Thailand’s most expensive condo opens Singapore and China offices

Foreign property investors looking for a piece of luxury in Thailand now have something new to look forward to. Thai developer Sansiri has partnered with Thailand’s mass transit operator BTS group to open international sales offices in Singapore and China, tapping on the influx of tourists in particular mainland Chinese in recent years.

Sansiri98WirelessPhoto credit: Sansiri

Their Singapore office opened at the Ocean Financial Centre 2 weeks ago and plans to open more in Shanghai and Beijing are already in the way. The venture hopes to increase sales from foreign buyers by 40 per cent. Though interest from Singapore investors have been rising, investment monies flowing into Thailand’s real estate sector from China has been limited. Sansiri currently has over 300 projects in Thailand and one in London.

BaseGardenSansiriPhoto credit: Sansiri

Their flagship condominium project, 98 Wireless, is touted as Thailand’s most expensive condominium development. 120 sq m two-bedroom apartment units are going for US$2 million. Though most Singaporean investors favour mass market condominiums in Thailand, Singapore is nevertheless a good base to indirectly steer attention from interest mainland Chinese parties temporarily residing or visiting the country to possible investment opportunities within the region. The developer says Singaporeans are more keen on rental yields and quick turnarounds. Their new partnership with the BTS group will also allow them a leverage in developing projects which build upon upcoming infrastructure.

Minimum purchase price for Malaysian properties may increase

Foreign ownership of properties in Malaysia have been out of the news for awhile. And as popularity of homes in Iskandar Malaysia has risen, especially amongst Singaporean investors, the Malaysia government may be considering raising the entry price bar for foreigners, in turn making it easier for Malaysians to own property.

KL Kepong PropertyAs the ringgit continues to weaken, the Malaysian government may increase the minimum purchase price for foreign buyers of Malaysia properties. The move may not affect foreign buyers as much since the currency exchange rates still favour them for now. The Housing Minister Noh Omar says the motivation behind the possible policy change is to give Malaysias more options and availability when it comes to property ownership.

The minimum purchase price for foreign property buyers has been raised twice in the last 20 years and currently stands at RM1 million (S$318,000). State governments are however allowed to set their own limits. The Penang state government has for example set their minimum purchase price at RM800,000. The government is in discussion on the 2 options in which the policies can be adjusted – 1) to raise the floor price of RM1 million per property or 2) to set the minimum purchase price in US dollars for all foreign buyers.

But before the new policies are implemented, will there be increased fervency for Malaysian properties, especially in states popular with foreign buyers such as Penang, Malacca, Kuala lumpur and the Iskandar Malaysia region?

New home sales yet to show significant change following SSD tweaks

Perhaps the recent changes in Sellers’ Stamp Duty (SSD) regulations may have no effect on the property market, or it might have a considerable effect. Whichever direction things might go, it is still too early to tell. Sales of new properties following the March 11 announcement has yet to show significant signs of change in terms of concrete figures, but the tweak has however boosted interest in new launches as shown in the response from the public at recent show flats such as that of Marine Blue and Park Place Residences.

MarineBlueCondoWhile earlier launches of The Clement Canopy and Grandeur Park Residences generated positive sales during their launch weekends, things have slowed down in the time following. That is however the general real estate market trend and is no cause for alarm. Most property analysts are glad for the change as it will bring about positive sentiments in the buying market, which could mean more energy, move net and direction in the months ahead. They are not certain this relaxation of the property cooling curbs will have a big impact on the market but are nevertheless happy the government has taken this step in moving forward. The next most likely impact would be the push for those caught in a dither of to-buy-or-not-to-buy.

On the other side, the Federal Reserve has raised their interest rates to 1 per cent and that could affect home loan rates, in turn diminishing demand from property investors.

 

Stamp Duty changes bring cheer to real estate market

With the recent Sellers’ Stamp Duty (SSD) changes, the real estate market is beginning to feel more upbeat all around.

PLQThe most significant changes were the SSD rates and the fact that sellers who let go of their properties after 3 years will no longer have to pay the sellers’ stamp duty. The Total Debt Servicing Ratio (TDSR) threshold has also been relaxed for properties with  loan-to-value (LTV) limits of 50% and less. The latter move is aimed at helping retirees monetise their properties as many could be sitting on their assets while having trouble with cash-flow or liquidity. Some property owners may wish to cash out on their properties in order to start businesses or send their children for overseas education but find themselves unable to loan enough as the TDSR framework limits the borrower only to amounts totalling up to 60 per cent of their gross income.

All these changes will give buyers a higher sense of security, knowing that they will have more flexibility in managing their finances without having to hold on to their properties should they urgently require liquidity. The crowds at the Paya Lebar Quarter’s (PLQ) residential project – Park Place Residences a couple of weekends ago were a positive affirmation of the improving sentiments in the property market. Property agents reckon that the SSD changes will motivate more people to buy as they now have less restrictions to take into consideration.

