Do you think $1000 per sq feet for sub-urban is reasonable?

[Funner]

Mass market home prices average $1mil

 

23 Sept 2011

Straits Times

AVERAGE prices for mass market flats in suburban areas have surpassed the psychological threshold of $1 million, according to a new study.

 

Values for new and resale private homes in the three months to June 30 averaged $1 million, up from about $970,000 in the same quarter last year, according to data compiled by Mr Ku Swee Yong, chief executive of International Property Advisor, and the Singapore Condo agency.

 

There were 3,931 sales made in that period with sizes averaging 1,157 sq ft, making the average price of about $880 psf, the report said.

 

Mr Colin Tan, head of research at Chesterton Suntec International, noted that the $1 million mark is a psychological threshold - developers have been reluctant to price their projects above that limit because they believe it is difficult to push homes at that price.

 

However, with prices of suburban properties inching up in recent quarters, Mr Ku said, crossing $1 million was a 'foregone conclusion'.

 

He added that with prices of Housing Board (HDB) flats continuing to rise, upgraders, who make up a sizeable portion of private home-buyers, are more willing to spend on their new flats.

 

Senior manager for Asia Pacific research at Cushman and Wakefield, Mr Ong Kah Seng, noted: 'One factor could be that developers have already paid out a certain amount for land and that's why they are pegging their prices at that level. Also, the new homes could be built with more premium features to justify the increased price.'

 

Singaporeans typically make up a large percentage of suburban home-buyers, but Chesterton's Mr Tan said foreigners are increasingly keen on units on the city outskirts.

 

'Singapore is becoming a well-established safe haven for people looking to invest their money.

 

'But with the strengthening of the Sing dollar, it could mean that foreign investors who would typically have their eye on mid-market homes are now also considering mass market suburban homes too,' he said.

 

The other psychological barrier - $1,000 psf - is one of the final frontiers left to cross for suburban properties, say analysts.

 

Several new suburban projects, including euHabitat at Eunos and The Luxurie at Sengkang, have already inched up to or past that psf threshold.

 

But experts say those are outliers and it is unlikely $1,000 will be the new average psf price seen across the board.

 

Cushman's Mr Ong said that while buyers will still be interested in projects with distinctive selling points, there may be a mismatch between sellers' expectations and home-buyers' willingness to pay such prices.

 

Economic uncertainty is keeping some home-buyers at bay, but Mr Ku pointed out that if Singapore's economy keeps growing and the global situation remains stable, then average psf prices could rise.

 

Suburban neighbourhoods of Punggol, Sengkang and Pasir Ris will see about 28,000 new homes, public and private, over the next five years, according to Mr Ku.

 

But market experts do not expect prices to soften much in response.

 

'I don't think we will see the average transaction price and average psf prices come down, especially when interest rates are so low and there's still liquidity in the market,' he said.

 

Cushman's Mr Ong also noted that even in the event of a slight price correction, opportunistic buyers will be quick to snap up flats, taking prices back to previous levels.

 

He added that suburban mass market units are generally considered the most affordable private homes, so crossing the $1 million barrier could raise concerns about affordability among buyers ineligible for public housing or executive condominiums.

 

WHAT WILL AFFECT DEMAND

 

1. Increased supply in areas of Punggol, Sengkang and Pasir Ris

 

2. Economic uncertainty

 

3. Continued interest from foreigners

 

 

 

 

[Funner]

Foreigners are investing

with a target of 6.5mil

there must be a great demand for housing

then there is a recession coming

 

so should we sell or buy

 

 

Private housing market continues to surprise

 

23 Sept 2011

Today

 

Just when you thought you have finally figured out what influences private home buying, the market throws up another surprise.

 

The latest Urban Redevelopment Authority (URA) figures show that developers sold 1,348 private homes last month. Although this is down 3.6 per cent from the 1,398 units in July, some analysts, including myself, had predicted that sales could likely slip below 1,000 units amid slower buying during the Hungry Ghost Month and the stock market slide that took more than 15 per cent off the STI benchmark.

