29-09-2011, 04:35 AM
Business Times - 29 Sep 2011
New high for mass-market homes?
S'pore posts 8.1% increase in rents between June 2010 and June 2011, and 0.9% for Q2-2011
By MINDY TAN
EVEN as ongoing concerns for the EU and US economies have affected sentiments for high-end properties, prices of mass-market homes are fast approaching the psychological barrier of $1,000 per square foot (psf).
It is against a mise-en-scene of falling sales volumes - Knight Frank expects primary market sales volume, excluding executive condominiums (ECs), to fall by some 7 per cent, quarter-on-quarter (q-o-q) - that Outside Central Region (OCR) bucks the trend, projecting sales numbers of approximately 2,868 for Q3 2011, a 5.9 per cent increase from Q2 2011.
Accounting for approximately 70 per cent of new sales transactions, these mass-market homes are expected to remain the main focus this quarter.
With an average transacted price of $941 psf in Q3 2011, prices of suburban homes (non-landed private residential properties, excluding ECs) have increased 2.5 per cent q-o-q, higher than the 1.7 per cent rise in the OCR property price index in Q2 2011.
Notably, prices of mass-market homes are fast approaching the psychological $1,000 psf barrier, while average prices exceeded the $1 million level in Q2 2011, Knight Frank says.
Within the Core Central Region (CCR), which includes the prime districts, CBD and Sentosa Cove, sales volume is expected to decrease 45.4 per cent to an estimated 287 units in Q3 2011, compared to 526 units the previous quarter.
Prices of these properties fell by 3.6 per cent q-o-q, transacting at an average of $1,800 psf in Q3 2011.
Meanwhile, Rest of Central Region (RCR) is expected to see sales drop by 10.2 per cent q-o-q, from 1,090 units to an estimated 979 units in Q3 2011. Transacting at an average of $1,300 psf, prices of homes in RCR increased 1.6 per cent q-o-q in Q3 2011, compared to 1.1 per cent in Q2 2011.
Overall, Knight Frank estimates that 4,134 units - excluding ECs - will be sold in the primary market in Q3 2011, a decrease in sales volume of some 7 per cent q-o-q.
On the rental front, high-end and mass-market segments saw rental increases of 1.9 per cent and 0.4 per cent q-o-q respectively, compared with 6.5 per cent and -1.4 per cent q-o-q in Q2 2011.
Rent in the mid-market segment, represented by properties in East Coast and Lower Bukit Timah areas, increased 2.3 per cent, as contrasted to -3.3 per cent in Q2 2011.
Slowdown in property price appreciation and tightened immigration policies may moderate residential rental growth, notes Knight Frank. In conjunction with more newly completed residential homes being pushed out, the company postulates that average residential rental will remain flat, or increase by less than 2 per cent for the rest of the year.
For Q4 2011, Knight Frank expects new sales (excluding ECs) to hit at least 16,000 units, with mass-market homes continuing to see strong sales, and high-end homes continuing to see selective buying. Overall volume is not likely to spike substantially.
'If the economic performance turns unexpectedly for the worse by a large magnitude, private home prices are expected to moderate albeit any corrections are expected to be marginal and not more than 5 per cent yearly. Otherwise, private home prices in general should hold or increase marginally at less than two to three per cent q-o-q in Q4 2011,' it said.
Separately, according to the Knight Frank Prime Global Rental Index for Q2 2011, Singapore posted a 8.1 per cent increase in rent between June 2010 and June 2011; rents rose by 0.9 per cent for the second quarter of 2011.
Based on the top 5 per cent of the mainstream housing market in each city, rents across key global cities rose by 1.7 per cent for the quarter, the fastest growth rate since Q2 2008.
Knight Frank notes that particularly in Asian cities, rents have further to go, given that in recent years, rental growth has been outstripped by average earnings growth.
Asia-Pacific saw rent undergo a 7.7 per cent annual increase; Hong Kong's rent increased by 12.3 per cent within the year, ahead of Singapore's 8.1 per cent.
