February’s dip in resale flat prices points to market stabilisation

February was a little slow for the resale HDB flat market as prices fell by 0.3% and transactions by 8.5%. This was following a promising start to the year. But industry experts are not too quick to dismiss the possibilities for the sector as the year moves ahead.

ClementiHDBflatThe slight dip last month was most likely due to the post Chinese New year lull which is a common occurence. Rather than being indicative of a falling resale flat market, the decline simply points at a stabilizing  market enironment. Though resale flat buyers paid about $2,000 less than market value across  the board, some HDB estates continued to clock more than 10 transactions and at prices above market value

In Bedok, some buyers paid $10,000 and more for their resale flats while in Clementi, some transactions closed at $4,000 above market value. That comes as no surprise as these are mature HDB estates where demand is high. There were also some recent private property launches in the vicinity, for example the Clement Canopy, which may have had some residual effect on the resale HDB  flat market.

Aerial view of HDB flats in Ang Mo Kio

Aerial view of HDB flats in Ang Mo Kio

There were however a couple of HDB towns which did not post as promising figures despite being popular locations for flat seekers. In Queenstown, the lowest below-market prices were clocked at $12,500,  followed by $10,000 in Ang Mo Kio. Prices of 3-room flats rose by 0.2% while executive flat prices fell by 1.7%. Overall, prices of resale flats in mature estates rose by 1.1%.

 

Post-brexit Britain sees property sellers lowering asking prices


London HOuse
British home owners are slowly coming to terms with the reality of having to lower asking prices, post-brexit. The fear of how Brexit might affect the economy may have finally sunken in as the politically uncertain climate has made investors wary and property sellers are finding that they have increasingly had to offer deep discounts due to waning demand.

In prime central London in particular, the effects have taken hold of the property sector quite immediately. The effects have now trickled down to other parts of the UK and the prices of homes which have escalated in the years prior to Brexit are now out of reach to most buyers. In London, home prices are 86 per cent higher than in 2009, that is in less than a decade.

SydneySkylineOn almost the other end of the globe, in Sydney, Australia, property prices continue to skyrocket. Investor demand is aided by low interest rates as home values rose last month at the fastest pace in 14 years. Property prices in Sydney have risen 18.4 per cent since 2002. Despite the authorities’ efforts to curb the rapid rise, home prices have continued to rise in this and other major cities in Australia such as Melbourne and Brisbane.

Singapore no. 2 destination for Asian property investors

A recent study has found Singapore to be No. 2 in a list of top destinations for wealthy Asian investors. The Wealth Report compiled by Knight Frank has placed Singapore second, after only Britain, as a country high net worth Asians are favouring as a property-investment destination.

BishopsgateResidencesExcluding their primary residence, these individuals are defined by their portfolios of at least US$30 million (S$42.3 million). They are also more likely to apportion most of their assets to real estate investments. This could come as good news to developers and property marketing agencies, helping them narrow down their target audiences and structure more focused marketing strategies which are more essential now than ever as the economy languishes.

While Chinese investors are the mainstay of the real estate scene, Indian and Malaysian buyers are making an increasingly obvious presence. Property analysts are expecting the proportion of foreign home buyers in Singapore to rise to between 25 and 28 per cent this year. Their numbers currently stand at 24.7 per cent. Singapore’s slower rate of property growth allows investors to take stock of their investment and stake calculated risks without having to grapple with the rapidly increasing price growth in cities in China, Australia and Canada.

Some of the other countries which are also gaining traction in the real estate investment arena are China and Vietnam. Singapore’s stable political and business environment has however continued to make it a choice pick amongst Asian investors.

More private land sites up for collective sale

With improving sentiments in the real estate industry, land and property owners are beginning to test the waters once more with new freehold sites and shophouses up for collective sale.

Goh&GohBuildingAn exciting prospect comes in the form of the Goh & Goh Building in Upper Bukit Timah. The 4-storey building is a mixed-use site currently consisting of 7 residential units and 7 shophouses. It has recently been put up for collective sale with a tag of $120 million. Situated right at the doorstep of the Beauty World MRT station and next to the Bukit Timah Shopping Centre and Beauty World centre, it is a delicious plot of prime land indeed. And a sale could be on the way as almost 80 per cent of the building’s owners have already given their consent for the go ahead of the collective deal.

Properties in the area have been selling swiftly and developers who are looking to replenish their land bank in the area will no doubt keep a keen eye on this land. The area has further potential for development, in terms of infrastructure and amenities. It is also situated in between the Upper Bukit Timah, Bukit Timah, Bukit Batok and Jurong Kechil areas where both local and international schools dominate. In fact, neighbouring land plots have already been earmarked for hotels, hospitals and other residential or mixed-use properties.