 

Total sales jumped to 1,638 if Executive Condominium (ECs) purchases are included. Last month's numbers were also achieved despite a new policy that raised the income ceilings for eligibility to buy new HDB flats and ECs, a move that some analysts had predicted would dampen sales in the private mass market segment.

 

The latest URA data led some property consultants to revise their private homes sales forecast for this year upwards to between 15,000 and 16,000 private homes, excluding ECs. This is close to the 16,292 units sold last year. In fact, I would not be at all surprised if the final numbers are a lot higher than last year's total.

 

Only recently, the Real Estate Developers Association of Singapore (REDAS) called on the Government to review the market cooling measures in view of the dark clouds looming over the economic horizon and to make greater use of the Reserve List system in managing its land sales.

 

But if new housing sales continue at this pace - despite a real threat of a recession that may hit Singapore as early as the first half of next year - REDAS' fears may be unfounded.

 

You could argue that any significant scaling down of supply now may result in a resurgence of prices which had moderated for the past several quarters. How do we explain this seemingly endless buying?

 

One explanation could be that demand is indeed driven by population growth and by the fact that our housing market has been severely under-supplied for many years. But we would be naive if we believe that this is the major reason for the buying resilience in the private housing market.

 

Last year, I suggested that there was more cash in the market to spend than properties released for sale. If I was not spot on then, I must be now. The latest statistics suggest that more outside money may be flowing into the Singapore property market, which may have more than offset the outflows.

 

An analysis of caveats lodged revealed that foreigners boosted their share of non-landed home purchases to a high of 33 per cent for the first eight months of this year. This no longer surprises us but what was notable is that it arose mainly from a higher proportion of purchases by non-Permanent Residents, whose share rose from 13 per cent last year to about 18 per cent from January to the end of August this year. The share of Permanent Resident purchases rose by only a single percentage point - from 15 per cent to 16 per cent.

 

Meanwhile, a quick look in our local newspapers will show property investment opportunities from all over the globe. They might be in the newly-emerging Iskandar region in Malaysia, key Australian cities or major global metropolises such as London and New York.

 

Most of those on offer are properties in London, which have attracted strong interest in the past year or so. The British pound is weak, currently trading at below S$2 compared with as much as S$3 just a few years ago - making it attractive for buyers here.

 

More overseas projects are being showcased here as foreign developers know that there are keen buyers here. A director of one agency bringing in such projects said demand is helped by the fact that Singapore property prices are ridiculously high. And the head of a London-based consultancy predicts that Singapore may account for about one-third of all Asian off-the-plan pre-sales in London.

 

There are no ready figures on the amount of Singapore money flowing out of the country into overseas properties, but judging by the enthusiasm with which such projects are being introduced here, it must be pretty significant. But even such a strong outflow does not appear to have made a dent in home purchases here.

 

 

 

Colin Tan is head of research and consultancy at Chesterton Suntec International.

 

[Throttle2]

No money , no talk.

 

 

[Ben5266]

  On 9/23/2011 at 4:27 AM, Throttle2 said:

No money , no talk.

Huat ah!

 

... What so good about property price appreciating?

I just received a letter from IRAS... up my property tax!

[Kyrios]

This aint fresh news...my relative bought a ulu upp bt timah condo 1200 sq ft for over a million! Nearby, the Treehouse condos all asking for 1.2million starting?

[Jasonjst]

Can lah 1K per sq ft nothing to rich Ah Thiong . They can even buy all in cash , no need to take loan . US print the dollars , China spend the dollars , Sinkies keep the dollars in CPF

[Mockngbrd]

too bad my salary below mass market rates

[Starbliss]

So now good time to buy property for investment? Or wait it out? But the recent news and articles like all saying prices won't drop leh....

