Published 29 March 2011
The Business Times
By Kalpana Rashiwala
They’re estimated to have fallen 20-25% from the preceding quarter
Developers have sold about 3,200- 3,400 private homes (excluding executive condos) this quarter, down 20-25 per cent from the preceding quarter. CB Richard Ellis, which gave this estimate yesterday, also said that home prices remained stable in Q1 at end-2010 levels as the property cooling measures announced on Jan 13 ‘rationalised the residential market’.
Last year, developers sold 16,292 private homes and Urban Redevelopment Authority’s benchmark private home price index rose 17.6 per cent.
Some of the new projects expected to be launched in Q2 include Hedges Park at Flora Drive, The Boutiq at Killiney Road, a condo at Upper Thomson Road and Phase 5 of the Luxus Hills landed housing project.
CBRE said that the projects that were able to attract buyers in Q1 2011 were those in locations earmarked as future growth areas such as Tanjong Pagar as well as those near existing or future MRT stations. Small-format units have continued to be popular among home buyers this quarter. However, activity in the high-end segment has been subdued as players await the right opportunity to enter.
Analysts do not expect interest in property to wane any time soon.
As DTZ’s head of South East Asia Research Chua Chor Hoon says: ‘Real estate remains an asset class which people feel secure to park their finances with in the current high-inflation environment.’
‘Nevertheless we expect the pace of increase in prices to slow down and plateau. There is more uncertainty this year, not just from the possibility of further cooling measures but also from recent events in the Middle East and Japan, the full impact of which is still not known,’ she added.
According to DTZ, the increase in landed home prices in Q1 outpaced that of non-landed homes, buoyed by owner-occupation demand. Nevertheless, the pace of price increase has slowed in the January-March 2011 period. Prices of resale freehold landed homes in the prime districts 9, 10 and 11 rose 2.2 per cent quarter on quarter to $1,730 per square foot on average in Q1, compared with a 5.1 per cent hike in Q4 last year.
In suburban locations, the average capital value of freehold resale landed homes grew 2.3 per cent quarter on quarter to $1,015 psf in Q1, again a slower rise than the 4.3 per cent increase in Q4 2010.
Knight Frank said prices of non-landed private homes stabilised in Q1, changing around -2 to +2 per cent from the preceding quarter, ‘which invariably meets the government’s goal of a sustainable and stable property market’.
The first three months of this year have also seen a slower pace of rental increases for non-landed private homes. Rentals in the high-end, mid-end and mass market posted respective quarter-on-quarter gains of 0.4 per cent, 3 per cent and 0.8 per cent in Q1 respectively. These rates compare with the gains of 5.6 per cent, 2.6 per cent and 4 per cent respectively in Q4 2010, according to Knight Frank.
Demand for rental apartments/condos has softened due to stricter criteria for foreigners working in Singapore and shrinking housing allowances for expats. In addition, supply from newly completed homes has added downward pressure on rents.
‘For 2011, we expect prices of mass-market private homes to decrease by about 5 per cent. Arising from new completions and an enlarged rental housing stock, residential rents are also expected to come under further pressure and could ease 2-3 per cent in the next quarter,’ said Knight Frank head of consultancy and research Png Poh Soon.
CBRE said that with the return of launches for executive condos – a hybrid of public and private housing with initial buyer eligibility conditions and resale restrictions – in October last year after a five-year hiatus, some 1,580 ECs have been sold, making up nearly 72 per cent of the total supply of 2,199 EC units launched over the period.