Week in Review – 30 April 2014

iProperty Survey shows pricing concern amid unshaken confidence in property, URA and NUS report falling prices, Executive condominiums popular among Singaporean families, Developers continue lowering prices

iProperty Survey Shows Pricing Concern Amid Unshaken Confidence in Property
The iProperty Asia Property Market Sentiment Report H1 2014 (APMSR), Asia’s largest consumer sentiment survey, reveals Singaporeans’ broad support for cooling measures and expectations of falling prices, while expressing unshaken confidence in property as an investment, both nationally and internationally. It also suggests growing pent-up demand, with private condominiums top of the purchase wish list. 
URA and NUS report falling prices
Reports from the National University of Singapore’s Institute of Real Estate Studies (IRES at NUS) and the Urban Redevelopment Authority of Singapore (URA) show prices continue to decline. According to the SRPI, compiled by IRES at NUS, overall prices have declined by 1.1 per cent in March month on month, accelerating from a 0.9 per cent decline in February. URA recorded a decline of 1.3 per cent for Q1 2014, following a 0.9 per cent decline in Q4 2013.
In both reports, prices of properties in the central region saw the largest decline. URA reported that properties in the Rest of Central Region (RCR) declined 3.3%, while prices of non-landed properties in the Core Central Region declined by 1.1 per cent for Q1 2014. The SRPI recorded a decline of 1.3 per cent in March 2014 for properties in the central region, excluding small units. The SRPI recorded a fall of 1 per cent month on month, while URA recorded a decline of 0.1 per cent versus a 1.0 per cent decline in Q4 2013.
In a Singapore Business Review report, PropNex forecasts further price declines over the next three quarters of 2014, with estimates of four to five per cent declines in Q4 2014 for the Core Central Region, five per cent for the Rest of the Central Region and three per cent for the Outside Central Region.
Executive condominiums popular among Singapore families
National Development Minister Khaw Boon Wan shared in a blog post that Executive Condominiums (ECs) were purchased by more than 11,000 Singaporean families between Q4 2010 and Q4 2013. ECs are designed to assist Singaporeans earning less than $12,000 a month to own a private condominium below market price. Approximately 1,961 EC units will be completed by the end of 2014 and 8,474 units by 2016.
Developers continue lowering prices
Developers Ho Bee Land and CapitaLand have seen either no sales, or a slowdown in property sales in Singapore this year. Ho Bee Land, which markets Sentosa developments, including The Turquoise, failed to record any sales of new properties in Q1 2014. CIMB Analyst Tan Xuan, commenting in the Singapore Business Review, said this shows concerns surrounding high-end properties, particularly Sentosa properties.
CapitaLand sold only 34 residential units in Singapore in Q1 2014, versus 544 units sold in Q1 2013. The company did however see a boost in April, when the re-launch of Sky Habitat recorded sales of 106 units, following a price reduction of about 10 per cent to 15 per cent, compared to prices at the initial launch.
Knight Frank expects total sales volume in Q2 2014 to pick up in line with more attractive offerings by developers. The company notes Lakeville and Sky Habitat as examples of properties that have sold due to lower prices and it expects more developers will either reduce the size of units, or make adjustments to prices on a psf basis. 
In a recent land bid, developers have taken a conservative stance, offering lower bids. A residential site at Sims Drive saw the highest bid by First Changi Development, a unit of GuocoLand, at only $530.9 million. There were also fewer bidders compared to a January tender for a nearby site at Geylang East Avenue 1. The Geylang East Avenue 1 site received higher interest with 16 bidders and was sold at $776.00 psf ppr to S L (Serangoon). The Sims Drive site has a 99-year leasehold and can potentially yield 900 units, a large development according to Mr Nicholas Mak, executive director of research and consultancy at SLP International. In an interview with Today, Mr Mak estimated selling prices will range from $1,220 to S$1,300 psf.