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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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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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HDB resale prices could bottom out in 2018

Analysts expect resale flat prices to remain flat this year.

HDB resale flat prices fell by 0.2 percent in Q4 2017 from the previous three-month period. For the whole year, prices dropped by 1.5 percent, revealed more complete data released by the Housing Board on Friday (26 January).

Resale flat transactions also fell by 1.2 percent to 5,738 cases in Q4 2017 from the previous quarter. However, the figure was up 14.5 percent from the same period in 2016. In addition, resale transactions rose by 6.1 percent to 22,077 cases in 2017 from the previous year.

Commenting, Eugene Lim, Key Executive Officer at ERA Realty, said prices are expected to bottom out due to spillover effects from the private housing market’s recovery.  

“For 2018, we are expecting resale HDB prices to remain flat. Any price increase is likely to be very moderate and would not exceed 1.0 percent for 2018,” he said.

Meanwhile, there was some growth in the HDB rental market with 53,750 units rented out as at 31 December 2017, an increase of 0.6 percent over Q3. Year-on-year, the number of approved applications to rent out flats was 5.6 percent higher.  

“For the more budget conscious tenant, HDB flats remain the accommodation of choice due to their combination of location and budget,” said Lim.

Looking ahead, HDB said it will launch about 17,000 new flats for sale in 2018. The next BTO exercise takes place in February, with about 3,600 flats offered in Choa Chu Kang, Geylang, Tampines and Woodlands. There will also be a concurrent re-offer of balance flats exercise.

SEE ALSO: Ultimate BTO guide

 

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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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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Report: Average home prices in Singapore could rise by 17% over 2018-2021

Investment volumes to remain strong for Singapore, while home prices are forecast to rise.

The prospects for the Singapore property market are bright, with investment volumes to remain strong and home prices forecast to rise, revealed a 2018 Asia Pacific Property Outlook report released by Colliers International on Wednesday (10 January).

On the back of strong economic growth seen in 2017, property investment sales in the city-state are likely to remain robust this year.

There was a slew of transactions in 2017 which amounted to an estimated $ 40.2 billion, up 54 percent from the previous year. The majority (54 percent) were residential deals due to the strong demand for sites via public tender and the collective sale market. According to Colliers, this was the highest annual investment sale value since the 2007 property boom.

“This positive momentum should carry into 2018, with a strong start anticipated in the residential sector,” said Tricia Song, Singapore research head at Colliers International. “As at January 10, there are 11 residential collective sale tenders closing in the next five weeks, including City Towers in District 10, and four GLS (Government Land Sales) tenders due on January 30.”

The property consultancy also expects private home prices to recover further due to demand from displaced sellers of collective sale projects and the large capital gains.

“Average home prices may rise by 17 percent over 2018-2021, supported by higher GDP growth, falling physical completions and ongoing collective sale deals,” noted Colliers.

 

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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