Property relaunches something to look out for

 

In lieu of the price decline last year, property developers have held back on many launches, hoping perhaps for a market rebound.  The task of attracting buyers who are becoming increasingly price-sensitive falls hard on the shoulders of property developers especially as they are restricted by a time frame in which they can hold on to their units, thus we may be seeing a good many more relaunches this year.

TrillinqSome properties which were relaunched at lower prices managed to move many more unsold units. Take the 698-unit The Panorama in Ang Mo Kio for example. At it’s initial launch in January last year, only 8 per cent of its units were sold. Four months later, they relaunched and have since sold 305 units.

Buyers will however be looking out for discounts and incentives at these relaunches. And with the competition being higher than ever, with resale units adding to the private property market mix, developers may be pressed to offer attractive price baits. Huge discounts will be unlikely but properties with a higher number of unsold units and developers who are facing heftier QC fees may be those more likely to want to move these units.

Some of the projects which sold the last number of units in 2014 include Seahill, The Trillinq, Hillion Residences, Kingsford Hillview Peak, Amber Skye and Bijou.

Will shoebox apartments be 2015′s top seller?

 

Despite a rise in the number of available shoebox apartments over the last year, the fall in prices of this property sector was the lowest amongst all the other completed non-landed private apartments.

JurongLake_URA

Photo credit: Urban Redevelopment Authority (URA)

These small units up to 506 sq ft in size, especially if situated in good locations, will this segment continue to do well this year despite a 4 per cent price decline in 2014? Made popular in 2009, shoebox units in the prime districts such as those in the city centre or city fringes, were snapped up well and fast over the past 5 years. So much so that developers launched projects with shoebox units which made up as much as 80 per cent of the total number of units launched outside the city centre region.

Though these small studio-size units are commonly popular in highly populated cities such as London, Sydney, Tokyo and New York, will they work in suburban Singapore? With new regional hubs such as Jurong and Woodlands coming up, and even more in the next 10 to 20 years under URA’s redevelopment plans, it could possibly be so as businesses fan out from the city centre into these regions, bringing with them expatriates and their housing needs.

For the current year, property experts are waiting to see the markets’ response to resale shoebox units as more of these developments attain their TOP (temporary occupation permit). The most recent additions to the market are The Promenade@Pelikat and The Hillier. It could be a battle between centrally located shoebox units and slightly larger two-room apartments outside of the city.

2015 – A year of the property buyer

 

Following the footsteps of 2014, this year seems like it will continue to be a buyer’s market. Some property hotspots have sprung up over the course of last year, as new MRT stations and areas of redevelopment were announced.

Twin Fountains Executive Condominium in Woodlands.

Twin Fountains Executive Condominium in Woodlands.

For buyers looking for a good deal, there will be sellers out there who are willing to let go of their property as not all are able to have the holding power to last out the year. Many HDB upgraders who are moving to private properties may have to sell their HDB flats, and due to a mortgage restriction, some private residential property investors may also be looking to move units in exchange of a healthier bank balance.

For buyers looking for immediate to medium term property returns, areas near upcoming MRT stations may be their ticket. These include those along the North-East Line (NEL) and Eastern Region Line. Other further flung districts which are experiencing an influx of amenities and new properties such as the Jurong Lake district, Woodlands Central, Buona Vista and Paya Lebar, may also pique the interest of investors. And for those who are not in a hurry to reap the benefits from their property purchase, property analysts are expecting districts which have not been included in previous upgrading and redevelopment plans, to get a major face lift within the next decade or so. Woodlands could be the next area to watch.

Thomson MRT Line's alignment. Are you already area-spotting for the best property investment?

Thomson MRT Line’s alignment. Are you already area-spotting for the best property investment?

Starting from the second quarter of the year, sales are expected to pick up, and industry experts’ advice for buyers are to keep a clear idea of what they are looking for, search for sellers who are sincere about selling, and hit the iron while it’s hot.

Executive Condominiums – Now’s the time

 

If you are a second-time HDB property buyer, and are looking at upgrading from a HDB flat to an executive condominium (EC) – the time may be now. Before the resale levy really kicks in.

