This is lower than 4.2% for full-year 2012 and 8.7% in 2011
[SINGAPORE] Prices of completed non-landed private homes have risen at a slower pace year-to-date up to November than they did for the whole of last year, latest figures from the National University of Singapore (NUS) show.
Based on the flash estimate for November released yesterday, the Overall Singapore Residential Price Index (SRPI) has inched up 0.6 per cent since December 2012 - a smaller rate of increase compared with 4.2 per cent for full-year 2012, 8.7 per cent in 2011 and 11.7 per cent in 2010.
The SRPI series, which tracks prices of completed private apartments and condos (excluding executive condos), is compiled by the university's Institute of Real Estate Studies (Ires).
Developers' sales, though down as well, have fallen at a slower percentage rate of 33.9 per cent to 14,678 units in the first 11 months of this year from 22,197 for the whole of 2012. These figures are based on developers' sales declarations to the Urban Redevelopment Authority.
Resale transaction volumes are expected to remain low in 2014. DTZ head of Singapore research Lee Lay Keng cites limited incentive for individuals to offload their private residential properties unless they receive a premium, as their replacement cost is now higher.
"With moderately improving economic sentiment, individual sellers are also unlikely to sell their properties in distress. There could be further downside pressure on resale prices going forward, with increased competition from the large pipeline supply and lower launch prices of new projects by developers," said Ms Lee.
Close to 20,000 private homes are expected to be completed each in 2014 and 2015 - roughly double the past 10-year annual completion figure of about 9,400 units.
Subsale activity will continue to remain weak with the seller's stamp duty in place, she added.
In the primary market, DTZ forecasts that developers could sell around 12,000-15,000 private homes in 2014.
"Even though the TDSR (total debt servicing ratio) framework has slowed transaction volume, the drivers for the residential market - such as economic growth and the current low interest rate environment - remain healthy," said Ms Lee.
Developers' prices are likely to hold or inch down slightly in 2014, as they will have limited flexibility for downward price adjustment, since they have generally paid high land prices. Demand will be "more project-specific", said Ms Lee. Projects that will still enjoy relatively healthy demand are likely to be those close to an MRT station, or in a mature estate or in a locale with limited supply, or being launched at below prices of nearby projects released earlier.
Based on the NUS flash estimates for the SRPI series, completed small apartments (up to 506 sq ft) islandwide have posted the biggest price hike YTD 2013 of 3.3 per cent, outpacing a 1.9 per cent price gain for completed condos/ private apartments in Non-Central Region (excluding small units). In each of the three preceding years, the Non-Central Region subindex had posted the strongest price increase, followed by small units.
DTZ's Ms Lee suggests that the relative outperformance by small units this year reflects their popularity among investors on the back of sustained rental demand. The YTD 2013 increases in the subindices for small units and Non-Central Region were both smaller compared with gains of 4.7 per cent and 9.2 per cent respectively in 2012.
The SPRI for Central Region (again excluding small units) has declined 1 per cent YTD 2013, after easing 1.3 per cent in 2012. Ires defines Central Region as districts 1-4 (including the financial district and Sentosa Cove) and the traditional prime districts 9, 10 and 11.
Month on month, the Overall SRPI rose 0.1 per cent in November, contrasting with a 0.8 per cent month-on-month decline in the revised value for October.
The subindex for SRPI for small units islandwide dipped 0.6 per cent month-on-month in November, after remaining unchanged in October. Prices for Central Region rose 0.3 per cent in November, after falling 1.1 per cent in October. The SRPI for Non-Central Region dipped 0.1 per cent in November. It declined 0.5 per cent in October.
Source from Business Times