2 April 2019

HDB resale prices dip 0.3% in Q1

Housing Board resale flat prices dipped 0.3 per cent in the first quarter of this year compared with the quarter before, according to the latest HDB flash estimates released yesterday.

The resale price index was 131, down from the 131.4 in the fourth quarter of last year.

The final figures, with more detailed public housing data, will be released on April 26.

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Adapted from: The Straits Times, 2 April 2019

HDB resale prices down 0.3% in Q1

Housing and Development Board (HDB) resale flat prices dipped 0.3 per cent in the first quarter of 2019 compared with the quarter before, according to the latest flash estimates released on Monday.

The resale price index was 131, down from the 131.4 in the fourth quarter of 2018. The final figures, with more detailed public housing data, will be released on April 26.

Although prices have continued to fall for a third consecutive quarter, the quarter-on-quarter change is still considered moderate and the decline is at a slower pace when compared to a year ago at 0.8 per cent, noted OrangeTee & Tie research head Christine Sun.

She said that prices have largely stabilised, slipping by around 2 per cent over the last two years.

There may be more positive sentiment for the HDB resale market in the coming months, she added, as the government makes changes to the Central Provident Fund loan rules on the purchase of older flats.

Ms Sun said that the new rules may enhance the attractiveness of older flats as buyers may now be better able to finance their purchases.

With more flats in prime locations like Queenstown, Bukit Merah and Ang Mo Kio and DBSS (Design, Build and Sell Scheme) units reaching their minimum occupation period (MOP) this year, she added that marketing activities may pick up for some of these areas.

In addition, with the latest US Federal Reserve suspending its plans to continue raising rates this year, many central banks around the world may follow suit.

This will ensure ample liquidity within the financial system which usually will have a positive impact on the property market, she said.

In May, HDB is also expected to offer about 3,400 Build-To-Order flats in Kallang/Whampoa, Tengah and Woodlands. There will also be a concurrent Sale of Balance Flats exercise.

Ismail Gafoor, the chief executive officer of PropNex Realty, noted that the HDB resale market displayed signs of resiliency as compared to the same time period last year, with prices holding at current levels.

This is primarily due to the overall demand of 23,099 resale transactions last year, reflecting rising growth for public housing, he said.

"We will witness a continuous stream of supply potentially entering the market, as a result of an estimated 30,000 HDB flats (comprising HDB and DBSS flats) reaching the MOP this year," he said.

"Therefore, with the maturity of MOP flats adding on to the supply, we are anticipating prices of public housing to hold at a marginal increase of one per cent for the entire year of 2019."


Adapted from: The Business Times, 2 April 2019

Private home prices down 0.6% in Q1: URA flash data

Private home prices eased at a faster clip for a second straight quarter, falling 0.6 per cent in the first quarter of this year from the previous three-month period, according to the Urban Redevelopment Authority's (URA) flash estimate released yesterday.

The 0.6 per cent price drop is slightly steeper than the 0.1 per cent dip in the fourth quarter of last year, as the July 6 cooling measures and macro-economic uncertainty took their toll on buying sentiment.

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Adapted from: The Straits Times, 2 April 2019

Prime areas lead slide in private home prices in Q1

Apartments and condos in the prime areas or Core Central Region (CCR) led declines in private home prices in the first quarter of this year.

Compared with the other submarkets, CCR has been the hardest hit by last July's hike in additional buyer's stamp duty (ABSD) rates, which impacts investors and foreigners more severely, points out JLL senior director of research and consultancy Ong Teck Hui.

Based on the Urban Redevelopment Authority's flash estimate data for the first quarter of 2019, the price index for non-landed homes in the CCR fell 2.9 per cent quarter-on- quarter - the sharpest quarterly drop since the 5.2 per cent slide in Q2 2009 in the aftermath of the global financial crisis, notes Colliers International's Singapore research head Tricia Song.

The latest decline in the index, combined with the 1 per cent fall in the preceding quarter, takes the total decline to 3.9 per cent from the recent peak in Q3 2018.

URA's overall private home price index too contracted for the second consecutive quarter. The 0.6 per cent (flash estimate) decline in Q1 2019 was a bigger drop than the 0.1 per cent q-o-q dip in the preceding quarter.

