Overall price growth for private homes, HDB resale flats slowed in Q4 but high-end hit new high(SINGAPORE) A surge of interest in high-end and luxury homes pushed prices in the segment, which has underperformed the rest of the market over the last two years, to a fresh all-time high in Q4 2010.

But in the rest of the market, prices of private homes as well as HDB resale flats grew more slowly in the fourth quarter compared to the first three quarters of last year.

Flash estimates released by the Urban Redevelopment Authority (URA) yesterday show that overall private housing prices edged up 2.7 per cent in Q4 to a fresh record high.

Private home prices in Singapore first surpassed the former all-time peak achieved in 1996 in Q2 2010, and then continued to inch upwards in Q3 and Q4. For the whole of 2010, prices climbed 17.6 per cent.

But the gain in fourth-quarter prices was the smallest in six quarters, URA’s data shows.

The high-end market was a notable exception. Non-landed home prices in the Core Central Region (CCR) micro-market, which includes the prime districts Marina Bay and Sentosa Cove, rose 2.3 per cent in Q4, faster than the 1.6 per cent growth seen in Q3.

This pushed luxury home prices to a new all-time high, outstripping the previous peak in Q1 2008.

By contrast, the price index for Rest of Central Region (RCR) rose by 1.7 per cent in Q4, down from 2.3 per cent in Q3. And in the Outside Central Region or OCR (where suburban condos are located), prices climbed 1.6 per cent in Q4 after increasing 2.2 per cent in Q3.

Analysts attributed the slowdown in price growth in the RCR and OCR areas to resistance from buyers for increasingly expensive projects.

Price growth in the CCR region, by contrast, rose on the back of the prevailing strong economy and low interest rates, which once again enticed foreign investors to pick up luxury homes in Singapore.

‘In 2010, much of the activity was focused on the mass and mid-market segments,’ said Joseph Tan, CBRE’s executive director for residential. ‘Foreigners stayed away, thinking that the lack of transaction activity in the high-end segment would lead to a fall in prices and allow them to buy the properties for less.’

But since most high-end home owners proved to have ‘holding power’, the anticipated fall in luxury home prices did not occur and foreign buyers are slowly returning to the luxury market, Mr Tan said.

The number of foreign home buyers rose by 14 per cent in 2010 compared to 2009, said Knight Frank’s head of consultancy & research Png Poh Soon.

‘The tightened regulations in Hong Kong and aggressive anti-speculation rules in China caused some investors to shy away from those markets and directed them to Singapore,’ Mr Png said. ‘High net worth foreign buyers would definitely consider the Singapore property market to park their money.’

Analysts also noted that while the latest round of cooling measures introduced by the government on Aug 30 have not dampened transaction volumes, they appear to have at least moderated price growth. A record 15,500-16,500 new private homes are estimated to have been sold in 2010, despite demand-side and supply-side measures introduced periodically throughout the year.

CBRE’s Mr Tan said that transaction volumes were still high in 2010 as many potential buyers are still out looking for units.

But the price growth has slowed as these buyers – especially those house-hunting in the mass-market segment – are sticking to a budget.

Over at the HDB market, prices of resale flats rose 2.4 per cent in Q4 2010 – a slower rate of growth than the 4 per cent increase in Q3 2010 – according to flash estimates from the Housing & Development Board.

But while the resale price index was pushed to yet another all-time record, the transaction volume fell.

The resale volume declined by about 21 per cent in Q4, HDB said. And the median cash-over-valuation (COV) amount is also estimated to have fallen by $7,000 or 23 per cent, from $30,000 in Q3 2010 to $23,000 in Q4 2010.

In fact, COV levels declined progressively over the last three months of 2010, according to data from PropNex.

The firm’s chief executive, Mohamed Ismail, said that according to monthly transactions handled by his company in Q4 2010, the median COV fell from $26,000 in October to $23,000 in November and to $20,000 in December.

But overall resale prices are still climbing in spite of falling COV levels due to a time lag, he explained

‘Valuations for resale flats that were transacted in Q4 2010 were based on prevailing caveats for flats in the vicinity,’ Mr Ismail said.

‘There is therefore a certain lag time of about two months and hence the (HDB) prices overall are still climbing.’

