First annual dip in HDB resale prices in 8 years

The Resale Price Index (RPI) for HDB flats for the full year of 2013 has dropped 0.6 per cent, the first annual decline since 2005.

SINGAPORE: Prices of HDB resale flats dipped by 0.6 per cent last year, marking the first annual fall since 2005.

According to data released by the Housing and Development Board (HDB) on Friday, the volume of resale transactions also reached a record low last year.

The HDB started recording such statistics in 1997.

The decline is down from the 6.6 per cent price growth seen in 2012, and the double-digit growth in the two years before that.

It also marked two consecutive quarters of price decreases in 2013, with prices falling 1.5 per cent in Q4.

This is slightly higher than the flash estimates released by the HDB earlier in the month.

For 2014, some property analysts think prices will remain flat, while others said prices could decline by four to eight per cent.

Nicholas Mak, executive director for research & consultancy at SLP International Property Consultants, said: "HDB resale prices have actually enjoyed quite a good run in the last four to five years. In fact, it's one of the price trends that actually defied the sub-prime crisis -- it's continued to increase.

“At such a high pace, there's actually quite a bit of room for prices to correct, if the market were to hit some kind of crisis. But luckily we're not facing any recession or crisis in the face, but due to the strong supply of BTO (Build-to-Order) flats that's expected to be offered in 2014, HDB prices are quite likely to come under pressure."

HDB resale transaction volume has also reached a record low.

Just 18,100 units were transacted last year -- a 28 per cent drop compared to 25,094 units which changed hands in 2012.

Colin Tan, director and head of research & consultancy at Suntec Real Estate Consultants, said this could be due to several factors such as the supply of flats eligible for sale and cooling measures.

He elaborated: "The low supply of maturing five-year flats -- I think, in the past decade we've built an average of six thousand (flats per year), compared with the previous two decades we were completing about 20,000 units per year. So this means the supply of resale flats has come down by more than half.

“The cooling measures bar you after you sell your flat, it's difficult to re-enter. So for the majority, if they can afford to keep their HDB flat they will do so. After all, if you've been looking at the median rentals, they're still pretty resilient,quite decent rental amount. So that has further reduced the amount of supply."

Another factor is the new rule barring new permanent residents from buying an HDB resale flat for three years, so some analysts said transaction levels could remain the same in 2014.

And some observers believe such low transaction levels may result in pent-up demand among upgraders going forward.

Some property analysts said another reason for the low transaction volume is that the demand has been shifted away from the HDB resale market.

For example, they said families may be drawn to cheaper Build-to-Order flats, while singles are now also able to buy a flat directly from the HDB.

Cash-Over-Valuation (COV) has also fallen across the board.
For instance, a four-room flat in Punggol would have commanded a COV of S$45,000 in the fourth quarter of 2012.

But in the fourth quarter of 2013, the COV has dropped to zero.

As for the HDB rental market, subletting transactions fell by three per cent in the fourth quarter of last year.

This is from 7,505 cases in the third quarter to 7,268 cases in the fourth.

However, the total number of HDB flats approved for subletting rose by 1.6 per cent in the last three months of 2013.

There were 44,966 units approved in the third quarter, compared with 45,764 in the fourth. 

- CNA/nd/gn

By Olivia Siong POSTED: 24 Jan 2014 09:42

Source: ChannelNewsAsia

Private home prices fall for first time in nearly 2 years

Singapore's fourth-quarter private home prices fell 0.9 per cent -- the first decline in almost two years as the government's mortgage curbs took effect.

SINGAPORE: Private home prices in Singapore fell in the fourth quarter, under the weight of policy measures and loan curbs.

The private-residential property price index fell 0.9 per cent in October-December to 214.3 points, according to final figures issued by the Urban Redevelopment Authority (URA) on Friday.

This is higher than the initial estimate of a 0.8 per cent drop.
For 2013 as a whole, private-home prices rose 1.1 per cent, compared with a 2.8 per cent rise in 2012.

As the market had expected, private home prices fell in the fourth quarter, hit predominantly by the government's mortgage curbs which were implemented in June 2013.

Private home prices in the core central region continued to moderate, falling 2.1 per cent in the fourth quarter.

Homes in the suburban areas recorded their first price drop since the second quarter of 2009, declining by 1 per cent.

