What makes a property tick – Exclusive address and prime location

Though the prognosis for real estate this year may not seem positive, some properties may still sell well. With bigger mass-market condominium projects slashing prices to bring in the sales, smaller developments with lesser units at a prime location and an exclusive address may take the cake this year.

Cluny Park ResidenceA recent million-dollar condominium at the Cluny Park area has garnered strong interest from buyers with thickly-padded pockets. With only 52 units for sale, the freehold Cluny Park Residence has already sold 20 – 6 two-bedders and 14 four-bedders. The project slated for completion in 2016 only has two- and four-bedders and is designed by SCDA Architects, the same people behind The Marq on Paterson Hill and Botanika at Holland Road.

Developers are upbeat about the ultra-rich still buying up properties with well-thought-out concepts, attractive locations and a strong potential for development in the area. In other words, those looking for long-term investments will still be on the lookout and may purchase whenever they come across a project worthy of their money.

Surprisingly, bigger units were the draw. A 754 sq ft two-bedder at Cluny Park Residence is going at $2.3 million and up to $8.3 million for a 2,842 sq ft four-bedder penthouse. The next exclusive mixed-use project to be launched is likely to be Ascent @ 456 on Balester Road this weekend. Prices for its 28 three-bedders of 689 to 829 sq ft are expected to be between $900,000 to $1.2 million and may be perfect for the beginner investor.

Shadows cast on property market

New properties are revving up their engines once more. As the market prepares themselves for these launches, what could the consumer expect?

Resale private properties situated near the sites of new properties to be launched this year may be slightly affected by the prices set by these new kids on the block. And as resale HDB flat prices dip, HDB upgraders may also not have as much as before to spend.   As developers find it harder to attract buyers since some have since redrawn from the investment pool as their finances are restricted by loan limits and mortgage curbs, prices of these new properties may be lower than expected. Properties nearby may then be forced to do the same with their resale units.

Tanglin ViewIn areas with potential for redevelopment and growth, such as Alexandra and Tanglin, competition may be fiercer. For example at Tanglin View condominium, the going rate used to be $1,600 psf a year ago, but now the average selling price stands at $1,400 psf. Similarly for Ascentia Sky apartments, prices have dropped from $1,900 psf to the current $1,500 psf.

But there are still profits to be made for private property sellers. Even though prices may not be as high as a couple of years ago, properties which were purchased 10 to 20 years ago may still find suitable buyers. Property prices today are definitely still much higher than a decade ago. Those who were hoping to rake in a quick profit with properties bought less than five years ago may find themselves having to hold on to their properties for slightly longer to wait out this year’s lull.

For the serious home buyer, it could be the prime time to buy.

Foreign property buyers not biting

National Development Minister, Mr Khaw Boon Wan has announced a significant drop in the number of foreign buyers of property in Singapore, from 17 per cent in 2011 to only 7 per cent in Q3 of this year. From 1, 400 transactions per quarter in 2011, it’s now down to 330 transactions last quarter.

Was the high in 2011 reason for the government implementing the 10% Additional Buyers’ Stamp Duty (ABSD) in December of the same year, and is the current drop the intended goal of that exercise? Sub-sales, which are an indication of the property speculation level in the market, has decreased by 3 per cent. It stood at 7.6 per cent in 2011.

The Creek in Bukit Timah.

The Creek in Bukit Timah.

This year, there were a few rounds of property cooling measures, including a new debt-servicing framework and also caps of loan limits. Increase in the ABSD percentage may have also put a bitter taste in the mouths of some investors. The luxury market has been quiet for awhile, but property developers seem to be hopeful about next year, with some holding back on launches, waiting out the year-end festive period which is usually a lull period for the property market.

Moving forward, Mr Khaw says regulatory policies will need to remain nimble in order to deal with a fluctuating and ever-changing industry. Although many other countries have had stricter property-buying rules for foreign buyers, such as in Australia, it does not necessarily mean the property market is entirely stable. They are in fact experiencing signs of a property bubble and thus being able to react to market response is a skill the authorities will have to hone. Perhaps also with some good luck on the side.

