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URA’s reply for “Public deserves reliable, consistent data”

URA logo
By Property Soul
I have written to The Straits Times Forum regarding the problem of inconsistent and incomplete private property transaction data. Below is my letter (Dec 18, Thursday) andreply from URA (Dec 23, Tuesday).
Public deserves reliable, consistent data
Published on Dec 18, 2014
THE computation of the HDB’s resale price index has recently been improved to give a more accurate picture of price movements in the public housing market (“New way to better reflect HDB resale market”; Dec 10).
In contrast, there are different property price indexes tracking the private residential market – including the Urban Redevelopment Authority’s non-landed residential Property Price Index (PPI), the SRX Property Index (SPI), the NUS Singapore Residential Price Index, and Redas’ Real Estate Sentiment Index – with each one claiming to be more accurate than the others.
The conflicting results from the monthly and quarterly property performance reports released by these organisations confuse the public. For instance, there were at least seven quarters of conflicting price signals between the PPI and SPI from 2008 till now.
Also, the private home transaction data are incomplete owing to the following loopholes:
– Lodging caveats with the Singapore Land Authority is voluntary.
– Developers are not required to submit sales data of their delicensed projects after obtaining the Temporary Occupation Permit.
– All incentives from developers – including stamp duties, cash rebates and rental guarantees – for new projects are not captured, thus inflating the transacted prices of new sales.
The inflated prices of new sales in turn serve as a biased reference for valuation of similar properties. Thus, buyers risk taking bigger housing loans from banks and servicing mortgages higher than the actual market values of their properties.
This defeats the Government’s intentions of ensuring financial prudence of borrowers and maintaining a sustainable property market.
The conflicting indexes make it difficult for the public to have a real picture of the latest market situation.
The market confidence of buyers and sellers is influenced by the announcement of property sales data and price indexes, affecting their bargaining during negotiations and their final decision to buy/sell their properties.
The Government also needs a reliable and consistent private property index that it can monitor closely in order to identify a “meaningful correction” before revising property cooling measures.
Upgrading to a condominium is the dream of many Singaporeans. To many, it is the most expensive purchase in their lives. They deserve more complete, transparent, accurate and consistent data concerning private residential sales in Singapore.
Vina Ip (Ms)

URA index shows broad price trends in private home market
Published on Dec 23, 2014
WE THANK Ms Vina Ip for her letter (“Public deserves reliable, consistent data”; last Thursday).
The Urban Redevelopment Authority’s Property Price Index (PPI) provides the public with a broad indication of price trends in the private residential market. The index covers the entire private housing market, including uncompleted and landed properties.
In contrast, the other property price indices tracking the private housing market have different coverage and methodologies. Hence, the resulting price changes may vary.
To compute the PPI, we use data from caveats lodged with the Singapore Land Authority for sub-sales and resales. For new sale transactions, we have complete data on property prices from a regular survey of developers. All discounts and rebates provided by developers are deducted to derive the nett prices.
Besides the PPI, prospective home buyers can view the transaction prices of individual private homes on our website.
We are also working towards releasing the nett prices of individual units sold by developers on our website in the first half of next year.

We assure Ms Ip that we will continue to make improvements to our property market data.
Sin Lye Chong
Group Director, Land Sales and Administration
Urban Redevelopment Authority

What’s next after disclosure of nett prices

There is an article “Homebuyers to gain from fuller price disclosures” in The Straits Times that reiterates what URA mentions in their reply – the disclosure of nett prices of individual units sold by developers.
The reporter has interviewed spokespersons from a legal firm, a property agency and a consultancy firm, as well as a home owner and investor. They are all in favor of URA’s reporting of nett prices over the current inflated prices of new sales by developers. Hopefully, property buyers and investors can soon have more accurate and transparent sales transaction data – at least on new project sales by developers.
Looking forward, home buyers would welcome mandatory lodging of caveats with the Singapore Land Authority, and compulsory submission of delicensed project sales data by developers. Afterall, the two missing puzzles are critical to present a complete picture of Singapore’s private residential property market.
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