Breaking news: August new home sales down another 15%!

The private housing market remained in the doldrums in August, with sales of homes falling 15% from the previous month as developers continued to scale back new launches. 

Excluding executive condominiums (ECs), developers sold 432 new units last month, down from the 509 units sold in July, data from the Urban Redevelopment Authority showed on Monday (Sep 15). Including ECs, 490 new units were sold in August, down from 560 units in July.

The lacklustre sales came as developers continued scaling back new launches, with just 351 units launched in August, down from the 441 units launched in the previous month.

Source: CNA

Maybe Highline Residences and Marina One will be the saviours in September?

More space and greenery mandated for cluster homes!

The Urban Redevelopment Authority (URA) said on Friday (Aug 22) it has revised the guidelines for strata landed housing developments, also known as cluster homes, to determine the maximum number of units in an estate.

Under the revised guidelines, which will take effect on Saturday (Aug 23), a new set of formulae will determine the maximum number of houses developers are allowed to build in various types of strata landed housing developments. The new formulae will generally result in fewer units, the URA said in a statement.

“The move addresses feedback from residents in landed housing estates that such developments could inject a disproportionately large number of units, causing additional traffic and parking problems as well as creating a more congested living environment,” the URA said.

There are also new guidelines to enhance the communal facilities and greenery provision within such developments. Developers will have to set aside at least 45% of the land area for communal open space, up from the current 30%. Of this, a minimum of 25% has to be set aside for on-ground greenery while up to 20% can be used for communal facilities like swimming pools and playgrounds.

“By increasing the minimum communal open space to be set aside in strata landed housing developments and mandating minimum on-ground greenery coverage, we hope that strata landed housing developments will further enhance the quality of the living environment for residents,” the URA said.

Source: CNA

The wife and I are glad that URA has finally came out with the latest revision. Hopefully, this will also mean that there will be more “separation space” between rows of cluster homes within the development. One major gripe we have with most of cluster housing projects that we had seen thus far is how close your opposite neighbour’s unit is to yours. We always jest that the next biggest benefactor of such development (other than the developer) is probably the curtain makers… which when one stops to ponder over, may not be entirely a joke.

And if you unit is located in a row that is stuck between two other rows of  cluster homes, your unit can come across as rather dark and gloomy (or stuffy even, with the kind of weather we get in Singapore) given that you are “blocked” from both front and back by opposite neighbours at close proximities. 

Click on link below to read the official circular from URA on the revised guidelines:
http://www.scribd.com/doc/237475141/Revised-Guidelines-for-Strata-Landed-Housing-Developments-22-Aug-2014

Developers’ housing sales: Another dismal month in July with worse expected in August!

Latest official statistics showed that developers’ housing sales continued to languish last month, but the focus now is on the likely launches for the rest of the year and how much room developers have to price them attractively to get potential buyers into making a commitment.

Many developers paid high prices for 99-year private housing sites at state tenders in the past couple of years as they sought to replenish land following strong home sales at the time.

“Those with a high breakeven cost but who need to launch a project are likely to adopt a “Star Buy” strategy for inferior stacks of units in the development to draw out initial take-up to drive confidence in the launch,” a seasoned developer told BT yesterday.

There will be heightened competition for buyers as more property launches are expected by developers who had bought residential land after December 2011. These developers are required to complete the projects and sell all units within five years, otherwise they would have to pay a hefty additional buyer’s stamp duty on the land prices with interest, said Chia Siew Chuin, director at Colliers International.

Even amid weak July developers sales released yesterday by URA, evidence is surfacing of developers successfully drawing out buying demand through attractive prices, highlights SLP International executive director Nicholas Mak.

The number of new homes sold last month was about 10% more than the 434 units that went on the market, indicating that buyers could have been lured by price cuts to projects launched earlier.

“For instance, Wheelock released The Panorama in Ang Mo Kio in January this year, posting a median price of $1,343psf for sales in that month. But since it reduced prices in May to the $1,200-plus psf level (median price), this project has been among the top sellers every month,” Mr Mak said.

“This goes to show that developers can revive sales at existing launches with meaningful price cuts. What remains to be seen, however, is whether this will result in a price war, which could be triggered, for instance, if one player were to sharply cut prices relative to other projects in the vicinity.”

URA’s July data also revealed that the remaining 37 units at The Vermont on Cairnhill, which was completed last year, were sold at $2,113psf median price in July. This is 8.6% below the $2,313psf median price, based on caveat data, for all previous sales in the project by its developer, said OrangeTee research head Christine Li.

