Homepage
PR Newswire
08-12-2012, 08:20 AM
The media seems very happy to splash such headlines on the front page of the "Money" section, even as more and more couples and singles are being completely priced out of the property market!
As a comparison, unlevered gross yield fell to 3.77% for property, implying (to me) that prices have risen so much that yields have dropped significantly. I would apply the same case for shares - if blue-chip yields fell below 4% it would signal to me that valuations are expensive!
The Straits Times
www.straitstimes.com
Published on Dec 08, 2012
Bright end to the year for property market
Condo resale prices at historic high despite dim rental outlook
By Melissa Tan
THE year looks like it is ending with a flourish for the property market, with turnover up and condominium resale prices already at a historic high.
The only weak spot is rentals, which have weakened in the wake of increased supply and job cuts among global firms.
Condo resale prices rose overall to $1,222 per square foot (psf) on average for October and November, according to the Singapore Real Estate Exchange (SRX) yesterday.
This is 5.4 per cent up on the $1,159 psf average recorded during the third quarter this year.
Although data for December is not in, PropNex chief executive Mohamed Ismail expects the figures to have a minimal impact on resale prices for this quarter.
Gains were seen across the island during October and November.
City centre resale prices were 2.8 per cent higher than the average in the third quarter, city fringe condos were up 3.3 per cent and suburban condo values shot up 4.5 per cent.
But Mr Ismail said "record supply in the pipeline could further help alleviate any pent-up demand" in the suburbs, and so prevent price spikes.
The overall islandwide price growth of 5.4 per cent was higher than the individual increase in each region because condos in the city centre, which are more expensive per square foot than the rest, made up a bigger percentage of transactions in October and November than in the third quarter, the SRX said.
Resale transaction volumes climbed 6 per cent to 2,483 in October and November, from July and August. However, analysts noted that December is typically a quieter month, given the festive break, so overall fourth-quarter transaction volumes may not show a significant increase.
The rental market appears to be heading in the opposite direction to the resale market.
Overall gross rental yield dropped to a six-year low of 3.77 per cent in the first two months of the fourth quarter, the SRX said, citing a double whammy of strong price gains and weaker rents.
Analysts said the rental outlook is likely to be dim.
"As supply comes on-stream and banks continue to freeze headcount or retrench, I think residential vacancies and rentals will slide further," said International Property Advisor chief executive Ku Swee Yong.
"So yields will suffer more. But thanks to low interest rates, strong employment, holding power will remain strong and so we will not expect to see any desperate sales cases."
Average unit monthly rents dipped from $3.88 psf in the third quarter to $3.84 psf in October and November.
The sharpest drop was in the city fringe, where rents moderated after three straight quarters of growth this year, falling 2.5 per cent to an average of $3.91 psf.
Rents for condos in the rest of the island remained relatively stable relative to the third quarter.
City centre rents averaged $4.67 psf in October and November, little changed from the thirdquarter, while suburban rents were virtually flat at $3.06 psf.
The SRX's report also included, for the first time, data for shoebox units, which are apartments smaller than 50 sq m.
Demand was high for rents, with 1,328 contracts having been signed so far this year, but the number of resale transactions was relatively small at 198 units as of Dec 6.
Average unit monthly rentals for shoebox apartments were $6.65 psf in October and November, slightly higher than $6.61 psf in the third quarter.
melissat@sph.com.sg
As a comparison, unlevered gross yield fell to 3.77% for property, implying (to me) that prices have risen so much that yields have dropped significantly. I would apply the same case for shares - if blue-chip yields fell below 4% it would signal to me that valuations are expensive!
The Straits Times
www.straitstimes.com
Published on Dec 08, 2012
Bright end to the year for property market
Condo resale prices at historic high despite dim rental outlook
By Melissa Tan
THE year looks like it is ending with a flourish for the property market, with turnover up and condominium resale prices already at a historic high.
The only weak spot is rentals, which have weakened in the wake of increased supply and job cuts among global firms.
Condo resale prices rose overall to $1,222 per square foot (psf) on average for October and November, according to the Singapore Real Estate Exchange (SRX) yesterday.
This is 5.4 per cent up on the $1,159 psf average recorded during the third quarter this year.
Although data for December is not in, PropNex chief executive Mohamed Ismail expects the figures to have a minimal impact on resale prices for this quarter.
Gains were seen across the island during October and November.
City centre resale prices were 2.8 per cent higher than the average in the third quarter, city fringe condos were up 3.3 per cent and suburban condo values shot up 4.5 per cent.
But Mr Ismail said "record supply in the pipeline could further help alleviate any pent-up demand" in the suburbs, and so prevent price spikes.
The overall islandwide price growth of 5.4 per cent was higher than the individual increase in each region because condos in the city centre, which are more expensive per square foot than the rest, made up a bigger percentage of transactions in October and November than in the third quarter, the SRX said.
Resale transaction volumes climbed 6 per cent to 2,483 in October and November, from July and August. However, analysts noted that December is typically a quieter month, given the festive break, so overall fourth-quarter transaction volumes may not show a significant increase.
The rental market appears to be heading in the opposite direction to the resale market.
Overall gross rental yield dropped to a six-year low of 3.77 per cent in the first two months of the fourth quarter, the SRX said, citing a double whammy of strong price gains and weaker rents.
Analysts said the rental outlook is likely to be dim.
"As supply comes on-stream and banks continue to freeze headcount or retrench, I think residential vacancies and rentals will slide further," said International Property Advisor chief executive Ku Swee Yong.
"So yields will suffer more. But thanks to low interest rates, strong employment, holding power will remain strong and so we will not expect to see any desperate sales cases."
Average unit monthly rents dipped from $3.88 psf in the third quarter to $3.84 psf in October and November.
The sharpest drop was in the city fringe, where rents moderated after three straight quarters of growth this year, falling 2.5 per cent to an average of $3.91 psf.
Rents for condos in the rest of the island remained relatively stable relative to the third quarter.
City centre rents averaged $4.67 psf in October and November, little changed from the thirdquarter, while suburban rents were virtually flat at $3.06 psf.
The SRX's report also included, for the first time, data for shoebox units, which are apartments smaller than 50 sq m.
Demand was high for rents, with 1,328 contracts having been signed so far this year, but the number of resale transactions was relatively small at 198 units as of Dec 6.
Average unit monthly rentals for shoebox apartments were $6.65 psf in October and November, slightly higher than $6.61 psf in the third quarter.
melissat@sph.com.sg
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/