PRIVATE HOME PRICES
EDGE UP 2% IN Q2
Private home prices in
edged up 2.0 percent quarter-on-quarter in the second quarter, lower than the 2.2 percent increase in the first quarter, according to the Urban Redevelopment Authority’s (URA) real estate statistics for Q2 2011. Singapore
The increase was more evident in the Outside Central Region (
OCR) at 1.7 percent, compared to 1.1 percent for the Rest of Central Region (RCR) and 1.6 percent for the Core Central Region ( CCR).
“The cooling measures have been effective in the price growth slowdown,” said Mohamed Ismail, Chief Executive of PropNex.
“The authorities introduced tighter lending criteria in mid-January to try and suppress house price inflation. The lowering of maximum
LTV ratios to 60 percent of the value of the property and increases in stamp duty both for the period of imposition and percentage applicable were aimed at curtailing speculative purchasing and maintaining a stable and sustainable property market.”
Roza Sure Bagus, Managing Director of Sure Bagus (
Asia) Ltd, agreed, saying that “cooling measures that the government had implemented in August 2010 and January this year have worked. This is in line with the government's aim to bring prices to a more sustainable level.”
She also said, “Deputy Prime Minister Tharman Shanmugaratnam's recent message to brace ourselves for a sluggish global economy, could signal uncertainty ahead as the property market is very sentiment driven. Also with a possibility of a double dip recession, we are taking a bearish approach.”
Looking ahead, Roza believes that, despite the bleak outlook, windows of opportunity abound for genuine homeowners.
“The property market moves in cycle. Therefore, we expect the price index to head South should a double dip recession occur or slower than expected domestic economic growth. Cash rich investors should look to buying distressed properties or buy at a low,” she said.
Meanwhile, office space rentals grew 1.5 percent in the second quarter, down from 5.4 percent in Q1, while prices of office space rose 3.6 percent, down from 4.9 percent in the previous quarter.
Li Hiaw Ho, Executive Director of CB Richard Ellis (CBRE), said that while rents continued to trend upwards in Q2 2011, “the pace has slowed”.
“It is apparent the government has been seeking to bolster office supply to facilitate business expansion and to ensure that operating costs remains competitive vis-à-vis other regional cities,” he said.
The URA noted that more office space supply will also come from the GLS sites which were recently awarded or released for sale in 2011.
“This includes the commercial sites at
Robinson Road / Cecil Street and Paya Lebar. In addition, more supply of commercial space is also expected from the development of the six plots of land at and Marina Bay Ophir Road / Rochor Road to be jointly developed by M+S Pte Ltd,” it said.
In terms of retail properties, the index showed that rentals for shop space climbed 0.8 percent in Q2, while prices of shop space rose 1.1 percent, compared with the 0.5 percent increase in the previous quarter.
While CBRE is positive about the eventual take-up rate at Jurong Gateway, given that retail demand is somewhat supply-led locally, Li noted that the company has concerns about pressures on suburban rents given the increase in supply.
“Nonetheless, well-managed malls and necessity trades should continue to flourish. Retailers could also take the opportunity to expand their retail network.”
Info courtesy- PropertyGuru.com.sg