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6 Jun

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.

7 Mar

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.

17 Jan

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?

21 Dec

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?

 

22 Nov

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.

7 Nov

Private flat rentals unpredictable

One would think the central business districts apartments fetch the highest rents in town, but apparently not. Recent Singapore Real Estate Exchange (SRX) numbers show that flats in district 2, the Anson and Tanjong Pagar areas, were one of the worst performers in terms of private residential apartment rental.

Domain 21 condoThe areas that did well were District 14 – Geylang, Eunos, Paya Lebar and Kembangan, District 3 – Queenstown and Tiong bahru, and district 12 – Balestier, Toa Payoh and Serangoon. Private apartments in district 20 – Bishan and Ang Mo Kio, also did well with at least a 10 per cent increase.  Areas where rental prices slide include district 13 – Macpherson, Braddell and Potong Pasir, and district 11 – Watten Estate, Novena and Thomson.

Construction taking place in many places may have affected rental, for the moment, as the noise and dust may have caused the temporary drop in prices. The tenant pool may also be changing as more share units to save on the high rental prices, and there may also be a decreasing pool as the revised immigration policy kicks in. Industry experts are however expecting changes in June 2013, where more small apartments enter the market.

26 Oct

Residential property investors on the decline

The property cooling measures seem to be finally taking effect as the number of property buyers purchasing real estate for investment purposes are decreasing. Since the several rounds of property cooling curbs have been launched, the percentage of residential property investors have dropped from 38 per cent in 2010, to 31.8 per cent in 2012.

With the most recent measure being the home loan tenure period limitation, industry analysts are predicting an even further drop when the full 12-month figures are out. Despite the decline, one in three home buyers here are still looking into buying properties for investment purposes.

iProp EXPO Nov 2012With the raise of downpayments for a second and subsequent property to 40 per cent and a 16 per cent stamp duty for home owners selling a property within a year of purchase, many home owners have been putting down their children’s names on the second or third mortgages. As their children are younger and can have more years on the loan tenure, it gives them the ability to purchase bigger apartments. On paper that is. And many of these property investors may have already taken out their mortgages prior to the recent property cooling curb. Should you be a current property investor, is it a good time to enter the market?

How does this affect the affordability of homes? Is investing in residential property risky and what should your considerations be? If its answers from experienced experts you’re looking for, attending timely property and investment seminars may be one way you can gain more knowledge and ensure that you are truly making a wise decision.

17 Oct

City fringe homes see big rise in price margins

Just outside of the prime districts yet not far enough into the suburbs, city fringe homes have been under the radar for a long time. But this year, they have climbed silently but surely to the top.

Suites @ Newton, one of the popular city fringe districts.

Also termed in some instances at the Rest of Central Region (RCR) has trumped both suburban and prime district homes in the new sales and resale market. And perhaps it is simply a matter of time. With close proximity to the city, easy transport links with new MRT lines and bus services, yet just exclusive enough, away from the constant buzz of the city, it’s a wonder city fringe homes were not picked up earlier.

Renting these units out to expatriates also prove to be an easier task, especially to those who may have had their housing budgets scaled down. City fringe homes can be almost 20 per cent cheaper than city centre homes, and ares such as Balestier and Geylang have been taking the lead. Rents have also been rising for the past 2 years, up nearly 12.5 per cent. With more than 20,000 new homes in the city fringe area to be completed within the next 5 years, it might be prudent to measure how much you can get out of rental yields and consider if buying a resale unit is better than new one.