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16 May

New Homes sales halved

New properties rode the big wave earlier this year in the first quarter. Now, the tide has brought them back on the ground.

Sant Ritz near Potong Pasir MRT station.

Sant Ritz near Potong Pasir MRT station.

But the reason may not be because the fish are not biting. There are simply fewer launches in April. Although new home sales saw a spike in March, industry analysts are putting it down to pent-up demand following January’s cooling measures. Are April’s numbers more reflective of the actual effect of the property curbs? As the heat from Q1′s fever dies down, home buyers who are shopping for a home may be holding back in wait of potential launches in the coming months.

The most recent launches were Sant Ritz in Potong Pasir , Jade Residences in Upper Serangoon, Cosmoloft in Balestier and The Siena at Farrer Road. Data from the Urban Redevelopment Authority (URA) indicated 104 units sold at the 214-unit Sant Ritz, at an average of $1,494 psf. At Jade Residences, buyers snapped up nearly half of the 171 units at a medai of $1, 592 psf.

cosmoloftBuyers are becoming more savvy, and are increasingly not only drawn by a property’s location but also design and potential investment value. Do buyers now have the upper hand and will developers be pressed to lower selling prices? CBRE executive director of residnetial Joseph Tan believes that buyers now draw the line at properties ranging between $900 to $1, 600 psf. Properties selling above that price line may not see as many takers. For now.

Deputy Prime Minister Tharman Shanmugaratnam’s statement last month which spoke to the unlikelihood of more cooling measures could also mean buyers are now in less of a hurry to buy up properties and can well afford to play the waiting game. It may seem like a supply glut could be near, but as soon as population increases, and depending on how fast a rate, demand will soon rise as well. Is it better to buy now than to wait for prices to drop?

Upcoming launches include KAP Residences at King Albert Part, Corals at Keppel Bay, Liv on Sophia near Dhoby Ghaut MRT station and Stratum in Pasir Ris.

14 May

Singapore’s Luxury home prices remain stable

In most countries across Asia, high-end properties are seeing a considerable rise in prices. Only in Singapore and Hong kong, where property cooling measures were implemented, did prices remain stable.

While luxury homes here saw a 0.6 per cent dip in prices, in other major Asia cities such as Beijing, Shanghai, Bangkok, Kuala Lumpur, Manila, Jakarta and Mumbai, prices leaped an average of 6.1 per cent year on year. Singapore is the only city where year on year high-end home prices fell, at 4.3 per cent.

Corals at Keppel Bay.

Corals at Keppel Bay.

Which city saw the largest jump in luxury property prices? Jakarta – with an increase of 8.7 per cent in Q1, that is a whooping 32.9 per cent year on year. Kuala Lumpur and Beijing saw steady quarterly rise in property prices as well. But it is worth noting that the Chinese government is quite aware of a possible property bubble and may be clamping down on building and investments soon. Jones Lang LaSalle‘s head of Asia Pacific research, Ms Jane Murray, is predicting a fall of up to 5 per cent for high-end property here in SIngapore. As population and economic growth slows, the same is expected of the property market.

Have investors veered away from Singapore properties to focus on real estate  elsewhere in Asia and are Singaporean investors doing the same? As property cooling measures continue to kick in, will they deter home buyers even further? What will it mean for Singapore’s real estate market and is this the intended purpose of the property cooling measures?

8 May

Novena Ville will soon be Novena Regency

As far as mixed-use developments go, the new kid on the block is Novena Regency. Taking over the spot of the previous Novena Ville, (foodies might remember it as the location of the popular Wee Nam Kee Hainanese Chicken Rice),  Novena Regency will consist of 45 shop units and 55 residential units. It is set to receive its Temporary Occupation Permit in 2017.

Novena RegencyConsidering its prime city fringe location, the proximity to the Novena MRT Station, shopping malls such as Novena Square and United Square, post offices, churches and offices, Novena Regency looks set to bring even more life to the area. Launched just a few weeks ago, property developer Fragrance Realty, a subsidiary of the Fragrance Group, is predicting a more than healthy demand for both their shop and home units. Shop units are going for $7, 000 psf and the apartments at $2,300 psf.

Fragrance Group executive chairman and chief executive Koh Wee Meng has expressed positivity in buyer demand, “We are fairly confident that buyers will be attracted to its location – an exclusive private estate enclave within the Novena vicinity”. Commercial units will face the main road, where human traffic is heavy both on the weekdays from the offices nearby, and also on the weekends from the church-goers from Novena Church.

