singapore property market

Singapore Property Market 1st Half 2014

Last week URA released the final statistics for the property market in Q2 which allows us to compute the overall picture for 1st half of 2014 as follows :

Ppty IndexOverall MarketCore Central (CCR)Rest of Central(RCR)Outside Central(OCR)
2014 Q2-1.0%-1.5%-0.4%-0.9%
2014 Q1-1.3%-1.1%-3.3%-0.1%
2014 1H Total-2.3%-2.6%-3.7%-1.0%

Click here to see how this looks like graphically.

 

Last week the Monetary Authority of Singapore (MAS) Managing Director Mr Ravi Menon also re-iterated the official stance that it’s still too early to ease property cooling measures.  And in an insightful statement given by Mr Menon, he has perhaps given the market a clue (to the timing of policy loosening) when he said property prices have risen 60 per cent over the last four years but have declined by just 3.3 per cent over the last three quarters.  He also said the relaxing property measures at a time of low interest rates may set off another spiral of price increases.

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Could Mr Menon be alluding to a double-digit decline in the magnitude of 15-20% before government will relax the rules? Possibly.  Putting it all together I think it will be a case of whichever happens first – when interest starts to rise for a while (eg. from current 1.5% to 3%) or when the decline gets worst, or when both events happen at the same time.

Understand that the figures quoted is based on an index movement – a much “blended” measurement across hundreds of property transactions in the whole island of Singapore.  Which also means the effect on individual condos you are looking at could be a lot more than you think.  To prove my point, I have crunched the caveats from URA website using 3 condos that investors are most familiar with to represent a precinct.  I will look at 5 precincts in the prime District 9/10/11 plus 5 other famous condos in the outskirts.

 

PrecinctRepresentative CondosHighest PSFAve PSF 2014 1HAve PSF 2013 2HPrice ChangeRental 2014Q2Rental 2013Q4Price Change
Orchard RoadArdmore Park*$3,016$3,016$3,467-13.0%$5.78$5.780.0%
Four Seasons Pk*$2,743$2,533$2,630-3.7%$4.20$4.87-13.6%
Orchard Res (ION)*$4,047$3,899$4,312-9.6%$7.25
Robertson QuayRivergate$2,198$2,091$2,0790.6%$5.29$5.084.2%
Cosmopolitan*$2,068$1,995$2,072-3.7%$5.18$5.26-1.5%
Aspen Heights*$1,647$1,520$1,604-5.2%$3.93$3.852.0%
NovenaPark Infinia*$1,898$1,797$1,952-7.9%$5.12$5.47-6.4%
Viva*
Soleil@Sinaran*$2,191$2,084$1,9805.3%$5.92$5.556.6%
Marina BayThe Sail$2,708$2,209$2,2000.4%$6.02$6.19-2.8%
Marina Bay Res*$3,923$2,778$3,092-10.2%$6.07$6.33-4.1%
Marina Bay Suites*$2,787$2,754$2,7510.1%$4.09$4.76-14.0%
Sentosa/KeppelOceanfront*$1,617$1,617$1,711-5.5%$4.09$4.44-7.9%
BerthByTheCove*$1,618$1,603$1,608-0.3%$4.36$4.85-10.0%
Caribbean$1,738$1,548$1,634-5.3%$5.29$5.63-6.0%
Outside CentralCostal Del Sol$1,453$1,328$1,3012.1%$3.62$3.620.1%
Kovan Melody$1,239$1,116$1,211-7.8%$3.62$3.78-4.4%
Grandeur 8$1,115$1,045$1,094-4.5%$3.26$3.38-3.4%
One-North Res$1,697$1,368$1,505-9.1%$4.65$4.91-5.3%
The Parc Condo*$1,327$1,258$1,14410.0%$3.49$3.53-1.1%

Note:
Condos selected are those fairly new (less than 10yrs old) with huge no of total units (for liquidity)
Those marked with * are condos with less than 5 transactions in the 6-month period which may skew the reading and analysis.
Rental prices are in psf per month taken from actual contracts lodged by IRAS and compiled by URA  

 

With the exception of a few, the general trend over the past 6 months since Dec 2013 has been a decline in the region of 3-8% at most condos.  The decline is even more pronounced at the luxury segment of orchard road properties of around 10% I reckon.   For the outside central region, with the exception of The Parc Condominium bucking the trend with a 10% growth (Costa Del Sol can be considered flat with an insignificant  2% change), the general decline is also at the high single digits of 5-10%.

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The official property index changes in the same 6-month period may show only a 2-3% drop but when you look at the caveats of individual condos the fall can be 2-3 times greater in absolute percentage terms, which is what most buyers will notice and conclude as well.

On rentals comparing 2014 Q2 data with that of 2013 Q4 over another 6-month period, the general trend is also down as we all know.  Sentosa Cove fared the worst with all 3 condos declining 8% on average.  A few condos buck the trend like Rivergate and Soleil.

 

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About Darren Goh

Darren Goh is the Executive Director of MortgageWise.sg, a thought leader in the Singapore mortgage industry, with frequent interviews and quotes by the press - Business Times, Straits Times, Zaobao and EdgeProperty for his views on the latest mortgage trends. He is an avid property investor with successful careers in banking & real estate before becoming an entrepreneur.
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