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Singapore Property Prices Reach All-Time High, But Singapore Property News This Week Resale Property Transactions (December 12 December 18)
FROM THE
EDITOR
Welcome to the 84th edition of the Singapore Property Weekly. Hope you like it! Mr. Propwise
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Based on analysis of the URA numbers done by the Singapore property research site PropertyMarketInsights.com, at the current levels the price index is 19.4% above the previous 2Q2008 peak, and 16.8% above the previous all time high in 2Q1996.
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SINGAPORE PROPERTY WEEKLY Issue 84 economic situation especially with the troubles in Europe and weak growth in the US, and the dampening effect of multiple rounds of government measures.
Figure 1 URA Property Price Index (based on 4Q2012 flash estimate) This estimated increase of 1.8% comes after last quarters 0.6% quarter-on-quarter increase, indicating an accelerating pace of price growth. It appears that the strength of property demand, supported by low interest rates, has outweighed concern over the recession in Singapore, worrying global
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SINGAPORE PROPERTY WEEKLY Issue 84 the quarter. The actual second quarter statistics will be updated four weeks later, and past data have shown that the difference could be significant, especially when the change is small. Will property prices go up or down in 2013? At the beginning of 2012, most analysts were expecting a fall in prices, and were divided on whether we would see a sharp decline as during the 1997-1998 Asian Crisis and 20082009 Financial Crisis, or whether it would be a more gradual decline as we saw during the 2000-2004 Post-Dotcom Bubble and SARs era. Instead, based on the 4Q2012 estimates the URA PPI is actually UP 2.8% in 2012, an unexpected outcome versus the initial predictions of a 5% to 15% decline in prices predicted by most analysts. The question now hanging on most peoples minds is now: will property prices continue to rise in 2013? Certainly the re-acceleration of the PPI starting from the second quarter of 2012 was unexpected, but it should be noted that the 2.8% property price increase in 2012 is already a deceleration from the 5.9% in 2011 and 17.6% in 2012.
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SINGAPORE PROPERTY WEEKLY Issue 84 I believe that we will only see significant levels of price declines if there is an external crisis to cause a sense of panic, which we had in each of the previous three declines (e.g. Asian Crisis, Dotcom Bubble, Global Financial Crisis). This is because the abundant global liquidity situation and sustained low interest rates will continue to support Singapore property prices in the meantime. the Straits Times Index (STI) has recovered to 3,167 points as of end December 2012, up 17.8% for the year and 3.6% versus the last quarter. If you believe that the stock market is a leading indicator for the property market, then we could see continued support for property prices in the coming quarters. More cooling measures on the way? The continued resilience of property prices despite the previous six rounds of government measures increases the probability of a seventh round of property measures to further cool sentiment. It is not clear right now whether a potential new round of cooling measures would comprise merely of refinements to the current measures (e.g. increase ABSD?) or be something brand new. Will property prices keep going up? There are a couple of ways to think about this question.
SINGAPORE PROPERTY WEEKLY Issue 84 First, based on the Property Market Cycle Model of PropertyMarketInsights.com, we are in the Late Bull Stage of the market. This means that the upside potential risk is limited while the downside risk is significant. Second, while everyone believes that low interest rates will continue to prop property prices up, the large amount of upcoming supply could depress prices if demand is not able to keep up. Third, as Ive mentioned before, unexpected crises (black swans) tend to occur when we least expect it, especially when everyone has become complacent. Finally, I believe property prices cannot continue to defy gravity forever, and that investors looking to buy property in this market should continue to be cautious. By Mr. Propwise, author of Timing the Property Market.
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495 units in Q1-3 2012 from the 1,387 units in 2011, sales volume had increased since developers are offering ABSD rebates to both locals and foreigners. In Q1-Q3, 2,109 units were sold to locals, 86% of the 2,459 units sold in 2011 while the 489 units bought by PRs were 74% of the 665 units sold in 2011. Demand for prime properties in city-fringe locations or the RCR may also increase since the narrower price gap (25.4% in Q2 2012 compared to 32.3% in Q1 2011) between the upper-end suburban and lower-end prime markets has led to an increase in demand for the latter. 19,792 new homes were sold in the first 10 months of 2012, breaking 2010s record of 16,292 units. This is attributed to the large
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SINGAPORE PROPERTY WEEKLY Issue 84 number of shoebox units. With the restrictions on the maximum number of units in nonlanded private housing projects outside the Central Area, and buyer fatigue, this is likely to fall to 15,000-18,000 units in 2013. While some expect prices to remain stable with a marginal 5% fall at most in 2013, others expect an overall increase of up to 10% (mass-market and luxury properties to increase by 10-15% and 3-5% respectively), citing increased land costs and low interest rates. (Source: Business Times) 99-year leasehold Echelon launched for sale The private condominium project next to Redhill MRT Station at Alexandra Road is set to bel launched at an average price of around $1,700 psf. It is said that around 30-50% of the 508 units in the 43-storey, twin-tower
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development may be released. Units range from studios to four-bedroom apartments and penthouses. Meanwhile, 800 e-applications had been submitted for the 653-unit Forestville EC at Woodlands Ave 5/Woodlands Drive 16. It is being sold at an average of $700 psf, with those under the deferred payment scheme paying 3% higher. There are two to fivebedroom units and 29 penthouses (1,5502,756 sq ft) in the 14-block project, with 30% of the units being dual-key units. (Source: Business Times) Estimates of housing supply in GLS reflects smaller average unit sizes The average GFA per unit for most private condo sites in OCR and RCR in the 2013 H1 GLS programme has been reduced by 5 sq m to 90 sq m and 80 sq m respectively compared with the sizes in GLS sites in 2012.
