Private resale non-landed home prices rising

With more new non-landed homes reaching completion this year and entering the market with more vigour, resale properties will have quite a bit more competition to deal with.

65cc3e41521f45a9bee9cd4c20bcbf8cBut for the moment, good news prevails as prices of resale non-landed homes have risen albeit slightly. In March, prices rose 0.2 per cent with the number of sales maintaining at around 300 in February and March. Although there is no significant rise in the number of sales transactions or prices, at the very least prices do not seem to be dropping. This could indicate a stabilising market and where it goes thereafter is very much dependent on governmental policies and market forces.

Suburban resale homes were leading the price rise, with a 0.3 per cent monthly gain. Central region homes in districts 1 to 4 and 9 to 11 also saw a 0.1 per cent rise. It were the smaller apartments which saw a drop in prices of 0.4 per cent by the month. These shoebox apartments, with floor areas of 506 sq ft and less, were one of the hottest ticket items the last couple of years, why the depression in prices now?

Property analysts are putting it up to the increasing number of shoebox units in suburban condominium developments. Demand for these smaller units outside of the Central region may not be as high as developers had thought, and as the number of unsold or untenanted units rise, so does the competition. Buyers have more choices and will be more likely to bargain or wait for lower prices.

Sticking to previous estimates, property prices are expected to dip 3 to 6 per cent this year. Previous estimates were around 4 to 8 per cent.

 

New properties on a fresh new ride

And hopefully it will be an upwards ride.

May 2014 was a good month for the new private home market. Mostly due to the large number of properties launched, 1,487 units were sold. But after that huge spike, sales have held steady at around 300 to 400 units sold per month, with December’s showing a little lower due to the festive season.

KingsfordWaterbayThe numbers have however increased significantly in March this year, from 390 units sold in February to 613 last month. The results are promising, but there has been a few recent launches of new units at previously launched developments and also a release of pent-up demand after the Chinese New Year festivities, which could account for some of the positive vibes.  Most of the sales came from Kingsford Waterbay with 155 units sold and Sims Urban Oasis with 107 units sold. New launches are pulling out all the stops to get buyers’ attention. Competition will be high as more launches are planned for the year, thus getting first dibs with the buyers’ pool is crucial for developers.

Suburban properties are often priced below city fringe and central district properties; at 22 per cent lower than city fringe and 43 per cent lower than central region homes. Lower quantum prices seems to be the factor helping to close deals, as the property cooling measures do not work in favour of most middle-income buyers. The Skywoods and Symphony Suites projects seemed to stacked up better, but sales at Northpark Residences and Botanique @ Bartley may very well give them a run for their money soon, looking at the response from the public.

The outlook for the market this year seems spotted, with possible glimmers of hope but also tough restrictions which may put a damper on sales volume and prices.

 

Penchant for Penthouses

Although the luxury property market seems to be falling behind as property cooling measures take bite, penthouses which are few and far in between are attracting the right customers.

At the exclusive Ardmore Park district, the one-and-only penthouse at Le Nouvel Ardmore recently sold at $51 million, apparently the highest recorded since the global financial crisis. Measuring at 13, 875 sq feet, that translated to about $5,000 psf. Considering news of a recent high-end property resale at a loss of $15.8 million just broke not too long ago, industry players are understandably happy about the recent progress.

Le Nouvel Ardmore in the exclusive Ardmore Park area. Image by Wing Tai Holdings Limited.

Le Nouvel Ardmore in the exclusive Ardmore Park area. Image by Wing Tai Holdings Limited.

Prime district condominiums are all in the millionaire range and penthouses are even higher on the price charts, mostly because of the floor area. One of the largest sale of penthouses in recent years was one at TwentyOne Angullia Park which sold for $42.9 million in 2013. Other high-end apartments include The Marq on Paterson Hill, The Orchard Residences and the Ardmore Park condominium. At The Marq, four-bedders start at $20.5 million ($6, 850 psf) which makes for a higher per square foot price than the $51 million penthouse at Le Nouvel Ardmore, but with a more palatable quantum price.

Are the buyers coming back into the market, slowly but surely? What will entice them back quicker and what are they looking for in a property? Property experts expect properties which are already completed will be a much higher draw for this high-end luxury property customer base as they often prefer to invest in the tangible.

Are resale home prices stabilising?

After January’s dip in resale private property prices, February’s fall was considered slightly more positive. It was less steep for one, at 0.3 per cent as compared to January’s 0.9 per cent. Buyers have been waiting around for prices to slide further, but they seemed to have held firm. The prediction for January’s fall was originally 1.6 per cent.

Tre ResidencesLuxury homes took the brunt of the hit, with those in the city centre suffering an obvious softening demand. Suburban home sales remained level. Some of the market movements could be due to the lack of new property launches in February and the lack of activity during the festive Chinese New Year period.

Prices of shoebox apartments have been uncertain of late, as more have been completed are are now ready for the rental market. This in turn may have implications for the latter as competition runs high. Tenants now have fresh pickings to choose from and may have the upper hand when it comes to price negotiations.

In the months ahead, buyers and investors can expect a slight market shift, but not necessarily a significant one. It will be constant cha-cha between buyers and sellers and they try to suss out the other’s expectations.

