Prices of completed private apartments up slightly in February

[reporter2]

http://www.straitstimes.com/business...ly-in-february

Prices of completed private apartments up slightly in February

Rennie Whang


Prices of completed private apartments rose marginally for a second straight month in February, thanks to higher values in the central region, but experts are not reading too much into the numbers.

Overall prices added 0.4 per cent last month after increasing 0.2 per cent in January, according to flash estimates from the NUS Singapore Residential Price Index (SRPI).

But sales volumes are so low that the odd transaction could skew index readings, industry watchers warned.

One such outlier in the high-end market could have been the sale of a St Regis Residences penthouse late last month for $15 million, or at $2,706 per sq ft (psf).

The sale to an Indonesian buyer netted the owner from the United States a gain of $3.3 million despite a slew of loss-making transactions at the project in recent years.

According to the SRPI, prices of completed private apartments in the core central region rose 0.5 per cent last month.

"High-end residential prices have turned a corner since the fourth quarter of last year," said Mr Alan Cheong, Savills Singapore research head.

Savills' basket of luxury non-landed private home prices rose in the fourth quarter over the third, and should be positive in the first quarter of this year as well.

But volumes are thin. Just 281 resales and subsales of private apartments took place in the core central region in the fourth quarter and only 217 have been recorded this quarter so far.

So the slight uptick in high-end prices could be due to statistics, with low transaction volumes causing less than robust readings, noted Mr Cheong.

But there are overseas buyers still keen on Singapore prime property as its value is much lower than that in London and Hong Kong, even with the Additional Buyer's Stamp Duty.

Foreigners accounted for 92 resales and subsales of private apartments in the core central region in the fourth quarter, and have made 57 such sales this quarter.

At the same time, however, some of these transactions may not be as clear cut as they look.

While two four-bedroom apartments at The Ritz-Carlton Residences were sold for $10.6 million and $11.6 million last month, or at $3,467 psf and $3,795 psf each, the developer is said to have given some rebate, making the effective sale price about $3,200 psf.

The developer is believed to be maintaining prices in the event of a bulk sale at the project, which has about 30 unsold units.

Prices of completed private apartments in the non-central region rose 0.3 per cent last month, while those of units up to 506 sq ft fell 1.1 per cent, according to the SRPI.

The overall SRPI is down 2 per cent from this point last year, with similar drops in central and non-central indices. The SRPI for small units fell 5.6 per cent over the same period.

Investors who bought small units may find it tough to find tenants, said Mr Eugene Lim, ERA Realty key executive officer.

Rents of units sized 400 to 600 sq ft in the Redhill and Queenstown areas averaged 3,500 a month in 2014 but are now $2,900, he noted.

Small-unit owners with weaker holding power may have been forced to sell. The same could occur towards the middle of this year, with some high-value homes recording losses if business owners affected by falling oil prices are forced to sell, said Mr Cheong.

"They may have mortgaged their homes for working capital, and are now caught up in the crises of their sectors, be it oil and gas or marine. There could be some volatility especially for landed homes," he said.

Overall prices added 0.4 per cent last month after increasing 0.2 per cent in January, according to flash estimates from the NUS Singapore Residential Price Index.

But sales volumes are so low that the odd transaction could skew index readings, industry watchers warned.

[reporter2]

http://www.businesstimes.com.sg/real...04-in-february

Resale prices of private apartments inches up 0.4% in February

By Lee Meixian

[email protected]

@LeeMeixianBT

Mar 29, 2016


FOLLOWING a prolonged cool-off in buying interest in 2015, prices of completed condominium units and apartments rose 0.4 per cent in February, steadily following a 0.2 per cent increase in January.

This was based on the latest flash estimates from the National University of Singapore (NUS) for its Singapore Residential Price Index (SRPI) series.

The increase was driven by prices of homes in the central region - defined as districts 1-4 (including the financial district and Sentosa Cove) and the traditional prime residential districts of 9, 10 and 11. Prices here rose 0.5 per cent in February, after falling 0.6 per cent in January.

But R'ST Research director Ong Kah Seng said this could be a "one-off rebound", as the general trend he has seen for high-end homes is still either flattish price movements or slight price declines.

"A handful of sellers are actually making losses from their resales. Owners are also increasingly adopting an open mind to cut back on losses and move on."

Prices in the non-central region rose a milder 0.3 per cent in February, after rising 0.9 per cent in January.

Prices of small units of up to 506 square feet fell 1.1 per cent, after inching up 0.2 per cent in January.

Mr Ong said this is not surprising. Unit prices in the central area are falling from previously sky-high levels as expatriate renters move to city fringes. Meanwhile, shoebox units in suburban areas pose weak appeal to renters, who can rent a four- or five-room HDB flat for the same price.

Overall, Mr Ong noted the continued appeal of resale condos, and put this down to the greater product differentiation available compared to newly launched developer homes.

"Completed properties come in all shapes and sizes, conditions and designs," he said.

A 15- to 25-year-old completed condo unit has usually been renovated at least once.

One major difference is that older condo units are more spacious, compared to today's new condo unit which can hardly hold any more than a king-sized bed in the master bedroom.

He maintained that there are still some good value propositions in the completed condo space, more so than for developer sales, especially in this weak market where resale prices have fallen to a more affordable and realistic level.