Property prices in China continue to climb

Earlier in the year, China’s government laid down new regulations in an attempt to avert a property bubble, but if last month’s 33 per cent year-on-year increase in home value is anything to go by, they may have to do a whole lot more to prevent the real estate industry from travelling dangerously down the path of no return.

chinaProperty prices rose 1.2 per cent in August in 70 Chinese cities, not only in major cities such as Shanghai and Shenzhen but also in regional cities. Last year, the Chinese government relaxed rules on foreigners purchasing properties in China, and despite a slowing economy, property prices have continued to rise. Unrealistically? Perhaps. In Shanghai and Beijing alone, prices have risen 4.4 and 3.6 per cent respectively. In Shenzhen and Guangzhou, home values rose as well at 2.1 and 2.4 per cent respectively. Previously, only the first and second-tier cities had to grapple with sky-rocketing property prices, but the effect may have trickled down to cities of various tiers.

Property analysts are certain however, that as long as land supply remains stagnant and loans are fairly easily attained, the rise will continue. Previous curbs have yet to made a significant impact on the industry and as long as supply remains lower than demand, property prices will continue to climb.

Vietnam real estate market – Young and Dynamic

In many ways and in most sectors, Vietnam could be said to be one of the most dynamic countries in South-east Asia. Its current growth and potential for future growth is becoming clearer to investors and the real estate sector is simultaneously being well-ploughed and sufficiently fertilised.

Riviera-CovePhoto credit: Keppel Land

Keppel Land and Centurion Group are just a couple of major industry players setting their sights and putting in good investment money into Vietnamese real estate. One of the main pull factors are the Vietnamese government being actively pro-business and opening their industries up to foreign investments. They are not simply making essential changes to the law that allows foreign companies the ease of starting up businesses in Vietnam, but also consistently building up infrastructure. With a young and dynamic population growing, the demand for office, commercial and residential properties is set to intensify in the next decade or two.

THe Dalat 1200Photo credit: The Dalat at 1200

Keppel Land alone has 19 licensed projects totalling $2billion in the major cities of Hanoi, Ho Chi Minh City, Dong Nai and Vung Tau with plans to build up to 25,000 new homes in developments such as Rivera Cove. Rivera Point and The Estella Heights and Estella Heights, all in Ho Chi Minh City. The Centurion Group is developing a prestigious country club and private estate situated 1200 metres above sea level and a 40-minute flight away from Ho Chi Minh City – The Dalat at 1200. It is the world’s first country club and private estate to be accredited as an Asian Tour Destination and boasts an 18-hole golf course and expansive stand-alone villas and resort apartments surrounded by nature.

Vietnam will no doubt be one of the Asean economies to watch and with the dynamism it now exudes, growth seems inevitable.

Small apartments: New fare better than resale

Prices of private non-landed properties in the central region have risen 0.7 per cent last month, a possible indication of the market bottoming out soon. New payment and incentive schemes could also have helped boost sales numbers, in particular for properties in the prime districts of 9 and 10. Across the board, prices of completed apartments have risen 0.2 per cent.

E MaisonNew small apartment units fared better than resale units as demand for the latter tends to be overshadowed by the former. Buyers are more open to buying small apartment units directly from developers rather than in the resale market as new projects tend to offer more longer-term benefits and immediate rental profits from resale units have been falling as the foreign workforce shrinks as a result of  tighter immigration policies. Most of the buyers are Singaporeans or permanent residents looking for properties to live in or rent out for the long-run, and having waited a couple of years for the property cooling measures to be lifted to no avail, are now dipping more than their toe into the pool.

July has proven to be a good month for the real estate market, with some property agents reporting up to a 50 per cent increase in sales in a year-on-year comparison.

Former HUDC Estate in Potong Pasir soon up for collective sale

Following the successful collective sale of the former HUDC estate, Shunfuville, earlier this year, yet another such property could be coming into the market soon.

Raintree Gardens Potong PasirPhoto credit: Google Maps

In May this year, Shunfuville was sold for $638 million. Now, the 175-unit Raintree Gardens on Potong Pasir Avenue 1 which was privatised in July 2014, could also be hoping for similar results as they finally attain their minimum consent level. The 201,405 sq ft site just next to the Kallang River is projected to have an asking price of $430 million, which could mean a potential $1.8 million for each home-owner in the estate. Developers may be drawn to its proximity to the Potong Pasir MRT station and the future Bidadari HDB estate, which could mean a bustling area that could potentially attract new businesses and the development of other amenities as well.

poiz-img-001The number of new private condominiums in the Potong Pasir area have been growing steadily, and most have sold well as consumers respond well to the exclusivity and connectivity of the district. One of the most recent launches in the area was that of Poiz Residences. With the St. Andrew’s Village nearby, the site will also be near primary and secondary schools as well as a junior college. It will be an en bloc sale effort worth watching as developers weigh in. One of the considerations developers may have is the length of time between getting the site and being able to start redeveloping it as the procedure in between could take at least 6 months.