[Picanto]

  On 9/23/2011 at 3:41 PM, Starbliss said:

So now good time to buy property for investment? Or wait it out? But the recent news and articles like all saying prices won't drop leh....

 

its a bad time to buy

[Booboon]

Why ts kenna ban?

[Starbliss]

  On 9/23/2011 at 3:47 PM, Picanto said:

its a bad time to buy

 

Care to share your views?

[Asd78]

  On 9/23/2011 at 3:47 PM, Picanto said:

its a bad time to buy

 

 

Before I get flamed, I must state I'm a property agent. My take is most developer will not lower their price much for those that have already launched their project because they must be fair to those who had bought their units during the initial launch. Only hope is for new launch prices to be downward adjusted but not too much as land was bought at a high. The only ones to really slash their prices are investors who had over leveraged and having a fire sales.

 

Prices may be high but there are always still buyers be it local or foreigners. Just buy what you can afford for own stay. Not a good time to buy for investment. Uncertain economic outlook and all time high prices. That being said, high prices are here to stay for some time.

[SimonTan]

Now Singapore can claim, every household family is worth S$1 million in assets!

 

Those whose properties worth more than a million...can reveal a little please.

How does it feel to be a assets rich millionaire? Shiok?

Like walking on air? Talking also more confident n loud?

Or still need to work n feels nothing?

 

 

[Sabbie]

  On 9/23/2011 at 11:56 PM, SimonTan said:

Now Singapore can claim, every household family is worth S$1 million in assets!

 

Those whose properties worth more than a million...can reveal a little please.

How does it feel to be a assets rich millionaire? Shiok?

Like walking on air? Talking also more confident n loud?

Or still need to work n feels nothing?

 

 

Worth 1 million in assets and 800K in debt?.....yeah!!!! shoik.....net worth??? what is 1 million....many people in mcf worth 8 digits!

[Jasonjst]

  On 9/23/2011 at 4:07 PM, Asd78 said:

Before I get flamed, I must state I'm a property agent. My take is most developer will not lower their price much for those that have already launched their project because they must be fair to those who had bought their units during the initial launch. Only hope is for new launch prices to be downward adjusted but not too much as land was bought at a high. The only ones to really slash their prices are investors who had over leveraged and having a fire sales.

 

Prices may be high but there are always still buyers be it local or foreigners. Just buy what you can afford for own stay. Not a good time to buy for investment. Uncertain economic outlook and all time high prices. That being said, high prices are here to stay for some time.

 

Sure bo ? Let see if stock market tank another six months price will drop or not .

[Sabbie]

  On 9/24/2011 at 1:34 AM, Jasonjst said:

Sure bo ? Let see if stock market tank another six months price will drop or not .

 

Do not trust people with vested interests....

[Scb11980]

stock market moves generally 6 months ahead of the property market

but that said

with the current over heated property market around us, many foreigners see singapore property market as playing catch up

hence the rational for believing that the property price will move up

in addition, this is just my personal believe that the baseline of property price will continue to remain high because the recent years of good profit from property investment has made many millionaires and hence have deep pockets

many will choose not to sell but to hold and rent it out cheap

the recession these few years apppear shorter and shorter

 

[Sportster]

  On 9/23/2011 at 5:10 AM, Kyrios said:

This aint fresh news...my relative bought a ulu upp bt timah condo 1200 sq ft for over a million! Nearby, the Treehouse condos all asking for 1.2million starting?

 

Just a year back, my bro wants to buy a $1m resale condo ground floor unit in the ulu far eastern end of Singapore. Instead I told him to look at landed property as land are limited esp FH landed supply, whereas 99LH mass market apts are being flooded into the market by GLS. Took my advice and he managed to get a resale 12 yrs old, 1800sq ft land size, 2800 sq built-in FH terrace at $1.5m near ulu Changi. On hindsight, I think I have given him astute advice since price has trend up. Btw, I am no property agent, just like to follow-up on property news over the years

Edited September 24, 2011 by Sportster