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Subscribe to this list via RSS Blog posts tagged in H1 2014

The property market in Bangkok is expected to decline further after a deadly blast rocked the city recently. Demand for property was already soft before the bombing, and residential developers will reconsider, postpone and even scale down plans in the next four months, reported The Bangkok Post.

Supalai, Property Perfect, Major Development and Noble Development are just a few of the developers that have postponed launches scheduled for this year. Thailand’s largest developer, Pruksa Real Estate, is also considering delaying some of its launches, while AP (Thailand) is now focusing on safer single-house and townhouse projects.

“Developers should be more cautious of new investment, particularly in large projects that take a few years to develop,” Atip Bijanonda, President of the Housing Business Association, told the newspaper. “Maintaining financial liquidity with cash on hand enough for one year amid an uncertain situation is a must, as this year’s fourth quarter may not be a hot time for the sector to boost new residential sales.”

Developers are better off focusing on smaller projects that can close sales and be completed in a shorter time, he noted.

Suriya Poolvoralaks, Managing Director of Major, said the company has already converted a large condominium into a smaller eight-storey project of only 200 units to quicken sales and revenue.

Pruksa will delay its projects to next year due to the unfavourable market conditions, but the company isn’t sure how many will be pushed back. “It is hard to have new sales,” said Managing Director Prasert Taedullayasatit. “We will try to transfer our condo sales backlog to have revenue as targeted.”

Theeraphon Voranithiphong, Executive Vice-President of Noble, said the company has decided to postpone all four of its projects scheduled to launch in the coming months to 2016. These include condo developments in Thong Lor, Ari and a site that has yet to be determined.

Supalai will not launch any residential developments until it believes demand has returned. “We will not launch condo projects when we are not sure of their locations because launches come with expenses,” said Deputy Managing Director Tritecha Tangmatitham.

Fragrant Property CEO James Duan said the group postponed two new projects scheduled to launch in the fourth quarter to next year, including one on Soi Sukhumvit 36.

credits: propertyguru

Tagged in: H1 2014 land parcel
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Posted by on in New Launches

A recent property auction organised by property consultancy JLL saw one apartment sold out of seven residential and commercial properties submitted for sale.

The 2,174 sq ft loft unit at Orchard Scotts in District 9 comprises three bedrooms and was sold via mortgagee sale and with vacant possession for $2.8 million, despite being listed for $3.3 million.

The apartment comes with a 99-year lease with effect from January 2001.

Held at the Amara hotel last Thursday, the auction saw four properties put up for mortgagee sale and the rest through owner’s sale. Two other listings were withdrawn before the event.

The most expensive listing which didn’t sell was a two-storey maisonette at The Balmoral, with a price tag of $4.5 million.

JLL will hold its next auction on 23 September.

credits : property guru

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General Storage Company (GSC), a wholly-owned subsidiary of Singapore Post, has acquired the Store Friendly Self Storage Group (SFG) from Store Friendly Asia – the largest self-storage network in the region.

The acquisition of Singapore-based SFG, which provides personal and business storage facilities services, amounted to $12 million in cash and was funded from SingPost’s internal resources.

GSC may pay another $4 million to Store Friendly Asia if certain conditions are met.

“The acquisition will increase GSC’s presence across Singapore, making us the self-storage provider with the most number of facilities here (15). Customers of Store Friendly, especially those operating e-commerce businesses, will benefit from our value-added services such as parcel delivery,” noted GSC’s Group CEO Helen Ng.

In a statement released via SGX on Tuesday, SingPost said the deal is not expected to have any material impact on the net tangible assets or earnings per share of the group for the financial year ending 31 March 2016.

credits : propertyguru

Tagged in: Ascott DBS H1 2014 Overseas
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Extensive public consultations are currently underway as to how studio apartments and 2-room flats can be combined into the new 2R Flexi scheme, but still retain their objectives, said National Development Minister Khaw Boon Wan.

Writing on his blog, Mr Khaw explained that singles and families will still be able to purchase a new 2-room flat from HDB on a 99-year lease, but elderly households aged 55 and above can choose a shorter lease period based on their age and preference under the unified scheme.

The lease options range from 15 to 45 years in 5-year increments, and will be granted provided the chosen lease allows applicants and their spouse to live in the flat till age 95 or above.

