Tag Archives: price falls

Landed property sees bigger slide in prices by 5.1%

LANDED homes are taking more of a hit than apartments in the lacklustre property market, with prices falling and demand drying up.

The price index for landed property has fallen 5.1 per cent over the past four quarters, well in excess of the 3.3 per cent slide in the non-landed index, according to the Urban Redevelopment Authority (URA).

“It was previously thought that the landed segment, which has so little new supply and strong demand, might be more resilient than other segments,” said Mr Ong Teck Hui, JLL national research director.

“The effect of the Total Debt Servicing Ratio (TDSR) on the landed segment has turned out to be worse than anticipated… now, with severely constrained borrowing, there are probably much fewer potential buyers of landed homes. Or if they are still in the market, their budgets would have been substantially cut.”

The transaction volume for landed properties in the five quarters after TDSR was imposed at end-June last year is 65 per cent lower than that of the five quarters before TDSR, Mr Ong added. Non-landed property recorded a 57 per cent decline in sales volume over the same period.

Buyers’ preferences are also changing, moving towards smaller, more modern-looking living spaces found in the private apartment market, said Mr Ong Kah Seng, director of R’ST Research.

“Savvy property buyers feel there is less value in buying a landed home in Singapore where costs are high and designs tend to be older,” he added, noting also that buyers are looking to the Johor housing market for more affordable landed property.

Mr Ong said suburban areas, especially in the northern and western regions, have seen more of a pile-up in completed and unsold landed homes due to their outlying locations, which “would not reflect much prestige or exclusivity in owning a private property”.

In Sembawang and Canberra, demand from HDB upgraders would have been substantially absorbed by some non-landed projects as well, including the One Canberra executive condominium, SkyPark Residences, Canberra Residences and The Nautical, said Mr Ong of R’ST Research.

Another factor is that it has become harder to get approvals for Singapore Permanent Residents (PRs) to buy landed homes, said Mr Nicholas Mak, SLP International executive director.

Buying landed homes is limited to Singaporeans and PRs, but PRs can buy only one landed home for their own occupation, with the purchase subject to government approval.

The Singapore Land Authority (SLA) further tightened eligibility criteria over the past two years. The number of approvals a year fell from 145 in 2010 to 117 in 2011, and 31 in 2012 – the first full year after tightening – and 11 last year. Nine approvals were granted in the first three quarters of this year, and eight in the same period last year, an SLA spokesman said.

Developers of landed projects with slow sales say they are concerned about how the measures are biting.

“Our agents are also suffering. We have taken steps to offer some discounts and, hopefully, buyers will see the value. Where (else) can you get a new landed house with a park or sea view?” said Mr Sam Chong, senior manager at Sunway, which developed Avant Parc in Sembawang. The completed project is selling at an average of $570 to $590 per sq ft (psf) of built-up area, with quantums from $2.488 million for a terrace home.

Mr Victor Ow, chairman and chief executive officer of Clydesbuilt Group, said the company is prepared to hold on to unsold homes at its completed Eleven @ Holland just as it held on to Lornie 18 residences during the 2009 recession.

It has started renting out Eleven @ Holland homes, with tenants for about eight homes already moving in. By the third quarter of next year, Mr Ow expects at least 75 per cent of homes to be taken up. Pricing at the project is an average of $1,050 psf, unchanged from its launch in June 2011.

“Despite cooling measures, good-quality projects in prime locations won’t be affected in the long term,” said Mr Ow.

At Belgravia Villas on Ang Mo Kio Avenue 5, which was launched a year ago with completion due in 2018, 31 of 118 landed homes have been sold at prices from $800 to $850 psf.

“Given recent government rules for strata-landed homes, future supply will be limited. We are confident our project will do well,” said Mr Darren Lim, assistant marketing manager at Tong Eng Brothers. Tong Eng’s unit Fairview Developments is building the project.

Consultants say the investment outlook for landed property remains encouraging. The vacancy rate for such homes was 3.5 per cent as at the third quarter while that for apartments was 8.2 per cent.

The average upcoming supply of 710 landed properties per year from 2015 to 2018 could be “easily taken up during a buoyant market”, said Mr Mak.

Mr Ong of R’ST Research expects resale prices for landed homes in the central region to be flat or fall up to 5 per cent next year while prices at suburban locations will continue to dip, falling up to 7 per cent next year.

Those in city fringe locations are likely to see flat pricing next year as those areas have become established as the “best of both worlds” with convenience and reasonable pricing.

“Investment yields are generally lower than for private condominiums, with gross yields of 2.5 to 3.5 per cent… Landed homes are better products to buy for long-term capital appreciation,” he said.