New high for mass-market homes?
S'pore posts 8.1% increase in rents between June 2010 and June 2011, and 0.9% for Q2-2011
By MINDY TAN
EVEN as ongoing concerns for the EU and US economies have affected sentiments for high-end properties, prices of mass-market homes are fast approaching the psychological barrier of $1,000 per square foot (psf).
It is against a mise-en-scene of falling sales volumes - Knight Frank expects primary market sales volume, excluding executive condominiums (ECs), to fall by some 7 per cent, quarter-on-quarter (q-o-q) - that Outside Central Region (OCR) bucks the trend, projecting sales numbers of approximately 2,868 for Q3 2011, a 5.9 per cent increase from Q2 2011.
Accounting for approximately 70 per cent of new sales transactions, these mass-market homes are expected to remain the main focus this quarter.
With an average transacted price of $941 psf in Q3 2011, prices of suburban homes (non-landed private residential properties, excluding ECs) have increased 2.5 per cent q-o-q, higher than the 1.7 per cent rise in the OCR property price index in Q2 2011.
Notably, prices of mass-market homes are fast approaching the psychological $1,000 psf barrier, while average prices exceeded the $1 million level in Q2 2011, Knight Frank says.
Within the Core Central Region (CCR), which includes the prime districts, CBD and Sentosa Cove, sales volume is expected to decrease 45.4 per cent to an estimated 287 units in Q3 2011, compared to 526 units the previous quarter.
Prices of these properties fell by 3.6 per cent q-o-q, transacting at an average of $1,800 psf in Q3 2011.
Meanwhile, Rest of Central Region (RCR) is expected to see sales drop by 10.2 per cent q-o-q, from 1,090 units to an estimated 979 units in Q3 2011. Transacting at an average of $1,300 psf, prices of homes in RCR increased 1.6 per cent q-o-q in Q3 2011, compared to 1.1 per cent in Q2 2011.
Overall, Knight Frank estimates that 4,134 units - excluding ECs - will be sold in the primary market in Q3 2011, a decrease in sales volume of some 7 per cent q-o-q.
On the rental front, high-end and mass-market segments saw rental increases of 1.9 per cent and 0.4 per cent q-o-q respectively, compared with 6.5 per cent and -1.4 per cent q-o-q in Q2 2011.
Rent in the mid-market segment, represented by properties in East Coast and Lower Bukit Timah areas, increased 2.3 per cent, as contrasted to -3.3 per cent in Q2 2011.
Slowdown in property price appreciation and tightened immigration policies may moderate residential rental growth, notes Knight Frank. In conjunction with more newly completed residential homes being pushed out, the company postulates that average residential rental will remain flat, or increase by less than 2 per cent for the rest of the year.
For Q4 2011, Knight Frank expects new sales (excluding ECs) to hit at least 16,000 units, with mass-market homes continuing to see strong sales, and high-end homes continuing to see selective buying. Overall volume is not likely to spike substantially.
'If the economic performance turns unexpectedly for the worse by a large magnitude, private home prices are expected to moderate albeit any corrections are expected to be marginal and not more than 5 per cent yearly. Otherwise, private home prices in general should hold or increase marginally at less than two to three per cent q-o-q in Q4 2011,' it said.
Separately, according to the Knight Frank Prime Global Rental Index for Q2 2011, Singapore posted a 8.1 per cent increase in rent between June 2010 and June 2011; rents rose by 0.9 per cent for the second quarter of 2011.
Based on the top 5 per cent of the mainstream housing market in each city, rents across key global cities rose by 1.7 per cent for the quarter, the fastest growth rate since Q2 2008.
Knight Frank notes that particularly in Asian cities, rents have further to go, given that in recent years, rental growth has been outstripped by average earnings growth.
Asia-Pacific saw rent undergo a 7.7 per cent annual increase; Hong Kong's rent increased by 12.3 per cent within the year, ahead of Singapore's 8.1 per cent.