Singapore - Housing 01 (May 08 - Oct 08)

[winston]

THE STRAITS TIMES - Prices of luxury homes in Singapore fell 2.1 percent in the first quarter to an average price of S$2,360 ($1,730) per square foot, after a steady 2-1/2-year climb that saw values more than double, a report by property firm Savills Singapore showed.

[kennynah]

this shouldnt be a case of oversupply, i guess...
foreclosures? i 've not heard of this happening on a large scale here in singapore..

smaller demand size vs an existing selling size..? more likely the case...

i duno...am not into property...

anyone can offer some insights, please? thanks

[iam802]

I think the key point to note is the price is to the luxury home prices. At $2,360 per square foot, that is really the top tier homes (eg. Nassim area?).

URA has some data as follows as of April 25. It shows an increase in prices:

===
PRIVATE RESIDENTIAL PROPERTIES

Prices
Overall prices of private residential properties rose 3.7% in the 1st Quarter 2008, compared with the 6.8% increase in the previous quarter (see Annexes A-1, A-6 & A-7).

Prices of non-landed properties rose 3.7% in the 1st Quarter 2008, compared with the 7.2% increase in the previous quarter. Prices of apartments rose 3.6% while those of condominiums rose 3.7%.

Prices of non-landed properties in Core Central Region1 (CCR) rose 3.8% in the 1st Quarter 2008, while prices of non-landed properties in Rest of Central Region2 (RCR) and Outside Central Region (OCR) rose by 3.3% and 3.8% respectively (see Annex A-2).

Prices of landed properties rose 3.9% in the 1st Quarter 2008, compared with the 4.2% increase in the previous quarter. Prices of detached, semi-detached and terrace houses rose 3.5%, 4.7% and 4.0% respectively in the 1st Quarter 2008.
=====

[kennynah]

thanks 802,

so it appears that it is just the normal gyrations in prices...then no real cause for worries?

[winston]

Time to buy Property stocks ?

From UOB-Kay Hian:-

Market factoring in 40-50% decline in residential prices.

The private residential property price index advanced 3.7% qoq to 177.2 points in 1Q08.

In contrast, the market factored in a sharp downturn, pricing in a 40-50% decline in residential property prices. This is an overly bearish scenario and the magnitude of the expected fall rivals only the declines seen at the height
of the Asian financial crisis.

Asian economies are a lot more resilient and their currencies are much stronger now. Asia is expected to be the growth engine
of the world economy for the next few years and a repeat of the Asian financial crisis is highly unlikely.

We believe the Singapore residential property market is on course for a multi-year upcycle. That said, near-term correction in physical property prices is both healthy and necessary for the long-term sustainability of the property boom and our forecasts already incorporate up to a 20% decline in residential prices.

[winston]

Based on the latest monthly developer sales data from the Urban Redevelopment Authority, property prices could be on the downward trend.

Developer sales fell, with April seeing only 274 transactions, about 9 percent lower than the 301 units sold in March, though still higher than the 174 units sold in February.

[HengHeng]

waiting for lelong

[winston]

Property seems paler, but it's anyone's call
Volumes shrink, prices weaken but some segments are holding firm
By ARTHUR SIM

SINGAPORE) Based on the latest monthly developer sales data from the Urban Redevelopment Authority (URA), property prices could be on the downward trend.

Developer sales fell, with April seeing only 274 transactions. This is about 9 per cent lower than the 301 units sold in March, though still higher than the 174 units sold in February.

And while it is difficult to accurately pinpoint price movements with such low volume, an analysis by Knight Frank of overall median prices achieved nevertheless registered an 8.9 per cent drop in April, falling to $943 psf compared to $1,035 psf in March.

The peak median price of over $1,400 psf was reached in August 2007.

Knight Frank director (research and consultancy) Nicholas Mak also explained that the analysis was a 'median of median prices', and so may not be a precise reflection of price movements.

Mr Mak also said that applying a different mode of analysis to the same data - the formula used to calculate URA's quarterly property price index for instance - could even show that prices have increased slightly.

Still, a comparison of monthly median prices of recently launched developments does suggest that prices could be falling.

The 79-unit Blu Coral was launched in February with nine units sold at a median price of $872 psf. In March, 28 units were sold at a median price of $802 psf, while in April, 18 units were sold at a median price of $657.

Similarly, 53 units of the 106-unit, The Verve, were launched in March with 36 units sold at a median price of $1,187 psf. In April, 8 units were sold at a median price of $1,055 psf.

And nine units of the 625-unit, The Quartz, were sold in March at a median price of $742 psf, followed by 14 units sold in April at a median price of $721 psf.

Interestingly, one unit of Waterfront Waves was sold at $909 psf in April, higher than the median price of $806 in March when 14 units were sold.

Perhaps another indication of the weakening market is that 43 units of 659-unit The Parc Condominium, previously reported as being fully sold, have re-emerged on the market. According to the monthly data, the returned units first appeared in February.

