Property players divided over URA's Q3 data

Property consultants have given mixed reactions to the latest third-quarter private housing data released by the Urban Redevelopment Authority (URA).

Pointing to indications of weakness setting in, some analysts highlighted that the 3,951 private homes (excluding executive condos) sold in primary and secondary markets in July-September 2013 was just 57 per cent of the volume in the preceding quarter, in addition to being the weakest showing since Q4 2008 during the global crisis, when 1,639 units were transacted.

Also, price indices for non-landed private homes in Core Central Region (CCR), where the choicest homes are located, and Rest of Central Region (RCR), which covers city fringe locations, slipped 0.3 per cent and 0.9 per cent, respectively, quarter on quarter.

However, others looked at the bright side of things. A 2.2 per cent quarter-on-quarter hike in the index for Outside Central Region, though small compared with the 3.8 per cent increase in Q2, reflected the still-strong sentiment for mass-market suburban condos.

Constrained by the total debt servicing ratio (TDSR) framework and earlier rounds of cooling measures, buyers are focusing on units priced between $800,000 and $1.3 million, which are more likely to be found in OCR, noted ERA Realty key executive officer Eugene Lim. Units in this price range are typically below 900 square feet. And small units typically have a higher per square foot (psf) pricing, which probably explains the rise in the OCR price index, he added.

Also supporting demand for private homes in OCR are newly minted permanent residents who are now required to wait three years before they can buy public housing flats in the resale market. "OCR prices will continue to rise - albeit at a slower pace - over the next six months," Mr Lim said.

He argued that it may also be possible for prices in RCR - which includes Tiong Bahru, Bishan and Toa Payoh - to rebound "depending on what gets launched".

URA's overall price index for private homes inched up 0.4 per cent in Q3 over the previous quarter, identical to the flash estimate released earlier this month. In Q2, the index rose one per cent.

URA's All Residential rental index climbed at a slower pace of 0.2 per cent quarter on quarter in Q3, a tad below the 0.3 per cent increase in Q2. The vacancy rate for non-landed private homes climbed from 6.3 per cent at end-Q2 to 7 per cent at end-Q3 - its highest level since Q3 2009.

These two indicators are seen as portending downward pressure on private housing rents, especially after factoring in the record level of private home completions forecast for Q4 and full-year 2013.

Developers received Temporary Occupation Permit (TOP) for 3,685 private homes in Q3, taking the total for the first nine months to 9,519 units. Based on developers' submissions to URA, another 6,305 private homes are slated for completion in the fourth quarter, taking the full-year figure to 15,824. This would surpass the record 14,582 units completed in 1997; the figure for last year was 10,329.

New launches since the TDSR framework took effect in late June have been posting a patchy performance. The latest winner appears to be The Inflora condo in Upper Changi. A consortium led by Hong Leong Holdings that is developing the 396-unit project did roaring sales yesterday, with 250 options granted as at 6pm . "More options to purchase are in the process of being issued," it said in a release.

"Prices start from over $400,000 for a one-bedder apartment. Unit sizes range from 462 sq ft for a one-bedder to 1,302 sq ft for a four-bedder, and 1,463 sq ft for a dual-key apartment."

Word on the street is that all 128 one-bedders have been snapped up. The average price for the eight-storey, 99-year leasehold project is understood to be slightly below $900 psf.

Source: Business Times –26 October 2013

PROPERTY LAUNCHES & INVESTMENTS

Property Launches & Investments

Property players divided over URA's Q3 data

Comments

Leave your comment