Meanwhile, homes in the city fringe bucked the trend, with a 0.4 per cent growth in prices.
Property agency OrangeTee expects overall private home prices to fall by 2 to 5 per cent this year.

Christine Li, head of research and consultancy at OrangeTee, said: "For 2014, we know that for first half, prices might be flat or even surprise on the upside.

"But for the second half, I think some of the sites are not so attractive as those in the first half, and developers might find it tough to justify a benchmark price for that location, especially for sites not near the MRT stations. So for the second half, for the prices to hold up is a bit challenging."

14,948 new private homes (excluding executive condominiums) were sold in 2013 -- significantly lower than the 22,197 units sold in the previous year.

URA said the sale of 14,948 new homes by developers in 2013 is the lowest since 2009, when developers sold 14,688 new homes.

Analysts expect new home sales this year to be weaker than 2013, at around 12,000 units. That is mainly due to the cooling measures, loan curbs and fewer project launches this year.

Meanwhile, rentals of private homes fell by 0.5 per cent in the fourth quarter -- their first decline since the third quarter of 2009.

For 2013 as a whole, rentals increased by 0.9 per cent, lower than the 2.1 per cent increase in 2012.

Analysts expect rentals to moderate further as more housing units are completed in the coming years.

Nicholas Mak, executive director of SLP International Property Consultants, said: "We could also see the phenomenon of flight to quality. That means as you have more projects that are going to be completed, tenants will have more choices, and as rents come under pressure, some of these tenants may be moving from suburban areas to city fringe areas, while those that can afford higher budgets may be moving from city fringe areas to the prime districts.
"So on the whole, property in the prime districts will probably see stronger rental demand."

According to URA, 19,907 units, including executive condominiums, will be completed in 2014 while 24,153 units will be completed in 2015.
In comparison, about 14,400 units were completed in 2013. 

- CNA/nd/ms

By Wong Siew Ying POSTED: 24 Jan 2014 12:35
Source: ChannelNewsAsia

JOINT NEWS RELEASE BY THE LAND TRANSPORT AUTHORITY & SLA - EXTENSION OF SENGKANG WEST WAY FROM JALAN KAYU TO SENGKANG WEST ROAD

The Land Transport Authority (LTA) will extend the existing Sengkang West Way from Jalan Kayu to Sengkang West Road. The existing stretch of Sengkang West Way between Jalan Kayu and Fernvale Road is a dual-three lane road which provides motorists from the Sengkang and Jalan Kayu areas with connectivity to the expressway network via Jalan Kayu. The proposed road extension is part of the road network enhancement plan to support upcoming developments in this region, such as redevelopment of the Seletar Aerospace Park.

2.         In 2013, LTA completed the stretch of Sengkang West Road between Yio Chu Kang Road and Sengkang West Avenue, and the stretch of Sengkang West Way between Jalan Kayu and Fernvale Road. By 3^rd quarter of 2014, a new interchange, consisting of a dual 3-lane flyover (Seletar Aerospace Flyover) across Tampines Expressway (TPE), will connect to the CTE/ SLE/ TPE and Jalan Kayu.

3.         Works for the extension of Sengkang West Way will commence in 3^rd quarter of 2015. The contractor engaged by LTA will erect temporary barriers where possible to minimise noise and any inconvenience to residents and occupants living or working in close proximity to the works.

4.         Please refer to Annex A for the location plan.

Land Acquisition

5.         To facilitate the road works, the Government will need to acquire the Esso Petrol Station at 215 Jalan Kayu under the Land Acquisition Act. The Singapore Land Authority (SLA) has gazetted the land affected by the acquisition today.

News Releases

23 Jan 2014

Source: LTA

Sengkang, Punggol resale-flat sellers feel the pain

SINGAPORE - For some, the housing dream at Sengkang and Punggol has turned sour. More than half of all resale transactions in these estates last month were found to have closed below valuation.

The sellers were the hardest hit among those from Housing Board towns that clocked deals with a negative cash-over-valuation, revealed the Singapore Real Estate Exchange yesterday.

Overall, one in five HDB resale deals was closed below valuation.

Other areas that had more than 30 per cent of all transactions made below valuation included Choa Chu Kang, Sembawang and the outskirts of Woodlands.

