Archive for April 2nd, 2008

Home prices hold their own, but just barely

Posted by luxuryasiahome on April 2, 2008

Analysts expect at least one quarterly dip this year

Despite the quieter market, home prices continued to edge up in the first quarter, although at a slower pace, latest flash estimates show.

The quarter-on-quarter rate of increase in the Urban Redevelopment Authority’s price index for private homes decelerated to 4.2 per cent in Q1 this year, after a 6.8 per cent gain in Q4 2007.

Some property consultants are now factoring in declines for at least one of the remaining three quarters of this year, as the full impact of the US economic slowdown bites into the local property market.

URA’s flash estimate also showed that regional sub-indices for non-landed private home prices posted smaller gains all-round in Q1 this year than they did in Q4 2007. However, the 4.8 per cent increase in the Outside Central Region (OCR) in Q1 outpaced gains of 4.4 per cent in the Core Central Region (CCR) and 3.9 per cent in the Rest of Central Region (RCR) – for the first time in four years.

Jones Lang LaSalle said prices are steady in the CCR, supported by deep-pocketed investors, but may be peaking in the RCR, while demand continues to be strong in the OCR as en bloc sellers pick up replacement homes in the suburbs, where prices are relatively more attractive.

In the public housing segment, the Housing & Development Board’s flash estimate shows that the HDB resale flat price index rose 3.4 per cent in Q1 over the preceding quarter, again slower than the 5.7 per cent increase posted in Q4 last year.

Knight Frank director (consultancy and research) Nicholas Mak said that in a worst-case scenario – assuming the Singapore economy contracts in the coming months – URA’s overall price index for private homes could post a full-year increase of zero to 5 per cent.

This factors in one quarter of decline, to the tune of 0.5 to 2.5 per cent, possibly towards the end of the year. Any decline in the index would be the first since Q1 2004, Mr Mak added.

Mr Mak’s best-case scenario is for a 10-15 per cent full-year gain in the index, with increases in all four quarters.

URA’s private home price index rose 31.2 per cent in 2007.

Colliers International’s director for research and consultancy Tay Huey Ying too said that the Singapore property market is likely to experience the full impact of the US economic slowdown by Q3 or Q4 this year.

In a worst-case scenario, URA’s private home price index may rise 8 to 10 per cent for the whole of this year, with possibly a decline in the fourth quarter of not more than 4 per cent, Ms Tay said.

In a best-case scenario – if the US enters a mild recession and recovers by the year-end and Singapore’s GDP growth rate is at the higher end of the MTI’s forecast of 4 to 6 per cent – the full-year increase in URA’s index could be 12-15 per cent.

For the next quarter, CB Richard Ellis is predicting a marginal rise in the index, of about one to 2 per cent from the Q1 level. It estimates that developers sold about 700-1,000 private homes in Q1, less than the 1,449 units they sold in Q4 last year.

Observers said that price gains in the OCR may have come from the secondary market, from completed developments like The Clearwater and Aquarius by the Park in the Bedok Reservoir area. The fact that a new launch in the area, Waterfront Waves, sold for an average price of about $800 psf could have encouraged the trend.

In the western part of Singapore, units sold at The Lakeshore and LakeHolmz in the Boon Lay vicinity may also have helped boost the sub-index for non-landed homes in the OCR, analysts suggest.

Knight Frank’s Mr Mak said that the 4.4 per cent gain in the CCR during Q1 was the lowest rate of increase in the past seven quarters.

As for the HDB resale price index, ERA Singapore assistant vice-president Eugene Lim predicts a full-year increase of not more than 10 per cent, compared with a 17.5 per cent jump in 2007.

Some demand may be taken away from the resale market because of a higher supply of new flats coming onstream, so resale prices may increase at a more measured pace in the coming months.

The HDB said in its release yesterday that the total planned Build-To-Order (BTO) supply of 6,100 new flats for Jan-Sept 2008 will surpass the annual BTO flat supply in 2007 (6,000 units) and 2006 (2,400 units).

HDB’s records show that in February 2008, about a quarter of resale flats were transacted at prices not exceeding $10,000 above market valuation.

