DUO Residences rise up

With its prime location, DUO Residences is hitting all the high notes to the tune of an average $1. 994 psf. And bringing along with it, tons of potential investors to the Bugis area. Already 87% of its 660 units have been sold since its launch earlier this month.

DUO ResidencesIts completion is targeted for 2017, just three years away from now, and with the Central Business District (CBD) and Orchard Road shopping belt just a few MRT or bus stops away, it joins the ranks of properties in the fringes of the city centre commanding high prices. At the 360-unit Concourse Skyline for example, prices hovered between $ 2, 279 to $ 2, 830 psf. This is close at the heels of the top-selling mixed-use development, Southbank on North Bridge Road.

If you have travelled past the Bugis and Rochor areas of late, you would have noticed the major changes in the landscape, both horizontally and vertically, as it prepares itself for the new Downtown Line MRT stations and new residential and commercial properties. Rental potential is incredibly promising as there are not yet as many completed condominiums or private properties available in the area as compared to other city fringe districts. With its heritage and other artistic and entertainment centres nearby, not to mention schools such as the Nanyang Academy of Fine Arts and School of the Arts, the Bugis area seems set to be abuzz with activity.

Besides the usual Novena, Newton and Geylang city fringe districts, Bugis seems to be hitting the bulls eye with investors. Are you ready to grab a piece of the pie? What other considerations should you be weighing?

Luxury Apartment prices broke $5, 000 psf

But property analysts are not bringing out the champagne yet.

Although selling prices for luxury condo apartments have broken the $5, 000 psf record, it may not yet be significant enough to indicate a rebound of the previously lacklustre luxury apartment sector. The lack of interest from potential buyers, renters and investors have signaled a continuing weak top-end property market. Low leasing demand may be the main reason for the lull.

Hamilton Scotts

Hamilton Scotts

In view of the volatile and somewhat fragile global economy, companies which hire expatriates are more cautious about providing generous housing allowances. In addition, senior expatriates are increasingly more willing to cut frills and opt for less spacious, more functional properties. These same companies may also have cut back on the number of expatriates offered relocation packages.

TwentyOne Angullia Park. Photo by China Sonangol.

TwentyOne Angullia Park. Photo by China Sonangol.

The properties which went for more than $5, 000 psf? The first was a 2,756 sq ft unit at the Hamilton Scotts apartments at the edge of Orchard Road. The unit went for $13.8 million at $5,001 psf. Considering most units were going only at $3, 401 psf prior to January’s cooling measures, a $5, 001 psf selling price meant kudos to the developers.

Further into the heart of Orchard, the freehold TwentyOne Angullia Park sold not one, but two units above the $5, 000 psf mark. One went for $5, 099 psf and the other at $5, 5600 psf in May. Prior to this year’s top high-end apartment sellers, the last apartment unit which sold above the $5, 000 psf mark was one at the Skyline @ Orchard Boulevard in September 2012. After that, prices had hovered around $4, 000 psf.

It will be a real feat to keep the high prices going, and if they do, what does that mean for Singapore’s real estate sector? How does that affect the average Singaporean?

Lowered prices for High-rise living

If you’re thinking about reaching for the top, that is. All the way to the top.

Penthouses are the creme de la creme of every condominium, and naturally they would come with corresponding prices. But with the decreasing number of buyers for these sky-high units, developers are now dangling discounts and offers for these rare but expensive units.

Signature@Lewis is located in the prime district 9, near good schools, amenities and the Botanic Gardens.

Signature@Lewis is located in the prime district 9, near good schools, amenities and the Botanic Gardens.

As the number of expatriates dip and so do their housing allowances, rental is on the downhill slope as well. City Developments Limited (CDL) has been offering a 5 per cent discount on their unsold stock of completed penthouses. These include those at Shelford Suites, Wilkie Studio and The Glyndebourne. Prices start at $2.9 million after discount.

Another property developer offering discounts on penthouse units is Hiap Hoe. At Skyline 360, four penthouse units are going at a whooping 28 per cent discount. Though still a considerable $9 million, you get a 3,929 sq ft unit, and at those prices, shaving off 28 per cent is amount to scoff at. At their Signature at Lewis project, they are offering a similarly attractive discount of 25 per cent. Prices are estimated at $4.6 to $5.2 million ($1,500 psf).