Yishun no backwater town

A somewhat laid back atmosphere that speaks of a slow and nature-filled life with occasional bursts of activity and energy describes the fringe township of Yishun. This HDB estate once was called “Ulu” (a Singaporean slang for being out-of-the-way and backward), but it has progressed nicely into the genteel gem it is today.

It seems to live life just the edge, growing and filling in a gap that straddles bustling and slow. Latest news of the redevelopment of the Yishun Central, with Frasers Centrepoint Homes taking the lead in building a mixed-use condominium and mall development, Northpoint City, in the vicinity, the Yishun area may be seeing a revival of sorts.

The EstuaryStretching out in a large area between Chong Pang, Sembawang and Yio Chu Kang, it has quite the space for development and expansion. Some of the current private properties already in its midst include Orchid Park, Lilydale and The Estuary. Newer residential developments include Nine Residences, Symphony Suites and the recently launched Northpark Residences.

There are a considerable number of HDB flats in the area as well, and property prices are considered reasonable and affordable. For now. New BTO (Build-to-Order) flats were also introduced into the mix starting from 2013, putting a good 9,500 units in the estate, including Yishun Greenwalk, DBSS ADora Green and Vista Spring.

From kampung to new town. The kampung spirit remains strong.

Lowered condominium prices scores sales

Two property launches over the weekend signaled a drop in new developer-launched private non-landed property prices. Kingsford Development’s 1,165-unit Kingsford Waterbay at Upper Serangoon launched at median prices of $1,050 to $1,180 psf. With those prices in mind, buyers snapped up 140 units over 2 days, a considerable success.

Over at GuocoLand’s 1,024-unit Sims Urban Oasis, prices ranged from $1,295 to $1, 595 psf. 29 sales were secured over the weekend, bringing the total to 170 units sold since 14 February. Developers’ spirits are buoyed by consistent daily sales. Most of the buyers were young Singaporean couples and upgrades.

KingsfordWaterbayProperty launches coming up in the next few months include Northpark Residences in Yishun and Botanique at Bartley. The former has its proximity to the Yishun MRT station and the attached shopping malls as a unique selling point; the latter might be a little tougher to market as the area is already saturated with a number of newer and resale apartment developments. But property experts still expect demand to be present, though perhaps it will be strongly dependent on pricing.

The next quarter might be the right time to gauge the markets’ response to changing market trends and it might be a close competition between new properties, resale non-landed properties and executive condominiums.

Good Class Bungalows prices peak

Against all odds, the Good Class Bungalows (GCB) sector of the luxury property market has reached a price peak last month. Amidst the general market slowdown, luxury homes have been hit the hardest with a decline in sales volume and prices.

The average price for GCBs rose to $1,428 psf from the $1,405 psf in 2012. The rarity of these properties, plus their equally rare price tags, make them fodder for only the rich and wealthy. With their deep pockets, they may not be as affected by the recent property market slump as the everyday joe. There are only 3,900 Good Class Bungalows in Singapore, and they are located in gazetted areas. Only Singaporeans are allowed to purchases these properties.

GoodwoodResidencesWith the lack of foreign buying of local property due to the 15 per cent Additional Buyers’ Stamp Duty (ABSD) levied in 2013, the luxury home market has been on the downward slide for sometime. In Sentosa, where anyone, local and foreigner alike are able to purchase a property, only 3 bungalows were sold last year at a 20% price drop. Even with the lower prices, average selling price was at $1, 676 psf.

Non-landed luxury apartments also did not fare well last year. The most number of units sold were at Goodwood Residences. 41 units were sold at a median of $2,461 psf at this Bukit Timah Road property. This may be due to high competition in the market with 7 luxury condominium developments completed last year, including Ardmore 3, Le Nouvel Ardmore, Sculptura Ardmore, Tomlinson Heights, Hana, Nouvel 18 and TwentyOne Anguillia Park.

Competitive pricing will help Property developer move units quicker

Home mortgage interest rates look set to rise sometime this year, and while new properties continue to come into the market, buyers will be spoiled for choice with executive condominiums, resale private apartments and new condominium units all competing for their attention.

Trilive KovanPricing might then be the differentiating factor in the current property market which is still finding its footing. In January, Symphony Suites in Yishun proved to be one of the best sellers in the non-landed private property market. Prices averaged at $1,010 psf, which was not considered to be on the higher end of the price spectrum. Most suburban properties fared better, making up 62 per cent of the total sales numbers last month. City fringe properties followed behind with 28 per cent and city centre homes took up only 10 per cent.

The TDSR (total debt servicing ratio) continues to be the main obstacle for buyers as the loan amounts they are now able to receive have been largely reduced. However, developers are unlikely to make drastic price reductions as land prices have been high for the past two years.

Contrary to concerns that new properties may outshine previous older launches and resale properties, some older developments have fared well in the last month. Trilive in Kovan sold 22 units at a $1,562 psf median price while 20 units in Jurong West’s Lakeville also exchanged hands at the average selling price of $1, 378 psf.

While the influx of new units and restrictive loan limits may be the way things go for the year ahead, the demand for residential properties may not necessarily have disappeared altogether. It may simply be a matter of buyers taking longer to weigh their options.