http://www.businesstimes.com.sg/prem...-sept-20131029

Published October 29, 2013

SRPI for three of four sectors down in Sept

Overall index drops 0.7% after 0.4% fall in Aug; property players split on data

By Kalpana Rashiwala [email protected]


PRICES of completed non-landed private homes posted a worse month-on-month showing in September in three out of four categories, according to latest flash estimates of the Singapore Residential Price Index (SRPI).

The only segment that still managed to inch up, although by only 0.1 per cent, was the SRPI for Non-Central Region (excluding small units). In August, this sub-index had dipped 0.1 per cent based on the revised value for that month which was also released yesterday.

The biggest drop was posted by the sub-index for small units (up to 506 sq ft) islandwide, which slipped 1.9 per cent in September over August - contrasting with a 0.7 per cent month-on-month gain in the revised index value for August.

"One possible reason for this could be that those who bought shoebox units in the early days and sitting on huge profits are less inclined to quibble over pricing in today's market when offloading their units," suggested Savills Singapore research head Alan Cheong.

SRPI, which tracks prices of completed private apartments and condos (excluding executive condos), is compiled by the National University of Singapore's Institute of Real Estate Studies (IRES).

SRPI for Central Region (excluding small units) lost 1.7 per cent month on month in September, after easing 0.8 per cent in August.

Central Region is defined as districts 1-4 (including the financial district and Sentosa Cove) and the traditional prime districts 9, 10 and 11.

The Overall SRPI fell 0.7 per cent month on month in September after declining 0.4 per cent in August.

Property consultants gave mixed views on the latest data.

SLP International executive director Nicholas Mak said: "A general weakness in the price growth of the completed private housing market in Q3 2013 could point towards a turning point in the price trend of private residential properties".

He was referring to the performance of SRPI over the three-month period from June to September 2013. The Overall SRPI value declined 0.8 per cent, led by a 2.2 per cent slide in the Central Region. On the other hand, the sub-indices for Non-Central Region and small units managed to post modest gains of 0.3 per cent and 0.9 per cent respectively.

Commenting on the steeper slide in Central Region, DTZ's head of Singapore research, Lee Lay Keng, noted: "This segment is seeing a bigger impact from more difficult financing conditions under the Total Debt Servicing Ratio framework due to the generally larger overall price quantum involved."

"Buyers continue to gravitate towards smaller homes, which have a lower price quantum," said Ms Lee on the 0.9 per cent increase in the small unit (islandwide) index.

Savills' Mr Cheong said that "despite accelerated price declines for all save the non-Central basket" in the September SRPI values compared with the preceding month, it is still too early to make the call that the market has reached its inflection point.

"Looking at the period in November 2011, it showed the overall index turning down but in a short space of time, come March 2012, it reversed direction and trended up again."

"Nevertheless, this time, it appears that accelerative forces are beginning to dissipate from the resale market insofar as the NUS basket of properties is concerned," he added.

Year to date, the SRPI value for small units islandwide posted the best showing, rising 4.9 per cent, followed by a 2.9 per cent gain for Non-Central Region. The sub-index for Central Region dipped 0.4 per cent, lifting SRPI (Overall) by 1.4 per cent.

Summing up, associate prof Lum Sau Kim of IRES said: "On the whole all signals point to a slowdown in the private housing market as the driver from upgrader demand has been whittled somewhat by a contraction in HDB resale prices."