Penthouses are usually priced out of reach for most buyers, thus they are seldom the first to be sold in a project. But they do offer premium space and privacy with the larger floor areas that includes large roof terraces of double-storey units – also known as duplex penthouses.

Is there a difference between penthouses within the Central region and those in suburban developments? But of course. Industry analysts approximate penthouse prices to be at:

  • City Fringe – $1,400 to $1,800 psf
  • Outside Central Region – $850 to $1,200 psf
Martin Place Residences in District 9

Martin Place Residences in District 9

In the resale market, penthouses are even harder to come by as buyers are often able to keep them despite not finding tenants, or simply enjoy them for themselves. Rental yields for these prestigious homes are high, but harder to come by. Monthly rentals are by the tens of thousands. A 4,230 sq ft penthouse unit at Amber Residences in district 15 for example, rents for $10,800 per month. At Martin Place Residences in district 9, the price could go as high as $24,000.

Are penthouses worth investing in or should they mainly be considered for owner-occupation. Are there any cons in buying one or are there only pros, especially in the long term?

2 Doors, 2 keys, 2 rental opportunities

Shoebox units and dual-key apartments have both been taking the real estate market by storm of late. Rental opportunities are often the reasons behind these property purchases. But which will earn you the most in rental income?

Urban Vista at Tanah Merah.

Urban Vista at Tanah Merah.

The answer is obvious. A dual-key apartment will easily earn you twice the rental income with only one property. But with a shoebox apartment, it’s only one set of rent. Unless of course you have 2 properties to rent. But that would cost you the additional buyers’ stamp duty (ABSD).

Developers are quick to catch on as well, and have been increasingly rolling out a higher number of dual-key apartments in their new projects. The Fragrance Group and World Class Land for example, have launched 700 sq ft dual-key units in their Urban Vista project in Tanah Merah. The new Liv on Sophia also has such units, albeit a limited number as there were not many to begin with. The development only has 64 units in total.

Dual-key apartments first hit the market in 2009, when Frasers Centrepoint brought it to the limelight. The main purpose was to cater for large family units who wish to live together under the same roof. Dual-key units are unique in that they have 2 separate entrances with their own keys and are big enough to accommodate large, extended families.Increasingly, these units now appeal to property investors who are looking to rent out both units in order to reap more profits and more quickly. And now for the ultimate plus point: If you purchase a single dual-key apartment, you can avoid the expensive ABSD since you are only essentially buying one unit.

Liv on Sophia.

Liv on Sophia.

In January, new rulings made the second and subsequent property taxable for Singaporeans and first purchases already taxable for Permanent Residents. Singaporeans have to fork out a 7 per cent ABSD for their second property and 10 per cent for their third and subsequent properties.

For smalls families or singles who are able to afford a dual-key unit, it might be the best way to reap profits through rental of the other unit. For now, the Central region is the only area without a restriction on the unit size, thus smaller dual-key apartments are available here and the costs might be considerably more affordable even for smaller families, couples or singles. Liv on Sophia’s dual-key apartments feature a small additional room or “suite” which features a small kitchenette and sufficient space for a washing machine. As a freehold property, units are going at $2, 450 to $2,500 psf.

Holland and Bukit Timah properties Big Hit with Expatriates

Despite January’s cooling measures, rental and sale prices of residential properties in the Holland and Bukit Timah areas remain high. A district commonly popular with expatriates, they are getting increasing interest as expatriates move away from the prime areas around town in search of something not too far away, but provides privacy and exclusivity at the same time.

The Trizon condominium in Holland Village.

The Trizon condominium in Holland Village.

Rental alone saw a 4 to 7 per cent rise in comparison to 2012, according to ECG Property. Property agents are seeing a hike in enquiries and requests for short-term leases, usually of a one-year period instead of two.

Property agents have always been familiar with the popularity of homes in Districts 9, 10 and 11, and SLP International‘s research shows that sale prices have risen 8 per cent and new properties along the stretch have brought prices up even more.

New properties along the Holland and Bukit Timah stretch has brought rental and sale prices of units at neighbouring, older apartment blocks up with them as well.

New properties along the Holland and Bukit Timah stretch has brought rental and sale prices of units at neighbouring, older apartment blocks up with them as well.