Hillbrooks CondoAfter taking into account the $15 million development charge the successful bidder is estimated to have to pay, property analysts expect the land rate to hover around $1,460 psf and the winning developer could possibly accommodate around 100 residential units in the new project.

January’s private home sales plateau

After a slight rise of 0.1 per cent in December, January’s completed private home prices remained flat. There were some rise and fall in the different districts but overall, non-landed residential property prices evened out on a plateau.

CreekBukitTimahThat may not necessary be a negative as signs of stabilisation are generally expected of the year. Property analysts say that some of the zero per cent month-on-month change could also be due to the availability of smaller units with a higher psf pricing schedule. Besides shoebox apartments, studios and one-bedders, family-size units in new developments are also now smaller in size than before.

Small apartments aside, prices of completed condominium units in the central region did rise 0.7 per cent after a 0.3 per cent dip in December. In the non-central regions however, prices went the other direction with a 0.6 fall following a 0.5 per cent increase the month before.

26NewtonThe private real estate market could however be looking at more resale properties entering the pen soon as most buyers who have purchased investment properties in 2013 will have completed their 4-year holding period this year. This means they are no longer tied down by the cooling measure which requires them to pay a seller’s stamp duty should they sell their property within 4 years following the purchase. Whether the sector is ready for this influx of properties while pulling themselves sluggishly out of the lull remains to be seen.

Property cooling curbs working in China

Many Asian-pacific countries have placed property cooling curbs on their housing and real estate industry as prices climbed rapidly within the past half a decade. Cities such as Hong Kong, Tokyo, Sydney, Melbourne, Beijing, Shanghai and Singapore are facing not only space and housing issues but also rapid inflation and increasing property prices.

Aerial view of suburban neighborhood, Wuhan, Hubei, China on 11th March 2016. (Photo by Jie Zhao/Corbis via Getty Images)

Aerial view of suburban neighborhood, Wuhan, Hubei, China on 11th March 2016. (Photo by Jie Zhao/Corbis via Getty Images)

The Chinese government has been placing curbs upon curbs on their real estate industry, with perhaps conflicting sentiments as the sector accounts for a large part of the country’s economic growth. But housing prices have been skyrocketing at an alarming rate and for the first time in the past few years, the measures seem to be taking effect.

In Shenzhen, currently the country’s hottest market for new homes, property prices have fallen 0.5 per cent after consecutive dips over the past 4 months. In Shanghai, prices fell by 0.1 per cent, also following a 3-consecutive-month decline. While prices remained unchanged in Beijing, the stabilisation is a start to possible price deflation. News of a possible reduction of land release by more than 3 times that released in 2016 could further reign in price increase.

Park yoho venezia Hong Kong propertyThe price-increase in January was reflected in the smallest number of cities in a year. Home prices have fallen in 20 cities while 45 out of 70 cities saw a gain in prices, down from 46 in December last year. Part of the reason could be the curbs placed not only on buyers but also on banks. Some bank branches in major Chinese cities such as Beijing, Guangzhou and Chongqing have recently increased mortgage rates for first-time buyers. China’s central bank is likely to have even stricter restrictions on credit and housing loans put in place, in particular targeting developers and households, in order to prevent a property bubble.

 

New property launches in Clementi and Choa Chu Kang drew crowds

When a new condominium becomes available in a mature estate, it usually excites the crowd. Especially if the estate has not had a new launch for sometime.

iNzExecCOndoPhoto credit: www.inzresidence-ec.sg

Demand for new private residential units have been on the rise since late last year and pent-up demand following the year-end festive season plus the affordability of units at The Clement Canopy in Clementi have brought in the crowds at its launch last weekend.

195 units from the 505-unit The Clement Canopy has already sold on its first weekend of the launch – that is almost 80 per cent of the 250 units released. This new development leans heavily on 2-bedroom units with almost 40 per cent of the apartments sized between 635 to 732 sq ft and priced between $850,000 to $1.2million.

ClementiCanopyPhoto credit: http://clementcanopy.info

The growing interest in the property could be precisely because of the reasonable quantum prices. The project’s green features and location also adds to the potential resale value of the units as some buyers who have been waiting for drastic changes in the property market make the decision to strike when the iron is hot. The discounts of $6,000 to $12,000 afforded buyers over the weekend may also have sweetened deals of course.

Elsewhere, the iNz executive condominium (EC) was also launched to welcoming response. Developed by Qingjian Realty and situated in Choa Chu Kang, it is the first EC to be launched this year. E-applications for the project will end on March 5.