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.

 

Private properties – Not all in the slumps

Recent figures showed that the property cooling measures have only really affected the luxury market, which has slipped into the red.

Even then, there are properties within the private property market which have not been as drastically affected by the measures and market slump. At Cote d’Azur in Marine Parade for example, prices rose by 4.3 per cent. Prices of resale units at Costal del Sol also rose 4.5 per cent. And for the new property market, in Chestnut Avenue, selling prices of units at Eco Sanctuary showed a promising increase of 4.1 per cent.

Eco SanctuaryAlthough this could be caused by developers choosing to release juicier units later in their launch schedule, enticing buyers to purchase at their latest launches, this nevertheless gives hope to the market. Buyers are still wiling to fork out the cash to get the units they want. And there is no lack of these savvy folks.

Naturally as with all market movements, effects are never seldom felt the same way across the board, there will be units with more potential than others. It takes a keen eye and a close followup of market trends to make a killing at the right time.

While this is good news for property developers and sellers, it raises the question of whether the property cooling measures have really been effective in making property purchasing affordable for the majority, or only instead stymied the inflow of foreign cash earnings in the high-end property market?

 

2015 – A year of the property buyer

Following the footsteps of 2014, this year seems like it will continue to be a buyer’s market. Some property hotspots have sprung up over the course of last year, as new MRT stations and areas of redevelopment were announced.

Twin Fountains Executive Condominium in Woodlands.

Twin Fountains Executive Condominium in Woodlands.

For buyers looking for a good deal, there will be sellers out there who are willing to let go of their property as not all are able to have the holding power to last out the year. Many HDB upgraders who are moving to private properties may have to sell their HDB flats, and due to a mortgage restriction, some private residential property investors may also be looking to move units in exchange of a healthier bank balance.

For buyers looking for immediate to medium term property returns, areas near upcoming MRT stations may be their ticket. These include those along the North-East Line (NEL) and Eastern Region Line. Other further flung districts which are experiencing an influx of amenities and new properties such as the Jurong Lake district, Woodlands Central, Buona Vista and Paya Lebar, may also pique the interest of investors. And for those who are not in a hurry to reap the benefits from their property purchase, property analysts are expecting districts which have not been included in previous upgrading and redevelopment plans, to get a major face lift within the next decade or so. Woodlands could be the next area to watch.

Thomson MRT Line's alignment. Are you already area-spotting for the best property investment?

Thomson MRT Line’s alignment. Are you already area-spotting for the best property investment?

Starting from the second quarter of the year, sales are expected to pick up, and industry experts’ advice for buyers are to keep a clear idea of what they are looking for, search for sellers who are sincere about selling, and hit the iron while it’s hot.

The future of Singapore’s property market – Looking outwards or inwards?

The property industry experts are hoping that the Government will take crucial and timely steps to aid the country’s property and construction sector should trouble loom.

8scape Malaysia property

Photo: 8scape Residences in Malaysia.

Redas (Real Estate Developers’ Association of Singapore) president, Mr Chia Boon Kuah recently mentioned that the impact on the property sector could similarly transfer to an impact on the country’s overall economy. The vacancy moving forward is expected to hit 10 per cent as the number of new properties reach 68,000 in the next few years. Transaction volume has declined by half of last year from 18,000 to 9,000.

There were also talks about the languishing luxury property market here. The stricter measures and higher taxes may be reasons for wealthy investors looking elsewhere in the region for property investment opportunities and even draw Singaporeans away from investing within their own country.

However, with possible interest rates hikes and stimulus slowdown in the United States, interest in overseas property investment may be waning. As the local property market cools, and prices start coming down, some may also choose to take the wait-and-see stance, possibly holding their horses for a good future run in the local markets. How will the market fare in 2015 and will buyers be drawn to local or foreign properties?

New life at Jurong Lake district

We’ve all heard about the various prestigious “Lake districts” of popular cities across the globe. Now, Singapore could finally boast a few of their own as waterfront living takes on a whole new spin. Sentosa Cove, Marina Bay, Punggol waterway and now Jurong Lake.

Lake Life ECAt the Lake Life EC (executive condominium) in the Jurong Lake district, almost 1,200 applications were registered when it was launched 2 weekends ago. And with one in three applicants being a first-time home buyer, it shows the demand for and power of these hybrid properties. An EC is sold under the HDB scheme but after 10 years, it becomes private property, making it value for money in the long run.