 

Sellers’ Stamp Duty rates tweaked

From March 11, the staggered rates which sellers have to pay should they resell their properties within stipulated time periods will be reduced. Previously, properties sold within a year of purchase were subjected to a 16 per cent seller’s stamp duty (SSD), the rates are at a staggered 12 per cent for properties sold within 2 years, and at 8 per cent and 4 per cent for those sold within 3 and 4 years respectively.

SingaporeskylineThe new tweaks to the regulation means that sellers now only have to pay 12 per cent stamp duty for properties sold within a year, and then at the staggered rates of 8 and 4 per cent for those sold within 3 and 4 years respectively. Whiles some buyers might have missed out on this new ruling by a day, the effect of the change on buyers who have purchased for the long-term will be minimal. This slight change in the property cooling curbs may provide a more fertile environment for property investment and some buyers may be interested in making headway with a second or subsequent property.

Whether this will boost home sales this year remains to be seen, but property analysts are expecting a slow and muted effect on the market. While the change may not translate to actual figures, with property analysts expecting only a 3 per cent increase on the previously projected 8,000 property transactions for 2017, what it does create is an atmosphere of positivity and a sense of hope. Any tweak by the government, however slight, could be seen as an indication of the market bottoming out, and following a period of market stabilisation, investors are hopeful that the market will eventually recover.

Next major condo launch to watch – Park Place Residences

Following the successful launches of The Clement Canopy and Grandeur Park Residences, The Park Place Residences at the Paya Lebar Quarter (PLQ) previewed on 11 March and developer, Lendlease is more than hopeful about the response.

Paya Lebar Quarter_Lendlease

Photo credit: Lendlease

With a prime location in the developing Paya Lebar regional hub, the 429-unit property will provide fodder for the current pent-up demand in the market. The 99-year leasehold development released 40 per cent or 171 apartment units at its first release a couple of weekends ago. Most of they units made available for selection were 2- and 3-bedders. The Park Place Residences is part of the $3.2 billion Paya Lebar Quarter (PLQ) development which will consist of 3 office towers, 3 residential blocks and a mall. It is jointly developed by Lendlease and Abu Dhabi Investment Authority.

The developers are already planning for a second wave of release, where the pricing will be higher and based on the response from the first wave. As interest in smaller, affordably-priced units have been on the rise, buyers will be interested to know that Park Place Residences will have 117 one-bedroom units sized between 480 and 580 sq ft with prices starting at $780,000. The project features mainly two-bedroom units sized between 650 and 900 sq ft starting at $1 million – there are 234 of these units in the project. The remaining 78 units are 3-bedders of between 1,080 and 1,350 sq ft priced at around $1.6 million.

ParkPlaceResidencesThe average selling price is between $1,560 to $1,610 psf. While this is higher than the $1,400 psf median prices of units at The Clement Canopy and Grandeur Park Residences, the location and potential for growth of The Park Place Residences more than make up for it. It will be launched for sale on March 25.

Weak rental market not an obstacle for investors

While the weakening rental market may have been putting pressure on investors, the concurrent weakening private property prices are opportunities to some. While the leasing market has slowed down considerably, the property-purchasing market has been gaining speed, especially in the last quarter or so.

TRE ResidencesThe overall genial atmosphere in the private residential property market over the past few months have brought property investors back into the heat of things. As more newly completed properties enter the market and new projects such as The Clement Canopy and Grandeur Park Residences were launched to affirmative responses early in the year. Overall private home prices fell at the slowest rate in 3 years, which could point to an increasingly stabilising market.

It would be prudent however for investors to take into consideration that the property cooling measures have not yet been lifted, though some signs of relief have been provided earlier this month. In the past, profits of up to 60 per cent could be reaped in the short-term, but the long-term potential of a property, rather than quick turnarounds or a dependency on rental profits, will be at the heart of a good investment henceforth. Property analysts advise investors to consider cash-flow, calculate mortgage and maintenance costs carefully while keeping a portion aside for periods of negative cash flow when  the property is unable to be tenanted.

Winds of change in local property market

A decade or so ago, owning a second or third property might be the fastest way to secure your retirement funds or to even accumulate a tidy little kitty. Investment properties were considered a surefire way of earning additional income, but in the climate of today, property owners and investors have much more factors to consider and competition to battle against.

SunshinePlazaResidencesWith the rental market weakening, property agents are finding that it takes twice as long and also many more viewings before a property is successfully tenanted. And even then, for much less than before. Some property owners have had to reduce rents by almost half. Leaving the units empty are simply not an option for some investors as the rents go towards the mortgage or mortgages of their properties. It is after all better to have less help than none at all.

SerangoonHDBflatFor new investors looking to enter the market, the environment is a lot tougher than before. Considerations such as whether there is a large pool of HDB flats available for rental nearby, the long-term potential of the property, competition from other new launches or even within the same property, whether the local and global economy will affect businesses and commercial hubs nearby thus reducing the pool of foreign tenants, and so forth.

Before the market makes a complete recovery, a possibly lengthy period of stabilisation will ensue, despite the governments having made some allowances in the are of the property cooling curbs.