 

More resale private properties sold in July

No movement may be good movement – as far as the current property market situation goes. Property analysts say any fluctuations in property prices or sales volume may be minimal for now. And as long as there are no drastic dips, the market is in good stead. Recovery may take awhile and it will probably be slow, a sudden rebound unlikely.

Hills TwoONeThere was a rise in property prices in Q2, though followed by a slight fall in July. Sales volume of resale private non-landed properties however has increased 31% and 770 units were sold last month, compared to the 586 in a year-on-year comparison. Buyers are back in action and are picking up deals which seem to be aplenty as more private properties enter the market, heating up competition in and between new and resale segments. The number of deals closed have been rising steadily since May with a 35.5 per cent increase followed by a 27.4 per cent increase in June.

For the rest of 2016, the resale market may see some heightened activity as stabilising prices prompt buyers who have waited long enough in the sidelines to jump back into the fold. The number of new launches this year is also considerably fewer than the last, and as buyers come to realise that prices are unlikely to fall further anytime soon, more may see the diminishing choices in the primary market as a sign to reconsider possibilities in the resale market.

 

 

Strata strategy – Landed homes with benefit

Though owning your own piece of land may seem the ultimate goal in terms of local property, but the maintenance fees, property taxes and other extras it comes with are often mentioned and considered much lesser than they should be.

Eight Riversuites condominium in Whampoa East.

Eight Riversuites condominium in Whampoa East.

And it is this market gap which cluster housing and strata-landed homes fill so well. These landed properties, though mostly leasehold, come with condominium facilities and amenities, not to mention the security of a gated community. In fact, so residents of me cluster housing developments even manage to foster long and meaningful relationships with one another.

Eight Riversuites is one of the latest additions to the sector and they have 19 three-storey terrace strata landed houses, each with their own roof terraces and bdedicated asement parking spaces. Some units even come with jacuzzis. Some other popular landed strata homes include those in Thomson Grand, Whitley Residences and Belgravia Villas

Strategically situated near Boon Keng MRT station in the Bendemeer and Whampoa districts, it is in a hip up-and-coming city-fringe area and is but just 3 MRT stops away from the town centre. There are a number of schools in its vinicity and value of properties around it have risen over the past few years. As MRT stations reach completion, values of properties in their vicinity will no doubt increase as well. Prices of units currently start at $850psf. 

 

Signs of property market bottoming out?  

Though the vacancy rates of private residential properties are currently 1.4 percent higher in Q2 and at a 16-year record high, and property prices 9.4 percent lower than the 2013 peak, property analysts remain positive about the outlook as these could be signs that the property market is reaching the bottom of its cycle.

7478d455d05b4f2aa26fd1e5a8ce7bd2There were 30,310 vacant private homes in the second quarter, that is 5,391 units more than in Q1. As the number of completed properties rise, with almost 11,400 new units entering the market in the first half of 2016, the rates are seemingly modest. Property prices have also been stabilizing, and as long as interest rates remain at their current level, most households will be likely to be able to hold on to their properties over the down season.

More property buyers are now making home purchases for their own use instead of pure investment purposes and many are taking the opportunity to seal deals during this quieter time. In a year-on-year comparison, sales volume has risen 11 per cent and the luxury property market in particular is enjoying a spike in buying interest as prices have fallen sufficiently, luring buyers back into the high-end property market.

 

 

 

Luxury property market heats up 

After the market lull in the past couple of years, buyers are once again picking off choice luxury units in the prime residential property sector.

ArdmoreIIIPrices in this segment have gradually become more competitive over the last year or so and sales volume has increased, partly due to this change. For example, in the first half of 2016 alone, 131 apartments priced above $5 million were sold. Only 166 similar units were sold in the entire 2015.

Investors are favoring Singapore properties they match up well against those in other global cities such as New York and London. Property analysts say most investors are still Singaporeans, though  Malaysians, Indonesians and Chinese continue to feature strongly in the investor pool as they see the value of properties here and are not deterred by the currency fluctuations.

An upcoming luxury development is the 99-year leasehold Victoria Park Villas by CapitaLand which consists of 3 bungalows and 106 semi-detached houses starting from $4.3million. In better times, these houses could have cost up to $6 million. Other high-end units currently in the market include those at Gramercy Park, OUE Twin Peaks and Ardmore Three.