Though EC buyers may qualify for the HDB grants and subsidies, it largely depends on their income ceiling, which has been raised to $12,000 per household. Prices of these flats are also considerably higher than other HDB flats, new and resale.

As the price gap between private homes in the city centre and city fringe continue to narrow, and as suburban private properties rise in price, ECs may become the property of choice for growing households and young couples. How the scale tips may eventually affect the effectiveness and purpose of this hybrid property. Are ECs here to stay? Or could they possibly become obsolete?

Varied market response to declining property prices

Home prices in both the private and resale HDB markets have continued to dip in the second quarter of 2014. In the first three months of the year, the decline was 1.6 per cent. Perhaps buoyed by the increased number of launched in Q2, the rate of decline was somewhat less steep at 1.3 per cent the quarter past.

Rezi 3 TwoBuyers who have been on the lookout for opportunities such as this may be happy to find that more than a few property developments have been offering discounts. Though the overall number of sales have picked up in the second quarter, mostly due to new launches, the private homes market saw a more obvious slowdown in both the city centre and suburbs. The drop was 1.5 per cent in the city centre and 1.1 per cent in the suburbs. Properties in the city fringe fared better with a 0.6 per cent drop, an improvement considering the 3.3 per cent dive in the earlier part of the year.

But there are those who are concerned about the longevity of their investment should they purchase now. The question they may ask is, is this the lowest prices can go? If I were to buy now, will the prices continue to drop? Though property analysts are doubtful that the prices will bottom out anytime soon, they are expecting the maximum of a 5 per cent decline.

As long as the supply continues at a steady pace, prices will not vary far from the current levels. Perhaps true change will only come with a shift in policies. Considering the elections will be here in a couple of years’ time, the time leading up to that might be a period of uncertainty.

Private property buyers holding out on post-launches

New residential developments usually draw large crowds at their previews and initial launches, with some selling out within weeks as eager house hunters scramble for the best units. But buyers are holding back during post-launches, opting instead to wait for newer projects or other post-launches to see which developers offer the best deals. City Developments’ Coco Palms sold only 20 units over the weekend. In its debut, 52 per cent of its 944 units were sold. Prices range from $880,000 for a three-bedder to $1.21 million for four-bedder though units available range from 463 sq ft one-bedders to 3, 111 sq ft penthouses.

Commonwealth TowersSome developers have been dishing considerable discounts on their post-launch offerings. The Panorama in Ang Mo Kio just a couple of weekends ago saw developers giving up to 12 per cent discounts on their second launch. Property hunters are likely to compare between new project launches and previous projects’ re-launches, weighing the potential of rental possibilities and asset appreciation.

The increased number of mass-market property launches in May has lent some joy to the market and transaction volume is expected to reach 1,600 units. Projects which are offering prices lower than the projected buyers’ total quantum will be likely to still get buyers coming to their doorsteps. When it was first launched, units at Waterfront@Faber condominium went for $1, 100 to $1, 350 psf. Since then, only 6 more were sold, at an average of $1, 280 psf. Another May baby was the 845-unit Commonwealth Towers, where more than 66 per cent of the 400 units released have been sold.

As we move into the middle of 2014, the next half will be a time to watch. It may show signs of what 2015 will bring.

City fringe districts going strong

In the current softening property market, where private home sales and prices are on the downhill slide, it takes a good location to help a new launch stand its pricing ground.

The Thomson and Bishan area saw 3 such promising launches – Thomson Three, Three 11 and Sky Vue. Throw their proximity to current and future mrt stations, good schools, heartland shopping malls and other eateries into the mix, and it’s a recipe for success.

Thomson ThreeAll 65 units at Three 11 along Upper Thomson Road has been sold, whilst Thomson Three on Bright Hill Drive has already seen a 87 per cent take-up rate of its 445 units. Prices at the former were around $1,368 psf and $1, 308 psf at the latter.

Closer to Bishan, prices were even more positive, with units at the Sky Vue going at a median of $1, 465 psf. Prices have however dipped slightly. At its launch last September, prices were higher at $1, 500 psf. Closer to the Bishan MRT station, the massive 505-unit development, