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28 July 2012

28th July, Saturday




Private home prices reach all-time high

Source: Today

Private home prices in Singapore hit a new record high in the second quarter, the Urban Redevelopment Authority (URA) data showed Friday, sustained by the prolonged low interest rate environment as resale market activity picked up to offset a drop in developer sales.

The URA's final index reading of 206.9 was a tick higher than its preliminary estimate of 206.8 released earlier this month. In percentage terms, home prices rose 0.4 per cent in the second quarter from the previous three months, after falling 0.1 per cent in the first quarter, in line with the URA's flash estimate.

An analyst said: "The decrease in new home sales was matched by an increase in the resale market transactions. As new home sale prices have been rising, buyers are turning to the resale market for bargain hunting."

The trend was more apparent in the Core Central Region (CCR), where some of the resale prices were comparable to top-end new home prices in the Outside Central Region (OCR). He noted that some prices in D'Leedon in Leedon Heights and Valley Park in River Valley were lower than in Watertown in Punggol.

And even as the supply pipeline reached a record 83,251 units at the end of the second quarter, buying momentum stayed strong, DWG research analyst Lee Sze Teck said, noting that the proportion of unsold units fell to 45.9 per cent from 46.2 per cent in the previous quarter.

For the second half of the year, further price rises are expected to be capped by several factors despite the favourable interest rate environment, another analyst said.

Among these are the Hungry Ghost Month, renewed concerns over euro zone debt, and the follow-through effects of the Government's cooling measures and supply side policies, the latest being the land sales programme that is expected to yield about 7,100 homes, including Executive Condominiums, from the Confirmed List.


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Demand for resale flats up

Source: Today

More buyers are flocking to the resale flat market, with 7,000 units sold in the second quarter of this year as prices rose to a record high, while the Cash-Over-Valuation (COVs) demanded by sellers continued to ease.

The number of flats sold is a 19-per-cent increase from the previous quarter, in which 5,900 flats were sold.

Releasing the data Friday, the Housing and Development Board (HDB) said prices of resale flats rose 1.3 per cent in the second quarter, in line with flash estimates released earlier this month.

Analysts Channel NewsAsia spoke to said demand for resale flats is boosted by the fact that COVs remain affordable.

Said one analyst: "With COVs hovering around S$25,000, many home buyers choose a resale flat instead of going for BTOs (Build-To-Order) that come with a three-year wait."

Noted DWG Research and Consultancy senior manager Lee Sze Teck: "Buyers could have also returned to the resale market after failing to land their ideal home in the Build-to-Order and Sale of Balance flats exercise in March."

The number of HDB flats approved for subletting also grew by about 3 per cent to just under 7,000 units. Median rentals for four-room flats are between S$2,000 and S$2,900.

One analyst said: "One thing for sure, expatriates' pay packages are now a lot less than they were in the past. So a lot of them are now looking for rentals below S$3,000."

With demand for HDB rentals staying robust, some expect HDB flat owners who move to private homes to hang on to their flats for rental income."It may lead to a supply crunch in the HDB resale market which can then have the effect of pushing up resale prices again," the analyst said.


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Developers lowering launch prices: URA data

Source: The Straits Times

Developers appear to be lowering the prices of their launches, with fresh figures showing prices for uncompleted homes falling slightly in the second quarter.

Data from the Urban Redevelopment Authority showed that prices of uncompleted non-landed homes dipped 0.9 per cent in the three months to June - the first fall since mid-2009.

Prices for completed private homes, however, climbed 2.3 per cent.

Experts say the fall could be explained by the fact that some launches in the period were in less desirable locations, including those further from MRT stations and amenities, thus fetching lower prices.

Another factor they cited is that some of the new launches were in estates such as Punggol and Pasir Ris, where many projects had already been pushed out. This led to stiff competition and more conservative pricing.

Developers are more willing to launch new projects at lower prices, and then gradually move prices up if buyer response is good, rather than launch at high prices, which might result in them getting stuck with unsold units.


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Landed properties still in hot demand

Source: The Straits Times

Landed home prices moved up a notch in the second quarter as demand for the pricey properties stayed buoyant.

Values increased 0.4 per cent from the previous three months, according to the Urban Redevelopment Authority (URA) index out Friday.

Terraced homes showed the largest increase at 1.2 per cent, followed by semi-detached at 0.6 per cent, while detached homes declined by 0.4 per cent.

Property consultants noted that landed home prices have outperformed those of private flats since the third quarter of 2010.

Landed prices have 'risen substantially' since the second quarter of 2009, rising nearly 80 per cent by the second quarter this year.

Terraced homes had the highest price increase of 84 per cent over that three-year period. Detached house prices were up 83 per cent while semi-detached home prices rose 71 per cent.

They are perceived as better investment 'given the limited supply of landed properties in land-scarce Singapore with a growing population, rising affluence of local families and influx of new wealthy citizens', said an analyst.

Consultants said demand for landed properties is expected to stay resilient.

'The outlook is excellent... As more private properties are derived from government land sales, the limited pool of freehold landed properties find their share of the total housing stock shrink over time. It 'pays for upgraders to aspire to move into this type of housing' as the relatively quick capital gains 'will make it a superior hedge against not only inflation but also against social-class stagnation', an analyst said.


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Industrial property prices continue on upward path

Source: The Straits Times

Prices in the sizzling industrial market continued to defy gravity in the second quarter, shooting up 8.4 per cent.

The hefty increase in the three months to 30 June came on the back of a sharp 7.3 per cent surge in the first three months of the year, while other sectors slowed.

Prices overall have rocketed 48 per cent since the start of last year, driven by continued investor interest and economic expansion.

Such robust numbers are raising concerns that the once-unglamourous sector is getting a bit too frothy, while smaller companies are complaining about rents going up on the back of higher valuations.

Industrial rents were up 2.8 per cent in the second quarter, adding to the 1.8 per cent increase in the previous three months, according to the Urban Redevelopment Authority Friday.

It was a completely different picture on the commercial front, with prices and rents mostly flat or dipping slightly.

Office rents fell 0.5 per cent, while sale prices eased by 0.9 per cent. However, prices of shop spaces rose 0.7 per cent, although rents fell 0.3 per cent.

An analyst said low interest rates and cooling measures in the residential sector will continue to favour the strata-titled industrial market. She expects prices and rents to continue increasing for the rest of the year, though at a slower pace.

The trend cannot go on, according to one industrial developer, who said quarterly price gains of 7 per cent to 8 per cent are 'unsustainable'. The developer, who declined to be named, added that the freehold industrial segment, in particular, might be in a bubble, given many projects like M38 at Jalan Pemimpin are setting benchmark prices and crossing the $1,000 psf mark.

There have been some government attempts to rein in prices.

The latest move came last month, when lease terms for industrial sites under the government land sales programme to be sold from now to December were capped at 30 years. More sites of smaller size and shorter tenure will continue to be released to meet the demand of industrialists who might prefer to build their own facilities rather than rent. A bumper supply of industrial sites has also been pushed out.


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Property agent fined $15,000 - highest sum so far

Source: The Straits Times

A property agent has been fined $15,000 for acting against the interests of consumers, the highest penalty handed out so far by the Council for Estate Agencies (CEA).

Anthony Su, 34, has also been suspended for seven months. He is the third agent to be charged by the CEA's disciplinary committee this month.

He was convicted of three charges against him for a transaction that occurred last year.

Su had lied to his clients while selling their property that he was co-broking the transaction with a fictitious agent named Adeline. Based on his word, the clients increased his commission. Throughout the deal, he also kept information from them that another potential buyer had turned up.

And he took a cut from another agent, who was selling the property owned by the eventual buyers.

His services were terminated by his estate agency.

Property agents who breach the agency's Code of Ethics and Professional Client Care could have their registrations suspended or revoked, and pay a maximum fine of $75,000.


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