The TerraceImplemented in Dec 2013, the levy applies to ECs launched after Dec 9 the same year and as most of the EC launches from now on will be for units launched after Dec 2013, a levy of $15,000 to $50,000 will apply. And that’s no small sum to scoff at.

Executive condominiums have long been the way to move from public to private housing for most middle-class Singaporean families. As young couples now see this as one of the best ways to start their families, competition for the same properties have never been fiercer. As a hybrid between public and private housing, ECs will become private properties following a ten-year period. There is a income ceiling for applicants however, of a combined household income of $12,000.

As bids for EC land plots dip, mostly due to a saturation of launches in the last few months, prices and sales volume may not hold as well moving forward. Currently, ECs which just escape this resale levy include Bellewoods, Bellewaters, The Terrace, Lake Life and The Amore. They each boast their own unique selling point, with unblocked views at The Terrace, basement carparks at The Amore, nature-inspired landscapes at Bellewoods and resort-living lifestyle atmosphere at Bellewaters. Combined with options of units such as penthouses and condominium facilities, it’s the only logical step up for HDB upgraders.

2015’s HDB resale property market

 

Following the hash of cooling measures implemented and enforced over the last couple of years, prices of resale HDB flats have been on the decline since 2014. The dip may continue this year, and into 2016 but at a manageable rate. A fall of 5 to 8 per cent is expected this year, similar to the last.

Sembawang Breeze HDB

Photo credit: HDB

A look back at the past decade will see a huge and quick rise of resale flat prices since 2006. Some flats were even looking at a 95 per cent rise in prices. Much of the price rise was effected by the COV (cash-over-valuation) system. Since its removal last year, prices have began to fall, though very slightly.

What are the factors leading to this fall in HDB resale flat prices?

  1. A increased supply of BTO (build-to-order) flats
  2. Lowered MSR (mortgage servicing ratio) with a loan tenure period limit of 25 years (down from the previous 30 years)
  3. Allowing singles to apply for 2-room HDB flats directly from HDB instead of on the resale market
  4. Making it easier for second-timers to purchase directly from HDB
  5. A 3-year waiting period for Singapore Permanent Residents (PRs) before they are allowed to purchase HDB flats

Sellers and buyers may have taken 2014 to get used to the new measures and the price adjustments certainly showed as such. But 2015 could be the year where buyers come back into the market as prices become more palatable, and transaction volumes may be boosted by HDB’s scaled-down BTO supply.

For sellers, the dip may not be such a bad thing, yet. The price decline is fairly gentle and with the current prices, they will hardly make a loss, just not as much of a gain as before. It could be a win-win situation for all if the timing is right.

Brisbane is the city to watch for 2015

Brisbane_800x530
 

Brisbane is the capital of Australia’s Sunshine State and the city’s property market is expected to take on a similarly bright sheen over the next few years.

Sydney and Melbourne have often been the star performers in the Australian market –Sydney grew 17.15 percent in the year to November 2014 and Melbourne’s property market increased 9.38 percent – but big questions are being asked about whether growth might slow.

Attention is now being directed towards Brisbane, which historically is about one or two years behind their Australian city cousins. Many economists are even saying it’s now roughly three years behind where Sydney is now and that Brisbane is set to play catch up.

After a period of moderate growth in the property market over the last five years, there are many reasons to suggest this might change. The population has spiked and there has also been little residential construction in the same period, which will put pressure on the market.

Demand for residential housing in Brisbane is forecast to exceed supply. By 2031, an additional 156,000 dwellings will be required, with 132,000 of these classified as apartments and townhouses.
Average annual returns have already been 11.9 percent over the past 10 years and the current rental yield of 5.33 percent is ahead of both Melbourne (4.42 percent) and Sydney (4.69 percent).

ANZ Bank’s chief economist Warren Hogan has said Australia is expecting another property price increase (15%-20%) in the next two years and Brisbane is tipped to be a property market leader this year.

It’s a view shared by All Property Solutions Singapore director Lyndon Fairbairn.
“Brisbane’s property market, out of all the property markets in Australia, is going to be the one to shine in the next two to three years and it is where the smart investors are buying right now,” he said.