Looking ahead, growth in private home prices may slow to anywhere between 3 per cent and 10 per cent in 2011, analysts predicted.

But most are more bullish on luxury home prices, which some said could climb by up to 15 per cent this year.

In the mass-market segment, the ample supply of new homes coming onstream from the beefed-up 2010 Government Land Sales programme should help to keep price growth to less than 5 per cent, analysts said.

And in the HDB resale market, prices are expected to grow by 5-10 per cent in 2011. The overall median COV level should also fall to about $18,000 to $20,000 in Q1 2011, said Mr Ismail.

Source: Business Times, 4 Jan 2011

But URA data shows private property prices overall moderating in Q4
NEW data on property sales tells a mixed tale – city centre apartments have made a comeback and values are now likely at record levels but private home prices overall are moderating slightly.

Cooling measures introduced in August last year seem to have taken a little of the heat out of the market with prices for non-landed homes up 2.7 per cent in the three months to Dec 31 – slightly down on the 2.9 per cent increase in the third quarter.

Signs of moderation were even starker among private suburban apartments, with prices up just 1.6 per cent in the fourth quarter, down from the 2.2 per cent increase seen in the third.

But even a slower fourth quarter could not take the shine off what has been a bumper year for private homes, no matter where you live – or bought.

Prices of apartments in the city fringe jumped 17.5 per cent last year while they were up 14.5 per cent in suburban spots and 14.3 per cent in the city centre, according to flash estimates from the Urban Redevelopment Authority (URA) yesterday.

All in all, prices for private homes – landed and non-landed – surged 17.6 per cent last year.

The city centre, which has much of Singapore’s high-end property, was clearly the laggard last year but the URA numbers show that a rally in this zone has finally kicked in.

Prices of private apartments in the city centre increased 2.3 per cent in the last quarter and are now 2.1 per cent higher than their previous peak, in the first quarter of 2008.

Experts tip that these prices could rise a further 8 to 15 per cent this year given the increasing number of foreigners buying here, healthy economic growth and low interest rates.

Mr Png Poh Soon, head of research and consultancy at Knight Frank, said that foreigners made up 24.7 per cent of buyers last year – up on the 21.8 per cent in 2009. ‘The tightened regulations in Hong Kong and aggressive anti-speculation rules in China will inevitably direct some investors from these buoyant markets to Singapore,’ he added.

The trend was already evident in the last quarter when Chinese buyers edged out Malaysians as the largest proportion of foreign transactions for the first time, Mr Png said.

Ms Tay Huey Ying, director of research and consultancy at Colliers International, expects city centre prices to jump by between 10 and 12 per cent this year while the overall market should see values rise by 10 per cent.

Experts said that buying momentum for high-end homes is likely to continue, with prime projects such as Ardmore 3 and Le Nouvel Ardmore on the way after recent successful launches such as Robinson Suites, Suites at Orchard and The Glyndebourne.

Ms Tay added that slowing price rises in suburban homes – up just 1.6 per cent in the fourth quarter – should keep further cooling measures at bay in the short term.

Mr Ong Kah Seng, senior manager of Asia-Pacific research at Cushman & Wakefield, added that modest price rises in suburban condos despite buoyant new sales in November and last month showed that the Government’s measures have stabilised prices.

But he believes the cooling steps will have less impact on the top end.

‘Prime residential properties, which have been the laggard in 2008 to 2010, are expected to shine in 2011, while those in (suburban areas) may be relatively restrained… due to the large forthcoming supply which intensifies competition among developers and provides more choices for home buyers,’ he added.

The URA estimates capture mainly transactions in October and November as the cooling measures intended to quell speculation – including tighter lending rules for buyers with second mortgages – started gaining traction. The data will be updated in four weeks.

Separately, Far East Organization said yesterday that 253 out of 299 Soho-style – small office or home office – apartments released at 338-unit The Tennery at Bukit Panjang have sold for $950 to $1,350 per sq ft.

Source: Straits Times, 4 Jan 2011

THE Christmas buying spree has rubbed off on home hunters who have been snapping up units at Singapore’s latest property launch.

Some 181 of the 217 units put up for sale at The Tennery since Monday last week have already been snapped up – and this in the usually slow month of December.