There are no restrictions on foreigners purchasing properties in Hong Kong. Will investors turn their attention there instead? A comprehensive listing of properties for sale and rent are available at GoHome.com.hk.

There are now increasing restrictions on foreigners purchasing properties in Hong Kong. Will investors turn their attention elsewhere instead? A comprehensive listing of properties for sale and rent are available at GoHome.com.hk.

In Hong Kong, the government is already imposing a 50% down payment on properties. With the minimum sum raised six times over less than three years, they seem determined to find ways to make homes more affordable. The Singapore government has not resorted to such drastic measures yet, but in future, will we go down the same road? Will more Singaporeans be able to afford their own homes then?

EC Easy

Despite the recent loan curbs flexing its muscles, the market seems to be responding with exuberance, but only to executive condominiums (ECs). The financial restrictions placed on property loans may have made it more difficult to purchase private properties, but it has not yet applied to executive condominiums, thus making this sector ever more attractive to buyers. In any case, ECs will become private properties once it passes the 10-year mark.

Sea Horizon EC near Pasir Ris Beach.

Sea Horizon EC near Pasir Ris Beach.

What makes the difference? If you own a HDB flat but wish to apply for an EC, you need to sell your HDB flat once the EC is completed. Which means you only essentially have one property at hand at any one time. And under the new TDSR (total debt servicing ratio) framework recently set by MAS, the bank will only calculate the monthly payment for your EC unit. But if you were to purchase a private property whilst holding on to your HDB flat, the bank will calculate the monthly mortgage payment of both your HDB flat and private property, which makes it harder to loan the maximum amount. This in totality, affects the amount of money you can loan from the banks, and thus may require you to have more cash available before making a private property purchase.

LUsh AcresThe most recent EC launches were wildly received by buyers, Sea Horizon in Pasir Ris mostly for its unique location and Sengkang’s Lush Acres for its amenities and potential for growth. Sea Horizon was oversubscribed by three times, with 1,500 applications for its 495 units, making it the most subscribed EC in 2013 thus far. Most exec condos have been located in centralised, more urban landscapes, but Sea Horizon overlooks Pasir Ris beach, making its seaviews a unique selling point for its developers, Hao Yuan Investment and Sustained Land. Over at Lush Acres in Sengkang, 76 per cent of its 380 units were already sold over the weekend. Prices averaged at $785 psf and total prices ranged between $704, 000 to $1, 275, 200.

With this new consideration in sight, will buyers now flock more fervently to EC launches and could this possibly nudge the authorities to in turn adjust the criteria for EC purchases? How will that affect the overall real estate landscape?

More aiming for two-bedroom apartments

This is on the back of the recent property cooling measures and declining rental demand. Most investors have previously gone for one-bedders for the affordability and rental potential. But as the landscape changes under the bent of most recent adjustments in the real estate industry, market demand is now for two-bedders instead. Buyers are opting for this property type as they provide a better option should they wish to live in them instead of merely relying on their property purchase for rental purposes. Borrowing restrictions could also have played a big part in the change in the direction demand blows.

Urban Vista at Tanah Merah.

Urban Vista at Tanah Merah.

Property developers have also began reducing the number of one-bedroom units within a private residential development. For most suburban projects, two and three-bedders could be the most popular and numbered units. In prime units however, due to space restrictions and the high psf prices, the take-up rate of one-bedders are still high.

In a number of private properties launched only this year, such as Urban Vista, D’Nest, The Trilinq and Novena Regency, two-bedroom apartments were selling faster than one-bedders. Property buyers are apparently now purchase homes rather than properties. Meaning owner-occupation takes priority over investment yields. Two-bedders also have a lower psf prices with a more affordable quantum. In the long run, two-bedders are deemed more prudent investments against a weaker rental market as compared to one-bedders which may be more susceptible to market downswings.