Prices of the 2R Flexi flats will take into account the lease tenure and whether they are bought by first-time or second-time buyers.

“Shorter lease flats will be cheaper than longer lease flats. Second-timer buyers will pay more than first-timers as the latter will get more subsidies. Through a combination of pro-rated grants for first-timers and pro-rated resale levy for second-timers, we will be able to price the 2R Flexi flats so that recent buyers of SA or 2R flats will find the 2R Flexi scheme to be fair. New buyers of 2R Flexi flats will also find the flats affordable,” wrote the Minister.

“We have worked hard over the past few months to get this balance right, for the new 2R Flexi scheme,” he added.

The government is expected to launch the unified scheme during the next Build-to-Order (BTO) exercise in September.

credits: property guru

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Posted by on in New Launches

The Australian dollar weakened to under the S$1.00 level on Monday (27 July), falling below parity against the Singapore dollar for the first time since 2009.

According to Bloomberg data, the Australian dollar was trading at 99 Singapore cents at around noon yesterday, not far from just above S$1.00 across Asia last week.

The decline was attributed to slowing global demand for the country’s commodities exports in recent months.

The Australian dollar has weakened against its Singapore counterpart by about 8 percent since the start of the year falling below parity for the first time in six years.

Industry experts, as cited by the media, said the Australian dollar could further weaken against the local currency over the next few months.

credits: property guru

Tagged in: ERA H1 2014 Rent
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Posted by on in Commercial

Leading Indonesian property portal has appointed Rafael Jeffry Sani as Country Manager, where he will be responsible of spearheading's growth and strengthening the local management team.

He said: "I look forward to be part of this company and can't wait to lead as well as contribute to its business development in Indonesia. With my knowledge and experience, I want to give new perspectives, ideas, and innovations to reach its glory," Sani stated in the press release.

The appointment of Sani is the second strategic decision that has made in several weeks. The first one was a partnership with Emtek Group to strengthen its position in Indonesia's market.

Steve Melhuish, PropertyGuru Group's Founder and Chief Executive Officer, said that he is optimistic that Sani is the right one to lead to the top.

He added that has actually led the market, reflected from the number of downloads the platform gets which has doubled from last year's figure, and the fact that the platform has more than 8,800 property agents actively posting their property ads.

He said: " is obviously leading Indonesia's online property search market. Sani will bring in his experience as a businessman as well as leader to lead the company. With his proven capability of managing a fleet of different brands, Sani is the right man for's success.", as one of PropertyGuru Group's property portals, is the biggest property portal in Indonesia. It has more than 2,000,000 visitors per month and provides more than 290,000 property listings.

As of the end of 2013 the associated App had received more than 1.3 million downloads.

Credits: Property Guru

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Poor sales were recorded on the first day of launch for Marina One Residences with only 20 units sold last Saturday, according to media reports.

This is a sharp turnaround from the strong build-up seen during the preview phase, which saw more than 300 units taken up since 3 October, many by bulk buyers.

Singaporeans account for about 70 percent of buyers, while the rest are PRs and foreign nationalities. The top three groups of overseas buyers are from Malaysia at 20 percent, followed by Indonesia and China.

Approximately 70 percent of the units at Marina One Residences are one- and two-bedrooms. Prices start from around $1.4 million for a one-bedder while two-bedders cost above $2 million.

M+S appears to have adopted a cautious approach to selling units at the development. Just one of its two towers is available for sale right now and only 372 of the total 1,042 apartments have initially been released.

Located in the heart of Singapore's new downtown core, the 99-year leasehold condominium is close to Marina Bay MRT station.

Meanwhile, sales of luxury apartments in Singapore's central business district have been muted in recent times.

A CBRE report attributed the drop in sales to the TDSR framework which took effect at the end of June 2013.

At the same time, foreign buyers who used to be big players in Singapore's prime residential market, appear to be retreating since the ABSD was raised to 15 percent.

Credits: Property Guru

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Posted by on in Trends

The price gaps for secondary private residential market in Core Central Region (CCR) versus the Rest of Central Region (RCR) and Outside Central Region (OCR) have been narrowing since the market softened, according to a report by HSR.

The price gap between CCR and RCR median prices reached a high of $610 psf in Q4 2011. In Q2 2014, this gap fell to $461 psf. This translates to a 24 percent decline.