For example, units at the Trizon command rental prices of $6,500 – $7000 for a three-bedder. Neighbouring Ridgewood Condominium, which is an older establishment, also commands $5000 for a 1, 615 sq ft apartment. The newer One Devonshire condominium along Holland Road has also pulled rental and home sales up along with it.

Property investors could have something to look forward to, with an upcoming residential project at the existing Henry Park Apartments site. It is situated directly across Henry Park Primary School and that could be a plus point for some families.

The rise of the Private Homes

Prices, that is. Private home prices look like they are on the way up. As suburban land prices steadily head upwards, a total of 22 per cent in 2012 alone, prices of new private properties may follow suit. 20, 879 private units were sold in January to November last year, boosted mainly by the regular supply of residential sites from the Government Land Sales (GLS) programme.

Cashew Crescent Terraces

And in 2013, as long as the supply of land sites continue, demand may be sustained at a respectable level. While the new private homes market is expected to do relatively well this year, they may stay just under last year’s numbers. The Government is keeping a close watch on the shoebox apartments sector and has implemented a cap on the number of non-landed private homes outside of the Central area. Property developers may find a drop in buyers due to subsiding rental demand.

However, landed property seem to top of the leader board with a 9.7 per cent increase, the largest rise in the private property sector. Is this because investors are expecting further rise in prices this year or at least within the next two years? Resale condominiums have also reflected a 3.4 per cent increase, though at a much slower pace compared to 2011′s 8.4 per cent.

Studio MarneForeign interest in the luxury segment is increasing, as more Chinese flock back to the market, especially as China’s economy improves. Reports reflect a hike in the numbers of Chinese buyers of properties above the $5 million mark.

If Singapore’s real estate market continues to walk the current path, it certainly puts big beams on property investors and sellers’ faces. In terms of the overall property and housing market however, uncertainty is masked. Are we heading towards the point of no return? Or is this merely healthy growth?

Home rentals – Record numbers in 2012

What could be the reason for a record number of 48, 000 leases this year? Does this signify a major shift in the preferences of home buyers and are more buying for investment purposes? Do more now own more than one property and will home rentals continue to reap in good profits in 2013?

Trilight

Median monthly rental prices for private condominiums have risen to $3.75 psf, driving tenants to look for smaller apartments. Luxury apartments however have seen a drop in rentals as corporate rental budgets may have been reduced. But as the number of new condominiums nearing completion rise, especially in the suburbs, will rental rates drop?

Industry experts are expecting an increase in the number of vacant units all across Singapore. The Urban Redevelopment Authority (URA) has mentioned a possible excess of 100, 000 units by Q3 and more than 35, 000 private homes will be ready by 2014.

Savills is however expecting a steady flow of rental yields with up to 49, 000 transactions as companies here continue to hire expatriate employees. Already more are leaning towards mass market homes in various districts around the island, veering away from the expensive prime district and city-centre options. Does this spell a possible change in dynamics in the property sector?

 

Eastside Story – Amber Road

Along Amber Road, many new properties are being built. And before they are even completed, they are already been eagerly sought after, especially by the expatriate community. Reasons that area is well-liked is clear. A heritage area with good food, shopping malls, serviced by various means of public transport and roads that lead to the city centre, airport and beach which are all just a stone’s throw away – Amber Road is set to wow.

Shore Residences Amber RoadProperties along this stretch include The Seaview, The Esta, One Amber, Amber Residences, The Cape and Silversea. Industry analysts are expecting 700 new homes in this area within the next few years. There is yet space for another 150 units as Marine Point, sold in a collective sale last January, will yield a good many more homes. Many of the properties here are freehold, making them all the more enticing to property investors.

Sales of resale units in older condominiums as well as rental yields reveal a healthy appetite for homes in the East side. Near good schools, the beach, East Coast Park and many other amenities, property investors favor this spot for obvious reasons. However, those who are purchasing a unit here only now may be at a disadvantage compared to those who bought in before the implementation of the additional buyer’s stamp duty. The lack of a MRT station might be cause for a slower rise in home prices here. But by the way Singapore is progressing, this area may have a MRT station or improved transport modes sooner or later. Then, it might be time to rake in the profits.