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Thread: Luxury residential rents slide in Q1: DTZ

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    Default Luxury residential rents slide in Q1: DTZ

    http://www.businesstimes.com.sg/sub/...26205,00.html?

    March 31, 2009, 2.41 pm (Singapore time)

    Luxury residential rents slide in Q1: DTZ

    By KALPANA RASHIWALA


    SINGAPORE - The average monthly rental value for luxurious non-landed homes in Singapore's prime districts 9, 10 and 11 slid 18.8 per cent quarter on quarter to $5.20 (US$3.42) per square foot (psf) in Q1 2009, a level last seen in Q3 2006, according to property consulting group DTZ.

    Meanwhile, the average rental value of non-landed homes in the prime districts fell 16.2 per cent quarter-on-quarter to $3.65 psf per month in Q1 2009.

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    http://www.channelnewsasia.com/stori...419052/1/.html

    Private residential properties see sharp fall in rentals in Q1

    By Wong Siew Ying, Channel NewsAsia | Posted: 31 March 2009 1331 hrs


    SINGAPORE: Private residential properties in Singapore saw a sharp fall in rentals and a slight price decline in the first quarter of 2009.

    Real estate consultancy firm DTZ in its report on Tuesday said monthly rentals of luxurious homes slid 18.8 per cent to S$5.20 per square foot, a level not seen since the third quarter of 2006.

    Rent of units in prime districts also saw a drop, down 16.2 per cent to S$3.65 per square foot per month.

    The decline was largely due to corporate downsizing and increased supply from newly completed projects.

    DTZ's findings showed that some 10,122 private residential units were completed in 2008, about 17 per cent more than the annual average of 8,671 units recorded in the past 10 years.

    Meanwhile, prices of private homes fell at a slower pace in the first quarter of 2009.

    DTZ said prices of freehold private apartments in the prime districts of nine, 10 and 11 dipped by 3.7 per cent to S$1,120 per square feet, compared with the 14 per cent drop in the previous quarter.

    Luxurious home prices declined 3.6 per cent after a 22 per cent plunge in the fourth quarter of 2008.

    But despite the gloomy economic conditions and job losses, DTZ said response to the two new launches in February created a stir in the property market.

    Overwhelming take up rate for Caspian and Alexis also prompted other developers to bring forward new launches and relaunched projects at lower prices. Units in the mid-tier and mass market segments went for under S$1,000 per square foot or about S$1 million per unit.

    In all, some 1,323 private homes were sold in February, the highest since August 2007 when 1,731 units changed hands.

    - CNA/yb

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    Default Q1 home price respite fails to impress

    http://www.businesstimes.com.sg/sub/...26242,00.html?

    Published April 1, 2009

    Q1 home price respite fails to impress

    In rental market, luxury monthly condo rents slide 18.8%

    By KALPANA RASHIWALA


    (SINGAPORE) The prices of resale private apartments and condos fell at a slower clip in the first quarter compared with the decline in Q4 last year, according to latest figures from DTZ.

    However, the property consulting group is predicting price drops for the whole of this year to be just as sharp, if not sharper, than last year's declines as the recession bites and more new homes are completed.

    Meanwhile, property consultants estimate that developers sold between 2,000 and 2,400 private homes in Q1 2009, the best showing since Q3 2007, when the US sub-prime crisis struck.

    CB Richard Ellis (CBRE) said the top-selling projects in the primary market in Q1 were Caspian (550 units), Alexis (293 units), Double Bay Residences (250 units) and The Quartz (178 units).

    It predicts developers will sell some 5,000 to 6,000 units for the whole of 2009, while DTZ puts the figure a tad higher, at between 5,500 and 6,500 units. Either way, it would be an improvement from last year's dismal showing of 4,264 units.

    CBRE reckons that its predicted 10 to 15 per cent slide in private home prices across the board this year may encourage developer sales in the primary market.

    DTZ said yesterday that the average price for luxury freehold condos and apartments in prime districts 9, 10 and 11 slipped 3.6 per cent quarter-on-quarter to $1,880 psf in Q1 2009, much milder than the 22 per cent q-on-q decrease in Q4 2008.

    DTZ's senior director (research) Chua Chor Hoon is predicting a 25 to 35 per cent full-year drop, similar to last year's price fall of 30.4 per cent.

    In the mass-market segment, the average price for 99-year leasehold condos/ apartments outside the prime districts eased 2.6 per cent to $555 psf in Q1, roughly half the 5.8 per cent depreciation in Q4 2008.

    Ms Chua projects a full- year slide of 10 to 15 per cent, steeper than the 7.3 per cent decline last year.

    Landed home prices were more resilient, with average price drops of 1.5 to 2.2 per cent in Q1, compared with declines of 3.8 to 5.8 per cent in Q4 2008.

    'The leasing market bore the brunt of corporate downsizing and increased supply from new completions. 2008 saw the completion of 10,122 private residential units, 17 per cent more than the past 10-year average of 8,671 units.

    ' Some investors have resorted to renting out their units for the time being, hoping to sell when the market recovers,' DTZ said.

    Average monthly rents for luxury condos and apartments in prime districts fell 18.8 per cent quarter-on- quarter to $5.20 psf in Q1 2009, a level last seen in Q3 2006.

    Ms Chua is predicting full-year 2009 decline will come in at about 25 to 30 per cent, steeper than last year's 15.8 per cent fall.

    Based on DTZ's figures, which are based on resale prices, the average freehold luxury condo and apartment price of $1,880 psf in Q1 this year represents a drop of about one- third from the peak of $2,800 psf in late 2007/early 2008.

    In contrast, the average price of 99-year leasehold non-landed properties outside prime districts, at $555 psf in Q1 2009, has barely slipped 10 per cent in that period.

    That's not surprising since luxury home prices rose much faster than mass-market homes during the run-up. As DTZ's Ms Chua points out, in 2007 alone, luxury home prices increased by 66 per cent, while mass-market home prices rose a more moderate 27 per cent.

    DTZ says that falling construction costs will provide some leeway for developers to re-price their projects.

    Says the firm's executive director (residential) Margaret Thean: 'Mass market and mid-tier launches will continue to dominate the primary market in 2009.'

    Knight Frank managing director Tan Tiong Cheng observes that with the bigger slide in luxury home prices compared with other segments, the price gap has narrowed between high- end and mid-tier properties.

    'Eventually, this will provide some support to the high-end-market. Once developers start launching luxury projects and somebody sets a price benchmark at attractive prices, buying should return to this segment,' Mr Tan says.

    While foreigners and speculators who fuelled the run-up in luxury home prices have vanished, those who sold their homes in en bloc sales and who are still sitting on cash may be in a position to buy, he added.

    DTZ's Ms Thean cautioned that despite the recent pick-up in developer sales, weak economic fundamentals will weigh down hopes of a sustained recovery in activity.

    Those agreeing with this view say that the HDB resale market - which feeds the entry-level private residential market - is expected to slow down as unemployment worsens.

    ERA Asia-Pacific associate director Eugene Lim predicts that the HDB Resale Price Index will probably rise just 3 to 5 per cent for the whole of this year, after a 14.5 per cent gain last year.

    Still, most observers reckon that any eventual recovery in the private housing market will be bottom- up - emanating from the mass-market segment and fuelled by income-driven buyers - rather than a top-down effect from a surge in high-end prices generated by wealth-driven buyers as seen during the 2006-2008 bull run.

    'The signal must come from the economy because we're still the tail and the dog is the economy, because that's where the incomes are derived, and property is always the tail end of the value chain,' as a major developer puts it.

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