204,500 homes set to be ready by 2016

More private homes, ECs due for completion bump up earlier forecast

By Melissa Tan, The Straits Times, 26 Oct 2013

THE projected number of homes that will be built by 2016 has gone up to 204,461 units, said Minister of National Development Khaw Boon Wan in a Facebook post yesterday.

This was up from a previous forecast of 197,559 units made in January.

"We are making good progress in our ramp-up of the home-building programme," Mr Khaw said.

The increase in the projected total was solely due to more private homes and executive condominium (EC) units set for completion over the next three years.

Housing Board flat numbers to be completed remain the same.

Post by Khaw Boon Wan.

So far this year, 9,519 private homes have been built and 6,305 more will be finished by Dec 31. Over the next three years, 4,884 more private homes are scheduled to come onstream.

As for ECs, a hybrid of public and private housing, 1,253 units have been completed so far this year and 406 more are due to be completed by the year end. An expected 1,355 EC units will be completed over the next three years.

But the bulk of the completions will be in 2016, likely due to delays, market watchers said.

The revised estimates yesterday were released alongside the Urban Redevelopment Authority's (URA) private property price index data for the third quarter.

Overall private home prices rose 0.4 per cent, mainly owing to a 2.2 per cent increase in the suburban region, URA data showed.

That outweighed a 0.3 per cent dip in city centre prices and a 1.1 per cent slide in the city fringe. This marked the first time city fringe prices have fallen since the first three months of last year.

New sale volumes plunged 46 per cent to 2,430 units and resale volumes tumbled 35 per cent to 1,340 units in the third quarter.

Developers also held back major launches, releasing 3,313 new units for sale - 25 per cent less than in the second quarter.

Private home rents inched up 0.2 per cent in the third quarter.

This was despite the number of vacant units climbing from 5.6 per cent in the second quarter to 6.1 per cent in the third quarter, the URA said.

The stock of completed private residential units also grew by 3,478 units in July through last month.

Knight Frank research head Alice Tan said prices will likely drop in most market segments this quarter as developers cut launch prices to boost sales.

She expects city centre prices to drop by 0.3 per cent to 0.5 per cent, city fringe prices to rise 0.2 per cent and suburban prices to grow by 0.5 per cent to 1 per cent quarter on quarter.

HDB resale prices dip for first time since 2009
More sellers offloading flats below valuation as sentiment remains poor
By Daryl Chin And Rachel Au-yong, The Straits Times, 26 Oct 2013

PRICES of resale HDB flats fell 0.9 per cent in the third quarter of this year as the number of sellers offloading their flats below valuation grows.

Not only was it the first decline since the start of 2009 when a deep recession hit, but the typically strong third quarter also saw the number of deals dropping to 4,529.

This is a 13 per cent dip from the preceding quarter and a far cry from the 6,560 deals done in the third quarter of last year.

Private home prices, on the other hand, rose 0.4 per cent in the third quarter, according to the Urban Redevelopment Authority (URA).

The price decline in public housing, property analysts say, is a result of stricter controls on home loans as well as the attractiveness and volume of new Build-To-Order offerings.

PropNex chief executive Mohamed Ismail said the resale market has been serving mostly HDB upgraders of late.

This is because singles can now purchase new flats direct from the Housing Board, while newly minted permanent residents have to wait three years before they can buy a resale flat.

As a result, market sentiment is poor, and this has led to some sellers putting their flats up for sale at prices below valuation before the market dips further, he noted.

"These are sellers who are in sore need of cash. (The flats) can either be in areas where supply is far greater than demand such as Punggol, or less desirable units in areas where valuations are already high, such as the central areas like Toa Payoh," he said.

In Punggol for instance, the median resale price and cash over valuation (COV) of a five-room flat - at $560,000 and $30,000 respectively in the second quarter - has fallen in the third quarter to $542,000 and just $8,000.

According to agency data, the median COV has dropped from $35,000 at the start of the year to $15,000 now, and transaction volumes are heading towards a 16-year low.

"The market is still feeling the effects of the cooling measures introduced at the start of the year, although flats in good locations will be able to hold their price," added ERA Realty key executive officer Eugene Lim.

Now, a buyer can use only 30 per cent of his gross monthly income to service the mortgage of his HDB resale flat.

The maximum loan terms from HDB and private banks were also reduced to 25 and 30 years respectively.

Together with the 60 per cent cap on total debt obligations introduced in June, the curbs have forced buyers to take out smaller loans and scale down purchases.

The latest data showed a 0.6 per cent rise in the number of flats approved for rent.

"A lot of HDB upgraders are keen to rent out their flats, especially now that many new private properties have been recently completed," said R'ST Research director Ong Kah Seng.

Public housing, he added, typically provides "good rental yields" of around 5 per cent.

Full impact of loan curbs 'yet to be seen'
By Melissa Tan, The Straits Times, 26 Oct 2013

NEW figures showing private home prices rising 0.4 per cent in the third quarter belie growing market softness.

Home loan curbs imposed in late June have hammered prices in the city centre and city fringe, but their effects will take several months to show up in suburban regions, consultants said yesterday.

The rise in the private property price index, released yesterday by the Urban Redevelopment Authority (URA), may therefore fail to immediately reflect the full extent of the drubbing that the market took in the July to September period.

"The residential property market has not been this sluggish since the global financial crisis in 2008 and 2009," said Jones Lang LaSalle Singapore research director Ong Teck Hui yesterday.

The apparent 0.2 per cent rise in private home rents in the three months to Sept 30 also masks a growing number of vacant units.

One major reason that the overall price index seems to contradict the general market slowdown is that there is a lag in the suburban segment, market watchers said.

Suburban home prices climbed in the third quarter, outweighing price drops in the city centre and city fringe.

The effects of the June home loan curbs take longer to reach the suburban mass market segment because that segment is driven by demand from Housing Board flat upgraders, said International Property Advisor chief executive Ku Swee Yong.

Given that HDB resale prices fell only in the third quarter, any drop in upgrader demand and later in suburban private home prices would be seen only in the fourth quarter or later, he said.

Another major factor is the way the URA computes the property price index. The index figure is based on the median price per sqm for units sold or rented in that quarter. If more people buy smaller flats with higher per sq m prices but lower total prices, the price index goes up.

Similarly, a wave of tenants moving into newer homes - which tend to be smaller than older units - in the third quarter has led to a rise in the rental index because tenants are paying more per sq m even if their total rent remains the same, Mr Ku said.

Savills Singapore research head Alan Cheong added that in a quarter with fewer sales, the median figure could disguise a broader slowdown. "One could quite easily think of various permutations where the third-quarter (median) number could still be higher than the second's," he said.

But he stopped short of calling for the computation to be revised, saying: "Statistics have to be interpreted by those with a good grasp of the subject and constructed by those with good integrity and I am confident the URA has both."