8 Nov 2014 Straits Times

More homes sold as prices slip in Q2

Buyers jumped back into the local housing market as prices of both public and private homes fell for another straight quarter, figures out yesterday showed.

A raft of cooling measures has kept a tight rein on the market, but clear evidence of softer prices is drawing buyers back.

Private property prices slipped by a gentler 1 per cent in the April to June period from levels in the preceding quarter, when they dropped by 1.3 per cent. However, the number of homes sold shot up 46.4 per cent to 4,118 units from the first quarter to the second.

A similar scenario played out in the public housing market: Prices of resale flats fell 1.4 per cent in the three months to June 30 – a slight improvement over the 1.6 per cent drop in the first quarter.

But 4,389 Housing Board (HDB) flats changed hands during the quarter, up 16.1 per cent from the previous quarter.

This was the fourth straight dip in the HDB’s resale price index, which has seen a 5.3 per cent decline since the peak in the public market a year ago.

Although buying volumes are rising, analysts say that an increasing supply of completed condo units and public flats will continue to hold prices down.

R’ST Research director Ong Kah Seng said sellers of resale HDB flats can no longer demand high prices as the mortgage servicing ratio, which caps loans for public flats at 30 per cent of a borrower’s gross monthly income, limits large home loans.

As more owners take possession of newly completed HDB flats, the number of public homes on the resale market is likely to rise, said SLP International research head Nicholas Mak.

“Buyers of Build-to-Order flats are required to dispose of their existing HDB flats within six months of taking possession,” he said. And the supply will only increase as upgraders move into new private homes.

A total of 24,893 new units, including executive condominiums, are estimated to be due for completion by the end of next year, Urban Redevelopment Authority figures showed yesterday.

Prices on the private home front fell across all segments. City-centre prices declined 1.5 per cent, while city-fringe prices fell 0.4 per cent. Prices of suburban homes dropped 0.9 per cent.

Even though developers dangled competitive offers at new launches, the overall slide was led by non-landed resale units, which fell 1.3 per cent, while new condo units saw a 0.5 per cent dip.

Ms Chia Siew-Chuin, director of research and advisory at Colliers International, said: “This could indicate that the stalemate between home owners and buyers has given way to a softer stance among sellers.”

Upcoming launches such as Keppel Land’s The Highline Residences are expected to underpin sales volumes, which are likely to be around 4,000 to 6,000 for the second half, predicted Dr Tan Tee Khoon, executive director of residential services at Knight Frank. Private home prices could moderate by 5 to 6 per cent by the fourth quarter, he said.

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Private Resale Market is not spared of price falls despite volume increase

The number of private home resale transactions was a 7.9 per cent increase over May, but prices fell by 1.4 per cent in June, according to the Singapore Real Estate Exchange.

Resale prices for non-landed private residential homes continued to fall in June, reaching a 1.5-year low, according to the latest report by the Singapore Real Estate Exchange (SRX) on Monday (July 14).

Overall resale prices fell 1.4 per cent month-on-month to hit an 18-month low, with prices at their lowest since December 2012, according to the SRX Flash Report. Compared to the price peak in January this year, June prices are 4.7 per cent lower.

Prices fell for all three regions – Rest of Central Region (RCR), Core Central Region (CCR) and Outside Central Region (OCR) – with the city fringe area leading the fall by 3.2 per cent. This was followed by the core central area and the suburbs, which dropped 1.7 per cent and 0.3 per cent, respectively, SRX said.

The majority of districts – or 15 of 24 districts – saw zero or negative median Transaction Over X-value (TOX) in June. For districts with more than 10 resale transactions, districts 15 (Katong, Joo Chiat and Amber Road) and 10 (Bukit Timah, Holland Road and Tanglin) had the lowest median TOX at negative S$50,000 and negative S$37,000, respectively.

The number of resale transactions went up though, registering a 7.9 per cent month-on-month growth to reach an estimated 452 deals in June. Resale volume has gone up by 53.7 per cent since the beginning of year, the report said.

In terms of rental deals, prices slipped 0.8 per cent compared to May while volume went up 2.2 per cent over the same period. An estimated 3,151 whole units were rented out last month, according to SRX.


URA report on 68% fall of private homes sold

The number of units sold in June fell by 68 per cent from the previous month to 482 units, according to data by the Urban Redevelopment Authority.

Sales of private homes by developers in Singapore fell by about two-thirds in June from May, hurt by ongoing Government measures to cool the housing market.

Data compiled by the Urban Redevelopment Authority (URA) on Tuesday (July 15) showed developers sold 482 units in June, down 68 per cent from May when sales of 1,488 units were booked.

The bulk of the sales involved homes located outside the central region, with 269 units changing hands. Another 46 sales were made in the central region, while the rest of central region accounted for 167 units, the URA data revealed.

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