Luxury market boosts overall real estate figures

Ironically one of the markets which first took the hit when the property cooling measures kicked in is now the one keeping the numbers looking good.

GoodwoodResidencesFor her relative political and economic stability, Singapore is considered a haven for the rich who are hoping to park their wealth somewhere safe. And real estate here are considered stable long-term assets; not so much for those in for speedy turnarounds or hoping to make a quick buck in short-term rentals, but for investors looking at long-term capital appreciation.

Recent numbers released by the Urban Redevelopment Authority (URA) has shown a 76 per cent increase in sales of luxury apartments worth above $5 million this year. Some of the best sellers in this segment were Ardmore Three, Leedon Residence, Goodwood Residence and Gramercy Park.

GramercyParkProperty prices of city fringe units also rose 0.2 per cent though prices in the suburbs fell 0.5 per cent. But property analyst are seeing the market possibly bottoming out this and next quarter as the incline of the price drops have been gradually reducing.

There were a high number of completed units entering the market in the earlier part of the year, but as developers held back on major launches for a couple of quarters, it gave the market a few chance to do some catching up in terms of sales volume. The prolonged period of low interest rates may also push consumers to pick up deals now rather than later.

Singapore developer plans for 302-unit condo in Ho Chi Minh

One of Singapore’s property giants, CapitaLand, has just bought up a prime piece of land in Ho Chi Minh city and intends to develop a luxury private residential and serviced residence project which will yield 302 units across 0.5 ha in the city’s Cau Kho ward of District One.

seasonsavenuevietnam

Photo credit: CapitaLand Vietnam 

CapitaLand has previously launched 3 residential projects in Vietnam, including The Vista, Vista Verde and Seasons Avenue. All 3 had sales launches in Singapore and response has been positive ever since Vietnam relaxed their rules on foreign ownership of local real estate. The fact that this recent US$51.9 million (S$70 million) purchase is the developer’s third acquisition in less than a year and a half makes them a formidable foreign presence in the Vietnamese real estate sector. This launch will bring CapitaLand’s residential real estate portfolio in Vietnam to 9,100.

thevistavietnamPhoto credit: CapitaLand Vietnam 

As The Ascott‘s largest market in South-east Asia, CapitaLand will be managing the 200-serviced apartments in this new project under Somerset brand. The 17-storey residential block is targeted for a year-end launch, and will house 102-units made up of two- to four-bedroom apartments and penthouses. Akin to Cairnhill Nine, also developed by CapitaLand, in Singapore, plans are for the residential tower to also offer concierge services from the neighbouring serviced apartment block. This is apparently a first in Vietnam.

European-living in Tampine’s new condominium

It looks like the east will be getting a mountain deal of a new condominium development with a 9-block, 626-unit Swiss Alps-inspired one in Tampines. Named The Alps Residences, it is designed by a Switzerland-based architectural firm and the developers promise nature landscaping and a general ambience akin to living in well, the Swiss Alps, sans the alps of course. And resort-living it could be, as it will boast 30 facilities including a 50-metre lap pool, roof terraces, 2 shops and more than 100 bicycle lots.

alpsresidencesMCC Land launched a preview of the 99-year leasehold project last Saturday and it will be one of the larger launches this quarter, following weaker market showing due to the Hungry Ghost month in August. This will be their second private residential project in Tampines, the first being the Mediterranean-inspired The Santorini.

SantoriniThe Alps Residences is situated near the Tampines Regional Centre which consists of a hub of 3 shopping malls, the bus interchange and also the Tampines MRT station. The project has a good mix of 182 one-bedders, 416 two- and three-bedders and also larger units such as four-bedroom apartments and penthouses. Unit sizes are ranging between 441 to 2,486 sq ft and prices are set between $900 psf to $1,200 psf. With one-bedroom units going for approximately $400,000, the prices are well within the affordability range of recent buyers. Completion is estimated for 2020.

 

Glass tower condominium project in KL

eatonresidencesgshThe glass ceiling may not be such a bad thing in the case of this 52-storey private residential project in Kuala Lumpur. The massive development will feature an all-glass facade and an infinity sky pool – the highest in KL.

Developed by Singapore’s GSH Corporation, it is the developer’s first condominium launch in KL though they already have a slice of the real estate pie with their involvement in the Sutera Harbour Resort in Kota Kinabalu and also the Coral Bay@Sutera residential development just next to The Magellan Sutera Resort .

eatonresidences2Photo credit: GSH Corporation

Overlooking the Petronas Twin Towers and Royal Selangor Gold Course, the 52-storey Eaton Residences will have views that may be well worth the RM1.14 million (S$375,000) to RM4.92 million (S$1.62 million) price tags. The 99-year development is slated for a completion date of 2020 and will consist of 632 units, each with a unique view of either the Petronas Twin Towers or the golf course due to the specially-designed tilt of the building. It will have a good range of 635 sq ft one-bedders to 2,874 sq ft four-bedders as well as penthouses sized between 2,200 to 3,000 sq ft priced at RM$4.19 (S$1.38 million).

GSH has released 200 units in its initial launch where 150 units have already been booked through private previews.

