Tuesday, December 17, 2013

2014 new home sales predicted to moderate to 13,000-14,000 units

Link: 2014 new home sales predicted to moderate to 13,000-14,000 units

let see what happen, market sentiment is still bullish.

[Property bull run set to end, says analyst.
According to Maybank Kim Eng, looking forward to 2014, it reiterates its belief that conditions would likely culminate in a ~10% decline in private residential property prices, led by the mass market segment.
Maybank also expects new home sales to moderate to 13,000-14,000 in 2014, down from the estimated ~16,000 units to be sold in 2013. In other words, Maybank thinks the property sector will tip next year.]

[Here's more:
After almost four years of uninterrupted increase, residential prices in Singapore are finally set to dip in 2014 in our view.
Following seven rounds of property cooling measures since 2009, the QoQ increase in the Urban Redevelopment Authority’s (URA) Residential Property Price Index (PPI) is moderating. However, the PPI for 3Q13 was still 3.9% higher than a year ago.
The number of new private homes sold by developers also declined by 30% in 11M13 to 14,964 units (excluding Executive Condominiums or ECs) from 21,288 in 11M12. We expect 2013 to end with sales of ~16,000 units, ie, ~30% drop from 2012’s robust figure of 22,698 units.]

Monday, December 16, 2013

Developers' new home sales climbed 54.6% in November

Link: Developers' new home sales climbed 54.6% in November

the sales volume is determined by developer strategy. hard time for policy maker to gauge.

[95% of newly launched private homes sold.
According to PropNex, developers sold 1,228 (excluding ECs) new residences in November, close to 95% of total new private properties launched, (1,293 units excl ECs) in the month. In comparison M-O-M, there is a 54.6% increase (incl ECs) 21.7% increase (excl ECs) in the total new launches sold.

“November is another exceptional month whereby developers strategically launched their new homes in time of the festive seasons. Core of Central Region (CCR) marked the highest sale this year at 662 units largely due to DUO Residences that were priced near the baseline of its region and as such, were highly attractive to buyers.

Regardless of the regions of these launches, sales of new homes had remained strong, mainly contributed by the rightfully prices projects of the other top-selling projects of Alex Residences and The Creek @Bukit. It was these attractive prices that set the tone for the sale of new launches in November and it gives the strongest signal for developers to pricing sensitively their new launches to attain high take-ups,” commented Mr Mohamed Ismail, CEO of PropNex Realty.]

Chart of the Day: This chart shows how bad residential oversupply can get

Chart of the Day: This chart shows how bad residential oversupply can get from SBR website.


There'll be 168,200 units by 2014-2016.
According to Phillip Capital, over the next 3 years, it would be an oversupply situation within the Singapore residential segment. Inclusive of both public and private sectors, they project the physical completion of 168,200 residential units from 2014 to 2016.
In contrast, they look into the underlying ‘real’ demand that stems from population growth.
Here's more from Phillip Capital:
We estimate that the increase in population will provide take-up of c. 71,400 residential units. Beside the local government intervention in the aforementioned portion, the oversupply situation will be a major factor in the gloomy outlook for residential.
The mass market continues the trend of having lesser individuals per residential units. Currently, based on the total residents and the total residential units, the ratio stands at an estimated 4.07 individuals per unit.
We do acknowledge that this ratio is exhibiting a downwards trend. However, for the market to absorb the upcoming 3-yr supply, we would need this ratio to lower a further 7%, at 3.78 individual per unit.
We do foresee residents continuing to favor having fewer individuals under a single roof. Nonetheless, with the aging population and the affordability issues, the ratio should not decrease much further. Within these 3 years, this factor will not substantially negate the oversupply effects.


Thursday, December 05, 2013

HDB resale prices hit 15-month low in November

HDB resale prices hit 15-month low in November

Price still holding very well.

[It dropped by another 0.6%.
According to the SRX Residential Flash Report, overall HDB resale prices slipped another 0.6% in November, reaching the lowest level since September 2012.
According to flash estimates, 1,051 HDB flats were sold in November's resale market, an 11.5% drop from October's 1,187 resale cases. On a year-on-year basis, November resales volume represented a 34% drop from the same period in 2012.
An estimated 1,321 HDB flats were rented in November 2013, down by 11% compared to October.

HDB median rents slipped 2.1% to reach $2,350, marking the first drop since median rental prices reached $2,400 in June 2012.]

Tuesday, December 03, 2013

Expect HDB construction to taper from 2014: Khaw

Link here.

MND appears to be ahead of the curve.

[Over 77,000 BTO flats delivered in the last 3 years.

The government will begin to taper off the massive construction programme from 2014 after three years of sustained ramp-up to restore the balance in Singapore's housing market. This was revealed by Minster for National Development Khaw Boon Wan on his blog.

He said the COV trend in the resale HDB market is symptomatic of this development and is welcomed. The government will do so in a measured way, to allow the market to gradually adjust, just like what it had done to cool the property market earlier.