Executive director Andy Choa of real-estate firm DWG pointed out that the "abundance of willing sellers" in Sengkang and Punggol could be related to the demographics of homeowners in both areas.

"They are mostly young couples who could be looking to move elsewhere to suit their families' evolving needs," he said.

Mr Nicholas Mak, executive director of research and consultancy at SLP International, said that the ramped-up supply of Build-To-Order flats in both areas could pressure homeowners into selling their flats at a lower price than expected.

"It is likely that sellers are choosing to sell their flats now, rather than run the risk of selling them at even lower prices when new flats come up in the future," he said.

However, both Mr Choa and Mr Mak said that, because home prices in Sengkang and Punggol remain high, sellers still stand to gain even if they let go of their flats at valuation, or lower.

Friday, Jan 10, 2014

Jacqueline Woo

My Paper

Source: AsiaOne

Rental yield for private flats falls, down 7.1% from 2012: SRX

SINGAPORE - In its latest 2013 private real estate round up, Singapore Real Estate Exchange (SRX) said the median gross rental yield for non-landed private residential properties dropped from 4.2 per cent to 3.9 per cent in 2013.

Here is the press release from SRX:

The Singapore Real Estate Exchange (SRXTM) today released the latest 2013 private real estate round up, which shows that non-­‐landed private residential rental yield has fallen to below 4 per cent in the past year.

Overall, the median gross rental yield for non-­‐landed private residential properties dropped from 4.2 per cent to 3.9 per cent in 2013, according to statistics compiled by SRXTM.

This represents a 7.1 per cent decrease in yield from 2012 and a 31.6 per cent decline since its peak of 5.7 per cent in 2008.

"For many investors seeking income from residential properties, 4.0 per cent is a psychological barrier when it comes to rental yields," said Jeremy Lee, SRX co-­‐founder and Chief Technology Officer.

"They generally seek yields above 4.0 per cent in order to justify the risks inherent in property as an asset. Below 4.0 per cent, investors worry that inflation will wipe out their gains."

Yield Performance Varied by Locale

Of the 34 planning areas in Singapore, 31 experienced a weakening in median gross rental yields, contributing to the overall decline.

"In the past two years, low interest rates have increased the willingness of some property investors to accept lower rental yields," said Mr Nicholas Mak, SLP International's executive director.

"This is illustrated in the rental yield table where the non-­‐landed residential rental yields of a majority of planning areas in Singapore have contracted in 2013."

On a planning area basis, yield disparity widened in 2013.

At the lower tier, four locations saw gross rental yields below 3 per cent.

All of them are prime areas, including Orchard, Tanglin, Southern Islands (Sentosa Cove), and Newton.

Newton experienced the lowest yield of 2.1 per cent.

"In the prime areas, the cost of homes is out of balance with the rents they command," added Lee.

"The homes are relatively expensive because of their location.

At the same time, there is downward pressure on rents, caused, in part, by the shrinking or disappearance of expatriate housing allowances."

At the top end, Outram, Yishun, Geylang, Tampines, and Jurong West registered gross yields of 4.0 per cent or above. 

The highest yield was seen in Outram, which saw its rental yield went up from 4.6 per cent in the first half of the year to end at 5.1 per cent.

Three planning areas bucked the downward trend. Downtown Core, Southern Islands and Outram saw their rental yields increase by 2.5 per cent, 15.5 per cent and 16.8 per cent, respectively. Southern Islands, which covers primarily the Sentosa Cove area, started the year slowly, posting a yield of 1.7 per cent during the first six months of 2013. By years end, its rental yield had improved to 2.7 per cent.

Said Mak: "The main reason for the increase in gross rental yields in the three planning areas, namely Outram, 

Downtown Core and Southern Islands, is that the median rentals in these areas have increased, while their median transacted prices have fallen. For example, in the Outram planning area in 2013, median rentals increased 8 per cent year-­‐on-­‐year, while capital values decreased by 3.7 per cent year-­‐on-­‐year.

"A possible reason for the increase in residential rentals in these three planning areas is that they are at the city fringe, and there was very little new supply of completed private housing units in 2013. This shows that rental demand in certain city fringe locations is still healthy."