Property prices in China continue to climb

Earlier in the year, China’s government laid down new regulations in an attempt to avert a property bubble, but if last month’s 33 per cent year-on-year increase in home value is anything to go by, they may have to do a whole lot more to prevent the real estate industry from travelling dangerously down the path of no return.

chinaProperty prices rose 1.2 per cent in August in 70 Chinese cities, not only in major cities such as Shanghai and Shenzhen but also in regional cities. Last year, the Chinese government relaxed rules on foreigners purchasing properties in China, and despite a slowing economy, property prices have continued to rise. Unrealistically? Perhaps. In Shanghai and Beijing alone, prices have risen 4.4 and 3.6 per cent respectively. In Shenzhen and Guangzhou, home values rose as well at 2.1 and 2.4 per cent respectively. Previously, only the first and second-tier cities had to grapple with sky-rocketing property prices, but the effect may have trickled down to cities of various tiers.

Property analysts are certain however, that as long as land supply remains stagnant and loans are fairly easily attained, the rise will continue. Previous curbs have yet to made a significant impact on the industry and as long as supply remains lower than demand, property prices will continue to climb.

MAS relaxes income cap on loans

Interest rates have been flying low for sometime now. At less than 2%, home loan rates are even lower than the 2.6% offered by the Housing Development Board (HDB). Though the latter offers stability despite inflation, the small difference is considerable for the large purchases real estate surmounts to.

And though there has been talks of rate hikes, a sharp increase has not yet happen and while interest rates have plunged to near-zero in 2011 and not surged since then, many have been favouring the floating-rate loans which are pegged to the Singapore Interbank Offer Rate (Sibor). But at the same time, the property cooling measures rolled out in waves by the Monetary Authority of Singapore (MAS) and Inland Revenue Authority of Singapore (IRAS) have restricted the ability of many to refinance their previously high-interest home loans.

MAS has since adjusted the total debt servicing ratio (TDSR) framework as of 1st September, and more home owners and new buyers will find that they now qualify to refinance their loans or service a less taxing one. Now all home owners are exempt from the 60 per cent income cap. Previously, the monthly repayment amount for total household debt can only be of and less than 60 per cent of the household income.

As the goal of this regulation is to prevent a property bubble and to stop buyers from overextending themselves and running into debt, property investors may still find themselves restricted by the rule, but now with the change, less so. The loan threshold may be surpassed if they pass the bank’s credit checks and they also have to commit to repaying at least 3 per cent of the outstanding bank loan within a 3-year period. This may still keep errant property investing in check while allowing those we have done their risk calculations carefully an opportunity to plan their financial growth.

The property market has been gradually cooling for a few years now and while no change downwards or upwards has been sudden nor drastic, and although the authorities say this is in no way a relaxation of the property cooling measures, this is nevertheless a good start on the pathway to building a more structured and robust real estate industry.

Executive condominiums top August property sales

August was a good month for the executive condominium (EC) market, with all 3 top sellers coming from this particular property sector, namely – Treasure Crest in Sengkang, Sol Acres in Choa Chu Kang and Bellewoods in Woodlands.

Bellewoods ECUnderstandably, there were not many major property launches in August with only 590 units launched in the month at Victoria Park Villas in District 10. A total of 805 units were sold, less than half of the 1,921 sold in July, with 41 per cent of the month’s sales coming from ECs. But demand for these rare hybrid public and private properties seems to be rising.

The price gap between ECs and private properties may be closing in as resale private property prices continue to dip though there is still a considerable distance between these 2 property types. The median selling prices of all 3 top EC developments below $800 psf whereas average prices for private apartments are mostly above the $1,000 psf range.

Sol Acres Besides comparison with ECs, new developer launches have also been fighting market competition from completed resale units, providing discounts and other incentive schemes to entice buyers. As a hybrid between public and private housing, EC buyers can tap on HDB grants and subsidies in the initial purchase and after 10 years, are able to leverage on the private property status of their property, harnessing the full capacity of a private resale condominium.

 

Indian Diaspora form new group of property buyers

Diaspora has always been one of the many lucrative ways of boosting a country’s economy, one of the most obvious ways being through the media industry, and the next being the real estate sector. Diasporas’ high disposable incomes may also translate to higher investment demand and capabilities. And when provided with ample and clear opportunities, they are more likely than not to bite.

godrejthetreesmumbaiPhoto credit: Godrej Properties

The Chinese and Indian diasporas are especially strong globally, and now the Indian diaspora in Singapore is being seen as a worthy target audience group for one of India’s largest real estate developer, Godrej Properties (GPL).

GPL has already been actively working with clients all over the globe, namely in the UK, USA, Africa, Australia, Dubai, Hong Kong and Singapore but now with major luxury development projects happening in over 10 Indian cities such as Mumbai, New Delhi, Kolkata, Hyderabad, Ahmedabad, Gurgaon, Noida, Chandigarh, Pune, Nagpur, Bengaluru and Manglore, they are strengthening their marketing efforts to their global diaspora as these new properties are likely to be of interest and are highly affordable to these overseas individuals and entities.

godrejeternitybengaluruPhoto credit: Godrej Properties

GPL first established themselves internationally in 2014 in Dubai, and now their Singapore office will also serve an international clientele, with a focus on providing residential property investment opportunities to Indians in Singapore, Malaysia, Indonesia and Hong Kong.  Their office will be situated in One Fullerton Road. Foreign nationals or companies also invest in properties in India though they will have to fulfil more specific requirements set by the Reserve Bank of India.