Broad-based growth in Q2 property prices

Momentum of recovery in private residential rents also picked up. -BT

PRIVATE home prices generally rose at a slightly slower pace in Q2 than they did in Q1, but latest official numbers show a broad-based growth in property prices - with stronger quarter-on-quarter gains for office, shop and industrial properties, as well as HDB resale flat prices in Q2 than in the first quarter.

The momentum of recovery in private residential rents also picked up in the second quarter, supported by an acceleration in hiring of expats as Singapore's economy continues to expand. 'Sentiment among developers and market watchers probably moderated from the end of first quarter as a result of the eurozone's economic problems, but the recent spectacular official GDP growth forecast for Singapore has probably helped to restore some confidence,' said Real Estate Developers Association of Singapore CEO Steven Choo.

The Urban Redevelopment Authority's (URA) benchmark overall price index for private homes rose 5.3 per cent in the second quarter over the preceding quarter, close to the 5.6 per cent per cent hike in Q1.

The price index for office space increased 4.6 per cent quarter on quarter in Q2, a bigger gain than the 1.8 per cent quarter-on-quarter rise in Q1.

Likewise, the shop price index went up 3.9 per cent in Q2, following a 1.8 per cent pick-up in the first three months. URA's flatted factory and warehouse price indices rose 5.4 and 9.4 per cent in Q2. In Q1, each of these increased 1.5 per cent.

In the private housing market, prices of detached houses rose 6.8 per cent in Q2, slower than the 9.6 per cent increase in Q1. Semi-D and terrace houses appreciated 6 per cent and 5.6 per cent respectively in Q2 - compared with increases of 7.5 and 7.4 per cent in the first three months.

Non-landed home prices in Core Central Region (which includes the prime districts, Marina Bay and Sentosa Cove) climbed 5.4 per cent in Q2, higher than the 4.4 per cent growth in Q1. Likewise, the price index for Outside Central Region (where suburban condos are located) rose 5.7 per cent in Q2 after increasing 4.3 per cent in Q1.

However, in Rest of Central Region the pace of price gain slowed from 7.9 per cent in the first quarter to 4.6 per cent in Q2.

In the primary market, developers sold a total of 4,033 private homes in Q2, down 7.9 per cent from Q1. In the secondary market, strong buying momentum was also seen in the resale market, with 4,682 private homes changing hands in Q2, although this was 5.6 per cent lower than the first three months of the year. However, subsale volumes eased 27.4 per cent, from 996 deals in Q1 to 723 in Q2.

'Resales were strong in Q2 because prices are more reasonable for older, completed properties than new project launches. On the other hand, subsales (which are secondary-market deals involving projects that have yet to receive Certificate of Statutory Completion) come in waves. Those who bought homes from developers in the past few months are probably waiting for prices to rise further before they offload their units,' suggests a market watcher.

In the leasing market, URA's All Residential rental index rose 5.9 per cent in Q2 over the preceding quarter, compared with a 4.7 per cent quarter-on-quarter gain in Q1. The index has appreciated 10.9 per cent since end-2009.

Rents accelerated for both landed and non-landed private homes. Terrace houses led the landed segment, with rents rising 6.6 per cent in Q2, followed by semi-detached houses (up 5.6 per cent) and detached (up 4.6 per cent). For non-landed homes, rents in Core Central Region appreciated the most, by 6.4 per cent, followed by Outside Central Region (up 6.1 per cent) and Rest of Central Region (5.1 per cent).

However, the latest All Residential rental index is about 11.1 per cent below its peak in Q2 2008. Jones Lang LaSalles' head of residential Jacqueline Wong said the latest official figures confirm feedback from the ground. Monthly rentals of four-bedroom apartments in high-end developments such as Grange Residences, Draycott 8 and Ardmore Park are hitting $16,000-$18,000 on average - an improvement from $14,000-$15,000 in the second half of last year.

'But we still haven't achieved the peak levels of $18,000-$22,000 seen in the late 2007 to mid-2008 period,' Ms Wong added. 'We're seeing rehiring of expats again but housing allowances are not as generous as before.'

Ms Wong is predicting flattish rents until the end of this year, citing new competition with the impending completion of The Orchard Residences and The Marq on Paterson Hill.