And if you’re looking for a home that is both private yet highly convenient, Novena is the prime spot. Already more than 44 units have gone to eager hands since its launch in mid April. Not many residential units, made up of one-, two- and three-bedroom units, are left. There are quite a number of condominiums nearby, but if you’re looking for a unique development that combines exclusivity with vibrancy and convenience, these Novena Regency units might be just the thing to look at. Will apartments in their vicinity see a corresponding response from buyers?

2 May

Tanjong Pagar – Old School charm with New prices

Altez condominium.

Altez condominium.

Designated as one of the very few conservation areas in Singapore, Tanjong Pagar holds a distinct charm and mixture of the old and new, straddling chinatown and outram and the Central Business District. The Pinnacle@duxton towering over old conservation shophouses outlining the upcoming arts and design enclaves, modern condominiums, hotels embracing the skyscrapers of Shenton Way and old HDB flats just round the corner.

With the new Maxwell MRT station on the Thomson Line coming up within the next decade, this area might once again be vibrating with the heartbeats of a cosmopolitan melting pot. The new MRT station is expected to largely increase the amount of human traffic in the area, including residents from across the Causeway. Shophouses along Tanjong Pagar road have seen a sharp hike in rents in recent years, as new properties along the stretch bring new residents and human traffic to the area. And in turn, as the area becomes more vibrant, rents of residential properties may also rise.

New high-rise residential properties such as Altez, Skysuites@Anson and Spottiswoode Suites; and a mixed-use development along Peck Seah Street all hold a considerable amount of investor potential. Shophouse units along the main road are calling the shots in term of rental prices as well. Recent price appreciation have rised rents to around $4,000 per month on average for a 700 sq ft ground floor unit, to up to $10,000 per month for restaurant owners.

Tanjong Pagar RoadOne of the major concerns about living and running a business in the area could be the lack of parking space. Street parking is almost impossible and there are hardly any parking areas near enough to the business or residential homes in the vicinity. Do homes in this area command higher rents? As compared to other prime district and city centre homes,  is the investment value higher? Once the Pinnacle@Duxton completes its Minimum Occupation Period (MOP), will units in the area flood the resale HDB flat market?

24 Apr

Foreign buyers back in the market

Have the cooling measures done their job in managing property prices? Foreign property buyers have held back for the last quarter,  but are now back in full force. Instead of aiming high for prime district properties, they have instead gone for cheaper options, namely suburban condominiums,

La Fiesta condominium in Sengkang.

La Fiesta condominium in Sengkang.

Foreign buyers made up 10.7 per cent of 4,884 private homes sold in Q1 of 2013. Chinese and Indonesians made up the largest numbers, followed by Malaysians. The number of Mainland Chinese buyers particularly has been on the rise once more. This could be partly due to the tightening of property buying policies in their own country.

Almost half of the 108 foreign buyers in March alone were Chinese nationals. With their strong buying power, even with the newly raised 15 per cent Additional Buyers’ Stamp Duty (ABSD), a private condominium of $1.53 million is still very much affordable in their books. One of the most popular suburban condominiums in district 19 was La Fiesta in Sengkang and in prime district 10, D’Leedon.

d'Leedon condo project on Farrer Road.

d’Leedon condo project on Farrer Road.

Before December 2011, when the ABSD was first introduced, foreign buyers made up 21.2 per cent of the total home sales. By the first quarter of 2012, the proportion has dropped to 5.7 per cent. The current level is at 10.7 per cent. Jones Lang LaSalle Singapore research director Ong Teck Hui has said that Singaporean investors seemed to be more affected by the cooling measures than PRs and foreigners.

In short, the additional buyers’ stamp duty has merely herded the buying crowd in another direction. Are they competing with local buyers? If there are sufficient private homes to go around, then market forces will keep the real estate machine chugging on its own. Does this answer what Singaporeans have been asking for in terms of housing prices and supply?

23 Apr

Homes in Singapore, JB and even Batam.

Remember the Singaporean sitcom Phua Chu Kang? “Best in Singapore, JB and some say Batam”. Now some may be able to say the same about their homes in all 3 cities.

Funtasy Island

Waterfront living might be out of reach for some in Singapore, but at a fraction of the cost, you might just be able to get the same in Batam. With easy accessibility from our shores, Johor Bahru has long been an area investors hone in on. Now there’s Batam, less than an hour’s boat ride away.

Indonsian-based firm P.T Batam Island Marina are the people behind a leasehold development which will open by mid-2014. Named Funtasy Island, it consists of 450 villas and 150 apartments. Already more than half of the villas have been sold, 70 per cent to Singaporeans. Buyers from Europe, the United States make up the rest.

Aqua Villa on Funtasy Island.

Aqua Villa on Funtasy Island.