“Vermont’s brisk sales show many high-end buyers are on the sidelines waiting to enter the market once prices become attractive,” she noted. “In the private housing market as a whole, a 10 – 12% price cut is typically enough to draw buyers in droves.”

Developers sold just 484 private homes excluding ECs in July.  This was a paltry 0.4% higher than the 482 private condominium and apartment units moved in June – which was a 68% drop from May. In July last year, the figures was also 482 units.

There were only four new launches last month – of which three were in the city fringe. The city fringe also accounted for the lion’s share of new sales last month, at 46%. The suburbs made up 36% and the city centre, 18%.

The top seller was City Gate on Beach Road, with 89 units transacted at a median price of $1,809psf. Near Kitchener Road, the developer of The Citron Residences found buyers for 23 units at $1,585psf median price. In the West Coast, 11 units were sold at Bijou at $1,969psf.

Analysts said last month’s poor showing  was likely to drag on into this month.

“As the Hungry Ghost Festival falls in August this year, developers are generally expected to continue to hold back on their project launches,” said Ms Chia of Colliers.

She expects new home sales to come in at between 200 and 500 units this month, before picking up again towards next month.

 

In the first seven months, developers sold 4,839 private homes and 354 EC units. For the whole of last year, the figures were 14,948 private homes and 3,588 ECs.

Some market observers expect genuine buyers to increasingly head for the resale market to pick up a completed property, including units in newly completed projects.

Source: BT, ST

H1 Subsale study – interesting read!

In a study conducted by Ngee Ann Polytechnic, most subsales of private non-landed homes in 1H 2014 involved relatively long holding periods.

This may suggest that the seller’s stamp duty (SSD) is effective in curbing speculative deals. Subsales are secondary-market transactions in uncompleted projects.

In the high-end segment, nearly all subsale caveats were traced to units that were bought in 2009 and 2010, when SSD was not implemented yet. There were no caveat lodged for units in the Core Central Region (CCR) that were previously bought in 2012 and 2013.

In the mass-market segment, 73% of subsale transactions involved properties that were bought in 2009 and 2010.

SSD was introduced in 2010 for residential properties bought on or after 20 Feb 2010 and flipped within a year. Later that year, SSD was extended to properties bought on or after 30 Aug 2010 and sold within 3 years. And since early 2011, the holding period has been extended to 4 years with sharply higher rates. Residential properties bought from 14 Jan 2011 and sold within 4 years incur SSD of 16, 12, 8 or 4% if they are sold in the first, second, third and fourth year of purchase respectively.

Given their long holding periods, most of the H1 subsale transactions were profitable, though the proportion of subsales that were in the black was higher in the mass-market segment, where prices have climbed at a faster clip from the Q2 2009 through.

75% of the 40 subsales in CCR made money. In the Outside Central Region (OCR), where mass-market homes are located, the proportion is 97%, out of 142 subsales.

Profit or loss was calculated by comparing the latest price against the price at which the unit had previously changed hands, factoring in the prevailing SSD rates (if applicable). However, other costs such as interest, legal fees and ABSD were not counted.

The URA data was further dissected to identify the biggest absolute quantum in terms of gain and loss, respectively, for subsale deals done in 1H 2014.

From the data compiled,  two conclusions are quite evident for at least the first half of this year:   

1. Owners of units that are mainly in the suburban areas (OCR) fare much better in the subsale market than their counterparts with units in the prime districts (CCR), both in terms of % profit (much bigger) and % loss (much smaller). This seems to run contrary to our belief that properties in the prime districts are generally considered “good location buys” as they tend to retain their values better.  

2. Buying a unit right in the heart of CBD may not necessarily be the “cash cow” that one originally perceived it to be.

 

However, the wife and I suspect that the above may just be a reflection on those who do not have the necessarily “holding power” to ride out the current property storm. It will be interesting to have the same sets of analysis done a year from now, when the impending deluge of new homes especially in the OCR region hits the market.

 

Trouble on both (Completed & Uncompleted) fronts!

Wary buyers shun completed homes

Threat of an oversupply of private homes and a poor rental market are deterring home-seekers from buying completed homes. This is especially for homes in the city centre.

the upscale Districts 9, 10 and 11 account for the bulk of unsold units at completed developments across Singapore.

Private home vacancy rates have reached their highest point since 2006, according to URA figures.