Coupled with other strong launches, an estimated 600 new private homes have been bought so far this month. This means that the total number of homes sold for the year is well on track to reach the 16,000 predicted by real estate firm CB Richard Ellis.

At The Tennery, prices for the one- and two-bedroom units start at $720,000 and range from $950 to $1,300 per sq ft, according to developer Far East Organization.

It said Singaporeans and permanent residents made up 80 per cent of the buyers at the 99-year leasehold site at the junction of Choa Chu Kang Road and Woodlands Road.

PropNex chief executive Mohamed Ismail said the affordability of the small units – as well as the accessibility of the site – made the 16-storey residential development an attractive proposition for buyers.

‘Most of the buyers are probably medium-term investors who have a view to renting them out,’ he added.

He noted that the site, which will eventually boast 338 units, is near the Ten Mile Junction LRT and the soon-to-be completed Bukit Panjang MRT.

The successful Tennery launch coincides with solid performances at other new launches this month.

Some 232 units of the 250 units offered for sale by CapitaLand at its D’Leedon project on Farrer Road have been bought.

And buyers have purchased almost all of the 167 units at Robinson Suites, which are priced from $2,300 to $3,300 psf.

According to data released by the Government, some 15,025 new private homes were sold during the first 11 months of the year, already an all-time record.

With analysts predicting that full-year sales could hit 16,000 units, this would exceed the 2007 record of 14,811 units by some 8 per cent.

Orange Tee head of research and consultancy Tan Kok Keong predicts that the momentum of sales from November, when 1,909 homes were sold, is likely to continue into the new year.

‘The feel-good factor is back, with a more positive economic outlook and the Government reporting good job growth,’ he said.

Source: STraits Times, 29 Dec 2010

 FAR East Organization has sold 181 Soho-style (small office, home office) apartments in its 338-unit The Tennery.

The developer said yesterday that it released 217 units of its newest residential project, at Bukit Panjang, in a preview. A total of 181 units were sold at prices ranging from $950 per sq ft (psf) to $1,300 psf.

The 99-year leasehold The Tennery is part of an integrated residential and retail development Far East is building on the Ten Mile Junction site it won in a government tender in February.

Far East paid $164 million or $437 psf per plot ratio for the site at the junction of Choa Chu Kang and Woodlands roads.

In addition to The Tennery, the site will also house a 121,000 sq ft retail development called Junction 10.

Some 80 per cent of The Tennery’s buyers are Singaporeans and permanent residents, Far East said. It added that most of the buyers are professionals living in the Bukit Panjang, Choa Chu Kang, Bukit Batok and Hillview areas, who are familiar with the neighbourhood.

Far East Organization’s executive director and chief operating officer Chia Boon Kuah said that an increasing number of people are looking for versatile living spaces that allow them to work from home.

This development, he said, is flexible, expandable and designed for maximum functionality.

The Tennery’s one-bedroom apartments range from 619 sq ft to 640 sq ft in size, while two-bedders range from 860 sq ft to 950 sq ft in size. Far East will release more units during the project’s official launch on Jan 1, 2011.

In 2010, including The Tennery, Far East has launched nine residential projects in Singapore. Other launches included Altez in the Tanjong Pagar area, The Greenwich at Seletar Hills and Skyline@Orchard Boulevard.

Source: Business Times, 29 Dec 2010

Prices in Non-Central region top pre-crisis high, Central region 3.7% below peak
(SINGAPORE) The latest flash estimates for November from the National University of Singapore (NUS) show that prices of non-landed private homes in Singapore’s Central region (districts 1-4 and 9-11) have appreciated 7.9 per cent in the first 11 months of this year from end-2009.

Over the same period, the Singapore Residential Price Index (SRPI) sub-index for the Non-Central region rose at a faster clip of 12.9 per cent. As a result, the overall SRPI increased 10.7 per cent year to date.

SRPI, compiled by the NUS Institute of Real Estate Studies, covers only completed properties.

The Central region sub-index for November is still 3.7 per cent shy of its pre-Global Financial Crisis peak in November 2007. On the other hand, the sub-index for the Non-Central region in November has already surpassed its January 2008 pre-crisis peak by 15 per cent. As a result, the overall November 2010 index is about 7.6 per cent above its November 2007 pre-crisis high.

