THE property market appears to be improving across the board - a trend underlined by Urban Redevelopment Authority's data for the third quarter.
Private home prices rose sharply in Q3 over the preceding three months, while prices of office, shop and flatted factory space fell at a slower pace in Q3 than in Q2.
Property rentals - for offices, shops and industrial space as well as most categories of private homes - declined at a more modest rate in Q3.
In tandem with a more cheerful economic climate, positive demand returned to the office market, after three consecutive quarters of negative take-up from Q4 last year to Q2 2009. Supply pipelines are shrinking - although there's still ample supply of offices, shops and industrial space. Vacancy rates increased in Q3 for private homes, offices, factory space but decreased for shops and warehouses. URA's numbers show that the overall private home price index increased by 15.8 per cent in Q3 over Q2, a tad shy of the 15.9 per cent jump reflected in its earlier flash estimate for the same period. The latest rise in the index reversed four preceding quarters of declines.
In the primary market, developers sold a record 5,578 private homes in Q3, up 19.9 per cent from Q2. In the secondary market, the number of resale units sold rose 17.5 per cent quarter-on-quarter to 4,883. However, subsales (these cover projects that have not received Certificate of Statutory Completion) slid 19.3 per cent to 1,057 units. Subsales' share of total private home sales fell from 12.9 per cent in Q2 this year to 9.2 per cent in Q3 - the first time that it has slipped below the 10 per cent mark since Q1 2007.
CB Richard Ellis says that this indicates a toning-down in speculative activity.
Giving his take, Knight Frank chairman Tan Tiong Cheng says: 'All the ingredients for a sustainable recovery in the private housing market are present - local and foreign demand, mid- and high-end prices below their 2007 respective peaks, and still-strong HDB resale flat prices to support upgrader demand.
'Interest rates are also low. Frankly, there are few alternative investment options. These factors will continue to help support buying sentiment.'
However, the government's recent decision to ban the interest absorption scheme and restart confirmed list land sales in H1 2010 will serve to dampen demand and price escalation, Mr Tan added.
Price indices for detached, semi-detached and terrace houses posted quarter-on-quarter increases of 15.6 per cent, 13.4 per cent and 15.1 per cent respectively in Q3.
For non-landed private homes, the price index for completed homes in Core Central Region (CCR) surged 17.5 per cent quarter-on-quarter in Q3, much higher than a 12.8 per cent gain for uncompleted homes in the same region. Similarly, in the Rest of Central Region, prices of completed homes rose 19 per cent, compared with a 17.8 per cent price hike for uncompleted homes. This is in line with anecdotal evidence of secondary market sellers jacking up asking prices.
Going by various measures, the private housing supply pipeline has contracted. The total pipeline shrank from 66,422 units as at end-Q3 2008 to 59,728 units at end-Q3 2009. The number of unsold units in uncompleted projects fell from 42,918 units to 34,120 units over the same period.
The decline stemmed mainly from projects that have not been launched yet, including those that don't even have pre-requisites for sale although they have obtained planning approvals from URA.
However, URA pointed out that five sites recently triggered from the reserve list can generate about 2,000 units. In addition, government will be restarting land sales under the confirmed list in the first half of 2010.
The number of private homes slated for completion is also projected to contract - from 10,893 units for the whole of this year to 5,737 units in 2010.
Market watchers feel that the recovery in private home prices will continue this quarter, but at a slower pace.
CB Richard Ellis executive director Li Hiaw Ho reckons that 'while sales momentum will slow down in Q4 in view of fewer large-scale launches, we expect prices levels to remain stable for the rest of the year'.
ERA Asia Pacific's associate director Eugene Lim is predicting that URA's overall private home price index will post a more moderate increase of about 5-8 per cent in Q4 this year. 'The global economy is only starting to pull itself out of recession and so is Singapore,' he added.
Source: Business Times, 24 Oct 2009
No comments:
Post a Comment