Property mortgage sales even include uncompleted units

A weakening rental market and the growing supply of new homes have pushed even more units into the realm of mortgage sales.

Silversea1Even uncompleted units are now going under the hammer. While only 3 properties were auctioned last year, the number have more than quadrupled to 13 in the same period this year. More mortgagees are defaulting on their loans, which could be largely due to the diminishing loans they are now able to secure based on the debt servicing limits, increasing competition in the rental market and an overall property price drop.

Investors who have been dipping their toes into too many properties may be finding themselves unable to service the multitude of loans taken on multiple properties, in particular smaller one-bedders or studio apartments which are only reaching completion in the recent couple of years. Some units at The Greenwich in Seletar and euHabitat for example, in particular smaller one-bedroom apartments priced at $1 million or below, are being put up for auction as their owners are overstretched financially and find it difficult to secure rents sufficient enough to cover their mortgages. Larger penthouses with irregular layouts above 1,500 sq ft and priced above $2million are also finding it difficult to find buyers or tenants as they exceed the budget of many investors but may not yet fulfil the requirements of affluent or high-networth buyers.

The GreenwichSome of the units put up for auction this year include a one-bedroom penthouse in Guillemard Edge, a three-bedder in Bartley Residences and a four-bedder in Silversea condominium in Marine Parade. The latter was sold at $1,529 psf or a total of $3.9million.

 

Prices of suburban properties dipping

Prices of new properties in the prime central districts have been rising, even as the market dulls. Suburban homes are feeling the strain put on the market by the influx of completed new homes this year.

The PanoramaBuyers seeking out properties in the suburbs tend to be more price-sensitive, and are often hampered by the total debt servicing ratio (TDSR) framework and the additional buyers’ stamp duty (ABSD), leading to higher competition from an expanding pool of stock for a shrinking pool of ready buyers. Prices at The Panorama in Ang Mo Kio have fell 9.7 per cent since its launch to $1,213 psf and similarly in Clementi, units at The Trilinq are now priced around $1,408 psf, almost 9 per cent lower than its launch price.

In comparison, buyers of properties in the prime central districts are more affluent and are able to afford the prices properties here demand. For example at Robin Residences, selling prices are now hovering at $2,371 psf, 2.4 per cent higher than its launch-price. Buyers of centrally located properties also have stronger holding power and less likely to sell unless the price is right.

RObin ResidencesThe price gap between suburban and central district homes have been widening. Last year, CCR (core central region) new-home price premiums were 81 per cent over those in the OCR (outside central region). As more OCR homes hit the secondary market this year, how will smaller investors handle the competition?

 

Upper Thomson – Foodie and Nature Haven

Upper Thomson is quickly coming into its own as the next foodie, nature and lifestyle haunt, especially with its connectivity heightened by the upcoming Thomson-East Coast MRT line. This leafy North-east suburb will soon be just a short train trip away from the town centre, the CBD and even the other ends of the island.

183 LonghausThe number of new condominiums, hip food and beverage outlets and educational centres springing up in its midst has made Upper Thomson a much sought-after area for property investment. Condominiums which have been or are being built at the moment include Thomson Grand, Adana Thomson, Thomson Impressions, Thomson Three, The Panorama and most recently – 183 Longhaus.

The latter is developed by TEE Land and is essentially a mixed-use concept which will fit in superbly with the nearby landed homes and indie businesses. Despite being a low-rise 4-storey project, it will feature 10 commercial units and 40 apartment units including 14 penthouse units ranging from 88 to 110 sq m. The amenities such as banking facilities and the Thomson Community Club, and transport options such as bus stops and the circle and Thomson-East Coast line MRT stations nearby are big pluses; not to mention the MacRithchie and Lower and Upper Pierce reservoirs are just round the corner.

Adana CondoDespite the temporary inconvenience residents of Upper Thomson might have to endure as major road and tunnelling works are underway, the future for this suburban district looks bright.

843 new private homes sold in March

And that is a 8-month high, especially since the last new property launch was 4 months ago – The Poiz Residences in November 2015. That could be the glimmer of hope the local property market has been waiting for, though some analysts are still cautious about a obvious rebound as the government has tightened their grip on land supply this year.

WIsteria YishunThe rise in transactions of new units last month could be partly due to the pent up demand over the Chinese new year lull in February and the lack of new launches in the first 2 months of the year. Only 209 units were launched in February while the number more than tripled to 682 in March. The number of units sold doubled from 303 in February to 843 in March. The 2 new launches in March were Cairnhill Nine and The Wisteria.

Although the government has announced that they will be unlikely to ease up on the property cooling measures anytime soon, some buyers who may have been waiting in the sidelines for better deals may be coming to realise that prices will not be falling drastically this year and may have finally made the purchase move last month.

Overall, market sentiment is picking up and buyers are picking off bargains and affordable units before the winds change. New mass market suburban properties are capturing eyeballs and wallets.

High vacancy rate hits property rental market

The days of brisk rental demand for private apartments could be going as the high number of vacant private property units in the market reached a record 10-year high at the end of 2015. Rents have fallen 4.6 per cent last year and analysts are predicting a 6 per cent drop this year.