The latest indices from NUS tally with what property agents have been reporting from the ground – that mass-market condo prices have scaled fresh records this year while prices of prime and luxury condos have yet to touch their 2007 records.

DTZ executive director (consulting) Ong Choon Fah said that entry-level suburban condos have enjoyed strong demand this year, riding on upgrader demand amid a buoyant HDB resale market.

‘In addition, the trend of developing a higher proportion of smaller units in private residential projects has spread from the prime districts (where rental demand is stronger) to the suburbs – and this has also helped to boost sales of mass-market projects by making the lump sum investment more palatable to buyers.’

Mrs Ong also pointed out that these days, developers of suburban projects are offering some of the innovative features which in the past were available only in prime district projects – such as sky gardens.

Knight Frank chairman Tan Tiong Cheng said that the increase in high-end condo prices had not been so sparkling this year due to more subdued foreign buying compared with the previous bull run in 2007.

‘The foreign buying back then was from a wider spectrum. These days, buyers from the West, Middle East and Russia seem to be out of the equation. Also Western bankers were a significant buying contingent in 2007 but post-crisis, banks are less generous with remuneration.’

Month on month, the overall SRPI dipped 0.2 per cent in November. The sub-index for the Non-Central region too eased 0.3 per cent but the Central region sub-index was flat.

Since the last round of property cooling measures on Aug 30, the Central region sub-index has eased 0.4 per cent while the non-Central index has strengthened 0.9 per cent. As a result, the overall index in November was 0.4 per cent ahead of the August level.

Despite being proven wrong with their earlier forecast of stronger price appreciation for high-end condos compared to mass-market ones for 2010, analysts continue to predict the same trend in 2011, pointing to the already substantial price hikes posted in the mass-market segment. And if the government succeeds in taming HDB resale prices, that will also have an impact on upgrader demand for entry-level condos. Also, any interest rate hike, as well as further property cooling measures, is likely to make a bigger dent on demand in the mass-market segment than on upmarket condos.

Source: Business Times, 29 Dec 2010

HOME buyers looking at the resale market rather than at the buoyant new launch segment could benefit from a break in rising prices, according to new data released yesterday.

For the second consecutive month, the National University of Singapore’s Singapore Residential Price Index, which tracks only the prices of completed projects, fell.

Flash estimates suggest it was 0.2 per cent lower last month than in October. And revised estimates indicate that prices in October were 0.6 per cent down on the previous month’s, after having climbed 1.1 per cent per month in both August and September.

Prior to October, the last time the overall index fell was in July when it dipped 0.1 per cent.

Comparing central and non-central areas, home prices in central locations remained flat last month after falling 1.3 per cent in October. In non-central areas, home prices slid 0.3 per cent following their staying flat the previous month.

Experts said the index shows that prices are stabilising – particularly in non-prime areas where buyers are more resistant to higher prices and likely to be affected by the Government’s August cooling measures to a greater extent.

Some believe the index has highlighted the emergence of a two-tier market, with newer condominiums continuing to fetch benchmark prices while older completed projects stabilise or even decrease marginally in price.

Ms Tay Huey Ying, director of research and consultancy at Colliers International, said the second consecutive month-on-month slide was an indication of softening interest for older properties as buyers with a preference for everything new flock to new completions and launches. This is especially so since developers stepped up their launch activity last month, when their combined launch volume reached a 16-month high of 2,329 units, she added.

Mr Ong Kah Seng, senior manager of Asia-Pacific research at Cushman & Wakefield, said that the two-tier pricing market is likely to persist with buyers continuing to be enticed by new properties’ more exciting offerings.

Still, he expects an increasing number of home buyers to purchase resale properties, given that they represent ‘a cheaper alternative to suburban condominiums, offer almost immediate occupation and allow the direct benefit of owning a private property’.

Mr Ong added that although the cooling measures had done little to reduce home buying interest, they had served to minimise price increases, particularly for suburban condominiums.

DTZ’s head of South-east Asia research Chua Chor Hoon said that the measures, which have hit the Housing Board market harder than other segments, appear to have filtered down to the private sector.

The price index, which tracks the price movement of non-landed homes completed between October 1998 and September last year, does not capture the price movement of newly completed or soon-to-be- completed projects. The index also does not track the transacted prices of homes sold in the primary market.

