2 months of declining new private home sales nothing to fret about

The roller coaster ride of the real estate market has hit a gentle slope with regards to the new private home sector as sales volume fell for the 2nd month in a row since April, mainly due to the lack of new launches in recent months.

MartinModernWith 1, 024 homes sold directly by developers in May, the number of new private homes sold registered a 34 per cent drop from the 1,558 units sold in April. This follows a 12.5 per cent fall from March. The year-on-year figure also showed fewer homes were sold last month than in May 2016. To be fair, only 339 new units were launched in May compared, about 5 times less than the 1,616 units launched in April and no new executive condominium (EC) units were launched last month.

The 2 months of declining sales are nothing to fret too much about as the number of new private homes sold in the first 5 months of the year has surpassed that in the same period last year. 5,723 units were sold from January to May this year. Property analysts expect the buying momentum which began in the earlier part of the year to carry on through the rest of H2 as buyers are beginning to realise that the market has probably reached or is nearing the bottom after 3 years of declining prices.

HundredPalmsPhoto credit: hundredpalmsresidences.com

June however could be a challenging month for the market since it is the school holidays. But H2 looks to be promising with the expected launch of a number of new projects including the executive condominium development Hundred Palms Residences, Martin Modern and Le Quest.

Meyer road freehold condo up for en bloc sale

Abracadabra The Albracca? This 11-unit Meyer road private residential development could very well disappear soon should their collective sale asking price of $62 million to 65 million be met.

TheAlbraccaWorking out to be between $1,262 to $1,323 psf, the freehold site near Tanjong Rhu is currently home to the 10-storey The Albracca whose units range from 1,658 to 3,972 sq ft. Should the sale be successful, each owner will stand to receive between $3 million to $7 million.

The collective sales market has been red hot this first half of the year. 4 en bloc transactions have been successful thus far, and their combined value come up to $1.5 million which already surpasses the $1 billion combined total of the 3 deals from 2016. The successful deals in H1 of this year include One Tree Hill Gardens in district 9, former HUDC estates Rio Casa and Eunosville and the mixed-use development in Bukit Timah, Goh & Goh Building.

THeLineTanjongRhuZoned for residential use, the 23,400 sq ft site could potentially yield 65 new apartment units averaging 750 sq ft each. The location of the site could be the selling point of the property as it is situated near Katong Park MRT station which will be ready by 2023. Property analysts are expecting developers to actively go for this site as the asking price of $62 million to $65 million is rather affordable considering recent prices land plots have been going for.

Market recovery uncertain despite rise in resale condo prices

May was a rather good month for the resale private condominium market as prices rose 0.4% and sales volume increased by 17.4%. In comparison with the same month last year, prices have risen 1.5%.

CreekBukitTimahAll signs seem to be pointing to a market recovery after 3 years of lacklustre performances. However, some property analysts are taking a more conservative stance with regards to the recent price adjustments. The leasing market remains weak and rental prices have fallen, putting additional pressure on an already-weak market hence the market is still a ways from bottoming out. Private property values have fallen 11.6 per cent since the peak in Q3 of 2013.

skyline-residencesPrices of resale properties in the core central and city-fringe regions have shown improvements with a 1.1 per cent rise from April. In the suburbs, prices fell slightly by 0.4 per cent. A moderate look at the current situation would more likely than not mean a gradual rise in prices over the course of a year rather than a quick and immediate recovery. A recent hash of high land bids and the gradually diminishing stock of unsold private homes do however seem to be beacons of light, however dim, pointing towards the promise of a market stabilisation at the least. Positive sentiments and sales at new project launches and continued low interest rates may add icing to the cake if developers can have it and eat it too.

 

Freehold residential land in Orchard sold for $72 million

Land in Singapore seems to be selling like hotcakes in recent months. As the flow of plots made available under the government land sales (GLS) programme languishes, developers have been eyeing and snapping up plots sold privately. En bloc deals have been monopolising the real estate scene and the latest private land sale was of 1 Draycott Park to Selangor Dredging to the tune of $72 million.

DraycottPark

Photo credit: Google Maps.

What currently stands at the 17,422 sq ft site is a 7-storey apartment block with 8 apartments ranging from 860 to 6,200 sq ft. After a development charge of $15.3 million, the sale translates to $1,787 psf. As the site is zoned for residential development, it could potentially yield 36 new storeys of new apartment units.

Situated in the exclusive yet primely located Claymore Hill and Ardmore Park enclave, near Orchard road and the American Club, the new properties to be built on site are likely to go for between $2,700 and $2, 800 psf just to break even. Thus it will not be unusual to expect prices starting from $3,300 psf, about 10 per cent above recent transacted prices in the area, from the future launch of the new project.

TheClaymoreWhile foreigners account for about 50 per cent of the luxury property transactions in Singapore, the stamp duty rate which now stands at 15 per cent has somewhat kept demand at bay. However, from developers’ recent responses to en bloc and private land sales, the prices they are willing to fork out may signify a quicker than expected recovery to the high-end property segment.

2 more HUDCs try their hand at en bloc sales

On the back of successful collective sales this year, 2 more private residential developments are trying their hand at the process. Tampines Court and Florence Regency are both previous HUDCs, similar to the 2 other properties which sold recently – Rio Casa and Eunosville.

TampinesCourtThe lack of land sites made available under the government land sales (GLS) programme may be the reason behind the success of these recent en bloc sales. Developers’ hunger for land has been reflected in the the high prices paid for recent en bloc deals, and the latter could also be precisely what is bolstering the courage of residents of Tampines Court and Florence Regency.