Similarly, between CCR and OCR median prices, the price gap has fallen from a high of $870 psf to $712 psf for the same period, marking a decline of 18 percent.

One possible reason is the high correlation between the percentage of non-Singaporean buyers and the price gaps between CCR vs. RCR/OCR. "In other words, the higher the percentage of non-Singaporean buyers, the higher the gap is," the report said.

Since 2007, non-Singaporean buyers make up on average about 47 percent of yearly transactions in the CCR, 34 percent in RCR and 31 percent in OCR.

At the peak of the gap in Q4 2011, non-Singaporeans represented 61 percent of the total secondary transactions for non-landed properties in CCR compared to 35 percent in 1Q 2014.

During the last Global Financial Crisis, the price gap between CCR and RCR fell from a peak of $643 psf in Q4 2007 to $367 psf in Q1 2009. HSR believes this gap will continue to shrink by another $50 to $100 psf as property prices continue to fall.

Credits: Property Guru

Tagged in: H1 2014
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Posted by on in Resale

The drop in private residential home prices in Q3 has added pressure on developers who are already struggling to move units, reported the media.

According to analysts, margin compression is a real threat among property developers in Singapore as the government is unlikely to relax its property cooling measures anytime soon.

CIMB noted high supply, subdued expectations on property prices and financing restrictions limit buying activities, with private homes prices expected to fall by five percent this year.

With this, CIMB expects developers' profits to be muted due to higher land costs and weaker average selling prices.

"We think it is a little too early for a relaxation of housing restrictions and expect developer stocks to be range bound in the near term," it said.

Meanwhile, PropNex observed the price decline was accompanied by a significant decline in monthly primary private home sales. This is because buyers held back their buying decision in anticipation of a further price drop.

"We think the reduced volume transactions have reflected the near-term reduced market size and are likely to stabilise at this level as marginal buyers have been impacted by the financing restrictions put in place," said PropNex.

"Developers are facing the prospect of margin compression on weaker ASPs and as land prices remain high. Most developers have diversified overseas into countries such as Australia and the UK, as well as have boosted their recurrent income streams by investing in investment properties. This will enable them to generate higher PBT margins of 15-20 percent vs. 10 percent from the local projects, and will lift their RNAVs," it added.

Credits: Property Guru

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He was assistant financial controller at Kaixin Industrial, a subsidiary of AVIC International Maritime Holdings.

Pollux Properties announced the appointment of Chan Tee Yong as deputy financial controller.

Mr Chan, 29, will be responsible for the accounting and financial functions of the company and group, according to a Pollux Properties report.

He joined as finance manager in Kaixin Industrial (a subsidiary of AVIC International Maritime Holdings) in February 2012. In 2014 he was promoted to assistant financial controller until 8 August 2014. Before this, he was audit senior in Ernst & Young LLP from December 2009 to January 2014 and audit assistant in Deloitte & Touche (Malaysia) from February 2007 to September 2009.

Credits: Singapore Business Review

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But office rents are expected to spike.

Retailers are scratching their heads over weak sales, even as tourist spending growth continues to moderate. The future remains challenging for domestic retail and hospitality REITs, a report by Moody's Investors Service revealed today.

Moody's revealed that while a healthy operating environment and manageable refinancing risk continue to support the stable outlook for the Singapore Real Estate Investment Trust sector, certain segments will continue to face headwinds this year.

In the retail segment, for instance, weaker tenant sales and a lack of demand will slow the take-up rate for new retail space, creating a challenging environment for upcoming supply.

Meanwhile, the increasing supply pipeline in the hotel segment in 2014 and 2015, coupled with moderating growth in Singapore's tourist arrivals and tourism spending, will cap growth in average room rates.

But a rosy outlook awaits developers of office space, as Moody's expects the tight supply of new office
space in the core central business district will improve occupancy rates. The limited supply also provides landlords with greater pricing power, which will likely increase monthly rental rates.

"The outlook reflects our view that the sector's EBITDA will grow by 4% in 2014, supported by a larger asset base and some positive rental revisions," says Jacintha Poh, a Moody's Assistant Vice President and Analyst, speaking at the Property Market Update Seminar 2014.

Here's more from Moody's:

Business and science parks will also see sizeable space additions in 2014 and 2015, but Moody's expects rental rates will remain broadly stable, owing to the strong take-up.

