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News Release

Singapore

Jones Lang LaSalle Perspective: URA 1st Quarter 2013 Real Estate Statistics


​SINGAPORE, 26 April 2013
Residential market is cooling down
The continual fine adjustments to the existing government policies have finally taken traction and softened the residential market as a whole. Prices across all segments remained effectively flat or modest growth at most, as compared to the last quarter.

The islandwide residential growth of 0.6% q-o-q, in our opinion, is within the State’s expectations, and the policy risk is rather low, especially when overall transaction volume has also softened from 8,450 units in 4Q12 to 7,625 units in 1Q13.

Overall prices of private residential properties continue to rise at 0.6%, a significant moderation to the 1.8% growth recorded in 4Q12. As expected, non-landed properties contributed slightly more to the rise at 0.7% q-o-q with landed trailing at 0.5% q-o-q.

Outside Central Region (mass market) continued to lead the islandwide growth at 1.4% q-o-q although this is a marked slowdown to the 3.8% q-o-q recorded last quarter. The price growth was driven largely by completed projects at 1.8% q-o-q although that by itself is already a marked slow down from the 5.6% q-o-q recorded in 4Q12.

The lower prices of uncompleted high end properties after 4 consecutive quarters of price contraction, coupled with the narrower gap between high end and mass market prices have supported prices in the Core Central Region (CCR). Price of uncompleted projects in the CCR registered a weak growth of only 0.6% q-o-q, which is a reversal of the contraction since 1Q12 (Table 1), suggesting that the primary market for high end segment is nearing its trough.






Office market near inflection point
Leasing activity in the office market appears to have picked up moderately from 17,000 sqm to 25,000sqm in 1Q13, further affirming what we have noticed in terms of enquiries and commitments. Based on Jones Lang LaSalle market intelligence, the recent occupiers come from a myriad of industry sectors, suggesting a more broad base economic recovery could be underway. Although overall the URA office rental index continues to contract, the decline has maintained, suggesting an inflection point is near in the leasing market.

In fact based on Jones Lang LaSalle data, the gross effective rents for prime grade A office space in Raffles Place in 1Q13 has held stable at $8.90 psf pm, similar to that achieved in 4Q12. 

In summary
Overall, it looks like property market sentiments have cooled following the latest tightening measures. The policies are currently effective in slowing down price appreciation especially in the housing market. Although monthly new sales have picked up in March, the rebound is representative of the pent up following the policy tightening and is not an indication of the demand to come. The risk of any further policy intervention is minimal at this juncture.

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet. Its investment management business, LaSalle Investment Management, has $47.0 billion of real estate assets under management.
Jones Lang LaSalle has over 50 years of experience in Asia Pacific, with over 25,100 employees operating in 78 offices in 14 countries across the region. The firm was named ‘Best Property Consultancy’ in nine Asia Pacific countries at the International Property Awards Asia Pacific 2012, in association with HSBC, and was named the number one real estate advisory firm in Asia Pacific in the Euromoney Real Estate Awards 2012. www.ap.joneslanglasalle.com 
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