29-03-2011, 07:28 AM
Mar 29, 2011
Home prices steady in Q1
Estimates suggest cooling measures are working
By Esther Teo
HOME prices have stayed flat this quarter after steep rises last year, suggesting that January's cooling measures have started to bite.
Industry experts say values in the primary and secondary markets have largely held steady for the past three months after a blistering rise of 17.6 per cent last year.
The number of new homes sold has fallen, adding to the air of a market heading into a holding pattern.
CB Richard Ellis (CBRE) estimates that between 3,200 and 3,400 new homes would have been sold this quarter - about 25 per cent down from the 4,241 units moved in the final quarter of last year.
Mr Png Poh Soon, Knight Frank's head of research and consultancy, said the number of subsale transactions fell 72 per cent last month from January's level, while resale figures were down 56 per cent.
This is likely due to the Jan 14 measures, which targeted speculators with a hike in stamp duty that can reach 16 per cent on certain sales and a reduced loan-to-value ratio for buyers with an existing mortgage.
Resale prices have also barely moved this quarter, according to DTZ Research, which found that prices of flats have inched up by less than 1 per cent.
And a monthly index by the National University of Singapore (NUS) found that resale prices softened by 0.4 per cent last month compared with January's prices.
DTZ Research said the average resale price of leasehold suburban condominiums inched up 0.8 per cent to $665 per sq ft (psf), while that of freehold condos in the prime districts of 9, 10 and 11 saw a marginal 0.4 per cent rise to $1,525 psf from the previous quarter's figure.
Prices of luxury condos - still 6 per cent below their 2007 peak - also held firm at an average of $2,630 psf for the second consecutive quarter. DTZ said this was due to a smaller pool of buyers and an increased supply.
But prices of freehold landed homes in prime areas rose 2.2 per cent to $1,730 psf from levels in the quarter before, while resale prices outside prime districts were up 2.3 per cent to $1,015 psf.
Separately, the flash estimate of NUS' Singapore Residential Price Index - which tracks only prices of non-landed completed projects - showed that overall prices dipped 0.4 per cent last month after rising 2.9 per cent in January.
But resale prices of centrally located flats rose 1 per cent, while in non-central areas they dipped 1.5 per cent.
The preliminary numbers from industry players come before the Urban Redevelopment Authority releases first-quarter flash estimates on Friday.
Experts said prices are expected to remain stable with modest gains this year, as the market remains shrouded by various uncertainties in the global economy.
A hefty supply of new homes coming on the market over the next few years could also affect prices, they added.
Mr Nicholas Mak, head of research at SLP International, said prices could move by up to 5 per cent this year, either a gain or a drop.
'I'm still cautiously optimistic, people are still positive about the market... But there is a possibility of a decline as mounting pressure from competition might push owners to cut prices.
'A growing number of projects will also be offered for sale nearer to the end of this year,' he added.
Knight Frank's Mr Png said mass market homes in particular are the most vulnerable and prices are expected to fall 5 per cent.
CBRE's executive director of residential, Mr Joseph Tan, said: 'Assuming a stable economy and that the market moves at the same pace as in the first quarter, new home sales volume will be around 3,000 to 3,500 units (in the second quarter) with no significant fluctuations in home prices.'
DTZ's head of South-east Asia research, Ms Chua Chor Hoon, said the pace of price gains is expected to 'slow down and plateau'.
'There is more uncertainty this year, not just from the possibility of more cooling measures, but also from the events in the Middle East and Japan, the full impact of which is still not known,' she added.
esthert@sph.com.sg
Home prices steady in Q1
Estimates suggest cooling measures are working
By Esther Teo
HOME prices have stayed flat this quarter after steep rises last year, suggesting that January's cooling measures have started to bite.
Industry experts say values in the primary and secondary markets have largely held steady for the past three months after a blistering rise of 17.6 per cent last year.
The number of new homes sold has fallen, adding to the air of a market heading into a holding pattern.
CB Richard Ellis (CBRE) estimates that between 3,200 and 3,400 new homes would have been sold this quarter - about 25 per cent down from the 4,241 units moved in the final quarter of last year.
Mr Png Poh Soon, Knight Frank's head of research and consultancy, said the number of subsale transactions fell 72 per cent last month from January's level, while resale figures were down 56 per cent.
This is likely due to the Jan 14 measures, which targeted speculators with a hike in stamp duty that can reach 16 per cent on certain sales and a reduced loan-to-value ratio for buyers with an existing mortgage.
Resale prices have also barely moved this quarter, according to DTZ Research, which found that prices of flats have inched up by less than 1 per cent.
And a monthly index by the National University of Singapore (NUS) found that resale prices softened by 0.4 per cent last month compared with January's prices.
DTZ Research said the average resale price of leasehold suburban condominiums inched up 0.8 per cent to $665 per sq ft (psf), while that of freehold condos in the prime districts of 9, 10 and 11 saw a marginal 0.4 per cent rise to $1,525 psf from the previous quarter's figure.
Prices of luxury condos - still 6 per cent below their 2007 peak - also held firm at an average of $2,630 psf for the second consecutive quarter. DTZ said this was due to a smaller pool of buyers and an increased supply.
But prices of freehold landed homes in prime areas rose 2.2 per cent to $1,730 psf from levels in the quarter before, while resale prices outside prime districts were up 2.3 per cent to $1,015 psf.
Separately, the flash estimate of NUS' Singapore Residential Price Index - which tracks only prices of non-landed completed projects - showed that overall prices dipped 0.4 per cent last month after rising 2.9 per cent in January.
But resale prices of centrally located flats rose 1 per cent, while in non-central areas they dipped 1.5 per cent.
The preliminary numbers from industry players come before the Urban Redevelopment Authority releases first-quarter flash estimates on Friday.
Experts said prices are expected to remain stable with modest gains this year, as the market remains shrouded by various uncertainties in the global economy.
A hefty supply of new homes coming on the market over the next few years could also affect prices, they added.
Mr Nicholas Mak, head of research at SLP International, said prices could move by up to 5 per cent this year, either a gain or a drop.
'I'm still cautiously optimistic, people are still positive about the market... But there is a possibility of a decline as mounting pressure from competition might push owners to cut prices.
'A growing number of projects will also be offered for sale nearer to the end of this year,' he added.
Knight Frank's Mr Png said mass market homes in particular are the most vulnerable and prices are expected to fall 5 per cent.
CBRE's executive director of residential, Mr Joseph Tan, said: 'Assuming a stable economy and that the market moves at the same pace as in the first quarter, new home sales volume will be around 3,000 to 3,500 units (in the second quarter) with no significant fluctuations in home prices.'
DTZ's head of South-east Asia research, Ms Chua Chor Hoon, said the pace of price gains is expected to 'slow down and plateau'.
'There is more uncertainty this year, not just from the possibility of more cooling measures, but also from the events in the Middle East and Japan, the full impact of which is still not known,' she added.
esthert@sph.com.sg