Figures do not reflect changes in resale scene: Khaw
By Yeo Sam Jo, The Straits Times, 4 Dec 2014
By Yeo Sam Jo, The Straits Times, 4 Dec 2014
THE resale price index of public housing will soon be revised to better reflect the market's growing diversity.
This is because the current quarterly figures have failed to capture three changes in the Housing Board resale scene, said National Development Minister Khaw Boon Wan in a blog post yesterday.
First, more flat types and designs are available on the market now. These include taller blocks and three-room flats, which were reintroduced from 2004.
Second, there are more resale transactions in newer towns such as Punggol, Sengkang and Sembawang, but these are not included in the current resale price index (RPI).
Third, flats transacted in the market have a wider age range today, with a growing number of older flats.
"With these significant changes in the HDB resale market, the current RPI may not adequately reflect the resale market," said Mr Khaw. "It is therefore timely to review the RPI methodology to better capture price changes over time, and control for the variations in attributes of the resale flats transacted."
Now, the index is computed by taking the average resale flat prices for a representative basket, across different flat types, models and regions, based on actual transactions.
The average prices for each category are then aggregated to derive the index, which was last revised in 2002.
Mr Khaw said the HDB has been working with a consultant from the National University of Singapore's department of real estate to review the index computation methodology, and more details will be released soon.Flat owners, buyers and property experts said that the change is a timely update that will provide more accurate information.
"This will help me better gauge the price to expect from my sale," said IT executive Govindaraj Kuppusamy, 45, who is selling his five-room flat in Sengkang.
PropNex Realty chief executive Mohamed Ismail Gafoor said it is important to include new towns like Sengkang and Punggol, as there have been plenty of transactions there.
Analysts suggested that the index could be divided into sub- indexes like mature and non-mature estates, akin to how the Urban Redevelopment Authority's private property index displays figures for three main regions.
"A more granular representation would be more relevant to HDB buyers and sellers," said Mr Mohamed Ismail.
ERA Realty key executive officer Eugene Lim agreed: "The price in a particular area might be trending differently from the island-wide index, which is currently not segmented."
But Century21 chief executive Ku Swee Yong cautioned against relying too heavily on the index.
He said: "(It) is a general aggregate of the whole country's price trend. Buyers and sellers of specific properties should work closely with a trustworthy agent and consult with property valuers before signing their contracts."
Three significant changes
CURRENT figures do not capture these changes in the HDB resale market, said Minister Khaw Boon Wan:
CURRENT figures do not capture these changes in the HDB resale market, said Minister Khaw Boon Wan:
- More flat types and designs are available now.
- More resale transactions in newer towns but these are not included in the current index.
- Flats transacted in the market have a wider age range.
Private property price tracker under review
By Rennie Whang, The Straits Times, 4 Dec 2014
By Rennie Whang, The Straits Times, 4 Dec 2014
A WIDELY watched index used to track prices in the private property sector may be revamped to give a more up-to-date picture of the market.
There has been concern that the property price index (PPI), as it is called, does not give an accurate snapshot because it does not take into account the different type of units available, their size and quality. There are also too few transactions included.
The index, last modified in 2000 by the Urban Redevelopment Authority (URA), is also issued quarterly, which some say hinders its ability to be timely in a fast-changing market.
URA said yesterday that it is reviewing the need to revise it, in line with the revision of the Housing Board's resale price index (RPI). It added that reviews are done "periodically... to understand other ways of computing property price indices and ascertain the robustness of the PPI".
The review will take time as the index is more complex, a spokesman said. "Unlike the RPI, the PPI is computed for both completed and uncompleted units. Additionally, there is greater diversity in private housing."
The Singapore Real Estate Exchange and National University of Singapore (NUS) both produce indexes tracking prices. These are issued monthly.
The PPI is based on transaction prices from caveats lodged and uses a "moving average" method. This means the weights used to compute it are derived by taking the moving average of the values of properties transacted in each market segment over 12 quarters.
But Associate Professor Sing Tien Foo of NUS' department of real estate said it fails to account for changes in the quality of property in different locations.
HDB resale flat prices continue to head south
Prices fall across the board for 10th month; number of deals also down
By Janice Heng, The Straits Times, 5 Dec 2014
Prices fall across the board for 10th month; number of deals also down
By Janice Heng, The Straits Times, 5 Dec 2014
THE public housing resale market stayed gloomy in November, with prices falling for the 10th month in a row.
Buyers' spirits seemed dampened during the monsoon chill, with the number of deals falling after having risen for two months.
The volume is expected to rebound next year, said analysts, as fewer new flats are launched. But for prices, the dreary showing is likely to continue.
Housing Board resale prices fell 0.8 per cent to hit a 40-month low last month, according to flash figures from the Singapore Real Estate Exchange (SRX) yesterday.
Updated figures also showed that an apparent glimmer of light in October was an illusion.
In SRX's initial figures for October, resale prices edged up 0.1 per cent after eight months of decline. But yesterday's update showed that prices actually fell 0.1 per cent that month.
This makes November's fall the 10th in a row.
Prices fell for all flat types, dipping 0.8 per cent, 1.2 per cent, 0.2 per cent and 2.2 per cent for three-, four- and five-room and executive flats respectively.
Apart from the traditionally slow year-end season, the slide in prices was to be expected as loan curbs continue to bite, said experts.
ERA Realty key executive officer Eugene Lim expects prices to decline by another 5 per cent to 8 per cent next year, if resale policies and loan criteria do not change. He is more optimistic about transactions.
This year may see a historic low of about 17,000 flats changing hands, but there may be "some rebound" next year, he said. This is thanks to fewer new flats next year and the continued stabilisation of resale prices.
There were 1,350 resale flats sold last month. This was down from 1,553 in October, but still more than the 1,212 units sold in November last year.
R'ST Research director Ong Kah Seng also expects transactions to "recover slightly next year, especially after the Chinese New Year".
But this may not translate to price gains, he added.
"Most buyers will be 'opportunity buyers' who will buy a flat after a long wait (and prices have fallen)."
Madam Linda Ang, 38, for instance, has heard from only "one or two" interested buyers in the last month.
"This whole year is quite stagnant, so I don't expect many calls," said the clerk, who is selling a four-roomer in Woodlands.
But she, too, expects things to pick up next year. "It can't be going down all the way."