Developers appear to be responding by cutting prices further to boost sales in order to avoid penalties for failing to sell all their units by a dateline. Fines are imposed if a builder fails to sell all their apartments in a project within 2 years of completion, under the Qualifying Certificate (QC) rules.

There were 1,412 completed but unsold homes at the end of June – 1,259 condominium units and private apartments, and 153 landed houses – according to URA last Friday.

The city centre accounted for the bulk of that – about 894 units, or 63.3% – while the city fringe had about 414 unsold units, or 29.3% of the total. said OrangeTee research head Christine Li.

Both areas far outstripped the suburbs, where there were only 104 unsold completed units, or 7.4% of the total.

Ms Li pointed out that the prices of completed homes in the city centre slid 1.9% in April through June from the previous three months, the largest quarterly drop since 2Q’2009.

“This could suggest that some developers have started to become skittish and have started to cut prices in order to move units to avoid QC fines.”

Still, buyers will likely stay on the sidelines partly due to rising vacancy rates and a possible supply overhang in the near future.

The islandwide vacancy rate for all private homes, including landed housing, climbed from 6.6% in the first quarter of this year to 7.1% in the second – the highest level since the 7.4% recorded in 1Q’2006.

City centre homes were the worse hit in the second quarter of this year, with a vacancy rate of 8.5%.

Consultants said that a bumper crop of completed homes could weaken the leasing market even further.

JLL Singapore research director Ong Teck Hui pointed out that there were 9,016 private homes completed in the first 6 months of this year, compared to 13,150 units throughout the whole of last year and 10,329 units over 2012.

 

Steady increase in number of unsold units in launched but uncompleted projects

Many private developments have been launched but remain unloved by buyers as home loan curbs continue to suppress demand.

The number of launched but unsold homes as at the end of June was higher than at  the same time the previous year, according to official data last week.

There has been a “stead increase in unsold units in launched private residential projects” since the middle of last year, when tough restrictions were imposed under the TDSR framework, JLL Singapore research director Ong Teck Hui said.

Mr Ong noted that there were around 5,200 unsold units in launched private residential projects, as at the end of June last year. However, that jumped about 20% to reach 6,300 units, as at the end of last month, he said.

The three projects with the highest number of launched but unsold units were all in suburbs – The Santorini (Tampines), Hillview Peak (Bukit Batok) and The Skywoods (UPPPPPER Bukit Timah).

 

Info source: ST

So completed homes cannot sell. Uncompleted homes also finding it a tough sell. But developers are mostly still unwilling to drop prices because of possible “knock on” effects and the high land costs that they had paid over the past 2 years. Looks like we have ourselves a good ‘o fashion “Mexican stand-off ” – now to see who (buyer or seller) blinks first…

 

Private home prices down for THIRD consecutive quarter!

Prices of private residential properties in the second quarter fell by 1% from the previous quarter – the third consecutive quarter of decline, the Urban Redevelopment Authority (URA) said on Friday (July 25).

The price decline was observed across all segments of the private residential property market, URA said.
Prices of non-landed properties in the Core Central Region (CCR) declined by 1.5% from the previous quarter, following the 1.1% decrease in the January to March period.

Prices in the Rest of Central Region (RCR) declined by 0.4%, after decreasing by 3.3% in the previous quarter.

In the Outside Central Region (OCR), prices declined by 0.9%, after the 0.1% decline in the previous quarter.

Prices of landed properties declined by 1.7%, significantly more than the decrease of 0.7% in the previous quarter.

Rentals of private residential properties in the second quarter fell by 0.6% from the previous quarter, compared with a 0.7% decline in the January to March period.

LAUNCHES AND TAKE-UP
Developers launched 2,843 uncompleted private residential units excluding Executive Condominiums (ECs) in the second quarter, compared with 1,964 units in the first quarter, URA said.

A total of 2,665 private residential units (excluding ECs) were sold by developers during the quarter, compared with 1,744 units in the January to March period.

No new EC units were launched for sale during the quarter. Developers sold 154 EC units in the second quarter, compared with the 149 units sold in the previous quarter.

RESALES AND SUB-SALES
The number of resale transactions rose to 1,314 in the second quarter, up from 941 transactions in the previous quarter. Resale transactions accounted for 31.9% of all sale transactions during the quarter, compared with 33.5% in the first quarter.

There were 139 sub-sale transactions in the second quarter 2014, compared with 128 transactions in the previous quarter. Sub-sales accounted for 3.4% of all sale transactions in the quarter, lower than the 4.6% recorded in the January to March period.