URA numbers show 4,379 private homes received Temporary Occupation Permit (TOP) in Q2, compared with 1,407 units in Q1. The surge in new completions pushed up the islandwide vacancy rate for private homes to 5.4 per cent at end-Q2, from 4.6 per cent at end-Q1. But this could ease again as owners or tenants move into the new homes.

Major residential projects completed in April-June 2010 include One Amber, Marina Bay Residences, Dakota Residences and The Arte.

With a further 4,958 units expected to receive TOP by year end, the full-year tally will be 10,744, slightly above last year's 10,488 units.

Mon, Jul 26, 2010
The Business Times

By Kalpana Rashiwala

2010 will be record growth year for Singapore: PM Lee

HOUSTON, TEXAS: Prime Minister Lee Hsien Loong has said Singapore economy is on a "firm path" towards a record year.

He was commenting after the Ministry of Trade and Industry (MTI) upgraded Singapore's 2010 GDP growth forecast to a blistering 13 to 15 percent, outstripping estimates for China.

The revision followed the 16.9 percent year-on-year GDP growth in the first quarter while second-quarter expansion is estimated at 19.3 percent.

Mr Lee, speaking to reporters at the end of an official visit to the US, attributed the rebound mainly to the success of the two integrated resorts and a sharp increase in pharmaceutical output.

He said the two resorts, which opened early this year, "made a significant difference" this year and boosted tourism to Singapore.

Mr Lee also said Singapore should go into double-digit growth this year. But he tempered sentiments, saying that this is an exceptional year.

He said: "Numerically the growth figures may be higher than other countries. I would hesitate to compare myself to China. I think if you compare yourself to Shanghai they may well be ahead of us.

"But it's a good result and we should be happy but at the same time we should understand that it doesn't mean that next year you're going to get this, and the year after that you're going to get this."

Mr Lee said Singapore needs to press on with restructuring and improving productivity to sustain long-term growth.

He said: "This is a rebound. We are on a firm path upwards. Now we must make the most of this opportunity to implement the restructuring, the upgrading, the productivity improvement which we have been pursuing and talked about in the Budget.

"Because unless you get these longer term structural changes, we are not going to be able to sustain growth in the future years. And when we say 'sustain growth', we don't mean 9, 10 percent or 11 percent in future years but 3, 4, 5 percent steadily for another 10 years."

One issue being closely watched will be the property market. Mr Lee said the government will be mindful of the economy overheating with the strong growth - which will also mean having more foreign workers.

Mr Lee said: "I believe this year foreign worker numbers will go up in Singapore. It cannot be helped because with the market so tight, if we don't allow the foreign workers in you are going to have overheating.

"But we are managing the foreign worker numbers - the levies are being calibrated to moderate the inflow. Even with that, I would imagine there would be more than 100,000 extra foreign workers this year. I cannot see otherwise, but we have to accept that."

On Singapore's aim to raise the real median wage of Singaporeans by 30 percent in 10 years, Mr Lee described this as a "reasonable target".

He said: "It is not an easy task to achieve by any means because you are talking about the median wage, the 50th percentile, and that means a broad uplifting of the standard of living for Singaporeans and not just 10-20 per cent of the most successful Singaporeans.

"That means not just economic growth but also upgrading of workers, their jobs and training of the skills and restructuring so that when new companies come in they are able to make productive use of the workers whom we have re-trained. That is something we have to work towards. It is better for us to under-promise and over deliver than to make grand promise and then be disappointed!"

Mr Lee was also asked about the detention of a national serviceman under the Internal Security Act. He said it did not come as a surprise as there have been cases of self-radicalised Singaporeans before.

He added Singapore has systems to monitor trends, but the problem is a global one as the jihadist propaganda is now reaching a new audience with websites in English.

Mr Lee said: "We must expect our people to be exposed to the material, to read the websites, and once in a while you'll find somebody who goes astray and is misguided and may take another further step. We must be prepared for this to happen and have measures to detect and to intervene when necessary.

"It doesn't mean that you will succeed every single time. We have to succeed every single time. On the other side, the terrorist only has to succeed once! So we have to understand that that is the nature of the challenge we face."

