Pick up in transaction volume amid slower price fall for homes in 2Q2015
By Lin Zhiqin,
Tan Chee Yuen
/ Savills, The Edge Property |
Developers sold 2,116 private residential units (excluding ECs), more than the 1,311 units in 1Q2015, on the back of higher volume of 2,099 units launched, more than the 1,189 units in the previous quarter (Figure 1a). However, the number of units sold is lower than the 2,665 in 2Q2014. Developers launched 480 Executive Condo (EC) units and sold 439, more than the 378 units launched and 326 sold in 1Q2015. Resale transactions increased to 1,827 from 1,250 in 1Q2015 and 1,388 in 2Q2014. Sub-sale transactions also increased to 161 from 94 units in 1Q2015 and 158 in 2Q2014 (Figure 1b).
In the seventh consecutive quarter of decline, overall prices fell by 0.9% in 2Q2015, less than the 1.0% decline in 1Q2015. The slower rate of decline is likely due to price resilience of non-landed homes in the Rest of Central Region (RCR), which saw a 0.6% fall in 2Q2015, compared to the 1.7% in the previous quarter. Non-landed home prices fell by 0.6% in the Core Central Region (CCR), a steeper fall than the 0.4% in 1Q2015, and 1.1% in the Outside Central Region (OCR), the same as in 1Q2015. Prices of landed homes also saw a decline of 1.0%, more than the 0.9% in 1Q2015. Private home prices have fallen by 6.1% from their peak in 3Q2013.
Alan Cheong, head of research and consultancy at Savills Singapore, believes that prices have been soft in the resale market while new sale prices have been resilient, with Yishun’s North Park Residences’ 561 units-sold comprising 26.5% of new sales in 2Q2015 at prices well above $1,300 psf considered very firm.
Figure 1a: Developers’ launch and sales
Source: URA
Figure 1b: Resale and sub-sale volume
Source: URA
Stronger rental market
Private home rents are also in their seventh quarter of decline, falling 1.1% in 2Q2015, less than the 1.7% in 1Q2015. The gentler decline was observed in all segments, with rents falling 1.3% in the CCR, 1.1% in the RCR and 1.0% in the OCR, less than the 1.9%, 1.6% and 1.8% in 1Q2015. Landed home rents also declined by a smaller 1.0% compared to 1.2% in 1Q2015.
The number of rental contracts for non-landed homes increased to 16,015 from 14,390 in 1Q2015 and 14,187 in 2Q2014. Even if rental volume continues trending up, the vacancy level might not stabilise as there is an increasing number of overseas nationals who rent rooms within private apartments or HDB flats, according to Mr Cheong.
Revived demand for resale HDB flats
Declining prices and lower supply of new flats are also reviving demand for HDB resale homes. Resale transactions jumped 28% from 4,135 in 1Q2015 to 5,286 in 2Q2015. Prices of resale HDB flats slipped 0.4% in 2Q2015, less than the 1.0% decline in the previous quarter.
On the rental front, the number of HDB flats being sublet inched up 2.4% q-o-q to 10,510, compared with 10,385 units in 1Q2015.
HDB offered 13,426 flats in 1H2015 comprising 8,039 Build-To-Order (BTO) flats and 5,387 balance flats. An additional supply of about 4,860 flats will be offered in Bidadari and Punggol Northshore for September 2015 BTO exercise.
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