Fierce bids for Perumal Road land site

A mixed-use land site on Perumal road which could potentially yield 200 private homes and an entire floor of commercial spaces have attracted bullish bids from property developers since its release in November last year.

Sturdee-Residence11 bids have been placed, the highest at 4.4 per cent more than the next in line came from Low Keng Huat at $174.08 million. The second highest bid came from China Construction (South Pacific) development. The keen activity in the land sales sector could translate into a competitive primary and thereafter secondary market which will in turn mean a ready pool of buyers who are ready to spend after the prolonged market lull over the past few years.

Average selling prices at this site is expected to hover around $1,700 psf due to the high land cost and also its proximity to the Farrer Park MRT station and other amenities such as City Square Mall and Mustafa Centre. The neighbouring plot where Sturdee Residences stands only lodged at $787 psf.

The lack of land sites available for sale in the earlier part of 2016 could have resulted in pent up demand from developers who are looking to replenish their lank banks in preparation for 2018 and beyond when market recovery is expected to happen. Property analysts are already seeing signs of market stabilisation and developers who prepare ahead of the recovery could just catch buyers at an opportune time.

 

More for less – Smaller condo apartments

With the rising prices of land plots sold under the Government Land Sales programme and with developers taking into consideration how the property cooling measures have affected buyers’ purchasing power, private apartment sizes have been diminishing since 2010.

LakevillePhoto: Lakeville at Jurong West

More apparent in units in the city fringes, average sizes have shrunk from 1,051 to 810 sq ft. And in the suburbs, apartment sizes went from 878 sq ft to 811 sq ft; though the average sizes from new projects actually dropped from 1, 113 sq ft in 2006 to 667 sq ft in 2011 but rose again to 928 sq ft in 2014.

In 2012, the Urban Redevelopment Authority (URA) put in place guidelines for the maximum number of units for condominium developments outside of the central area. Developers have since noticed that buyers are more sensitive to the total quantum price of a unit rather than per unit prices, especially since the implementation of loan curbs such as the Additional Buyers’ Stamp Duty (ABSD) and Total Debt Servicing Ratio (TDSR), hence maximising the land area and total number of units would be the best way to go.

Symphony SUitesPhoto: Symphony Suites

There are some residential projects which chose to follow their own path however, including Lakeville and Symphony Suites. But as the population continues to grow, it seems that unit sizes will only continue to diminish. Resale units may then have an edge over the smaller-sized newer units, provided pricing is equally competitive when time comes.

Encouraging response from recent property launches

Over the weekend, show flats at two new condominium launches were packed to the rafters with eager buyers and those shopping for a good deal. Affordability and proximity to transport seemed to be the biggest crowd pleasers at these two developments.

Northpark Residences saw more than 70% of their 430 units sold with most of their buyers being Singapore citizens. Prices averaged at $1,300 psf. A 431 sq ft studio apartment for example, went for $612,000 while five-bedders with an average floor area of 1,432 sq ft sold at approximately $1.89 million.

Botanique @ Bartley2At the Botanique at Bartley, most of their units, about 70%, were all priced below $1 million. Definitely wallet-friendly for the middle-upper class household in Singapore and also more plausible for those who need a home loan. And they boasted the options of turning two- and three-bedders into dual-key apartments. Situated in the midst of quite a few schools such as the Paya Lebar Methodist Girls’ School (PLMGS), Maris Stella High School and the Australian International School, the property was quite the hot target for local and foreign buyers alike. Although only 300 units were put up for sale over the weekend, almost half have been sold. The most popular units were the one- and two-bedroom apartments starting at $598,000 for one-bedders and $798,000 for two-bedders.

If the weekend response and sales were anything to go by, the next few months may not be such dull ones. Is it time the property market picked itself off the floor, dust off and hit the road running? Will the positive effect rub off on older properties in close proximity to these new launches?

 

Low sales for resale homes in January

With city centre homes leading the way, resale home prices seemed to be walking down the same path as the month before, with a dip of 1.7 per cent. Suburban homes’ decline was slightly less steep at 1.1 per cent and across the board, resale homes saw a 0.2 per cent drop in prices. On the bright side, city fringe properties did fairly well, with a 1.5 per cent gain.

The number of transactions were part of the reason for the drop. In January, only 282 private properties were sold, down from 363 in December last year. Other reasons include the loan restrictions and overall lower buying sentiments. With the festive season coming up in a couple of weeks’ time, the numbers for February may not see a drastic pick-up, but from March onwards, the figures will be telling of the year’s property market prospects.

6DeryshireAs the year goes on, industry experts are expecting buyers to pick up on the softening home prices and keep a quick eye out for serious sellers who may have potentially value-worthy offers. There are sellers out there who are still holding on to their asking prices as they wait out 2015. The year could be a tussle between the these two groups. Any extreme asking prices on both ends will be unlikely to do anyone any favours.

Currently, areas with the highest resale home value (Measured by the amount buyers were overpaying or underpaying) of $60,000 are Watten Estate, Novena and Thomson. In Bukit Panjang and Choa Chu Kang, the prices were a negative $31,000.