Source: STraits Times, 29 Dec 2010

INSTITUTIONAL investors have become more active in the high-end home market, with the segment trading at a discount to its peak.

The Straits Times understands that 20 units at Paterson Suites were snapped up by Singapore-based investment fund Real Estate Capital Asia Partners (Recap) last month at an average price of $2,700 per sq ft (psf).

Recap is believed to have paid $118 million for the 20 four-bedroom apartments across the 2nd to 21st storeys with a total strata area of about 44,000 sq ft.

The price represents a discount of about a 10 to 15per cent on what the units would have cost individually, sources said.

The fund’s substantial purchase has helped boost total sales at the high-end condo to 64 out of its 102 units as of last month. Bukit Sembawang’s Paterson Suites was launched in 2007 and completed in the third quarter.

Property consultancy Savills is believed to have brokered the deal but could not be reached for comment yesterday.

Recap – headed by Mr Suchad Chiaranussati, who is married to a niece of City Developments executive chairman Kwek Leng Beng – is said to have recently sold 20 apartments at the Sui Generis freehold condominium in the Balmoral area for around $95 million or $1,935 psf.

The buyer of the Sui Generis apartments is understood to be Singaporean billionaire investor Peter Lim, who also purchased Thomson Medical Centre in October.

The Straits Times previously reported that 38 of the 41 units sold in total at Paterson Suites last month were bought by a handful of private investors. The 41 units sold at a median price of $2,661 psf last month.

The 20 units that Recap bought were part of the 38 units sold.

Experts believe that increasing interest in the high- end apartment segment is likely to be due to prices of such homes languishing below their 2007 peaks, providing an opportunity for capital gain. Also, the Singdollar, which is expected to strengthen further, provides investors with an opportunity for currency gain, further sweetening the deal, they added.

Source: Straits Times, 24 Dec 2010

Average cap value of prime resale freehold landed homes up 5.1% in Q4

AVERAGE cap values of landed homes in Singapore have risen at a faster clip than those of private apartments/condos in the fourth quarter as well as the whole of this year, show latest figures from DTZ.

DTZ’s analysis referred only to resale landed and non-landed homes, that is, properties that had already obtained Certificate of Statutory Completion.

‘The limited stock of landed homes has made them prized assets, especially those in the prime districts. Landed homes currently account for about 26 per cent of Singapore’s total private housing stock (including executive condos), with very limited supply in the pipeline. In contrast, the supply of non-landed private homes is injected at a faster pace via the Government Land Sales programme and collective sales,’ says DTZ’s Southeast Asia research head Chua Chor Hoon.

The average capital value of prime resale freehold landed homes stood at $1,693 per square foot (psf) on land area in Q4 2010, up 5.1 per cent from the previous quarter, taking the full-year increase to 17 per cent. For suburban freehold landed houses, the average capital value increased 4.3 per cent quarter on quarter to $993 psf in Q4, resulting in a full-year appreciation of 15.5 per cent.

In the non-landed segment, the average cap value for 99-year suburban condos remained unchanged at $660 psf on strata area in Q4 2010, taking the appreciation for the whole of 2010 to 8 per cent. The average price of prime freehold condos increased 0.4 per cent quarter on quarter to $1,520 psf in Q4, also reflecting an 8 per cent full-year price gain.

DTZ said prices in these two segments are hitting resistance, having risen by about 18 per cent and 36 per cent since their respective Q1 2009 troughs following the global financial crisis. The latest cap values are also above the respective Q4 2007 peak levels, it noted.

‘Greater prudence is also being exercised on buyers’ part following the latest property cooling measures introduced on Aug 30. Buyers are more selective and prefer projects with good location attributes such as proximity to MRT stations, schools or the central business district,’ DTZ said.

On the other hand, the Q4 2010 average cap value of freehold luxury condos (above 2,500 sq ft) in the prime districts was $2,630 psf, about 6 per cent shy of the Q4 2007 peak of $2,800 psf. The latest Q4 figure was unchanged from the preceding three months while the full-year 2010 increase was 9.6 per cent.

