Bottoming out seen in house prices, going by URA data

The majority of property consultants say that the Urban Redevelopment Authority’s second-quarter flash quotes signal a bottoming out in private residence prices is normally fast visiting.

For the ec market in the northern part of Singapore, Visionaire executive condo and Northwave EC are drawing in crowds. This, in conjunction with the new improvement in private residence sales, does mean that the the suspicious would be prepared to hesitate any reducing of the premises cooling methods. Some companies are also in hopes that Brexit could help repulse some premises buying fascination to Singapore.

URA’s standard overall privately owned home price tag index reduced 0. 5 per cent in Q2 in the preceding 1 / 4, a smaller drop compared with the 0. six per cent along with Q1.

The most up-to-date decline is additionally the smallest on the 11 successive quarterly reduces in the index since it peaked in Q3 2013.

URA’s Q2 adobe flash estimate means a 1. you per cent index drop in the first half of this year (Q2 2016 versus Q4 2015).

The price index for non-landed private homes in Key Central Area (CCR) flower for the 2nd straight one fourth – inching up 0. 2 % in Q2 after raising 0. two per cent in Q1.

This might indicate a ‘flight to value’, stated an analyst, which may continue and eventually prop up the overall non-public home value index for the next quarter to hover in the region of zero %.

In the city-fringe or Rest of Central Area (RCR), prices of private flats and condominium units treasured 0. four per cent in Q2 following remaining unrevised previously.

However , prices of non-landed homes in the suburbs or Outside Central Region (OCR) contracted 0. 7 per cent, though this was a smaller decline than Q1’s 1 . 3 per cent.

In the landed housing segment, the price decline gathered momentum, with a 1 . 3 per cent fall compared with Q1’s 1 . 1 per cent contraction.

Based on caveats, 52 per cent of transactions of private homes in Q2 2016 were non-landed ones in CCR and RCR, so one could say that half of the private residential market has improved.

Analysts expect a full-year decline of under 2 per cent. This would be the smallest annual contraction in three years; the index shed 3. 7 per cent last year and 4 per cent in 2014.

CCR prices in Q2 may have been supported by recent developer sales at OUE Twin Peaks and Ardmore Three which are included under “resales” in URA’s terminology since these projects are delicensed. These projects are relatively newer compared with the usual mix of resale transactions – units in older projects sold by individuals – and could slightly uplift overall prices in the CCR.

A housing project may be delicensed if it has received Certificate of Statutory Completion, and where the individual strata titles have been issued to buyers.

Another property consultant suggests that URA’s price index for CCR may be slightly inflated for instance a incentives provided by developers of delicensed jobs recently is probably not captured within the income data URA uses to compute their price directories.

One results of a task being delicensed is that their developer has ceased to be required to put up weekly product sales data to URA (showing discounts and also other incentives to reflect the web price).

For brand spanking new sales, URA uses these kinds of data via developers in licensed jobs to calculate its house price directories.

In the case of resell transactions, nevertheless , URA uses data collated from files submitted towards the taxman for the purpose of stamp obligation payment. A market player informed BT that even though upfront special discounts given by a developer within a delicensed task to a consumer would be captured during these records, any kind of incentives issued following the completing the invest in, that is, following stamp obligation payment, examine.

A case in point will be Ardmore 3 where creator Wheelock Real estate (Singapore) has got given customers a 12-15 per cent ABSD (additional potential buyer’s stamp duty) rebate about completion of the purchase.

When ever contacted, a URA speaker said: “Sales of finished private homes by programmers in jobs which have been delicensed by the Control of Real estate account for a comparatively small amount of all individual residential property sales transactions. ”

For new sales, the majority of models are sold by developers before the projects are completed and delicensed. URA’s private home price indices are “intended to provide a broad overview of property price trends, and thus computed based on all property sale transactions, both in the new sale and resale markets”, the girl added.

Analysts attributed the modest price boost in URA’s index for RCR in Q2 chiefly to new projects Gem Residences and Sturdee Residences.

The current extended downturn in the private home price index in the absence of any crisis is bound to create impatience among potential buyers to return to the market.

Despite the positive sentiment sparked by URA’s Friday numbers, market watchers highlight the headwinds still prevailing – such as the cooling measures, the high volume of new private home completions especially in the suburbs and not forgetting the global economic uncertainty, exacerbated by Brexit.

Still, ERA Realty Network key professional officer Eugene Lim spots a metallic lining. “With Brexit, Singapore might observe more attention from investors who are looking to park their money in a safe haven – and property may well be one of the property they would consider. ”

All those in another camp, however , argue that with the pound’s depreciation and softer UK property prices, London house is looking more attractive now.