More new homes sold in May

1,056 new homes were sold last month, the highest in the past 10 months and up 41.2 per cent from April.

StarsOfKovanSales were boosted mainly by 2 major property launchesGem Residences in Toa Payoh and Stars of Kovan in Upper Serangoon. The former moved 312 units at a $1,431 psf median while 76 units with an average price of $1,414 oaf were sold at the latter. The comparable selling prices could be indicative of buyers’ sweet. Factors which may affect figures in the next quarter could be the cutback on sales of government land sites and the lack of new launches.

Other properties which also fared well in the last month were Poiz Residences, Sturdee Residences and Botanique at Bartley. Location was definitely key, in particular units situated near MRT stations. Properties in the city fringe proved their mettle, selling 582 units while 414 suburban homes were sold and just 60 in the core central region.

But analysts are keeping their smiles on about property market’s recent movements though the second half of the year will need to have a strong economic showing to keep the momentum going. Interest rates if kept low, will also help to keep the ball rolling.

New property taxes for Australian Homes

Purchasing a property in sydney? Be prepared to pay a 4 per cent duty surchage. The rule was put in place on 21 June and will apply to all home purchases in New South Wales, making the state the second in the Country to impose stamp duties on foreign buyers. On top of that,there will also be a 0.75 percent land tax surcharge from next year on.

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A resale private condo market respite

3 consecutive months of rising private non-landed home prices is reason enough for some mid-year cheer. Could this be a sign of respite from the recent property market lull?

GramercyParkProperty seekers and buyers who have been on the lookout for good deals and the right opportunity to jump back onto the property investment train have proven to be more active of late. Incentive schemes for various residential developments such as OUE Twin Peaks and Ardmore Three have also helped boost sales and prices. The former’s deferred payment scheme has received positive response from buyers, which ultimately translated to sales. The number of resale units sold in May rose by 36% with 840 units sold. 619 units were sold in April.

Prime central region properties are once again finding favour with investors as they view the potential value of the private residential properties here with new eyes. The next launch in the core central region (CCR) would be Gramercy Park luxury apartments by City Developments.

Property analysts are however cautious about their predictions for the rest of the year as the cooling measures will still mean buyers continue to be price-sensitive. They are expecting resale private apartment prices to fall 3 per cent across the board this year.

 

Increase in Foreign property purchases

The local property market is looking a little zestier as more foreign buyers picked up units in the first quarter. This affirms the continued popularity of properties in Singapore as compared to those in other major Asian cities, or global cities for that matter.

Kingsford HIllview PeakProperty prices in Singapore are still relatively affordable, and the number of purchases made by non-Singaporean residents rose by 5.4 per cent, while purchases made by permanent residents rose by 2.6 per cent in Q1. The Additional Buyers’ Stamp Duty (ABSD) initially dampened sales, but as foreign property investors find themselves having similar, it not even higher, fees levied upon them in other markets, their return is not particularly surprising. While there are other emerging markets with even lower property prices, the stability and proven track record of Singapore’s properties has done the market justice.

Most of the properties foreign buyers hunt down are priced between $1.5 to $3 million. They bought 79 units at Cairnhill Nine and 38 units at Kingsford Hillview peak. Most of the foreign buyers were Mainland Chinese or Malaysians. Property analysts are keeping positive about the market’s prospects for the rest of the year despite the number of local buyers falling 18.2 per cent, though it could be due to the Chinese New Year holidays falling in the middle of Q1.

 

 

More collective sales in the pipelines?

Following the successful en bloc sale of Shunfu Ville, the property market is once again energised. It has reignited the fire for some developments which have been unsuccessful with previous collective sale attempts, while also pushing some properties to reach out to property firms and developers for quotes. The minimum approval for a property to be sold en bloc is 80 per cent.

TheCapriAt a former HUDC in Potong Pasir Avenue 1, blocks 110 to 112, 60 per cent approval has already been secured. Another similar HUDC property in Tampines have begun drafting a sale agreement while Eunosville on Sims Avenue is also looking to restart the collective sale process. As most of these HUDCs are older establishments in mature estates, their potential value may heavily outweigh the units’  current condition and value.

ShunfuVilleThe recent collective sale of Shunfu Ville garnered each owner an average of $1.78 million each, that is almost 50 per cent more than what each unit would have received when sold individually in the current market. Other properties which are also trying their hand at the process are Changi Garden and The Capri. In the commercial property realm, Katong Shopping Centre has reached the 80 per cent minimum approval criteria and will be launching the site for sale soon.