Source: CNA

 

 

Sharp rise in Q2 private home purchases

Here’s a possible reason why the authorities are not inclined to remove any property cooling measures just yet: There was an across-the-board increase in caveats lodged for private home purchases in the second quarter compared to the previous quarter.

DTZ’s analysis of URA Realis caveats database shows a 37.1% quarter-on-quarter increase in the total number of private homes transacted to 3,369 units in Q2.

A segmental breakdown showed that the number of units picked up in the resale market climbed nearly 41% or 386 units to 1,328 units in Q2 from 942 units in Q1 – ending three consecutive quarters of decline.

New sales by developers too rose by 511 units or 36.8% to 1,898 units. In the subsale market, 143 units changed hands in Q2, up 11.7% from Q1.

Across buyer segments, too, there were increases. Singaporeans, PRs and foreigners all bought more homes in Q2 than they did in Q1.

Purchases by Singaporeans rose 45% quarter-on-quarter to 2,491 units in Q2. The number of private homes picked up by Singapore PR climbed 24% to 574 units, while purchases by non-PR foreigners rose 2% to 260 units.

Those with HDB addresses bought 1,629 units in Q2, up 41.3% from Q1. The number of private home acquired by those with private addresses climbed 33.4% to 1,740 units.

Despite the recovery in Q2, the 5,826 total private homes sold in the first-half of this year is not even half the 13,651 units transacted in the first-half last year – reflecting the dent on transactions created by the Total Debt Servicing Ratio (TDSR) framework since its introduction in late-June 2013, notes Lee Lay Keng, regional head (SEA), research at DTZ.

Still the pick-up in the Q2 caveats would give the policy makers a reason to pause and reflect, amid calls by developers and other parties urging the authorities to start rolling back cooling measures such as the ABSD and SSD, she added.

Most industry watchers accept that TDSR is here to stay for the long term. 

“The reason caveats have recovered in Q2,” said Savills Singaporeresearch head Allan Cheong, “is that demand is extremely price elastic or price sensitive. Even a slight price decline would lure many potential buyers back to the market”.

“In 2012 and 2013, the market was fixated with new property launches. In 2014, the genuine upgraders and even investors who are not overwrought by new-fangled small-format homes have started to look at the resale market where more habitable, larger apartments are to be found, and they have started to plunge into the market.

“And the sellers of such properties being individuals, unlike developers, have little bargaining power and acceded to the buyer’s price offer. Hence, prices in the resale market have gone down.”

DTZ’s Ms Lee said the strong new home sales in Q2 was amid an increase in launches by developers.

DTZ’s caveats analysis also showed that because Singaporeans’ share of private home purchases rose at a faster clip in Q2 compared with more modest increases in buying by PRs and foreigners, the proportion of units bought by Singaporeans rose four percentage points quarter-on-quarter to 74%.

Conversely, PRs saw a two percentage point retreat in their share to 17% in Q2. Foreigners too poised a three percentage point fall in their share to 8%.

Another finding is that 58% of private homes picked up by Singaporeans in Q2 were new sales by developers. Among foreigners, the figure was 62%. For PRs, however, it was roughly equal split of the source of units between new sales and resales. “It appears that a higher proportion of PRs are buying for owner occupation and hence want a completed property they can move into immediately,” suggests Ms Lee.
 

Info source: BT

 Our thoughts after reading the BT report: 

1. The rebound in private home sales in Q2 is kinda expected given the dismal sales figures in Q1. But the Q2 figures is still the second lowest since Q2’2009. 

2. Even professional property watcher had acknowledged that apartments in the resale market are more habitable compared with new launches over the past 2 years by virtue of their larger sizes. This makes us wonder if “less than 400sqft” for one-bedroom apartment is really the norm going forward for home dwellers or will buyers eventually wise up to the fact that such size is really too small to be considered habitable?

3. The percentage of Singaporean buyers have risen while those of PRs and foreigners have correspondingly fallen. And for purchases from PRs, which constitutes the second largest proportion of overall home purchases, about half of these are supposedly bought for own stay. Maybe this should appease (at least a little) them chest-thumping locals that have been harping about foreigners coming into Singapore to speculate on our private properties, thereby jacking up prices and making such homes unaffordable to Singaporeans? You are back to competing with your fellow countrymen more and more…

 

 

 

May 2014 resale up but prices continue to soften in 2Q2014!

Resale prices of private homes staged a surprise rebound in May over April, reversing a nine-month decline. However, experts have warned that investors remain wary, and the unexpected price rebound does not necessarily signal a sustained recovery.

