Week in Review – 12 February 2015

Private residence transactions to rise this year? HDB resale prices to continue moderating in 2015, Rental volumes for HDB flats and private residences are up, HDB releases first batch of flats under BTO Exercise, URA releases residential sale site at Sturdee Road under GLS, 
Private residence transactions to rise this year?
Market sentiment towards non-landed private homes remains lukewarm, but is poised to pick up post-Chinese New Year if prices stabilise. 
According to SRX Property’s flash report, resale prices of non-landed private homes dropped by 0.2 per cent month-on-month in January. The decline was mainly caused by a 1.7 per cent and a 1.1 per cent month-on-month decline in the Core Central Region (CCR) and the Outside Central Region (OCR). Prices in the Rest of Central Region (RCR) rose by 1.5 per cent month-on-month. The flash report also noted that the number of transactions for non-landed private residences rose by two per cent, from 363 units in December 2014 to 370 units last month.
Mr Eugene Lim, Key Executive Officer at ERA, told TODAY that transactions are likely to pick up after Chinese New Year, with more buyers purchasing private resale homes should prices remain low. He added, “In the absence of any tweaks to the existing slew of cooling measures and loan curbs, we can expect the price decline to continue for 2015. Overall, prices may decline by 5 to 8 per cent for the whole year, while the CCR may see a higher price decline of 8 to 10 per cent.”
Property analysts who spoke to Channel NewsAsia expect 2015 prices for new private residential units to be competitively priced as the market softens. Recently launched Symphony Suites, a 660-unit development, is priced at over S$1,000 per sq ft. The developer, EL Development, said affordability is a priority. Another project slated to be launched this year is Sims Urban Oasis by GuocoLand; units are likely to be priced from S$1,300 to more than S$1,400 psf.
Mr Mohamed Ismail, CEO of PropNex Realty, told Channel NewsAsia that developers are providing attractive prices as they have to entice buyers, who are currently price-sensitive. PropNex noted that according to transactions at end-2014, new units in the suburban areas range from S$1,000 psf to S$1,400 psf, depending on distance from the MRT. Private residential units in the RCR command a range between S$1,400 to S$1,900 psf, whereas those in the CCR region, range from S$1,900 to S$2,400 psf. According to PropNex, overall prices of new homes have declined by ten to 12 per cent on average in 2014.
HDB resale prices to continue moderating in 2015
Overall resale prices of Housing and Development Board (HDB) flats rose in January, brought about by an increase in resale prices of four- and five-room flats. According to SRX Property’s flash report released on 5 February, HDB resale prices increased by 0.6 per cent month-on-month in January – the first increase since January 2014. Resale prices for HDB four- and five-room flats rose by 1.1 per cent and 1.5 per cent respectively. Resale prices for three-room and executive flats fell by 0.9 per cent and 0.6 per cent respectively. The flash report stated that the transaction volume declined by 3.1 per cent, from 1,295 units in December, to 1,255 units last month.
Property analysts who were interviewed by TODAY were careful to point out that the minor pick-up in prices does not translate to a market rebound. Mr Eugene Lim, Key Executive Officer at ERA told Channel NewsAsia that “The increase has more to do with the up and down fluctuations that are associated with tracking prices on a monthly basis.” Mr Nicholas Mak, Executive Director of Research and Consultancy at SLP International, told TODAY that a price decline is expected, based on the government’s suggestion on further softening of resale prices. He referred to the statement in December indicating that cooling measures would only be rolled back following a single digit decline.  
Rental volumes for HDB flats and private residences are up
As rental prices for Housing and Development Board (HDB) flats dipped 0.5 per cent month-on-month in January, rents for private homes rose by 0.2 per cent. This was according to SRX Property’s latest flash estimates.
Four-room, five-room and executive flats saw rents decline by 1.3 per cent, 0.3 per cent and 1.6 per cent, respectively. However, rental prices for three-room flats increased by 0.3 per cent. The rental volume of HDB flats increased month-on-month in January by 4.4 per cent.
For non-landed private residences, rental prices for units in the RCR and OCR increased by 1.9 per cent and 0.2 per cent respectively. Units in the CCR witnessed rents dropping by 0.8 per cent. Overall, the rental volume for private units rose by 13 per cent from December 2014 to January.
HDB releases first batch of flats under BTO Exercise 
The first Build-to-Order (BTO) exercise of 2015 will see 3,995 new flats for sale in five projects situated in Bukit Batok, Hougang and Geylang. The projects are West Edge and West Rock @ Bukit Batok, Buangkok ParkVista, Buangkok Tropica and MacPherson Spring.
A total of 16,900 BTO flats are set to be released this year, with 4,040 flats located at Clementi, Punggol North, Sembawang and Tampines for sale in May. HDB added that 4,000 to 5,000 flats will be made available for sale at a Sale of Balance Flats (SBF) exercise in May. 
URA releases residential sale site at Sturdee Road under GLS
The Urban Redevelopment Authority (URA) has released a residential site at Sturdee Road under the Confirmed List of H1 2015 Government Land Sales (GLS) Programme. The 6,111.5 sq ft site, which can yield about 270 units, will close its tender on 24 March 2015.
Mr Nicholas Mak, Executive Director of Research and Consultancy at SLP International, expects between 10 and 15 bids to be submitted, due to its small size and central location. He told TODAY, “However, the weaker residential property market would weigh on the bids. Hence, the top bid may range from S$138 million to S$157 million, or S$600 to S$680 per sq ft per plot ratio (psf ppr), which is lower than the S$731 psf ppr paid for the GLS residential site in Lorong Puntong last October.”