Moody's sees potential weakness in the warehousing segment, where a spike in the supply of new warehouse space will pressure occupancy and rental rates. Nevertheless, Moody's estimates at least 60% of upcoming space has been pre-committed by end-users.

Funding costs will increase with the rising interest rate environment, but Moody's notes the rated S-REITs are insulated as more than half of their outstanding debt is tied to fixed interest rates.

Finally, the sector's debt maturity profile is also healthy as majority of debt will be maturing in five calendar years and beyond. Moody's notes that sector's debt maturity profile is now well staggered, such that no more than 30% of debt needs refinancing in any single year.

Credits: Singapore Business Review

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Trends solidify this not-so-sunny forecast.

With interim results coming soon for China property, it is believed that they will be generally lackluster, due to various trends that have led to the forecast.

According to a research note from Maybank Kim Eng, these trends are: higher gearing HoH due to slower-than-expected cash collection ratio, and most developers maintaining contract sales targets for 2014 w/ a few exceptions (potentially Hopson, Sino-Ocean).

Further, another trend was also noted in the form of lower margin guidance for some that have not guided down.

The report said that it must be recalled that Agile, CG and Shimao already guided lower GPMs before blackout.

Here's more from Maybank Kim Eng:

Est 5-8% YoY profit growth for 1H: For the sector, we expect 5-8% YoY growth in underlying profit for 1H14, with COLI, KWG, and Shimao to post highest YoY core earnings growth.

So far, a few developers including COGO (81 HK, NR) and Greenland (337 HK, NR) announced negative profit warnings.

We believe the interim earnings represent more backward looking sales and might not represent full year's picture if there are some outlier projects being delivered.

In our view, future margin outlook and the cashflow situations are key.

A good number of China developers under our coverage would have to guide more negative operating cashflow for this year and likely to slow down either new landbanking or new starts GFA to maintain healthy cashflows.

Margin-wise, we see there could be some downside risks to consensus for Yuexiu Prop and Agile.

Our 2014F earnings for Sunac, Franshion, and Agile are 5% or more above Bloomberg consensus while 8% lower for Yuexiu Prop and 7% lower for Sino-Ocean.

Over 1M, property stocks under our coverage rose an average 21%.

There should be better stock entry points given some lackluster results pending in August.

Credits: Singapore Business Review

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He will also be chairman of the Audit and Risk Management Committee and a member of the Nominating Committee and the Remuneration Committee.

Hong Fok Corp announced the appointment of Steven Lim Jun Xiong as independent non-executive director.

At present, Mr Lim, 58, is CEO of SG Trust Asia since 2010. Prior to this, he was executive director at Strategic Associates Singapore from 2009 to 2010, as well as director ans senior consultant at HSBC Private Bank Suisse SA from 2007 to 2008, according to a Hong Fok Corp report.

Credits: Singapore Business Review

Tagged in: H1 2014 Private
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Posted by on in Resale

Prices sink amid looming BTO flat glut.

The Housing and Development Board is set to release 80,000 new build-to-order flats within the next three years, prompting prospective owners to sell off their existing flats.

This imminent supply flood is set to drag resale prices further, even as the market continues to struggle with lacklustre transaction volumes in recent months.

According to PropNex, HDB will also launch a total of 24,300 BTO flats in 2014 just slightly lower than last year's supply of 25,100 units. Minister Khaw has also revealed that 18,000 households in the next 3 years will be moving to a BTO flat, thus they are required to sell off their existing flat within the 6 months.

"The imminent flood in supply of HDB resale homes from owners collecting the keys to their new BTO flats and private properties will add further pressure on resale prices, even though transaction volume may also improve slightly as a result due to the lower asking prices of sellers," noted PropNex's report.

Here's more from PropNex:
"This will be a quiet year for the HDB resale market--– similar to 2013 which had seen the fewest deals in years. However, transactions have increased in Q2 and I expect the resale market to pick up in the second half as lower prices may entice more buyers to possibly upgrade to a larger flat," commented Mr Ismail.

Mr Ismail expects HDB resale prices to soften 6 to 7 per cent for full-year 2014, with volumes hitting around 17,000 units--likely to be the lowest in the last decade.

Credits: Singapore Business Review

Tagged in: H1 2014
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The duo bests three other bidders.