To balance off the government’s recent diminished land sales, these private collective sales could be attractive to developers looking for an opportune time to  strike it out in the market.

Property auctions at a glance

What happens at property auctions and are there truly good deals to be had? There has been an increase over the past couple of years in the number of properties put up for auction, with 516 properties listed for auction last year – a 45% increase from 2014.

TurquoiseCondoNot all auction sales are from mortagee’s sales (i.e. when a bank puts up the property for auction when the owner defaults on his loan payments) though they do make up an increasing percentage of property auction listings. In 2015, about 30 per cent of auction sales are from mortgagee’s sales. And contrary to popular belief, the properties listed at auctions do not necessary come with absurdly low prices and not all property owners of these listings are in a hurry to sell. Only about 1 or 2 properties are sold during the auction, with most others finding buyers following post-auction negotiations. Some property agents and buyers are there to see what options there are in the market, and almost everyone comes prepared, with a clear idea of market values and trends. Some owners even attend such auctions as a form of research, to better understand what their property is worth by comparing similar units offered at such auctions.

Parc EleganceWhile rock-bottom prices are not be expected, most listing vendors are more willing to budge on pricing by offering deeper discounts. As a guide, most properties valued at $3 million and below usually come with a 5 to 10 per cent discount while properties with price tags beyond $5 million may have even higher discounts. A recent auction sale of a $5.4 million unit at Turquoise in Cove Drive in Sentosa saw the bidder walking away with the unit at $2.92 million, $60,000 more than the opening bid of $2.86 million. Quite a steal, considering the $2.48 million difference. For property investors, auctions though not without risks, may be a good way to secure unique units which they can then profit from thereafter.

Some of the companies which organise property auctions are Knight Frank, JLL, DTZ and Colliers International.

 

 

London properties only foreign investors can afford?

Londoners are railing against the consistently rising property prices which have reached a mark where only rich foreign investors from Middle East and Asia are able to afford.

As foreign property investments become more common globally, countries are finding the need to regulate the property market and it ultimately comes down to the question of priorities. Taking notes from the US real estate bubble a decade ago, Australia and Singapore have both recently made policy adjustments to guard against excessive financial loans and foreign purchases on local properties.

London PropertiesLondon’s new mayor may also be lobbying to make moves to allow residents to purchase new properties ahead of foreign investors who have been snapping up units with fervour, with prices rapidly rising over the years. The average price of a home in London now costs approximately S$1.2 million and rental for a flat in central London can easily be S$2,700 per month. 20 per cent of home sales in Kensington and Chelsea are from foreign buyers and for new properties, the numbers can come up to as much as 75 per cent, with almost 67 per cent of them purchasing purely for investment purposes.

LondonProperty2Though some of these foreign buyers are purchasing units to rent out, some are owned by shell companies who leave the units empty on end, taking away essential numbers of available homes for London’s residents when they are already only rolling out half of the 50,000 new homes required each year.

With similar high-population versus limited land issues, Singapore’s average private home prices could easily rival that in London. While income growth lags behind other first world cities, living expenses are not necessarily remaining stagnant, will the country’s government need to revise their strategies in keeping homes affordable?

Penang properties a hit with Singaporeans

Over the recent decade, Penang has quickly found favour with foreign investors, many of which are Singaporeans. And many have invested in vacation homes and condominium units to earn rents on.

Penang ShophouseAs the prices of Singapore’s pre-war era shophouses skyrocket, many are turning to snapping similar properties in Penang, Malaysia. In the World Heritage Site of George Town, foreign buyers have been buying up pre-war shophouse units to renovate and refurbish and then renting them out, at times up to 5 times the previous rental rates. Just slightly over half a decade ago, rental rates were about RM$1,300. Now, monthly rents can easily come up to RM$10,000 – that is about 8 times higher than in 2010.

Tropicana Bay Condo PenangIn fact, so many Singaporeans have bought up these shophouses along a street near Komtar, that the place has been nicknamed “Little Singapore”. Some locals have expressed their concerns about the commercialism of George Town and that some local businesses or residents may be chased out of the area by rising rents. Most Penang property owners charge around RM$4,000 for monthly rents, less than half of what foreign property owners are asking for. Some local NGOs are lobbying for rent control and some traditional organisations such as the Cheah Kongsi who owns about 100 shophouse units and have kept rental prices between RM$1,500 and RM$2,700 to allow the city’s British Straits Settlement heritage to live on.

But market analysts are also aware of the high cost of conservation for these pre-war properties and foreign property buyers such as World Class Land are able and willing to put in the monies to keep the integrity of these historic properties.