Monday, October 1, 2012

Singapore private property and HDB's resale prices up in Q3 2012

Urban Redevelopment Authority (URA) and HDB have released flash estimates for Q3 2012 price indexes for Singapore private residential property and HDB resale flats.

Singapore residential property prices increase has accelerated to 0.5% q-o-q
Urban Redevelopment Authority (URA) its flash estimates for third quarter of 2012 shows that price increase of Singapore private residential property has accelerated: The overall private residential property index rose 0.5% from 206.9 points in 2nd Quarter 2012 to 208.0 points in 3rd Quarter 2012, up from 0.4% increase in Q2 2012.
Prices of non-landed private residential properties increased by 0.2% in Core Central Region in 3rd Quarter 2012, compared to an increase of 0.6% in the previous quarter. Prices in Rest of Central Region increased by 0.7%, compared to the 0.4% increase in the previous quarter. For Outside Central Region, prices increased by 1.0% in 3rd Quarter 2012, compared to an increase of 0.5% in the previous quarter.
Source : URA releases flash 3rd quarter 2012 private residential property price index
The pace of price increase in mass market residential units for outside central region is doubled from 0.5% to 1% in the months between July - September 2012.
Singapore overall residential private property prices rose 0.5% quarter-on-quarter in Q3 2012
Photo - URA
URA compiles the the flash estimates based on the transaction prices in caveats lodged during the first ten weeks of the quarter (supplemented by information on the number of new units sold by developers).

HDB resale price index jumped 2% in the last quarter

According to Housing Development Board (HDB) flash estimate of the 3rd Quarter 2012, overall prices of resale HDB flats jumped 2.0% over 2nd Quarter 2012.[1] This was the sharpest increase so far in 2012 for the HDB resale price index.

These numbers mean that the prices has increased 5.7% in the last 12 months compared to Q3 2011. However, the Q3 2012 increase in the index was lower compared with the 3.8 per cent rise in the same quarter last year to 187.2.[2]

According to DTZ Research[3], the severe cut-back in public housing supply in the last decade (which came after HDB's  implementation of Built-to-Order scheme (build flats after having a certain percentage of confirmed demand) resulted in an average number of 8,260 completed HDB units per year between 2001 and 2008 compared to the average of about 25,700 units per year between 1991 and 2000.[3] HDB has later increased the output to 25,000+ units per year starting from 2011 due to a supply crunch but new HDB flats can only enter the market 5 years after they are completed (Minimum Occupation Period - MOP) and 7-8 years after they are launched (add 2-3 years for the construction). So 70,000+ units planned to be launched between 2011 - 2013 will enter the resale market by 2018 onward. 2006 - 2009 were the least number of HDB units completed (see the graph at [3] - DTZ Insight Singapore house price debate Liquidity rules the market)  so we will see a supply glut in resale HDB units until 2014. Add this an increased demand due to low interest rates and non stop population increase, there seems to be no end to resale price increase in sight except a severe economic downturn.

HDB resale price index 2012
HDB resale prices jumped 2% in a single quarter in Q3 2012.
Source - HDB
[1] - Flash Estimate Of 3rd Quarter 2012 Resale Price Index
[2] - HDB's resale prices up 2% in Q3 2012
[3] - DTZ Insight Singapore house price debate Liquidity rules the market

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