There are a total 18 HUDC projects built since the 1970s and all have been privatised, with 9 sold thus far, including Shunfu Ville and Raintree Gardens last year. Shunfu Ville could essentially be what got the en bloc ball rolling and more successes were recorded this year. Rio Casa sold for $575 million and Eunosville for $765 million.

RioCasaHUDC HougangFlorence Regency is situated in H0ugang and has a land area of 389,000 sq ft. While it is still in the early stages of the en bloc process, Tampines Court on the other hand already has secured consent from 82 per cent of its residents. The asking price is currently set at $960 million for the 702,000 sq ft plot. At the moment, the property holds 432 maisonettes and 125 apartments. This is however not their first attempt at the collective sale process. The first attempt at $408 million was in 2008 and the second attempt in 2011. Property analysts expect home owners to seek higher prices following recent successes, but also warn against pricing too high as it may discourage developers from bidding.

The redevelopment of Johor Bahru City Centre

As it is, Singaporeans are heading north to Johor Bahru (JB) for business, leisure and even to live. But with massive plans to re-develop JB into hubs of many industries, what impact will it have on the real estate scene there as well as here in Singapore?

coronationasquarePhoto credit: www.skyscrapercity.com

Areas outside of Johor Bahru’s city centre, areas such as Iskandar Puteri and Danga Bay have been attracting many foreign investment dollars over the past few years. But JB’s city centre could be the place that will reveal major yields in the long term as it’s essentially the transport, retail and commercial hub of the city.

So it is perhaps not surprising that the government has put a RM20 billion (S$6.48 billion) plan in place to rejuvenate the ageing district. Launched in 2015, the plan aims to develop JB’s city centre into an international business district, complete with all-new infrastructure – the Ibrahim International Business District (IIBD). The most recent unveiling was the 268m link bridge which is targeted for a 2017 completion. It will connect the JB Sentral railway station and bus terminal to Persada Annexe, an extension of the Persada Convention Centre.

But perhaps the true gem of the project is Coronation Square, a major mixed use development. The RM$3 million project is overseen by Coronation Properties and consists of 6 towers – 2 office blocks, 1 condominium block consisting of 480 high-end apartment units, 1 block of serviced apartments, 1 hotel and 1 tower dedicated for medical purposes. The residential units have not yet been put up for sale, but the developers are so bullish about its potential they have already started the construction process.

AstakaJBAnother large-scale development near the city centre is the One Bukit Senyum project located just off the Tebrau expressway. Aside from a shopping mall, residences and a 5-star hotel, it will also house the Johor Bahru City Council‘s new headquarters. The residential component of the project is The Astaka, with 438 units spread across 2 blocks of 65- and 70-storeys. Already 300 units have been sold and Singaporeans make up more than half of the buyers.

As Singapore and Malaysia continues to improve on their inter-country accessibility, the demand for properties across both borders will remain high.

Rise in China and Singapore cross-border property investments

In global real estate sectors, the Chinese are known to be ferociously investing within as well as outside of their country. But is anyone else buying into properties on the mainland?

CapitaLandChinaProperty

Photo credit: CapitaLand China

Increasingly, investors looking to invest in land plots are looking to China to fulfil their development needs. Most of these are companies or developers looking for value-for-money options to buying land in Singapore, which is rare and often priced high. The property cooling measures and 5-year completion deadline for residential projects are also factors property investors are looking elsewhere.

In Q1 of 2017 alone, 88 per cent of investment monies in Asia Pacific residential land from Singapore went instead to residential sites in China. Cross-border investment activity has increased, as also seen in the high bids from China-based developers and co-ventures on recent collective sales within Singapore. Residential investment between China and Singapore has risen 137 per cent over the last 10 years to $42 billion last year.

Singaporean developers are also looking elsewhere for lower-cost assets and with the cultural and language similarities, and geographical proximity, China seems like as good a choice as any other. Within Southeast Asia, Vietnam and Malaysia are also on the list; as are Sydney and Melbourne in the Asia Pacific region. Property analysts expect continued increases in land prices in Singapore as government land sales sites are becoming limited.

New property taxes for foreign buyers of New South Wales properties

Sky-high property prices in certain Australian states have Australians concerned about affordability of housing in their country. To appease voters, New South Wales, arguably one of Australia’s most populous state, has doubled property taxes for foreign buyers of local property, targeting in particular Chinese investors who have been finding ways to circumvent previous regulations.

100HarrisSTreetSYdneyPropertyHousing debt has been growing as many locals blamed speculators for pushing prices to unsustainable levels. The country’s policymakers are highly aware of the risks of a property bubble bursting should prices continue to skyrocket. The Reserve Bank of Australia has already served warnings of rising levels of housing debts.

Starting July 2017, property taxes for foreign buyer of New South Wales properties will rise from 4 to 8 per cent. This follows in the footsteps of Victoria which already make the change last year. Land taxes for foreigners will also be raised. Country-wide regulations will also mean foreigners who leave their properties vacant for more than 6 months in a year will face fines while other property cooling curbs restricts foreigners from buying specific types of properties.

DOcklandsMelbournePropertyHome prices in Sydney and Melbourne have already fallen last month, but this respite is slight as the previous 12 months leading up to April this year has shown steady growth, a total of 15 per cent to be exact. With these new measures in place, the Australian government is hoping it eases the struggle first-time home buyers have been bearing.