Frasers Centerpoint and Keong Hong Holdings have joined forces to roll out the highest bid for an executive condominium site in Sembawang.

According to the HDB, the site is could yield 620 housing units and has a leasehold of 99 years.

FCL and Keong Hong's $214m bid is equivalent to $3445 per square foot per plot ratio.

Other bidders include Verwood Holdings and TID Residential ($211m), CEL Residential Development ($188m), and Sim Lian Land ($181m).

The HDB will evaluate the bids and award the tender at a later date.

Credits: Singapore Business Review

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It's a double whammy of TDSR and lukewarm developer interests.

Cautious developers are turning their noses up on Singapore's private residential market. The country's private residential investment sales slumped to a five-year low in Q2, as developers remained lukewarm on the en bloc and strata-titled properties investment market.

According to a report by Colliers, private residential investment sales hit $606.31 million in Q2, contracting 6.4% from the $648.07m recorded in Q1.

"This stemmed from the double whammy of frail investor interests in en bloc and strata-titled properties as well as anaemic developers' quest for land acquisition via collective sales. The confluence of multiple cooling measures and the Total Debt Servicing Ratio (TDSR) framework have put investors into a cautious stance, bringing about sluggish sales activity for the en bloc and strata-titled properties investment market in 2Q 2014," the report noted.

Here's more from Colliers:

In fact, the sluggish home-buying momentum was extended to the market at large. This, coupled with the record pipeline supply of new private residential homes that will be completed by 2018, have restrained developers' offering prices for collective sales sites.

This has exacerbated the mismatch in buyer-seller price expectations and hampered deal closures.

As a result, the collective sales market, which has ceased to be developers' preferred land banking avenue for a long while now due to its cumbersome and lengthy sales process, stood still for the third successive quarter in 2Q 2014

The fall in Singapore's property investment sales in 2Q 2014 was led by the plunge in the sale of residential properties. In fact, the residential sector suffered the deepest cut with total investment sales thinning by 22.5% QoQ to $1.96 billion from the $2.53 billion transacted in 1Q 2014.

A key reason for the dive in residential investment sales value was the dent in public residential land sales. During the quarter, only four residential State land parcels (including two for the development of executive condominiums) were scheduled for public tender and sold for a total of some $1.36 billion.

Credits: Singapore Business Review

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Resale prices continue their 5-month slide.

The government's property cooling measures are really working out, judging by the two-year low in HDB's price index in june. According to the Singapore Real Estate Exchange (SRX), HDB prices have dropped by 6.1% prices have dropped from June 2013.

The SRX HDB Flash Report for June 2014 showed that prices have dropped by 6.8% compared to peak levels in Apr 2013. Resale volume remained flat and rental prices dropped by 1.1%, while rental volume also fell by 2%.

"Overall, HDB resale prices slipped 0.6% in June compared to May. The price drop is evident in 3,4,5-room flats which saw a decline of 0.6%, 0.8%, and 0,3% respectively. Executive flats on the other hand experienced a 1.3% increase in price. However, compared to its peak in Feb 2013, Executive flats showed a decline of 5.1%," the report stated.

Here's more from SRX:

According to HDB resale data compiled by SRX, 1,315 HDB flats were sold in June's resale market. June's volume remained relatively flat from May's 1,320 transacted units.

On a year-on-year basis, June's resale volume is also relatively flat compared with 1,325 units resold in the same month of last year. Comparing to the peak where 3,649 units were resold in May 2010, the volume is still down by 64.0%.

An estimated 1,590 HDB flats were rented in June 2014, a 2.0% decrease from May's 1,622 units. On a year-on-year basis, June's rental volume was 0.9% higher than the same month of last year in which 1,576 units were rented.

Overall HDB rental prices decreased by 1.1% in June compared to May, reaching a new low since Jan 2012. 4,5-room flats and executive flats softened by 1.7%, 1.3% and 1.1% respectively, while 3-room flats saw a slight 0.1% price increase.

On a year-on-year basis, overall rental prices in June 2014 are down 3.4% from the same period last year.

Credits: Singapore Business Review

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Blame tepid activity in the resale market.

Sales in the mortgage market are expected to continue increasing in the next two quarters, unless government curbs on the market are relaxed or removed, according to Colliers International deputy managing director Grace Ng.