‘With a limited pool of buyers being able to afford these luxurious units which require a large quantum sum, this segment has seen more subdued purchasing activity,’ DTZ said.

The firm’s executive director (residential) Margaret Thean said: ‘Although there’s less activity in the high-end segment, we’re still seeing strong interest from Chinese and Indian nationals, and increasingly from institutional investors such as funds. They have confidence in future price growth due to Singapore’s strong economic fundamentals. As for individual foreigners buying for owner occupation, completed developments near renowned schools particularly interest them.’

Ms Chua predicts that resale prices of 99-year suburban condos are likely to remain flattish next year while those of prime freehold condos could rise by up to 5 per cent if there is more buying from foreigners due to the clampdown on property purchases in their home countries.

She expects prices of landed homes to continue to outperform those of apartments and condos due to their relative scarcity appeal.

Source: Business Times, 22 Dec 2010

Analysts see moderate rises next year
PRICES of resale condominium units have stayed more or less flat over the past six months though landed property performed strongly, according to new data analysed by consultancy DTZ Research.

One factor behind the steady trend for non-landed resale homes is that they had already risen sharply, it suggests.

Another is that home buyers are exercising greater prudence after market cooling measures introduced by the Government on Aug 30 to quell speculation.

But it is a completely different picture for the upscale landed homes segment.

Landed freehold units in the prime districts have seen prices rise 5.1 per cent this quarter from the previous quarter. Prices are about $1,693 per sq ft (psf).

Even outside prime districts, landed homes have posted strong price rises of 4.3 per cent to an average $993 psf.

Since the start of the year, landed property prices have risen about 16 per cent. Against the second quarter of last year, when prices started to rise, the jump has been even sharper at 37 per cent.

In a report, DTZ’s head of South-east Asia research Chua Chor Hoon said the limited stock of landed properties has made them desirable, especially those in the prime districts.

This contrasts with the non-landed category where government land sales and collective sales have boosted supply.

DTZ highlighted two key segments in its report on resale homes: mass market condos in suburban areas and condos in prime districts 9, 10 and 11.

Mass market condo prices are closely watched as they are the first rung up the property ladder for HDB upgraders.

After leading the overall prices for two straight quarters, resale prices for the mass market segment have taken a breather. They remained unchanged at an average of $660 psf in the fourth quarter compared with the third.

Prime district condos prices moved up slightly to $1,520 psf, rising 0.4 per cent compared to the previous quarter.

Average prices for both segments are up almost 8 per cent for all of 2010, lifting above 2007 levels.

Over the past seven quarters, prices of mass market condos have risen 18 per cent while prime district condos have surged 36 per cent.

Another segment, luxury condos, has still not reached its 2007 record levels. DTZ said that at an average resale price of $2,630 psf, this is the only segment with prices still 6 per cent under 2007 levels.

Looking ahead, Ms Chua said prices for resale non-landed projects next year are not likely to rise much.

‘The August measures are affecting the Housing Board market and this could result in a filter down effect in the first half of next year,’ said Ms Chua. ‘(Cash-over-valuation) has gone down and its impact is already being felt in the market, and could in turn affect the upgraders’ budgets and market.’

Other analysts agree. They expect next year’s overall price growth for the private property sector to remain moderate. The main factor is that prices have already risen sharply.

Credo Real Estate executive director Ong Teck Hui said: ‘As we’re at an advanced stage of the up-cycle, the price increases are likely to be more moderate. We could see average price increases of 2-4 per cent per quarter in 2011.’

Another factor will be the global economic climate – especially in the luxury segment. Knight Frank associate director and head of research and consultancy Png Poh Soon said: ‘Buyers of higher-end property will assess the economic outlook and changes before deciding where to put their money. They will come if the local economy continues to grow.’

A record 15,025 new private homes were sold in the first 11 months of the year, the Urban Redevelopment Authority said recently, surpassing the previous peak of 14,811 in 2007.

These figures, said Credo’s Mr Ong, show that there is relatively strong interest in the market and this demand will probably spill over into the new year.

Property prices move in tandem with the country’s economic growth, said Knight Frank’s Mr Png. This year, Singapore’s economic growth rate is expected at up to 15 per cent. Mr Png said overall property prices are up about 20 per cent this year.

Source: Straits Times, 22 Dec 2010