Singapore Private Residential
Property Report:
Current situation and outlook for foreign investors and expatriates
Private Residential Sales Market Singapore
As Singapore’s fiscal health continues to slip, official statistics correspondingly reflect a somewhat distressed private residential property sector. However, there are also some silver linings in the figures released.
Accordingly to the Urban Redevelopment Authority’s (URA) quarterly statistics, overall prices in Singapore’s private residential property market have eased by 14.1% quarter-on-quarter (qoq) in 1Q 2009. This was more pronounced than the 13.8% qoq decrease based on flash estimates, an indication that the average price contraction accelerated in the last three weeks of 1Q 2009. The deteriorating quarterly price growth of 14.1% qoq was also the most significant since 1990. Almost similar quarterly reduction in price growth was captured in 3Q 98 when prices eased by 13.2% qoq. Specifically, both overall landed and non-landed properties witnessed a more marked fall this quarter, by 9.2% qoq and 15.2% qoq respectively.
In terms of the non-landed market segments, while it is no longer unexpected that all three regions experienced continued reduction in prices, it was the mid-tier Rest of Central Region that recorded the sharpest fall (-17.0% qoq). This was followed by the prime Core Central Region and the mass Outside Central Region that witnessed prices wane by 16.2% and 7.3% respectively. In particular it was the larger volume of home sales in the mass market that aided in the lesser rate of price decline in this region.
Total primary sales in the suburban Outside Central Region in 1Q 2009 reached a level to almost what was achieved in the entire 2008. A total of 1,637 units were sold in the primary market, amounting to 64% of all primary market sales islandwide. On the contrary the prime market managed to garner a meagre 9.5% of all primary market sales. The launch market performed similarly, with 63% of all new launches found in the mass market. This compared to the record low (data available since 1Q 2004) 100 units launched in the prime market in 1Q 2009.
The residential rental market, though not as equally fraught as residential prices, experienced its third consecutive quarterly decline, falling by 8.5% qoq in 1Q 2009. In terms of the non-landed market, it was the prime market with the steepest fall of 10.3% qoq followed by the mid-tier and mass market segments that eased by 7.2% and 6.5% respectively. The weakening rental market illustrated that islandwide rentals are 14.2% shy of the peak achieved in 2Q 2008.
Source: Knight Frank Research
See also : Buyers' Guide and Investors' Guide
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Outlook Private Residential Sales 2009
Going forward, it is anticipated that private home prices and rent will contract sharply in the first half of 2009, but the rate of decline will decelerate consequently. In regard to sale volume, it is unlikely that the low sale volume in the primary market experienced in 2008 would be repeated this year. Based on the encouraging home sale volume achieved by developers in the 1Q 2009, the total primary market sale level this year is projected to range between 6,500 and 8,000, about 50% to 90% higher than that in the previous year.
Source: Knight Frank Research
For further detailed information on our Real Estate Quarterly Highlights visit the website below.
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Residential Leasing Market Singapore Slump in Rentals
Despite a general weakening in the private residential market, the leasing market was quite active in 2008. Based on preliminary figures, there were a total of 32,100 leasing deals for both landed and non-landed homes. This was just 5.1% lower than the peak in 2005, where the largest number of leasing deals was concluded. Although leasing activity sustained in 2008, these deals were concluded at a lower rental level. Based on Knight Frank’s research on non-landed property, rentals have generally decreased across the board in 2008. Rentals of luxury properties have dipped by 7.2% qoq in 4Q 2008, reflecting a 9.6% yoy decline. This was a stark contrast to the 25.6% yoy increase in rents of luxury apartments in 2007.
Rents of non-landed homes outside the luxury segment fell as well, although there was a dichotomy in the performance of rents of such homes. Specifically, rents of non-landed homes in both Lower Bukit Timah and prime East Coast areas fell the most in 2008, plummeting by 27.9% yoy and 19.9% yoy respectively. The fall was partly led by a sharp escalation in 2007, where the two areas strengthened in their appeal to tenants.
These include tenants who looked for alternatives to the prime residential districts 9,10 and 11, as prime rents were soaring. There were also some tenants who vacated from the prime residential districts as dwellings were demolished after being sold collectively. However, this trend had almost come to an end in 2H 2008 and tenants are increasingly cautious in this weak economic environment. There has been a resistance to commit to high rentals and some tenants are also more open to well-located suburban areas. Hence, non-landed homes in the Yishun and Yio Chu Kang areas dropped the least, by about 5% yoy.
Source: Knight Frank Research
See also Housing Market Singapore - Rental Guide
For further detailed information visit the website below.
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Outlook Residential Leasing 2009
In recent months, the embattled financial markets have created a ruckus globally, leaving the Singapore private residential market unsettled. The third quarter of this year has seen prices take a dip and going forward, it is anticipated that the price decline is likely to persist.
Essentially, whatever price gain achieved in the first half of this year would be given up in the 2nd half of 2008, resulting in overall price movement of 0% to a drop of 3% for the whole of 2008. Prices are expected to continue to fall in 2009 and this could result in a challenging year for Singapore's private residential property market.
Source: Knight Frank Research
For further detailed information visit the website below.
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