256 properties were put up for auction sale in 1H14, of which 64 were listed by mortgagees. According to Colliers, the increase could be attributed to lacklustre activity level in the residential property resale market, which has been hit by consecutive rounds of government cooling measures.

Colliers adds that borrowers who default on their loans have been finding it increasingly difficult to find a buyer on their own in the resale market, as buyers are faced the twin hurdles of Additional Buyer's Stamp Duty for their second and subsequent property purchases, and loan restrictions due to the Total Debt Servicing Ratio.

The rising number of properties put up for mortgagee sale could also be attributed to the increase in the number of bankruptcies.

Here's more:

On the other hand, in light of the continued softening of residential home prices QoQ since 4Q 2013, buyers are expected to continue adopting a wait-and-see approach, committing only if they perceive a bargain. Additionally, the impending interest rate increase, which is expected to set in as early as 2015, will also keep buyers on their toes."
Ms Ng concludes, "On the back of ongoing credit and budget constraints, properties that are priced around S$1.5 million and below will remain popular due to affordability concerns. The sale value for the Singapore auction market is likely to come in at between S$60 million and S$70 million for the whole of 2014, falling some 24-35 per cent from 2013's auction sales receipt."

Credits: Singapore Business Review

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The Yangon deal is still not set in stone.

Yoma Strategic Holdings has announced adjustments to its development of Yangon's Landmark site.

According to OCBC, "Instead of acquiring 80% of the Landmark site after the SPA Group secures a master lease extension to 50+10+10 years (as originally planned), Yoma will now acquire the site with its existing leases (comprising two sub-plots with remaining leases of 24 and 26 years respectively) with a first payment of US$43.2m."

The SPA group is also expected to procure approval for the transfer of the site to Yoma by the end of 2015 from the Myanmar Investment Commission.

Here's more from OCBC:

Yoma's pro rata development cost for Landmark will be capped at US$40m till Dec-15, in addition to the S$7m already incurred, and should SPA fail to obtain approval for the transfer by then, it will refund Yoma US$43.2m and all monies disbursed for the Landmark project.

To fund this acquisition, Yoma has proposed a 1-for-8 rights issue at 38 S-cents, expected in Sep/Oct 2014 pending approval from shareholders and the exchange.

Credits: Singapore Business Review

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It's a success: Property demand carnage effectively carried out by cooling measures

Even budgets of buyers were slashed.

The government can practically start throwing a party and popping the champagne now as the recent home sales reveal that the cooling measures have effectively curbed purchasing demand across all homebuyers. As a bonus, even the home purchasing power of potential buyers were also cut.

According to P&N Holdings, the various Government measures have effectively curtailed demand from all groups of homebuyers. Not only have selected groups of buyers been side-lined by financing rules under the TDSR, the home-buying budgets of eligible buyers have also been trimmed.

Here's more from P&N Holdings:

Additionally, demand from upgraders from the Housing and Development Board (HDB) market has also been affected by the softening resale prices of HDB flats which are expected to continue on a downtrend.

Ultimately, what matters in the current challenging environment is price — both on a psf and absolute basis. While selected projects which are reasonably priced and well located will continue to attract homebuyers, prices are expected to come under some pressure as the potential pool of buyers shrink and developers face stronger competition for consumer dollars.

This could be exacerbated by the sizeable residential supply that is expected to come on-stream, turning the market in favour of homebuyers. The general expectations among buyers for a price correction are also likely to keep prices in check.

With tightened loan policies, buyers will remain more discerning and developers have to respond accordingly or risk having a poor take-up rate. Developers need to be more sensitive to the market where value for money is key for most buyers. With the TDSR still in enforcement, it is crucial for developers to price their projects optimally, in order to achieve strong sales. Developers will also likely deploy more aggressive marketing strategies.

CEO of PropNex, Mr Mohd Ismail concluded, "we expect sales performance in the subsequent months of 2014 to hover between an average of about 900 to 1,000 units per month. Private home sales in 2Q14 will likely improve by over 50% to about 3,000 units in total as market interest gradually returns with anticipation of developers' attractive offerings".

"For the whole of 2014, we envisage that sales volume will be between 11,000 to 12,000 units in all. This is about 20% shy of the 15,000 units in 2013".

Credits: Singapore Business Review

Tagged in: H1 2014
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