Just 20 minutes away from the Singapore Cruise Centre and just 16km from Sentosa Cove, the idea of sailing from home to home might just be possible. Think other cities like New York, Sydney and Miami where the waterways are a practical way of travelling between places within their boundaries, Singapore might be joining their ranks soon.

So just how much does a villa at Funtasy Island cost? When they were launched in 2011, they went for as little as $235 psf, which is an average of $500,000 per villa. That might not even buy you a HDB flat in Singapore. A 684 sq ft apartment at the 150-unit The Cove starts at $348,000 and comes with a 8 per cent rental guarantee for five years, especially since there is no restriction on renting the homes out to tourists. Besides residences, Funtasy Island’ will also include a tourist park featuring the 328-hectare island’s eco-attractions such as nature hikes, fishing and snorkelling. There will also be a 24-hour in-house security on the island.

Forest Bungalow on Funtasy Island.

Forest Bungalow on Funtasy Island.

So if you fancy living the modern kampung life for less than half the price of what you might get on mainland Singapore, it might be fun to make fantasy, well, funtasy.

17 Apr

The case of the shrinking condominiums

Unit size, that is. It used to be that a one-bedder in 2008 measured an average of 678 to 947 sq ft. From 2010, they measured 538 to 678 sq ft. When the minimum becomes the maximum, it may be the sign of times.

 

One of the latest new properties offered - Natura condominium at Hillview Terrace.

Natura condominium at Hillview Terrace.

Property developers have been shrinking condominium sizes to make them fit into the pockets of buyers. And these are not restricted by area, across the board, homes are getting smaller. Shoebox apartments have been the focus these past couple of years, but now, it’s not only the studio apartments which are put under the microscope. Two and three-bedroom units have also been getting the slice. For example, a three-bedder in Natura at Hillview Terrace measures 635 sq ft, that’s even smaller than the smallest one-bedder unit launched in 2008. And before 2008, the same would have gotten you 1,500 sq ft.

As Singapore’s population rises, the challenge to contain all in livable conditions fall not only in the hands of the Government, but also on private developers. High land costs, labour costs, material costs have all contributed to the situation. It’s either higher prices or smaller spaces. Or both. But does this mean buyers now pay less? As competition increase, property developers find themselves fighting for the same crowd of buyers, and trying to put out products which fit into their price points.

Midtown Condominium at Hougang.

Midtown Condominium at Hougang.

Most buyers are willing to fork out $1.5 million for their first or second home, especially since loan limits have been tightened in the most recent round of property curbs. But experts are less concerned about the small size of shoebox apartments than two and three-bedders. They have voiced their concern that while it is reasonable for one person to live in a 500 sq ft studio space, it may not be so for small families to live within 600 to 700 sq ft. And these not only apply to private condos, but also to ECs (executive condominiums).

The trend looks set to continue, but is there any more space left to shrink? What quantifies “livable” space and are Singaporeans getting the quality of life they need?

10 Apr

Slow private home sales – The Grange Road effect?

Is this merely a trend that is happening to properties along Grange road or are other city centre properties suffering the same fate? Prime district properties have been nursing a bruise on its sales records since last quarter of 2012. January’s new round of cooling measures with the increased additional buyers’ stamp duty (ABSD) and the threat of possibly more to come, has put the damper on the market even further.

Twin Peaks condominium at Leonie Hill.

Twin Peaks condominium at Leonie Hill.

Even new property launches, which have been selling like hotcakes in the suburbs, along this stretch have been falling flat. The 462-unit Twin Peaks have sold 68 of the 70 units released. Median sale price stands at $3, 157 psf. At The Lumos, although units went for sale as early as 2007, only 18 units have been sold. That is less than half of the 53 units in the high-end residential project.

Even completed projects have found the recent situation to be an uphill struggle. Cliveden at Grange, which was completed in 2011, has sold 80 per cent since its launch in 2007. That’s an average of 18 units per year. The increasing number of new launches in the vicinity certainly have not helped things, neither for the new properties themselves nor their older neighbours. The newbies on the block include iLiv@Grange, Ferra and Opus at Grange.

Cliveden at Grange condominium project.

Cliveden at Grange condominium project.

Resale home prices and sales numbers have already shown a dip. In 2012, only 21 resale homes were sold in the Grange road area. And rental prices have also slowed by 9.3 per cent to $8.49 psf in March 2013.

Will the sky-high prices of these sky-high luxury apartments continue to skim the price ceiling or will they drop as time passes? Industry experts are expecting sales in the area to pick up some slack this year, as the exclusivity of the Grange Road district and corresponding improvements in the Western economies may bring investors back for seconds.

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