentiments have dimmed, many investors are still sitting on profits and are willing to negotiate and transact at lower prices.
"Based on matched caveats, most of the small units sold in 2015 year-to-date still remain profitable, excluding stamp duties and other costs."
The SRPI for Central Region (excluding small units) eased 0.8 per cent month on month in November, after rising 0.5 per cent in October.
The Central Region is defined as Districts 1-4 (including the financial district and Sentosa Cove) and the traditional prime residential districts of 9, 10 and 11 by the NUS' Institute of Real Estate Studies, which minted the SRPI series tracking prices of completed non-landed private homes.
Prices in the Non-Central Region (again excluding small units) retreated 0.4 per cent last month after easing 0.3 per cent in October.
The Overall SRPI shed 0.6 per cent in November; in October it had inched up 0.1 per cent. ERA Realty key executive officer Eugene Lim said this is just "month-on-month fluctuations".