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10-11-2012, 07:36 AM
So much for the "cooling" measures!
The Straits Times
www.straitstimes.com
Published on Nov 10, 2012
NON-LANDED PRIVATE HOMES
Prices and sales still holding up
Property market remains hot despite cooling measures last month
By Esther Teo Property reporter
HOME buyers seem to have shrugged off the latest round of market-cooling measures.
Both prices and volumes of non-landed private homes that changed hands last month held firm. Most sales came after the measures were unveiled on Oct 5.
Resale prices flatlined at $1,209 per sq ft (psf) last month, unchanged from September's prices, according to data from the Singapore Real Estate Exchange (SRX).
Strong sales volumes were posted, with 1,328 homes changing hands last month, more than the monthly average of 1,190 units in the April to September period.
The figures cover only resale non-landed transactions.
New projects such as eCO in Bedok and Sky Green off Upper Paya Lebar Road also continued to post healthy sales, with hundreds of units snapped up.
The SRX collates transactions, accounting for more than 80 per cent of the private market, by major property agencies.
This robust showing comes despite the sixth round of cooling measures announced last month designed to stop home buyers from over-extending themselves.
For instance, home loans are now capped at a tenure of 35 years.
Buyers taking a loan of more than 30 years, or extending past the retirement age of 65, will have to fork out more in cash.
City-fringe homes posted the strongest showing, with average resale prices last month rising 4.5 per cent compared with the July to September period. Suburban homes posted gains of 4.2 per cent while city-centre home prices rose 1.8 per cent, the SRX said.
Experts say that ample liquidity in the market, low interest rates and the fact that the previous five rounds of measures have failed to bring prices down have kept buying sentiment positive.
Savills Singapore research head Alan Cheong noted that "market fatigue" towards the measures has set in and buyers might be throwing caution to the wind despite the measures and threats of new policy risks.
"The recent measures seemed more geared towards safeguarding the banking system from excessive lending... But older people, who are the investors, still have a lot of reserves and are able to pay cash upfront," he added.
ERA Realty key executive officer Eugene Lim said the resilience could indicate that most do not go for long-mortgage loans.
He expects prices to continue inching up as land and construction costs remain elevated. The Housing Board resale market, which has seen prices continue to climb, also provides a support for suburban home prices.
"For demand and hence prices to be affected, it must mean an economic downturn, external shocks or if interest rates rise and the holding power of owners is lessened," Mr Lim added.
HSR Property Group special adviser Donald Han noted that there has been "a sense of optimism" in the market with no negative news in recent weeks.
Buyers who are affected by the new measures are not leaving the market entirely but could be buying smaller, more affordable units instead, he added.
But the rental market saw slimmer gains, with average unit rents rising just 0.5 per cent to $3.89 psf a month.
This weaker rental showing relative to strong price gains led to overall gross rental yields falling to 3.87 per cent last month from 4.01 per cent in the third quarter.
Savills' Mr Cheong said that the lower yields are unlikely to indicate that prices might soon fall in tandem. This is because low interest rates means that there is still "a good spread between borrowing costs and interest rates".
SRX data also pointed to the narrowing price gap between city-centre and suburban homes.
The price premium for resale city-centre homes has fallen to 85 per cent, the lowest since 2007. This is even lower than the trough of 92 per cent at the height of the global financial crisis in the first quarter of 2009.
esthert@sph.com.sg
The Straits Times
www.straitstimes.com
Published on Nov 10, 2012
NON-LANDED PRIVATE HOMES
Prices and sales still holding up
Property market remains hot despite cooling measures last month
By Esther Teo Property reporter
HOME buyers seem to have shrugged off the latest round of market-cooling measures.
Both prices and volumes of non-landed private homes that changed hands last month held firm. Most sales came after the measures were unveiled on Oct 5.
Resale prices flatlined at $1,209 per sq ft (psf) last month, unchanged from September's prices, according to data from the Singapore Real Estate Exchange (SRX).
Strong sales volumes were posted, with 1,328 homes changing hands last month, more than the monthly average of 1,190 units in the April to September period.
The figures cover only resale non-landed transactions.
New projects such as eCO in Bedok and Sky Green off Upper Paya Lebar Road also continued to post healthy sales, with hundreds of units snapped up.
The SRX collates transactions, accounting for more than 80 per cent of the private market, by major property agencies.
This robust showing comes despite the sixth round of cooling measures announced last month designed to stop home buyers from over-extending themselves.
For instance, home loans are now capped at a tenure of 35 years.
Buyers taking a loan of more than 30 years, or extending past the retirement age of 65, will have to fork out more in cash.
City-fringe homes posted the strongest showing, with average resale prices last month rising 4.5 per cent compared with the July to September period. Suburban homes posted gains of 4.2 per cent while city-centre home prices rose 1.8 per cent, the SRX said.
Experts say that ample liquidity in the market, low interest rates and the fact that the previous five rounds of measures have failed to bring prices down have kept buying sentiment positive.
Savills Singapore research head Alan Cheong noted that "market fatigue" towards the measures has set in and buyers might be throwing caution to the wind despite the measures and threats of new policy risks.
"The recent measures seemed more geared towards safeguarding the banking system from excessive lending... But older people, who are the investors, still have a lot of reserves and are able to pay cash upfront," he added.
ERA Realty key executive officer Eugene Lim said the resilience could indicate that most do not go for long-mortgage loans.
He expects prices to continue inching up as land and construction costs remain elevated. The Housing Board resale market, which has seen prices continue to climb, also provides a support for suburban home prices.
"For demand and hence prices to be affected, it must mean an economic downturn, external shocks or if interest rates rise and the holding power of owners is lessened," Mr Lim added.
HSR Property Group special adviser Donald Han noted that there has been "a sense of optimism" in the market with no negative news in recent weeks.
Buyers who are affected by the new measures are not leaving the market entirely but could be buying smaller, more affordable units instead, he added.
But the rental market saw slimmer gains, with average unit rents rising just 0.5 per cent to $3.89 psf a month.
This weaker rental showing relative to strong price gains led to overall gross rental yields falling to 3.87 per cent last month from 4.01 per cent in the third quarter.
Savills' Mr Cheong said that the lower yields are unlikely to indicate that prices might soon fall in tandem. This is because low interest rates means that there is still "a good spread between borrowing costs and interest rates".
SRX data also pointed to the narrowing price gap between city-centre and suburban homes.
The price premium for resale city-centre homes has fallen to 85 per cent, the lowest since 2007. This is even lower than the trough of 92 per cent at the height of the global financial crisis in the first quarter of 2009.
esthert@sph.com.sg
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