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Home prices could increase by 10% this year, says CapitaLand CEO

Rising sales and prices indicate an end to the four-year slump for Singapore’s housing market.

CapitaLand CEO Lim Ming Yan expects home prices in Singapore to increase by as much as 10 percent this year – a view which is in line with other forecasts, reported Bloomberg.

Analysts at Credit Suisse Group AG expect home prices to rise by up to 10 percent this year, while OCBC Investment Research and Morgan Stanley expect an increase of up to eight percent.

SEE ALSO: Pearlbank Apartments sold to CapitaLand for $ 728m

“Transaction volume has gone up and usually that’s a precursor to some price increase,” Lim said in an interview. “A five to 10 percent increase is possible this year barring any unforeseen major volatility in the capital markets.”

Rising home sales and prices reinforces signs of an end to a four-year housing slump. The market rebound saw developers aggressively bid for land.

While CapitaLand has kept a safe distance from the bidding war, it acquired the iconic Pearlbank Apartments for $ 728 million, with plans to redevelop it into an 800-unit residential complex.

“We continue to look for opportunities in Singapore but we feel the kind of bidding, the price, is too aggressive for us,” noted Lim. “We bid in a very disciplined manner.”

The property developer’s net income dropped 38 percent to $ 267.7 million during the last quarter of 2017 after completing fewer homes to sell in China.

Despite this, CapitaLand shares rose two percent to $ 3.54 in Singapore, the biggest increase since 5 October, after the company increased its full-year dividend by 20 percent.

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

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New private home sales up 37% from a year ago

Symphony Suites sold 65 units in the month of January, making it the most popular project. 

Property developers sold 522 new private homes excluding executive condominiums (ECs) in January 2018, up 21 percent from 431 units in the month before, according to data published by the Urban Redevelopment Authority (URA) on Wednesday (14 February).

Year-on-year, there was a 37 percent increase from the 382 units sold in January 2017.

According to property agency PropNex Realty, last month’s sales tally is the highest for the month of January since 2015. However, it is still lower than the average monthly figure as most developers only plan to launch their projects after Chinese New Year.

“Usually the months of December and January are the slower months with lesser property activities,” said PropNex CEO Ismail Gafoor.

“However, a closer look at the figures comparing with the past few years, it seems to depict that January 2018 is gaining momentum with home buyers and upgraders making their move to purchase existing stocks of private homes available which are rightly priced, before prices are predicted to go up in the later part of this year.”  

The top-selling project in the month was the previously launched Symphony Suites in Yishun, which sold 65 units at a median price of $ 1,085 psf. This was followed by Gem Residences in Toa Payoh, which moved 44 units at a median price of $ 1,508 psf. Parc Botannia in Sengkang was next with 43 units sold at a median price of $ 1,265 psf. 

Ismail expects to see more transactions after Chinese New Year as developers gear up to launch several new projects including The Tapestry at Tampines Avenue 10, The Enclave @ Holland and possibly Rivercove Residences EC in Sengkang.

“Activities in the market will pick up from March onwards with transactions along the lines of 1,000 units,” he noted.

Ismail predicts that some 12,000 units (excluding ECs) will be sold in 2018, similar to last year. 

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

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Keppel Land annual home sales down 4% to 5,480 units

Keppel Land’s total homes sales slid by four percent to 5,480 units last year on an annual basis due to cooling measures in China and the timing of development launches in Vietnam, reported the Singapore Business Review.

According to DBS Equity Research, Keppel Corporation’s real estate arm found buyers for 270 dwellings in Indonesia, 380 in Singapore, 1,110 in Vietnam and 3,725 residential properties in China.

Despite the dip in home sales, its earnings grew by 10 percent year-on-year to $ 685 million in 2017. The company is also expected to unveil 16,780 houses until 2020, or about 5,593 units per annum, out of its 63,000-unit overall pipeline.

Furthermore, DBS Equity Research said that 70 percent of Keppel Land’s landbank for residential projects were bought at a relatively lower cost over seven years ago. Hence, the firm’s net asset value is anticipated to improve after these housing developments are completed.

 

This article was edited by Keshia Faculin.

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Private home prices rise for 2 straight quarters

Overall private home prices in Singapore rose by 0.8 percent in Q4 2017, marking its second straight quarter of increase versus the 0.7 percent growth in Q3 2017, according to the latest data released by the Urban Redevelopment Authority (URA) on Friday (26 January).

According to Colliers International’s Research Head Tricia Song, the budding recovery reversed the weakness in the first half of last year. Consequently, prices of private residential properties edged up by 1.1 percent for the entirety of 2017 compared to a dip of 3.1 percent in the prior year.

Excluding executive condominiums (ECs), home builders launched a total of 6,020 uncompleted private houses last year versus 7,877 units in 2016. Despite the lower launches, they sold 10,566 private dwellings compared to 7,972 units in 2016.

“The twin effect of lower new launches and returning buying interest has kept prices of private homes trending upwards… With the indices of all segments (CCR, RCR and OCR) recording at least two consecutive quarters of growth, the price recovery appears to be on a firm footing,” said JLL’s National Director for Research & Consultancy Ong Teck Hui.

He noted that the number of units released last year was the lowest in 13 years, and developers are holding back their launches to leverage on rising home prices.

Meanwhile, Colliers’ Song expects developers to sell a total of 12,600 private homes, excluding ECs, for the whole of 2018. This would not only exceed last year’s 10,566 units, but also the highest since 14,948 units were taken up in 2013.

 

This article was edited by Keshia Faculin.

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Private home prices expected to rise by 3-10% in 2018

Property prices in Singapore could rise at a median rate of 5.5 percent.

Analysts believe Singapore’s private housing market has indeed rebounded, with prices increasing for two straight quarters following a four-year slump.

In fact, a Bloomberg survey of 11 property experts revealed that private residential prices here are forecasted to rise at a median rate of 5.5 percent, or between three percent and 10 percent for the whole of 2018.

Moreover, the market recovery bodes well for the city-state’s home builders, which are set to report their financial statements next month. For instance, City Developments Limited (CDL) is expected to post an annual profit of $ 563.4 million, while UOL Group’s full-year net income is projected to rise by 9.4 percent.

“Despite the strong run last year, valuations are not yet stretched, particularly in comparison with past periods of a property upcycle,” said Janus Henderson Investors investment analyst Low Xin Yan, adding that the strong performance of property stocks will continue.

Meanwhile, Maybank Kim Eng Securities analyst Derrick Heng reckons that it is “far too early to be worried” over a potential supply glut due to ongoing en bloc sale frenzy, as the homes to be built on such sites won’t enter the market until 2020 at the earliest.

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

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