A major shift in dynamics this year could be caused by the higher interest rates which are likely to happen this year. Buyers may take that into consideration, together with the tightened loan limits, which does not give them much leeway in negotiations. Sellers who are eager to make a sale will do well to consider these limitations as well and understand that it will not be easy for their buyers to easily fork out additional cash.

Property relaunches something to look out for

In lieu of the price decline last year, property developers have held back on many launches, hoping perhaps for a market rebound.  The task of attracting buyers who are becoming increasingly price-sensitive falls hard on the shoulders of property developers especially as they are restricted by a time frame in which they can hold on to their units, thus we may be seeing a good many more relaunches this year.

TrillinqSome properties which were relaunched at lower prices managed to move many more unsold units. Take the 698-unit The Panorama in Ang Mo Kio for example. At it’s initial launch in January last year, only 8 per cent of its units were sold. Four months later, they relaunched and have since sold 305 units.

Buyers will however be looking out for discounts and incentives at these relaunches. And with the competition being higher than ever, with resale units adding to the private property market mix, developers may be pressed to offer attractive price baits. Huge discounts will be unlikely but properties with a higher number of unsold units and developers who are facing heftier QC fees may be those more likely to want to move these units.

Some of the projects which sold the last number of units in 2014 include Seahill, The Trillinq, Hillion Residences, Kingsford Hillview Peak, Amber Skye and Bijou.

New private homes – Sales lacklustre

The hungry ghost month and the lack of new property launches during that time have affected new home sales in August. Sales were down 15% and only 432 units were sold although 351 units in previously-launched developments were put up for sale.

The PanoramaMost of the sales came from suburban properties, especially from newer launches such as The Panorama in Ang Mo Kio and Coco Palms in Pasir Ris. Median selling prices at the former was $1,249 psf and $1,046 psf at the latter. Whilst Eight Riversuites launched around the same time as Coco Palms in May 2012, the Whampoa East property fared better with average prices at $1, 345 psf. Positive sales at these few developments could be due to the lower prices at its re-launch. The Panorama for example saw sales picking up once median prices were lowered during its relaunch in May. It was official launched in January this year.

But in the upcoming months, home sales may see a rebound as new launches in the pipeline bring a surge of buying interest. New launches include Marina One Residences, Highline Residences, Seventy St Patrick’s., and a few executive condominium developments such as Bellewoods and Bellewaters EC.

Property analysts are however cautious about the amount of increase in home sales, and the overall sales figures for 2014. The TDSR (total debt servicing ratio) framework and other property cooling measures such as stamp duties for additional properties, may keep the numbers suppressed. Some developers could also be holding their launches for next year in wait of any policy or market shifts.

Prices remain low for private properties

With a drop of 0.3%, private home prices have slipped down the slope a little further in July. Property experts are taking this dip, 2 months in a row, to mean that prices could be stablising.

Bijou1Despite four new launches of private apartments Bijou, City Gate, Robin Residences and Citron Residences, which also meant a spill-over effect on surrounding resale properties, the market remained soft. Shoebox apartment units saw the largest difference, with a 0.8 per cent drop, with the non-central regions showing the most promise. Prices in the central region fell 0.7 per cent.

The biggest factor suppressing prices is the TDSR (total debt servicing ratio) framework. Since the authorities have expressed the fact that this cooling measure will not be reduced or removed anytime soon, the property market may see more slipping and sliding for now. The new year may bring a breathe of fresh air with new launches and some new properties reaching completion, though that could also mean a further dampening of the market with a larger supply and a diminishing demand.

Resale homes are expected to receive a larger blow as they often have older designs in comparison to the newer units and property buyers could be drawn by the discounts offered by developers.

New high for Executive Condominiums

A new record for selling prices of executive condominiums may be struck this week, with the launch of the latest offering in this property market – Sea Horizon near Pasir Ris beach.

Sea Horizon ECAt $ 800 psf, it is the highest so far for ECs, according to industry players.  The 495-unit development is a hybrid between public and private housing and will be situated at the junction of Pasir Ris Drive 3 and Pasir Ris  Rise. Rare to most public properties, this one will have most units enjoying an unobstructed sea view. This could be part of the reason for the high prices.

Sea Horizon will have a range of 71 sqm two-bedders to 160 sqm five-bedders and penthouses from 129 to 160 sqm. A closer look at recent executive condo launches will reveal that prices have been on the high side of late. Several launches have come close to $800 psf. Punggol’s Ecopolitan EC was tagged with selling prices of around $799 psf.

EcopolitanWill EC prices stop short at $800 psf? Probably not. Especially with a recent EC plot tender securing a bid which will put selling prices of units at $900 psf. Both property developers and home buyers are targeting this particular property segment as they are considered the best-selling and most stable in terms of long-term investment. With the private property market  taking a hit due to recent cooling measures, interest is expected to increase. Another EC, SkyPark Residences on Sembawang Drive is expected to launch in September. Are executive condominiums truly fulfilling its purposes as a stepping stone for Singaporeans to enter the private property market? Or could it merely be a calculated option which would eventually compete with private properties ?