Home prices slip but the 'centre' still holds

[mr funny]

http://www.businesstimes.com.sg/sub/...28740,00.html?

Published March 29, 2011

Home prices slip but the 'centre' still holds

Central region resists overall dip for now, but luxury market also expected to stay flat

By KALPANA RASHIWALA


(SINGAPORE) Prices of completed private apartments and condos have slipped slightly, overall, as the government's cooling measures made themselves felt. But those in the most posh part of town are still holding their own.

Latest flash estimates for February from the National University of Singapore show a weaker month-on-month performance in price indices compared to January.

'The Jan 13 cooling measures are certainly working,' said Knight Frank chairman Tan Tiong Cheng. 'The lower loan-to- value limit has affected investors with outstanding housing loans even if they have some financial capacity to purchase another residential property.'

NUS's overall Singapore Residential Price Index (SRPI) dipped 0.4 per cent month on month in February, a reversal of a gain of 2.9 per cent posted in January.

The sub-index for the Central region - home to Singapore's choicest residential districts (1-4 and 9-11) - rose one per cent month on month in February, a slower rise than the 3.1 per cent gain recorded in January.

The sub-index for the Non-Central region (where suburban mass-market condos are located) declined 1.5 per cent in February over the preceding month, in contrast with a 2.8 per cent appreciation in January.

Mr Tan predicts that private home prices in Singapore are likely to drift at current levels - 'unless the government opens the immigration tap again and removes some of these very severe cooling measures such as the seller's stamp duty rates and 60 per cent LTV for those with existing housing loans'.

Meanwhile, prices in the Central region have risen at a faster clip in the first two months of this year since end-2010 than in the Non-Central region. This marks a reversal of last year's pattern.

As a result, the SRPI for the Central region has finally surpassed its pre-global financial crisis peak of November 2007, albeit by just 0.1 per cent.

NUS's indices are produced by the university's Institute of Real Estate Studies and cover only completed non-landed private homes. The February 2011 flash estimate for the Central region index is up 4.1 per cent from the end of last year. This is a bigger gain than the 1.3 per cent year-to-date appreciation in the index for the Non-Central region.

The February Non-Central region index is up 18.8 per cent from its pre-crisis peak in January 2008.

The overall SRPI has appreciated 2.5 per cent year to date and is 11.5 per cent higher than its November 2007 peak.

February flash estimates reflect year-on-year increases of 10.3 per cent for the Central region, 13.1 per cent for the Non-Central region and 11.9 per cent for the overall index.

International Property Advisor (IPA) chief executive Ku Swee Yong said that prices of projects such as St Thomas Suites and Trillium in the prime districts, which were completed towards the end of last year, have posted price gains as buyers viewing the finished projects have found their quality better than expected.

'Clients whom we have brought for viewing for other projects like 8 Napier and Parkview Eclat have also been impressed by the quality of finishings,' he added.

Despite the NUS SRPI for the Central region outperforming that for the Non-Central region in February, Mr Ku is doubtful that this trend will prevail for the whole of this year.

'Unfortunately, wealth does not trickle from the bottom to the top,' he said. He does not expect the luxury condo market to outshine the suburban market in 2011 unless 'we see an influx of more high net worth individuals into Singapore both as tenants and buyers, and bankers receive their one and two-year bonuses again', he added.

The luxury market is likely to remain flat this year in terms of both prices and transactions, Mr Ku predicts.

Last year, out of the 16,292 private homes developers sold, only about 100 were above $3,000 per square foot.

'Foreigners are still scouting for buys but are not coming back to the high-end market the way they were in 2007,' he added.

Agreeing, Knight Frank's Mr Tan said: 'The foreign contingent is not back in full force. And there's still a good selection of units in prime district projects available from developers, which will put pressure on prices. For these reasons, I don't see a need for further cooling measures.'

[mr funny]

http://www.straitstimes.com/Money/St...ry_650384.html

Mar 29, 2011

Home prices steady in Q1

Estimates suggest cooling measures are working

By Esther Teo


HOME prices have stayed flat this quarter after steep rises last year, suggesting that January's cooling measures have started to bite.

Industry experts say values in the primary and secondary markets have largely held steady for the past three months after a blistering rise of 17.6 per cent last year.

The number of new homes sold has fallen, adding to the air of a market heading into a holding pattern.

CB Richard Ellis (CBRE) estimates that between 3,200 and 3,400 new homes would have been sold this quarter - about 25 per cent down from the 4,241 units moved in the final quarter of last year.

Mr Png Poh Soon, Knight Frank's head of research and consultancy, said the number of subsale transactions fell 72 per cent last month from January's level, while resale figures were down 56 per cent.

This is likely due to the Jan 14 measures, which targeted speculators with a hike in stamp duty that can reach 16 per cent on certain sales and a reduced loan-to-value ratio for buyers with an existing mortgage.

Resale prices have also barely moved this quarter, according to DTZ Research, which found that prices of flats have inched up by less than 1 per cent.

And a monthly index by the National University of Singapore (NUS) found that resale prices softened by 0.4 per cent last month compared with January's prices.

DTZ Research said the average resale price of leasehold suburban condominiums inched up 0.8 per cent to $665 per sq ft (psf), while that of freehold condos in the prime districts of 9, 10 and 11 saw a marginal 0.4 per cent rise to $1,525 psf from the previous quarter's figure.

Prices of luxury condos - still 6 per cent below their 2007 peak - also held firm at an average of $2,630 psf for the second consecutive quarter. DTZ said this was due to a smaller pool of buyers and an increased supply.

But prices of freehold landed homes in prime areas rose 2.2 per cent to $1,730 psf from levels in the quarter before, while resale prices outside prime districts were up 2.3 per cent to $1,015 psf.

Separately, the flash estimate of NUS' Singapore Residential Price Index - which tracks only prices of non-landed completed projects - showed that overall prices dipped 0.4 per cent last month after rising 2.9 per cent in January.

But resale prices of centrally located flats rose 1 per cent, while in non-central areas they dipped 1.5 per cent.

The preliminary numbers from industry players come before the Urban Redevelopment Authority releases first-quarter flash estimates on Friday.

Experts said prices are expected to remain stable with modest gains this year, as the market remains shrouded by various uncertainties in the global economy.

A hefty supply of new homes coming on the market over the next few years could also affect prices, they added.

Mr Nicholas Mak, head of research at SLP International, said prices could move by up to 5 per cent this year, either a gain or a drop.

'I'm still cautiously optimistic, people are still positive about the market... But there is a possibility of a decline as mounting pressure from competition might push owners to cut prices.

'A growing number of projects will also be offered for sale nearer to the end of this year,' he added.

Knight Frank's Mr Png said mass market homes in particular are the most vulnerable and prices are expected to fall 5 per cent.

CBRE's executive director of residential, Mr Joseph Tan, said: 'Assuming a stable economy and that the market moves at the same pace as in the first quarter, new home sales volume will be around 3,000 to 3,500 units (in the second quarter) with no significant fluctuations in home prices.'

DTZ's head of South-east Asia research, Ms Chua Chor Hoon, said the pace of price gains is expected to 'slow down and plateau'.

'There is more uncertainty this year, not just from the possibility of more cooling measures, but also from the events in the Middle East and Japan, the full impact of which is still not known,' she added.

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