Move may allay panic buying though prices may keep climbing
The Urban Redevelopment Authority continues to signal that there is sufficient supply in all sectors of the Singapore real estate market as property prices and rents continued to scale upwards in the third quarter - even if home buying took a dent from sub-prime woes.
For the private housing market, URA said that there were 65,406 uncompleted units in the pipeline as at end-Q3 2007, up 16.4 per cent from a quarter earlier. Of those units, about 58 per cent or 38,013 units were still unsold, some 26 per cent higher than at end-Q2 2006. The figure included 29,570 units that had planning approvals but not the pre-requisite conditions for sale, although URA said that these could be obtained quickly. URA's data showed that a slew of housing projects (at least 19) received provisional permission in Q3, including a 1,568-unit condo by a CapitaLand-led consortium on the Farrer Court site and a 1,284-unit condo at Pasir Ris Drive 8 by Hong Leong unit Hong Realty.
Singapore's planning authority also pointed to other sources of supply, including the Government Land Sales (GLS) Programme, which it will step up in the first-half of next year if necessary, as well as developments of private-sector sites, including those sold through en bloc sales.
Colliers International director (research and consultancy) Tay Huey Ying said: 'The supply will help ease further price increases and hopefully allay panic buying.'
URA's overall private home price index climbed 8.3 per cent in Q3 over the preceding quarter, taking the increase in the first nine months of this year (since end-2006) to 22.9 per cent. Its rental index for private homes rose 11.4 per cent quarter-on-quarter in Q3 this year and by 32.2 per cent in the first nine months.
The increases took place despite the drop in sales volumes. In the primary market, the number of private homes sold by developers dropped nearly 33 per cent quarter-on-quarter to 3,450 units in Q3. In the secondary market, resales fell 42.2 per cent to 4,539 units while subsales declined 35 per cent to 1,163 units.
Developers have sold 13,362 private homes in the first nine months of this year and Ms Tay estimated that they may be able to sell a further 3,500 units or so in Q4, taking the full-year 2007 total primary market sales to a new record of about 16,800 units.
Ms Tay estimated that the full-year 2007 increase in the private home price index will be around 30 per cent - notwithstanding the withdrawal of the deferred payment scheme announced yesterday evening. For next year, she is predicting a further increase of 20-25 per cent.
'The deferred payment withdrawal is likely to hit speculators and specu-vestors more than genuine owner-occupiers and investors,' she added.
She also estimated that URA's rental index for private homes would jump another 30-35 per cent in 2008, after posting an estimated 43 per cent gain for the whole of this year.
'While the government numbers show a strong supply pipeline, I think the stock of homes for immediate occupation will remain tight, providing support for continuous growth in rents and prices on top of the healthy demand we've been seeing,' said Ms Tay.
For the first nine months of this year, the net increase in the stock of private homes was just 605 units. And although the latest official numbers project that 5,541 new homes would be completed next year, the actual net increase in supply may be a smaller 3,500-4,000 units, after taking into account the demolition of en bloc sale properties which are redeveloped. 'This is lower than the five-year annual average (actual) net increase in supply of 7,670 units between 2000 and 2004 before the latest en bloc boom,' Ms Tay said.
URA's data yesterday also showed an even performance across various locations, with the price sub-index for non-landed private homes in the Core Central Region increasing 8.3 per cent in Q3 over Q2, while the Rest of Central Region and Outside Central Region both posted 7.9 per cent gains. The rental indices for these three locations also gained 11.8-12.2 per cent during the period.
Islandwide, the number of subsales in Q3 fell 35.1 per cent quarter-on-quarter to 1,163 units but their share of total private housing deals in the July to Sept quarter rose to 12.7 per cent, from 12.1 per cent in Q2. The Q3 2007 subsales figure was also 3.6 times the figure in the same year-ago period.
For office space, URA's median rental for Category 1 space was $10.95 per square foot a month in Q3 (based on leases that began during the quarter), up 15.3 per cent from Q2 and reflecting a 43.9 per cent gain in the first nine months. Category 1 office space is in modern, big buildings in the Downtown Core and Orchard Planning Area.
URA said that as at end-Q3, there was a total office supply of 6.6 million square feet gross floor area in the pipeline slated for completion by end-2010. Owners of older CBD blocks are seeking to redevelop their buildings while the government has been releasing more sites for office development and will release more transitional office sites in the coming months and add new 99-year sites to its H1 2008 land sales programme.
There is also four million sq ft of business park space in the pipeline slated for completion by end-2010.
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