CosmoloftThe dip in interest for shoebox units also shows in the slowed sales of units at the newly launched 56-unit freehold condominium in Balestier, Cosmo Loft. According to Urban Redevelopment Authority’s data, only 4 units were sold since its launch in June this year. In the previous couple of years, shoebox units have been all the rage, with one out of seven units sold in 2011 being a shoebox flat. Some of the most popular developments with shoebox units were Spottiswoode 18, Skysuites@Anson and The Interweave.

Does this shift in dynamics an early indication of the possible turning point of the Singapore property market? Is the bubble, if it could be called one, about to burst?

New properties to test waters post cooling measures

The best way to see how property buyers respond to the recent property loan restrictions may be looking at how they respond to the latest new property launches.

Vue 8Over the weekend, a number of new condominium projects were launched. 99-year leasehold Vue 8 Residence in Pasir Ris Drive 3 is one. With sea views and a popular location, it is set to sell at $900 to $1,200 psf. The slight sub-average prices, as compared to the $1,300 psf of similar new launches in the area, might just be the good measure of pick-up rate. There are 463 units in total, contained in eight 16-storey blocks. Units range from a 467 sq ft one-bedder and 1,701 sq ft five-bedroom apartment to penthouses of 1,873 to 3,391 sq ft.

Public housing hybrid, executive condominiums saw a new addition to their ranks with the opening of e-applications for Lush Acres EC at Fernvale Close in Sengkang. Prices have yet to be revealed, but a gauge of nearby properties show that Topiary EC units were sold at $897 to $977 psf. One could expect around the same for Lush Acres, though developer City Developments (CDL) has said the project “will be competitively priced with affordability in mind”.

Other private properties to be launched in the next couple of months include freehold Liv on Wilkie at Wilkie Terrace and The Glades, near Tanah Merah MRT station. Will property buyers maintain their interest in new properties or will those hoping to invest in their second and subsequent home choose to hold on to their cash?

Showflats sales deflate over the weekend

Sitting at the sidelines and watching the action from a safe distance. This is the position most home buyers are taking for the moment, as far as weekend sales at showflats goes. Though lunar new year preparations might have taken some steam out of the engine, some are hoping that it shows the cooling measures may be taking effect. Others may be waiting to see if property developers might lower property prices or throw in discounts of sorts.

La Fiesta condominium in Sengkang.

La Fiesta condominium in Sengkang.

Q Bay Residences, for example, launched with good sales some weeks back, but over the weekend, only 10 units were sold. Still, more than half of the 630 units in the new residential development has been sold. It was pretty much the same at the La Fiesta showflats, with only 7 units sold.

Properties that bucked the trend were CapitaLand’s Interlace and d’Leedon projects. The Interlace offered an additional 10 per cent discount on top of their previous 10 per cent, taking the prices down even more and selling 15 units. D’Leedon showed true promise with the sales of 47 units.

Q Bay

For now, the Chinese New Year break might be just the break buyers need to sit back and think things through, perhaps discuss a little over gatherings with family and friends, and do a stock-take of their current financial situations.  New launches the week or two after will be the time to watch, and it may just set the mood for the rest of the year.

New Pasir Panjang Freehold Low-rise Apartments

SeaSuites, launched over the weekend, has collected 100 cheques even before its official launch. As a freehold property, the units range from 517 to 1, 410 sq ft, mostly made up of one and two-bedders. Prices hover around $1, 650 sq ft. With the fashion-based business group, Link (THM) behind this project, this small-scale landed development may be projected at buyers with an eye for design. The group’s other residential properties include a landed housing site in Holland Road, which when completed are expected to fetch a grand $10.5 to $11 million per home.

SeaSuites 1

With only 52 units available, who out of the 100 cheques collected will successfully secure a home at this new residential development by the end of Sunday? The exclusivity and rarity of low-rise apartments are perhaps the calling card for this new property. The previous lack of private condominiums may also be a contributing factor. Many buyers or investors may look at the area as a future property goldmine, at least for the potential it holds. And as more MRT stations are being built, areas such as these which are yet relatively underdeveloped may see much more activity and early buyers could benefit from a wider profit margin.

Other private properties in this area include Village @ Pasir Panjang, Parc Imperial, The Foliage and West Shore Residences.