Mr Lee was also asked about his thoughts on issues that may crop up at the next General Election due by 2012.

But he remained tight lipped.

"I think it's too early to say. I mean we are just midway through 2010, with a record economy. I have not decided when the election will be."

- CNA/ir
By Imelda Saad Posted: 14 July 2010 1000 hrs

Singapore GDP expands at record pace

Singapore’s economy expanded at a 26% annual pace in the second quarter after a record surge the previous three months, spurring the nation’s currency and adding to evidence of Asia’s resilience to the European crisis.

Singapore’s growth for the first quarter was revised to 45.9%, the fastest since records began in 1975, the trade ministry said today. Gross domestic product will rise between 13% and 15% in 2010, compared with an earlier forecast of as much as 9%, the ministry said.

A year after Singapore exited its worst recession since independence in 1965, tourists are arriving in record numbers, companies have increased hiring and vessels are leaving the city’s ports carrying more cargo. The island’s strengthening economy has added to an Asian rebound that prompted central banks to raise interest rates in recent weeks, even amid concern that Europe’s fiscal woes will slow the global recovery.

“Singapore will be among the fastest-growing countries not just in Asia, but the world, this year,” said Song Seng-Wun, an economist at CIMB Research Pte in Singapore. “Price pressures are already evident and we expect the central bank to be watching if inflation expectations are raised because of these numbers.”

Singapore’s growth has already prompted the central bank to allow the currency to strengthen to temper inflationary pressures. The Singapore dollar is used instead of interest rates to conduct monetary policy.

Currency Gains
The island’s currency added 0.6% to $1.3745 per US dollar as of 8:23 a.m., bringing this quarter’s gain to 1.4%. Growth last quarter was more than the median estimate for a 23% increase in a Bloomberg News survey of 12 economists.

Policy makers in neighboring Malaysia have raised interest rates three times this year, matching the number of increases by India’s central bank. In Taiwan, Governor Perng Fai-nan moved the key rate 12.5 basis points higher last month and the Bank of Korea unexpectedly increased its benchmark last week.

“With growth likely to remain above trend for the rest of the year, the Monetary Authority of Singapore may be inclined to maintain the policy of gradual appreciation at its October policy meeting,” Wai Ho Leong, a senior regional economist at Barclays Plc in Singapore, said before the report.

Slot Machines
The two casinos run by Genting Singapore Plc and Las Vegas Sands Corp. opened in February and April this year and have since attracted millions of visitors to their slot machines and baccarat and roulette tables.

The economy grew 19.3% in the second quarter from a year earlier, compared with the median estimate for a 17.3% gain in a Bloomberg News survey.

“Growth in the trade-related sectors was bolstered by healthy global trade flows, while the openings of the integrated resorts and higher visitor arrival numbers contributed to the growth in the tourism-related sectors,” the trade ministry said in a statement. “The financial services sector also grew strongly, supported by increased foreign exchange trading and domestic bank lending activities.”

Still, Singapore’s dependence on global trade may mean it’s unlikely to escape the impact of any renewed slowdown. Governments in Europe are embarking on austerity programs to cut budget deficits and households in some of the world’s largest economies are holding back spending, clouding the outlook for the rebound.

Exports Forecast
Singapore’s non-oil domestic exports will probably gain between 17% and 19% in 2010, from a previous projection of as much as 17%, the trade promotion agency said today.

Overseas shipments rose 28.7% in June from a year earlier, after increasing a revised 24.3% the month before, the government said today. Electronics exports by companies including Venture Corp., Singapore’s biggest electronics contract manufacturer, climbed 43.9% in June, while overseas sales by pharmaceutical makers gained 29.8%.

Manufacturing, which accounts for about a quarter of Singapore’s economy, climbed 45.5% from a year earlier in the three months through June, after gaining 38.2% in the three months through March. Pharmaceutical output has at least doubled every month from March to May.

The performance of Singapore’s pharmaceutical industry is volatile as production swings by companies such as Sanofi- Aventis SA can cause industrial output to fluctuate.

The island’s services industry grew 11.4% last quarter from a year earlier. The construction industry gained 13.5%.

Written by Bloomberg
Wednesday, 14 July 2010 09:28