Luxury property market heats up 

After the market lull in the past couple of years, buyers are once again picking off choice luxury units in the prime residential property sector.

ArdmoreIIIPrices in this segment have gradually become more competitive over the last year or so and sales volume has increased, partly due to this change. For example, in the first half of 2016 alone, 131 apartments priced above $5 million were sold. Only 166 similar units were sold in the entire 2015.

Investors are favoring Singapore properties they match up well against those in other global cities such as New York and London. Property analysts say most investors are still Singaporeans, though  Malaysians, Indonesians and Chinese continue to feature strongly in the investor pool as they see the value of properties here and are not deterred by the currency fluctuations.

An upcoming luxury development is the 99-year leasehold Victoria Park Villas by CapitaLand which consists of 3 bungalows and 106 semi-detached houses starting from $4.3million. In better times, these houses could have cost up to $6 million. Other high-end units currently in the market include those at Gramercy Park, OUE Twin Peaks and Ardmore Three.

Spain – Holiday spot or potential gold mine? 

How does an apartment or a house in the suburbs of Barcelona or Madrid sound? More foreign investors are going into the Spanish property market, despite the political uncertainty without having had a new government for 7 months now. There has been a recent increase in building permits which could be an indicator of a property boom in the near future.

1089_XA77-3924_3_2016071905520431250Though there was a peak of real estate activity in 2007, most of the properties were in remote areas or urban fringes which did not garner as much interest as expected. That left almost half a million new homes empty . This time round, the popular properties are luxury apartments  and middle-class homes in the middle ain cities and regions with a strong industrial influence.

Many leading real estate developers have been buying up land banks in regions where demand for property is high, such as the Basque country, Madrid and Barcelona. Spain is 4th on a list, compiled by PWC, of European cities with property markets offering the best prospects.

1097_0_foto_20160719174440302_945856908925211Prices of properties go from as high as 8 million euros on an upmarket apartment in Madrid’s shopping Boulevard Serrano, or a 10,000 euros per square metre unit with swimming pool and spa which despite its price tag, is only a mere 10% of a similar unit in London. The immense potential for growth is apparent to investors, and despite the Brexit vote dragging down the pound, the major cities in Spain will still have their clout with savvy investors.

Jurong Lake District – New sparkling Gem of the West

In less than 2 decades, the landscape of Singapore’s west-side could be said to be almost completely transformed. From the largely industrial factory districts to far-flung housing estates and only a few schools, new shopping malls, transport hubs, commercial and office spaces, private residential homes and spanking new build-to-order (BTO) flats now dot the scene.

Juronglakedistrict

Photo credit: URA

Jurong, once a busy but secondary commercial district, has been slated for development as Singapore’s second central business district (CBD). Every large city is almost certain to have one secondary commercial hub, as big and functional as the town-centre CBD, but newer and with more space for development. Just thing of Shanghia’s Pudong or London’s Canary Wharf. The Urban Redevelopment Authority (URA) is looking to transform the Jurong Lake District into a eco-friendly, futuristic township with homes, offices, hotels and filled with greenery and waterways.

LakeGrandeWith the Kuala Lumpur-Singapore high speed rail in its midst and as the convergence point of a number of new and existing MRT lines, there seems to be quite a far breadth for value appreciation of residential and commercial properties in the Jurong Lake district.

With Punggol and Jurong both set to include many good, new things may be coming the country’s way in the next decade or two.

The En-bloc secret

Could you possibly be sitting on an En-bloc golden egg and not know it? Or before you make an investment, do you know if your purchase could earn you a tidy sum in the  future?

Laguna Park

Laguna Park

En-bloc sales of older properties can often be the windfall property owners are looking for and having an idea of the process could be the start to planning for the future. Not every development will have the same potential and often the wait could be longer than the photos yields, but there is money to be made this way.

The first step involves securing 20% of the total share value of 25% or the total number of owners. But should the first bid at a collective sale fail,  50% of the previously mentioned total share value or total number of owners will be required to requisition a extraordinary general meeting (EOGM) within 2 years. Then there is the election of the collective sale committee (CSC). They will then draft the proposed a reserve price as part of the collective sales agreement (CSA). Though a high reserve price may increase the probability of securing sufficient signatures go the sale, the high price may also turn potential buyers away. Developers do after all need to take the time and money to conduct feasibility studies and land surveys of the site.

Then there is also the issue of valuation per unit. The criteria for share allocation as recommended by the Singapore Institute of Surveyors and Valuers are valuation, strata area and share value. In addition,  80% of the owners must also agree on the method of apportionment before the bid can happen.