Friday, Jan 17, 2014

Angela Tan

The Business Times

Source: AsiaOne

New non-citizen quota on subletting of HDB flats to prevent foreigner enclaves in HDB estates

From 16 Jan 2014, HDB will introduce a quota on the subletting of whole HDB flats to non-citizen (NC) subtenants (非公民租户顶限). This is to prevent the formation of foreigner enclaves in HDB estates, and maintain the Singaporean character of our HDB heartlands.

NC Subletting Quota Framework

2Today, only Singapore Citizens and Permanent Residents can buy HDB flats. But foreigners can rent rooms or entire flats. Currently, there is no cap on the number of flats sublet to such foreign tenants in HDB blocks. Less than 4% of HDB flats are sublet to foreigners, excluding Malaysians. However, the proportion could go up to 9% in some areas, or even 18% in some blocks.

3To prevent the formation of foreigner enclaves, HDB will implement a quota to cap the number of flats that can be wholly sublet to NCs in each neighbourhood and block. The quota will be set at 8% at the neighbourhood level, and 11% at the block level. It will apply to subtenants who are Singapore Permanent Residents and foreigners, but will not apply to Malaysians who can better integrate into our estates due to their cultural and historical similarities with Singaporeans.

4The quota will also not apply to subletting of rooms, to reduce the impact on those who rely on subletting for additional income, especially the elderly and low-income households.

5This aims to maintain the Singapore character of our HDB heartlands while balancing the housing and subletting needs of citizens and foreigners in Singapore.

Implementation Details

6The new policy will apply to all flat subletting applications received by HDB with immediate effect. All flat owners who sublet their flats to one or more NCs will be subject to the NC quota.

7A new e-Service is available on the HDB InfoWEB for members of public to check if a flat can be sublet to NCs (please see Annex A  (PDF 177KB) for the revised application process). The information will be updated on a monthly basis on the first day of the month, and is valid for the whole calendar month.

8Flat owners who are currently subletting their whole flat with HDB’s approval may continue to do so for the remaining approved duration. Once the existing approval expires or is terminated, any subsequent flat subletting application will be subject to the new policy.

Inclusion of NCs During Subletting Term

9Currently, the maximum period of subletting allowed per application is 3 years (if the subtenants are Singaporean/Malaysian), or 1.5 years (if they are non- Singaporean/Malaysian). Flat owners who have obtained approval to sublet their flat to Singaporean/Malaysian subtenants, and who wish to include NC subtenants subsequently, will be subject to the NC quota (please see Annex B  (PDF 176KB) for the revised application process). There will be no change to the approved subletting period if the remaining approved duration is less than 1.5 years from the date of inclusion of the NC subtenant. However, if the remaining approved duration for flat subletting is more than 1.5 years, it will be reduced to 1.5 years from the date of inclusion.

Actions against Unauthorised Subletting

10We would like to remind all flat owners that unauthorised subletting of the HDB flat is a serious infringement of the lease. HDB will take firm action against errant flat owners, which can include a fine and compulsory acquisition of the flat.

Enquiries

11For enquiries, the public can call 1800 555 6370 between Mondays and Fridays, 8am to 5pm.

Source: HDB

Flash Estimate of 4th Quarter 2013 Resale Price Index

HDB’s flash estimate of the 4th Quarter 2013 Resale Price Index (RPI) is 202.1, a decline of 1.3% over 3rd Quarter 2013 (see Annex A1 (PDF 5KB) and Annex A2  (PDF 7KB)).

2The RPI provides information on the general price movements in the resale public housing market. The transacted prices of individual flats (by block and flat type) can be found on HDB InfoWEB (online enquiry).

3The RPI for the full quarter and more detailed public housing data for 4th Quarter 2013 will be released on 24 January 2014.

4In 2014, HDB will reduce the supply of new 3-room and larger flats by 18% from 22,600 units in 2013 to 18,600 units, now that the demand from families has stabilised. The number of 2-room BTO flats in non-mature estates, however, will be increased from 2,600 units in 2013 to 5,000 units. This will help meet the demand from singles. HDB will also offer 700 Studio Apartments to meet the right-sizing demands of the elderly. Overall, HDB will offer 24,300 BTO flats in 2014. HDB will continue to monitor the housing needs of Singaporeans closely and respond appropriately to demand and supply conditions.