Cassia EdgePhoto: Cassia Edge condominium

With the sheer number of new condominiums and smaller units introduced into the market in the last five to ten years, the opportunities for investors with varying financial capabilities have expanded vastly. Many of them have purchased smaller suburban units for investment purposes but 2016 may not bode well for those looking for a quick turnaround in terms of resale or rental of these units. The number of new condominium units hitting the market this year will mean increased competition for a diminishing tenant pool which will squeeze rental prices downwards. Many landlords are already finding it difficult to find tenants with the same asking prices as before, and have found it necessary to lower prices by 10 to 20 per cent.

Districts 19 and 20, which includes Bishan, Ang Mo Kio, Hougang, Punggol and Sengkang, will have the highest number of new units in their midst this year – approximately 8,200. This is despite the fact that rental prices have not risen much in these districts over the past 3 years. Property experts are however positive about the huge redevelopment of the Seletar Aerospace park which may continue to provide the demand for rental units. In the eastern districts however, demand may be waning as expatriates working in the hard-hit financial and banking sectors could be leaving the country.

Foreign buyers favour luxury properties in Singapore

Private apartments up to the size of 506 sq ft, more popularly known as shoebox apartments, have been having a hard time finding new owners as prices of completed units fell 1.1 per cent. However, non-central region private apartment prices rose 0.3 per cent in February and central region units have fared surprisingly well.

St Regis ResidencesThe recent sale of a $15million St. Regis Residences penthouse may have given the owner in a $3.3 million profit margin and given last month’s figures a boost despite the low sales volume. Overall, private property prices rose 0.4 per cent last month, following a 0.2 per cent rise in January. The luxury property market has not been in the best of health last year, but things may be taking a turn for the better.

Though property analysts are conservative about their predictions of a market turnaround this year, it is nevertheless a glimmer of light. With rising home prices in London and Hong Kong, foreign buyers are taking a second look at properties here in Singapore for investment purposes. Approximately 92 per cent of the sales and subsales transactions registered in the core central region come from foreign buyers.

Sturdee-ResidenceProperty investors with less holding power may be pushed to sell their units, in particular the smaller ones as rental prospects have dimmed, as oil, gas and marine sectors wobble.

How likely is the China property bubble?

Buying properties in China could be risky business though the authorities are beginning to plug loopholes in the system such as property agencies acting as intermediaries in housing transactions. When your property agent or agency in China offers you a loan for your down payment, know that it is illegal.

beijing-tongzhouPhoto credit: Beijing Tongzhou integrated development by Perennial Real Estate.

As the population shift from countryside to cities, first- and second-tier cities are becoming more crowded and home prices are sky-rocketing. Money stimulus policies which began in November 2014 may have contributed to the boom, especially in cities such as Beijing, Shanghai and Shenzhen. Home prices in Shenzhen for example, have climbed 52 per cent in a year. The Chinese government has however been implementing cooling measures to curb or at the very least slow down the sharp rise and are positive that a property bubble similar to that in Japan in the 1980s will not happen.

While the top-tier cities are enjoying the benefits of the nationwide population shift and influx of foreign investment monies, smaller third- and fourth-tier cities are suffering from a pressurising load of unsold inventory. Reports of ‘ghost towns’ were not uncommon from more than a year ago and stock has only increased since then. In fact, 70 per cent of the 739 million sq meters of China’s home inventory comes from these smaller cities. The lack of consumer interest in these cities could mean a downward spiral for the property markets in these lower-tier cities as the potential for value appreciation becomes narrower. Despite the government’s projected minimum annual growth of 6.5 per cent from now till 2020, market regulations may have to be tweaked to boost specific sectors in order to shine the spotlight on more than just the top-tier cities.

Luxury apartments in Thailand taking off

Thailand – one of the many South-east Asian countries frequented not only by regional visitors, but also those from countries afar who fancy a spot of sun, great food and even greater shopping. With short-term apartment rental schemes taking off and businesses relocating headquarters regionally, the construction and property markets have seen a boom in the past decade.

Chewathai InterchangePhoto: Chewathai Interchange (photo by TEE Land)

Just a stone’s throw away from the Don Meaung airport, Singapore developer TEE Land is building its first landed property development, Chewarom Residence. The project will have 15 detached and 66 semi-detached houses, and is set to launch in the second or third quarter of this year to prices starting from $194,500 (5 million baht). Though these units are only available to locals due to foreign property ownership rules, this is nevertheless a coup for developers outside of Thailand.

TEE Land also ha a number of other condominium developments in Bangkok and Nonthaburi. One of their most exciting ventures include a 279-unit, 26-storey condominium Chewathai Interchange, which will boast a host of communal facilities such as a sky swimming pool, business centre and 24-hr security. TEE Land’s subsidary, TEE Development, owns 49 per cent of Chewathai.

Hallmark NgamwongwanPhoto: Hallmark Ngamwongwang (photo by TEE Land)

Another 560-unit condominium, Chewathai Petchkasem 27 has a freehold status and will be made available to foreign buyers by September starting from 1.5 million for a 40 sq metre unit. Situated opposite Siam University near Bang Wa BTS station, it will be ready by 2018 and can easily to rented out.