The price drop for non-landed homes in the CCR in Q1 2019 came amid the launch of four prime projects in the region - Fourth Avenue Residences, RV Altitude, Fyve Derbyshire and Boulevard 88.

JLL estimates that more than 300 private homes were launched in Q1 2019 in CCR, significantly higher than the 182 launched in Q4 2018. Unsold units from projects launched last year have also increased the cumulative unsold stock, exacerbating the supply and demand imbalance in the CCR primary market.

Furthermore, the secondary market in CCR also softened in Q1 2019, as reflected by a 3.8 per cent decline in median prices of non-landed homes in this segment during the quarter.

"According to URA Realis data as at Q4 2018, CCR's proportion of the total unsold (completed and uncompleted) private homes is 22.5 per cent, while units sold in CCR in 2018 made up only 5.9 per cent of the take-up for the whole of last year, reflecting the significant mismatch between supply and demand in this sub-market," said Mr Ong.

Ms Song of Colliers said a closer look at the transactions in Q1 2019 suggests that the q-o-q decline in median prices for certain projects in the CCR could have contributed to the price drop as developers sought to clear inventory in ongoing launches. These included: Marina One Residences, New Futura and TwentyOne Angullia Park.

"The lower prices transacted may also be due to bigger or less choice units, which command lower per square foot rates, as the projects get sold down," said Ms Song.

URA's price index for non-landed homes in the city fringe or Rest of Central Region (RCR) dipped 0.2 per cent in Q1 2019 after posting an increase of 1.8 per cent in the previous quarter. In the suburbs or outside central region (OCR), non-landed private home prices were unchanged, following the 0.7 per cent increase in the previous quarter.

Market watchers note that demand in these two segments is better supported by a higher proportion of buyers who are owner occupiers as well as relatively more affordable price points. Moreover, sentiment boost from the Cross Island Line announcement helped developers to hold onto prices of projects near future stations.

ZACD Group executive director Nicholas Mak said: "Although the current cooling measures would continue exerting downward pressure on private home prices in general, stabilising HDB resale prices could provide some support to buying demand in the OCR segment.

"In the absence of major shocks to the market, the price index for non-landed homes in the OCR could outperform the price indices of the other market segments this year."

URA's price index for landed homes rose 1.1 per cent quarter on quarter based on the flash estimate for the first quarter, reversing the 2 per cent drop in the preceding quarter.

Observers say that the landed price index may be more volatile due to the lower transaction volumes for these relatively big-ticket items and the fact that prices of landed homes may vary widely depending on their specific characteristics.

URA's benchmark overall private home price index is now 0.7 per cent below its most recent peak in Q3 2018 and 3.8 per cent below the all-time high in Q3 2013.

According to JLL's analysis of URA Realis data, there were 3,215 transactions of private homes in Q1 2019, a sharp 40 per cent year-on-year drop.

Said Cushman & Wakefield head of Singapore research, Christine Li: "Multiple doses of cooling measures coupled with stronger headwinds in the macroeconomic condition have started to weigh down buying demand, although the interest-rate hike is likely to be put on hold due to the pause in the Fed's rate hike.

"Weaker sentiment in the residential market is likely to persist in the near-term and may discourage buyers from committing early for fear that prices could erode further in the coming quarters.

"It also does not help when there is a steady stream of new launches in the pipeline due to the five-year (sales) deadline for developers - which means buyers are also spoilt for choice."

Moving forward, the less-than-ideal take-up rates at some recent launches are likely to nudge developers to price projects more sensitively in the coming months if they want to move units and better manage sales inventory, she added.

Mr Mak of ZACD predicts that the URA overall private home price index could post anything from a 3 per cent drop to 1 per cent growth for the whole of this year compared to last year.

Ms Song of Colliers is more sanguine, maintaining her forecast of 3 per cent growth in the benchmark index in 2019, for which, among other factors, she cites a halt in interest rate hikes, continued benign economic growth and those who sold their homes through collective sales buying replacement homes.


Adapted from: The Business Times, 2 April 2019

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