The three news reports that the wife and I had come across yesterday had allowed us to build a nice little "headline story" on the current state of the private real estate market:
Private resale still sliding in June, led by shoeboxes...
Resale prices of private homes fell
again in June, according to Singapore Residential Price Index (SRPI) estimates
released on Tuesday (Jul 28).
The SRPI, compiled by the National
University of Singapore's Institute
of Real Estate Studies
Prices of small units, which have a
floor area of 506sqf or below, fell 1.1%. Prices of homes in the
non-central region, excluding small units, fell 0.9% in June from May,
the findings showed.
Prices of homes in the central region,
excluding small units, bucked the trend, rising 0.3% from the previous
month, according to SRPI.
While market sentiment remains weak...
Market sentiment in the real estate
industry remained weak in the second quarter of this year, according to a poll
of 64 industry players conducted by the Real Estate Developers' Association of
Singapore (REDAS) and the National University of Singapore (NUS).
The sentiment index stood at 3.9,
inching up from 3.8 in the previous three months. A score under five indicates
deteriorating market conditions, while a score above five indicates improving
conditions.
The residential and prime retail
sectors were the worst performing, while the business park/hi-tech space sector
was the best performing. Looking ahead, the Future Sentiment Index - which
measures sentiment for the next six months - also increased, to 4.0 from 3.7 in
the previous survey.
The survey showed that developers are
not likely to hold back on their residential launches. Close to 75% of the
developers surveyed said they expected new launches to increase moderately
and/or hold at the same level in the next six months. On price changes, 52.4% of
the developers said they anticipated a moderate decrease in residential
property prices in the next six months.
More than 73% of the respondents said
the slowdown in the global economy, rising inflation and interest rates would
adversely impact market sentiment in the next six months. Only 26.6% cited
Government cooling measures as a potential risk to negatively affect sentiment
in the market.
And interest in EC continues to be tepid!
The response to the latest batch of
executive condominium (ECs) projects has been tepid, with about 2,200 EC units
remaining on the shelves as of June 2015, the highest in almost a decade.
The largest EC development to date, Sol
Acres, received 800 e-applications for the first 707 of its 1,327
units, when subscription closed on Sunday (Jul 26). Booking will open for the
707 units on Aug 22.
The Brownstone EC, located
along Canberra Drive
In a statement, it added that the
three- and four-bedroom apartments enjoyed particularly good take-up rates. All
six of the five-bedroom penthouses have been sold out. About 65% of those who
purchased units at The Brownstone were first-time buyers, CDL said.
Developers of The Vales EC, which
opened for booking more than a week ago, sold about 100 units, less than 20% of
the total 517 units. Developer Singhaiyi said most of the units sold are the
three- and four- bedroom units.
In November last year, developers of Lake
Life EC sold more than 95% of the units in just two days. Since then,
response in the market to new projects has been less than warm. Market watchers
said it is a sign that recent projects are adding to the pool of unsold units.
Nicholas Mak, executive director of
research and consultancy at SLP International Property Consultants said:
"During the heyday of the EC launch market that was in 2011 to 2013, the
number of e-applications each EC project can sometimes achieve is double of the
number of units available.
“One of the reasons why the demand was
strong was also because of rising HDB resale and condominium prices. When
prices of the mass market condos are rising very rapidly, it begins to go out
of reach of some HDB upgraders who will then turn to the EC market as an
alternative. But right now, the prices of mass market condominiums are sliding
and HDB resale prices are also fairly stagnant."
Market watchers also said the 30% mortgage
servicing ratio cap and resale levy imposed on second-time buyers have also
curbed demand. Second-timers have to pay up to $50,000 levy when buying an EC
unit.
"For an EC project, typically the
number of second-timers is about 50% , so definitely the resale levy has hit
them quite hard,” senior manager of research and consultancy at OrangeTee Wong
Xian Yang said.
With talk of an impending increase in
the income cap for EC buyers, analysts said this could provide some respite for
the EC market.
CEO of Century 21 Singapore Ku Swee
Yong said: "Revising the household income cap on EC market would
definitely help to increase the demand. But a family with household salary of
$13,000 or $14,000 might also consider the ample supply of private
properties."
Analysts also said this is especially
so if mass market condominiums are reasonably priced. For instance, buyers were
quick to snap up units at High Park Residences condominium in
Fernvale, which average below $1,000 psf. Almost 80% of the 1,390 units have
been sold.
Sources:
CNA
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