Date issued : 02 Jan 2014

Source: HDB

HDB Resale Flat Index

URA releases flash estimate of 4th Quarter 2013 private residential property price index

The Urban Redevelopment Authority (URA) released the flash estimate of the price index for private residential property for 4th Quarter 2013 today.

Overall, the private residential property index fell 1.8 points from 216.3 points in 3rd Quarter 2013 to 214.5 points in 4th Quarter 2013. This represents a decline of 0.8%, compared to the 0.4% increase in the previous quarter (see Annex A).  For 2013 as a whole, prices increased by 1.2%, less than the 2.8% increase in 2012.

Prices of non-landed private residential properties in both Core Central Region and Outside Central Region declined in 4th Quarter 2013. In Core Central Region, prices fell 2.2%, which is significantly larger than the 0.3% decline in the previous quarter. Prices in Outside Central Region decreased for the first time since 2nd Quarter 2009, by 0.6%, compared with the 2.2% increase in the previous quarter. In Rest of Central Region, prices increased by 0.8% in 4th Quarter 2013, compared with the 0.9% decrease in the previous quarter (see Annex B). For 2013 as a whole, prices in Core Central Region fell 2.1%, while prices in Rest of Central Region and Outside Central Region increased by 0.3% and 6.8% respectively. Prices of landed private residential properties fell for the first time since 2nd Quarter 2009, by 1.2%, after rising 0.3% in the previous quarter. 

The flash estimates are compiled based on transaction prices given in caveats lodged during the first ten weeks of the quarter, supplemented by survey data on new units sold by developers in the first two months of the quarter. The statistics will be updated 4 weeks later when URA releases the full real estate statistics for 4th Quarter 2013, which captures more data on the caveats lodged and the take-up of new projects. Past data have shown that the difference between the quarterly price changes indicated by the flash estimate and the actual price changes could be significant when the change is small. The public is advised to interpret the flash estimates with caution.

Source: URA (Published Date: 02 Jan 2014)

URA Private Residential Property Index

Resale-flat prices may tumble 5-8 per cent

SINGAPORE- Resale prices of public homes fell 1.3 per cent in the fourth quarter of last year - the largest drop since the first quarter in 2009 - according to estimates released by the Housing Board yesterday.

And the slowdown may be more acute this year, with resale prices expected to go down by 5 to 8 per cent, according to both PropNex and ERA Realty.

Flash estimates from the Urban Redevelopment Authority showed that private home prices have also declined, by 0.8 per cent, in the fourth quarter of last year, the first time in nearly two years. Prices of non-landed private residential properties in the Outside Central Region dropped for the first time since 2009 by 0.6 per cent.

Where the HDB resale market is concerned, PropNex Realty chief executive Mohamed Ismail foresees a "quiet year (ahead)".

He said that the total number of HDB resale transactions this year could slump below 20,000, the lowest since the turn of the decade. Resale volumes have ranged between 24,000 and 37,000 over the past five years.

"It comes as no surprise...in the light of the numerous property-buying restrictions," he explained, citing the housing curbs for Singapore permanent residents, who now have to wait three years before they are eligible for a resale flat.

Mr Eugene Lim, key executive officer of ERA Realty, pointed out that the ramped-up supply of Build-To-Order (BTO) flats has offered first-time homebuyers "a good number and variety of choice", significantly reducing demand for resale flats.

He added: "By allowing singles to buy two-room BTO flats in non-mature estates, resale demand from this group is also reduced."

OrangeTee head of research and consultancy Christine Li said that prices of private homes could also moderate between 2 and 5 per cent this year.

"Many buyers have to cut back on affordability now, especially with cooling measures like the Total Debt Servicing Ratio (TDSR) framework," she said.

Under the TDSR, which was introduced by the Monetary Authority of Singapore in June, a property buyer's debt repayments cannot exceed 60 per cent of his gross monthly income.

Ms Alice Tan, associate director and head of research at Knight Frank Singapore, said that demand in the mid-tier and mass-market segments is likely to be more resilient, compared to the high-end segment.

Even so, the falling cash-over-valuation for HDB resale flats may set back demand for mass-market homes, as "HDB upgraders would have less returns to upgrade to private property", she added.

Friday, Jan 03, 2014

Jacqueline Woo

My Paper

Source: AsiaOne