Monday, April 4, 2011

URA Q1 2011 Flash Estimates

In a sign that the property cooling measures are taking effect, URA’s overall private residential price index posted a 2.1% quarter-on-quarter increase in Q1, compared with a q-on-q increase of 2.7% in Q4 last year, latest government flash estimates show.

"The rate of increase has moderated for 6 consecutive quarters since Q4 2009," URA said in its release.

URA’s sub-index for prices of non-landed private homes posted a q-on-q gain in Q1 2011 of 0.9% for Core Central Region (which includes the prime districts 9, 10 and 11, as well as the financial district and Sentosa Cove) – a smaller hike than the 2.2% q-on-q rise for Q4 2010.

However, the index for the Rest of Central region (which covers places like Bukit Merah, Queenstown, Geylang, Toa Payoh and Katong) increased 2.2% in Q1 over the preceding quarter – a bigger gain than the 1.9% q-on-q gain in Q4 2010. The index for Outside Central Region (covering suburban mass-market locations like Woodlands, Clementi, Jurong, Hougang, Tampines and Bedok) posted a 3.1% q-on-q rise for the first three months of 2011, after rising 2.1% q-on-q in Q4 2010.

Credo Real Estate executive director Ong Teck Hui said: “The cooling measures did not affect genuine home buyers as much as they did investors and speculators. And demand for OCR is sustained by genuine buyers.” Some market watchers suggest there may be some diversion of investment demand from high-end property to lower-priced segments as the cooling measures stretched budgets.

However, some analysts point out that the rate of q-on-q price increases for OCR had moderated in Q3 and Q4 last year before rising again in Q1. And the Q1 flash estimate for the region reflected a year-on-year appreciation of 13.6%; this figure has been easing since peaking at 36.1% in Q2 last year.

CB Richard Ellis executive director Li Hiaw Ho attributes the 3.1% rise in the Q1 flash estimate for OCR to projects like Waterfront Isle along Bedok Reservoir, The Lakefront Residences near Jurong Lake, and The Tennery in Bukit Panjang which registered strong take-up at median prices (in the first two months of this year) of about $990psf, $1050psf and $1200psf respectively. “These projects attracted home buyers mainly because of their proximity to an MRT station,” Mr Li said.

He attributed the 2.2% appreciation in the RCR’s price index to Spottiswoode 18 and The Cape - both transacted at a median price of about $2000psf – as well as projects with small-format units like Palmera East ($1225psf).

URA said that as at end-2010, there were about 33,000 yet-to-be-sold private homes in uncompleted projects with planning approval – of which 40% is in OCR. In addition, there were 1500 executive condominium units that were still unsold.

The above supply figures do not take into account new sites that were recently sold (which can generate about 8,100 units) or which will be made available for development through the confirmed list of the Government Land Sales (GLS) Programme in H1 2011 (which can generate about 5,360 units). Additional supply may also come from private land sources, such as enbloc sales.

*Above is extracted from a report in last weekend's Business Times



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