"The Nov 2013 BTO/SBF launch is about to close. The offering of 8,952 flats in a single launch was the largest in HDB’s history. With this, we have delivered over 25,000 BTO flats this year and over 77,000 BTO flats in the last three years," he added.]


Monday, December 02, 2013

How badly will Singapore be hurt by the burgeoning supply of residential properties?

How badly will Singapore be hurt by the burgeoning supply of residential properties?

Analysts project a whopping 73,600 completed homes by 2016.
It has been predicted that there will be 50,000 completed units by 2014, but what really rattled analysts is the projection that a further 49,700 homes will be available to the market by 2015 and another 73,600 by 2016.
If the average population growth in Singapore hits 86,000 a year from 2014 to 2020, demand for physical homes will just hit a measly 29,000 per annum. This supply-demand miscalculation got analysts worried about how the Singapore market will be whipped.
Here are the effects that analysts are fearing:

Eli Lee, Kevin Tan, OCBC Research:
One significant headwind for the residential sector lies in the large physical supply expected over FY14-16. Including HDB, DBSS and EC completions, we anticipate that 50.0k, 49.7k and 73.6k homes will come into the physical supply in FY14, FY15 and FY16, respectively.
Assuming a 6.0m population target by 2020 from the latest Population White Paper, we forecast average population growth at ~86k
individuals p.a. from 2014-20, which translates to an average incremental demand of ~29k physical homes per year. In our view,
this mismatch points to a fairly clear physical oversupply situation ahead.
That said, barring a macro crisis, we do not believe headline prices will correct excessively (>20%) in 2014. This is due to three reasons:
1) The direct impact of a physical oversupply (of homes which are already sold) is first on vacancy rates and subsequently on rental prices. While falling rents will pressure home prices, we do not see many home-owners force-selling into a softening market given that a negative rental carry is the norm in Singapore historically and that the average individual balance sheet remains fairly benign.
2) The level of unsold pipeline held by developers (which forms the primary supply) is currently at 36k units. This is lower than the 10-year historical average of 43k units and is not overly onerous. While developers will likely ease prices ahead to move inventory, a fire-sale situation is unlikely to ensue given relatively strong balance sheets.
3) Finally, we believe the data currently point to a fairly high price elasticity of demand. That is, significant numbers of buyers will come into the market at every incremental price dip. This is illustrated when CapitaLand introduced discounts at its 1715-unit d’Leedon in 1Q13 and subsequently saw 543 more units sold by 3Q13. Similarly, developers which set lower prices at recent new launches (Sky Vue at Bishan and Thomson Three at Bright Hill Dr.) saw firm performances, despite the Jul-13 TDSR measures.

Brandon Lee, Tuck Yin Soong, Macquarie Research:
2014 will see the completion of 19,302 units (+6.6% in inventory), which would result in a vacancy rate of 9.3%. Historically, property price declines have coincided with vacancies of 8% and above. Downside pressures will come from both the primary and secondary markets, as developers could trim their price expectations (which some already have) to capture declining volumes and more resale units could become available post the 3-yr expiry of the seller’s stamp duty.
Overall, we are forecasting residential prices to decline 4% in 2014, led by the high-end (-5%)due to the continued  absence of foreign buyers, impact of ABSD and sizeable completions (30% of 2014 supply).
Mid-end and mass would decline by a lower 4% and 3%, respectively due to continued interest from HDB upgraders and investors in view of an improved macroeconomic environment and low short-term interest rates. We expect sales volumes of14, 000 units in 2014 (-5% YoY), as prospective buyers will continue to feel the effects of TDSR.

Min Chow Sai, Nomura:
While the introduction of sellers’ stamp duty (SSD) since February 2010 has helped to slow the secondary market over the past few years, our survey of caveats lodged for new private homes suggests that more sellers are willing to pay the SSD to move their units in the secondary market – 192 units changed hands in 9M13, vs. 99 units in 9M12.
The average SSD paid per transaction was also higher in 9M13 (SGD32,185), compared with 9M12 (SGD19,655).
It also showed that more sellers are apparently willing to sell at a net loss (taking into account stamp duties and agents’ commissions) – 26 such transactions in 9M13, vs. nine in 9M12.

Lastly, of the 192 units sold with SSD paid in 9M13 and the 26 units sold at a net loss, 136 units and 16 units, respectively, are scheduled for completion in 2013-14F.
Sentiments have turned more cautious and the market is rightly concerned about the projected surge in completions, in our view. About 9,000 units of non-landed private homes [excluding executive condos (EC)] were completed in 9M13 and we are
projecting another 28,570 units to be completed by end-2014F, about 51% of which are located in the outside central region (OCR, a proxy for the mass-market segment).
While a lot has already been said about the potential impact on the rental market, we believe the impact on the secondary market could also be significant, notwithstanding the introduction of sellers’ stamp duty (SSD) in February 2010.