A source that did not want to be named also said that these units were returned by buyers who chose not to exercise their options, forfeiting a quarter of the 5 per cent downpayment in the process.

Jones Lang LaSalle head of research (South-East Asia) Chua Yang Liang has also analysed median prices as a measure of volatility and suggests that this has increased in the Outside Central Region (OCR).

Dr Chua explained that volatility, as a measure of how wide market prices are per unit dollar of the median price achieved could also reflect, 'the market's speculative level'. As such, he said: 'It would appear that upgraders may be returning, with entry level projects that are moderately priced between $750 to $850 psf as the preferred choice.'

Supporting this were the healthy sales of the 56-unit Stadia at Yio Chu Kang, which saw 52 units sold. Two units were sold for under $750 psf while the remaining 50 were sold at between $750 and $1,000 psf.

In the OCR, Dr Chua said based on the analysis, median prices continued to soften by 4.2 per cent. But he also added that the analysis was just an 'indication of the market's mood', and does not account for product differentiation or physical attributes of each development.

While the volume of sales was low in the Central Core Region with just 19 non-landed homes transacted, Dr Chua believes that the low volatility in median prices there suggests that market activity and future prices in the high end market are likely to remain stable.

Also holding this view is CB Richard Ellis Research executive director Li Hiaw Ho who noted that two units in Scotts Square were sold at around $4,300 psf, a unit at Orchard Scotts was sold at $2,520 psf and two units at Skypark were sold at around $2,300 psf.

'Although high-value transactions were limited, the individual transactions seemed to indicate that prices in the high-end market were still holding firm,' he added.

The analysis of price movements will however, remain an academic one, and as such will remain open to debate.

Colliers International director (research and advisory) Tay Huey Ying said there were too few transactions at the higher end of the market to comment fairly on the sector.

And even for the OCR, she noted that the median transacted price for mass-market units averaged $792 psf in April, about 8 per cent higher than the average median price of $729 in August 2007 when the highest sale volume for the sector was registered.

[winston]

Published May 16, 2008
PROPERTY

Leng Beng says S'pore real estate market sustainable; CityDev boss sees further investment opportunities ahead

By EMILYN YAP

HOTEL and property tycoon Kwek Leng Beng believes Singapore's real estate market is sustainable and further investment opportunities lie ahead.

'I am also waiting for the opportunity ... to go in and buy at the right time,' he said at a property conference yesterday.

The executive chairman of City Developments said growth in Macau's gaming industry had driven up residential property prices there sharply. And with two integrated resorts and big events such as the Youth Olympics in the next few years, Mr Kwek reckons the future is bright for Singapore real estate.

According to country head of Jones Lang LaSalle Singapore Christopher Fossick, the current slowdown in property demand is largely sentiment-driven, and many investors are probably waiting to purchase at better prices.

In terms of office space, Mr Kwek said: 'There has been a lot of talk that by 2010 and 2011 there will be a lot of oversupply. I do not believe so because in the first place, construction is a problem here.'

He cited rising construction costs as a reason for this view.

While office rents have been rising, Mr Fossick does not see this as a major business concern. Sharing feedback from multinational companies, he said wages are a much larger component of the cost of doing business, compared with rents.

Mr Kwek is also positive on the outlook for the hospitality real estate market. He believes the shortage of hotel rooms in Singapore and the rise in intra-regional travel will keep room rates on an uptrend.

Although Mr Kwek is generally upbeat on prospects for local real estate, he did express one concern. While investments from institutional funds have helped steady the market, 'funds have a duration of life and will get out', he said.

On the other hand, 'for the retail buyers, when they get out, they don't get out all at the same time'.

Mr Kwek asked in a panel discussion why the recent boom in Singapore's property market did not attract many individual investors from the West, while funds showed huge interest. The director of property at Henderson Global Investors Asia, Chris Reilly, said this could be due to the lack of familiarity with Asian real estate among retail buyers in the West.

[winston]

From Kim Eng:-

Property Developers were mostly hit by slower residential sales in their first quarter results, and for some, they also suffered a lack of fair value gains in investment properties. But even as the residential segment undergoes a correction this year, analysts do not foresee significant earnings weakness as revenue from pre-sold projects is still lending support.

For developers with a large amount of pre-sold projects and are able to hold back new units to await better prices, the greater blow from the weaker home sales will only kick in over the next few years if market sentiment does not pick up, analysts say.

'The earnings for this year have been locked in by the sales done in the past two to three years,' said UOB KayHian analyst Vikrant Pandey. 'Sales have slowed down this year, but the impact will only be felt two, three years down the line when the actual construction takes place.'

Investors have been greeted with a mixed bag of earnings results from property developers for the first quarter. The impact of the US housing problems and global economic slowdown was felt in terms of lower transaction volumes as developers held back new launches in a quiet market.

There was also the timing issue in recognising earnings from development projects on a percentage of completion basis, which added to the earnings volatility, analysts say.