ShunfuVilleOnly then will  public tender be made and a property valuation be made by an independent valuer on the closing date of the tender. In the 10-week period after the tender closing date, the CSC is still able to enter into a private treaty with a buyer. The process is often long and could take years, such as in the case of the Pearl bank apartments or Laguna Park.

 

Home loan competition heats up

As the economy slows worldwide,  as global markets struggle to make sense of the recent Brexit vote and as the US Federal reserves rate hikes are put on hold, the time to secure or refinance a home loan could be now. Especially as banks compete for earnings with diminishing property demands.

Image courtesy of Singapore Tourism Board.

Image courtesy of Singapore Tourism Board.

The Singapore Interbank offered rate (SIBOR) at which local home loans are set to, has since fallen to 1 per cent. At its peak, rates went as high as 1.25 per cent.  On the commercial property front, the swap offer rate (SOR) was at 0.94 in June, down from 1.36 per cent in March. What all this means is it now costs less for banks to borrow funds from one another, which makes it easier to schedule fundings for their clients and they may take the opportunity to offer lower rates to secure more earnings.

Banks have been battling for clients and offering up increasingly competitive home loan packages. The dropping SIBOR rates also means linked home loan packages will have lower interest rates. If the US Federal reserve continues to hold off the incline of the rates hike, home buyers may still be able to benefit from the correspondingly lower home loan rates here.

Mixed use properties – Aiming for perfection in Integration

In the past decade, mixed-use developments have sprung up all over the island, in almost every township and with the most popular ones near town centres and transport hubs. As cities become more crowded and space scarcer, these all-in-one properties are finding favour with buyers and investors as rental yields are often considerably higher.

South Beach
Integrated developments consist of a mix of at least 2 uses – transportation, retail, commercial and residential. They offer the benefits of having conveniences at your doorstop and with an emphasis on a balanced lifestyle. Although it may seem like the lines are blurred, developers are clever about giving residents a sense of exclusivity and most mixed-use properties have their own residential parking area, driveway and serviced-lift lobbies.

Some of the more recent integrated properties include North Park Residences, Kensington Square and The Rise @ Oxley just to name a few. There are a growing number of integrated developments in the city centre as well, near the Central Business District (CBD) and Orchard road districts, including Scotts Square Residences and Icon condominium in Tanjong Pagar  Some older properties include serviced apartments connected to malls such as Far East Plaza and Liang Court. There are also quite a few massive integrated developments coming up in the next few years such as DUO Residences in Rochor road, Tanjong Pagar Centre and South Beach.

Icon VillageThough these properties do not come cheap, their potential is considerable and as Singapore progresses into the 21st Century with lesser available land area and increasing population, their value seem very likely to appreciate.

New home sales dip in June

June and July are traditionally slower months for the local property market as the school holidays are followed by the Hungry Ghost month. The lower numbers may also have been due to the lack of new launches.

Kingsford HIllview PeakLast month, only 536 new private non-landed units were sold, about 49 per cent lower than the 1,058 units clocked in May. Despite the huge fall in market figures, property analysts remain positive about the journey as numbers have reached a plateau and the fluctuations between quarters have been minimal.

Following the slew of cooling measures implemented by the government over the past few years, th market has cooled considerably. In a year-on-year comparison to 2015, the 536 units sold is 43 per cent higher than the 375 units sold last year.

Suburban homes were the best sellers in May, with developments such as Kingsford Waterbay, The Glades and Kingsford Hillview Peak managing to sell off some of their unsold stock. Median selling prices were at $1,185 psf, $1,402 psf and $1,315 psf respectively. In previous months, sales were largely  boosted by developers offering discounts, but the units sold in June were not heavily discounted, signifying the return of buyers to the market as they gradually come to realize that prices will not come down much more.

Private resale home prices inching up

Prices of resale private non-landed homes have been on the rise since March this year and the upward climb though gradual, shows promise and property analysts are hoping market sentiments will improve as the year moves on.

Qbay ResidencesLast month’s price rise clocked at 0.5 per cent and was apparent throughout all regions. In the core central region (CCR), prices rose 0.9 per cent and 0.4 and 0.5 in the city fringe and suburbs respectively. Sales volume has also improved 27.4 per cent in a year-on-year comparison with 754 units sold, just a wisp lower than the 763 units sold in May.

Buyers are beginning to be more acceptable of the market prices of resale units as the median X-Value (TOX) was at negative $7,000, $1,000 more than the negative $8,000 in April. While there are a few major launches planned for the next half to the year, the number of unsold units in the market has been expanding to almost 15,000, and about 57,500 private homes and 12,000 executive condominiums are in the pipeline. How will the market react to the release of these units into the market? Many new launches now face challenging times beyond their initial launch. Depending on the speed and volume at which new units are released and changes in interest rates will be determining factors.