“The population is ever-increasing, which is putting pressure on the housing market and rental prices, so buying now for the future will see good capital growth and high rental returns.”

One of the highlights of Brisbane’s changing property face is the Brisbane Skytower, a 274m-high, $1 billion skyscraper with 88 levels of residences. Located in Brisbane’s CBD, and overlooking the botanical gardens and a section of the Brisbane River, it’s expected to rival iconic structures like Singapore’s MBS, Melbourne’s Eureka tower or Sydney’s Sydney by Crown.

It will be the tallest building in Brisbane and reach the city’s height limit of 274m. It will feature Australia’s highest infinity pool at the tower’s crown as well as incredible recreation decks and luxury health club and spa.

A limited allocation of these apartments will be sold in Singapore, with APSS holding the exclusive rights in south-east Asia. The first batch will be available in Singapore on January 31, and it’s possible to pre-register with APSS now.

Brisbane recently hosted the G20 summit and Queensland is set to host the next Commonwealth Games in 2018. Brisbane last year adopted a new slogan – Give me Brisbane every day. It’s what savvy investors are saying, too.

 

This article has been contributed by APSS and for more information, visit http://www.apss.com.sg

Interest in Executive Condominiums wane

 

Just awhile ago, the interest in executive condominiums (ECs) was red hot as pent up demand for these sought-after properties was released after a long hiatus. In areas such as Jurong, which had not seen a new EC launch for 17 years, the response was promising.

This interest has however diminished very quickly. In the latest EC launch, only 18 per cent of the units launched have been sold. Out of the 378 units in The Amore EC in Edgdale Plains, only 70 were sold at its launch last weekend. Prices averaged at $800 psf. A similar property nearby, The Terrace executive condominium, which was launched earlier last month, has only had approximately 20 per cent of its 747 units sold at a median of $812 psf.
TheAmoreEC_1Photo Credit: www.amore-ec.com

Bellewaters EC in Sengkang and Bellewoods EC in Woodlands fared similarly, with the only development bucking the trend being The Lake Life EC in Jurong West. Most of the units at The Lake Life sold within the weekend of its launch in November 2014. The sudden demise of interest in ECs came unexpectedly as even within last year alone, there was a good 9-month wait before any new EC development was launched and a rise in sales figures after a long wait is the norm.

Property analysts are putting this slowdown on the increase supply of BTO (Build-to-order) HDB flats, declining resale prices which have made resale HDB flats more affordable and the 30 per cent Mortgage Servicing Ratio (MSR) which was implemented in December 2013.

Moving ahead in 2015, 10 more new EC launches are expected and sales may be slow as future ECs will require a resale levy tax and competition heats up within the same location. As seen by recent numbers, areas with a higher concentration of ECs tend to fare more poorly in terms of sales volume.

Re-zoning Geylang – Fewer residential properties

 

At first instance, this proposal may not sound promising, but it may actually bring good news for owners of existing condominiums in Geylang. The Urban Redevelopment Authority (URA) has recently announced a re-zoning of residential areas in Geylang for commercial use.

Rezi3TwoWhile this means that there may not be as many private residential properties in the area, the value of those which have already been built may appreciate as offices and businesses eventually move into the area. This proposal by the URA could be seen as mainly to facilitate the balancing of residential and commercial activities in the district. The over-building of residential properties in the red-light district could have a reverse effect and introducing more commercial properties and maintaining a suitable amount of residential properties in the area may in turn increase the rental yields and value of properties in its proximity.

With Geylang’s prime location putting it close to the city centre, Aljunied MRT station and the Singapore Sports Hub, rental yields here are already 1.5 per cent higher than those in other districts. With the area mostly made up of smaller land parcels, the likely tenants would be boutique developers and small businesses, with the possibilities of niche eateries and shops.

Some residents have however raised concerns over this re-zoning move as more commercial spaces here may mean an increase in the illegal and disruptive activities normally associated with this infamous district. What are the pros and cons of purchasing property in Geylang and does one outweigh the other?