Source : Business Times – 2 Apr 2008

Posted in General, HDB News, Market Reports | Tagged: HDB, HDB News, HDB Prices, Property Prices, Singapore Property, Singapore Property 2008, Singapore Property Market Outlook, URA, Urban Redevelopment Authority | Leave a Comment »

Singapore home prices slow after record year

Posted by luxuryasiahome on April 2, 2008

SINGAPORE private home prices rose at the slowest in more than a year in the first quarter of this year, reflecting a general slow down in the property market.

Prices of private homes gained 4.2 per cent in the first three months, after rising 6.8 per cent in the previous quarter, according to early quarterly estimates released by the Urban Redevelopment Authority (URA) on Tuesday.

Prices of non-landed private homes in the core central region of Singapore such as Orchard Road and Sentosa Cove rose by 4.4 per cent, compared with a 7.5 per cent rise in the previous quarter.

Non-landed private home prices rose 3.9 per cent in the rest of central region and 4.8 per cent in areas outside the central region or suburban areas. In the previous quarter, these prices went up by 7.7 per cent and 7 per cent respectively.

Private home prices jumped 31 per cent last year on the back of a booming economy – to an 11-year high. The market has since slowed considerably in the wake of the global credit crunch and the jittery stock market.

The URA on Tuesday advised prospective home-buyers that there is ample supply of private housing in the pipeline.

‘As at the fourth quarter of 2007, there are about 64,900 private residential units in the pipeline, of which about 56,100 new private housing units are expected to be completed between 2008 and 2011,’ said the URA.

About 38,300 units, or 59 per cent of the total, haven’t been sold, the authority said.

Singapore’s residential property market outpaced increases in China and Bulgaria, researcher Global Property Guide said in a Dec 19 report. Prices excluding inflation climbed 24 per cent, the researcher said.

The figures released by the authority are preliminary and based on transaction prices lodged during the first 10 weeks of the quarter. The statistics will be updated four weeks later, the authority said in today’s statement.

The URA will release the full first quarter real estate statistics in four weeks’ time.

Source : Straits Times - 1 Apr 2008

Posted in General, Market Reports | Tagged: Property Prices, Singapore Property, Singapore Property 2008, Singapore Property Market Outlook, URA, Urban Redevelopment Authority | Leave a Comment »

World Bank forecasts trying times for Asian economies in 2008

Posted by luxuryasiahome on April 2, 2008

Developing economies in East Asia, including Indonesia, Malaysia and Thailand, will grow at their slowest pace in six years in 2008, according to the latest forecast from the World Bank.

It said growth is being dragged down by the US sub-prime mortgage crisis and a drop in exports to the US.

The World Bank also warned that governments in the region need to be watchful over rising inflation.

Trade with the US is key for most economies in East Asia, which is defined by the World Bank to include Southeast Asia and most other countries in the region, with the exception of Japan.

World Bank said these economies will be hurt by falling exports to the US and reduced spending in the wake of the sub-prime mortgage crisis.

Following the 10.2 percent expansion last year, the World Bank now expects developing East Asian economies to grow by 8.6 percent in 2008 – the slowest pace since 2002.

Growth in Indonesia is seen moderating to 6 percent and in Malaysia to 5.5 percent. But the World Bank warned that soaring food and fuel prices is now East Asia’s biggest challenge. Economists said rising costs will hurt developing economies the most.

Joseph Tan, Senior Strategist, Fortis, said: “I think if you look at the problem with food inflation, it is certainly a lot less severe in Singapore, compared to some of the other countries. Obviously in Singapore, we have a fairly even income distribution pattern as compared to some of the other poorer countries in Asia.

“(With regards to) what the World Bank said about the regressive nature of subsidies, we don’t have that problem quite as badly here in Singapore as compared to some of the other countries. The poor will certainly feel it a lot more when food prices start to go up because it is a much bigger part of their consumption basket, and I think that is going to affect the countries that are a lot poorer.”

In its report, the World Bank also noted that Asia is more diversified, with economies like China becoming global growth poles, cushioning the impact from a US slowdown.

The World Bank expects the US economy to grow between 0.5 and 1.4 percent this year, while China is expected to expand at below 10 percent, down from 11.4 percent in 2007.

Source : Channel NewsAsia – 1 Apr 2008

Posted in General, Global Economy | Tagged: Asia Economy, Asia Economy Outlook, Inflation, US Subprime Crisis Impact on Asia, World Bank | Leave a Comment »