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SINGAPORE PROPERTY WEEKLY Issue 84 The average GFA per unit remained at 100 sq m for EC sites in the OCR. This reflects the increase in smaller units in new projects which had led to the change in space standards. Sites at Kim Tian Road, Faber Walk and Jalan Bunga Rampai, however, have a larger average unit size since roads surrounding the sites could not support high traffic flows. COVs continued to climbed after stabilising initially in the first two quarters to $34,000. Volume of resale HDB transactions fell from 25,000 in 2011 to 19,000 in the first three quarters of 2012, a result of the extension of the Minimum Occupancy Period (MOP) and the requirement owners of private property to sell them if they buy HDB flats, both of which discourage upgraders from selling their flats.
Low interest rates, and the increase in demand for resale flats from singles both factors for well-performing resale market is likely to remain in 2013. Furthermore, the large supply of BTO flats also meant that it will be another eight years (three for construction, five for MOP) before the flats are available for resale. Owners with both private housing and HDB flats may also sell the flats if rental yields are low. However, the rising cost of mass market private housing may discourage upgraders, constraining the
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SINGAPORE PROPERTY WEEKLY Issue 84 supply of resale flats. (Source: Business Times) Commercial leasehold 0.3-ha parcel located at Tuas South Street 8 with a plot ratio of 1.0. Five to 18 bids are expected for the plot, with a top bid of $55 and $70 psf ppr.
The 3.9-ha site at Woodlands Ave 12 is zoned Business 1 with a 1,055,645.3 sq ft maximum GFA and a height restrictions of 61 m above mean sea level. The site is unlikely to be triggered, given its size and its proximity to an ample upcoming supply of sites. However, if triggered, the site is likely to be triggered at $50-$55 psf ppr and attract four to eight bidders with a top bid of $110-$126 psf ppr when launched. (Source: Business Times)
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Non-Landed Residential Resale Property Transactions for the Week of Dec 12 Dec 18
Postal District 2 3 3 3 3 3 3 4 5 5 5 5 5 5 7 8 9 9 9 9 10 10 10 10 10 Area Transacted Price Tenure (sqft) Price ($) ($ psf) 581 1,133,000 1,949 99 1,173 1,920,000 1,636 99 947 1,350,000 1,425 99 1,292 1,695,000 1,312 99 1,410 1,850,000 1,312 99 926 1,178,000 1,273 99 1,421 1,800,000 1,267 99 1,905 3,150,000 1,653 99 398 700,000 1,758 FH 398 690,000 1,733 FH 592 982,000 1,659 99 1,464 1,850,000 1,264 99 1,453 1,500,000 1,032 FH 1,249 945,000 757 99 980 1,340,000 1,368 99 732 1,032,000 1,410 FH 818 1,980,000 2,420 FH 1,733 2,845,000 1,642 FH 1,367 2,070,000 1,514 99 2,713 4,080,000 1,504 FH 2,583 6,888,888 2,667 FH 1,033 2,220,000 2,148 FH 538 1,020,000 1,895 999 2,669 4,600,000 1,723 FH 1,636 2,800,000 1,711 FH Postal District 10 10 10 11 11 11 11 11 11 11 11 12 12 14 14 14 14 14 14 15 15 15 15 15 15 Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,292 2,080,000 1,610 FH 1,087 1,475,000 1,357 99 2,605 2,980,000 1,144 FH 409 900,000 2,200 FH 2,250 4,250,000 1,889 FH 936 1,755,000 1,874 99 1,087 1,608,000 1,479 FH 1,249 1,750,000 1,402 FH 700 942,000 1,346 FH 915 1,228,500 1,343 FH 3,714 3,800,000 1,023 99 958 1,138,000 1,188 FH 1,141 1,250,000 1,096 FH 861 930,000 1,080 FH 1,184 1,268,000 1,071 FH 1,001 990,000 989 99 1,528 1,445,000 945 99 2,476 2,280,000 921 FH 1,238 1,065,000 860 99 1,604 2,700,000 1,683 FH 1,356 2,080,000 1,534 FH 1,216 1,580,000 1,299 FH 657 850,000 1,295 FH 1,399 1,688,000 1,206 99 872 1,046,000 1,200 FH
Project Name ICON MERAPRIME CENTRAL GREEN CONDOMINIUM CENTRAL GREEN CONDOMINIUM QUEENS EMERALD PARK THE METROPOLITAN CONDOMINIUM THE BERTH BY THE COVE PARC IMPERIAL PARC IMPERIAL ONE-NORTH RESIDENCES HERITAGE VIEW GOLD COAST CONDOMINIUM WESTCOVE CONDOMINIUM THE BENCOOLEN PRISTINE HEIGHTS THE SUITES AT CENTRAL WATERMARK ROBERTSON QUAY THE QUAYSIDE GRANGE HEIGHTS GRANGE RESIDENCES TANGLIN PARK MILL POINT GALLOP GABLES PINEWOOD GARDENS
Project Name THE SIXTH AVENUE RESIDENCES DUCHESS CREST THE LEGACY DUNEARN SUITES RESIDENCES @ EVELYN SOLEIL @ SINARAN TEN @ SUFFOLK NEWTON LODGE NOVENA LODGE ADAM PLACE THE ARCADIA CHELSEA GROVE THE CITRINE SIMS DORADO SMAILING COURT ASTORIA PARK SIMSVILLE WINDY HEIGHTS THE ALCOVE THE SEAFRONT ON MEYER GRAND DUCHESS AT ST PATRICK'S THE AMBROSIA THE MONTAGE COSTA RHU MELROSE VILLE
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NOTE: This data only covers non-landed residential resale property transactions with caveats lodged with the Singapore Land Authority. Typically, caveats are lodged at least 2-3 weeks after a purchaser signs an OTP, hence the lagged nature of the data.
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