Overall resale prices climbed 0.8% from April to May, according to Singapore Residential Price Index (SRPI) flash estimates out yesterday.

They had fallen 1% from March to April as new launches drew buyers from completed homes.

Consultants said that May’s price rise could have just been a blip, pointing out that the resale market largely remained stagnant. Resale prices are likely to have fallen or stayed flat from May to June.

SLP International research head Nicolas Mak noted that buyers could have gained confidence in the resale market in May due to relatively string sales of new homes that month.

Developers sold 1,470 new units, almost double the 749 moved in April.

 

The May resale prices increase contrast with that of the 2Q2014 price index for private homes, which continues to see a decline.

The price index for private homes fell 1.1% in the second quarter, the third continuous quarter of price decrease. This is according to flash estimates released by the Urban Redevelopment Authority (URA) today.

Prices of non-landed private residential properties in all market segments declined in the second quarter, the agency said. In the core central region, prices fell 1.5%, higher than the 1.1% decline in the previous quarter. Prices outside the central region decreased by 1.1%, higher than the 0.1%  decrease in the previous quarter. In the rest of the central region, prices fell 0.6%, compared with the 3.3% decline in the previous quarter.

Prices of landed properties fell 1.5%, higher than the 0.7% decline in the previous quarter, the URA said.

Sources: ST, CNA

And according to a report in BT today, the average transacted resale price of completed small units of up to 70sqm (753sqft) recorded a price increase of between 3.6 to 6.9% y-o-y across all three regions (i.e. Core Central Region, Rest of Central Region & Outside Central Region). Conversely, the resale price for big units (more than 70sqm) is down between 2.9 to 7.5% y-o-y across all regions.

Since the resale market typically takes its cue from the primary market, and with developers set to continue with their trend of building smaller-sized units in the face of TDSR, the logical conclusion is that resale price of small units may continue to fare better than those of  big units… a consideration that potential investors may want to keep in mind.

HOWEVER, the wife and I feel that there will still be good demand potential for big units. There is a limit on how many occupants can comfortably live in an apartment of up to 735sqft, even after taking into consideration the shrinking household size in Singapore. So despite the less than rosy picture seen year-on-year for big units, we expect prices of such to stabilize and eventually rise due to a smaller supply. When will that happen, you ask? Well…THAT is the million dollar question!

May 2014 private home sales: A case of "咸鱼翻生“…?

It was reported in the local media today that the private residential property market has sprang back to life in May after months of remaining in the doldrums, with developers’ sales surging 96% as buyers snapped up units at the slew of new launches last month.

Developers sold 1,470 new private homes last month, nearly doubling the 749 units that they moved in April, latest data by the Urban Redevelopment Authority (URA) showed on Monday (June 16).

Including executive condominiums (ECs), new developer sales rose to 1,528 units in May from 797 units in April.

The improved sales volume came as developers launched 1,790 new units into the market in May, nearly three times more than the 600 homes recorded in the previous month.

Two projects by City Developments topped the best-selling list for the month. Coco Palms at Pasir Ris Grove moved 590 of the 600 condominium units launched at a median price of $1,018psf, while Commonwealth Towers at Commonwealth Avenue sold 275 of 400 homes at $1,626 psf.

Besides the successes of new launches, May also saw another re-launch that did well: Wheelock Properties’ The Panorama at Ang Mo Kio sold 100 of the 126 units offered last month at a median of $1,241 psf.

咸鱼翻生:  This is a Cantonese idiom that literally translate as “salted fish coming back to life”. The idiom is used to describe a hopeless situation that suddenly turns hopeful.

It’s official: July new home sales down 73%

Sales of new private homes in Singapore plunged in July.

Figures from the Urban Redevelopment Authority show that just 481 units of new homes were sold last month, down 73% from June. 1,806 units were sold in June.

Market watchers had anticipated the sharp drop in sales transactions on the back of new loan curbs introduced on 29 June and the lack of new major project launches in July.

The top-selling project during the month was Vue 8 Residence in Pasir Ris, which moved 63 units, followed by Bartley Ridge at Mount Vernon Road with 25 units sold.

Including executive condominiums (ECs), 593 new homes were sold in July, down from 2,119 units transacted in the previous month.

The best-selling EC project was Forestville at Woodlands, which sold 78 new units.
Developers launched a total of 557 new units last month, compared to 2,421 units placed for sale in June.

Source: Channel News Asia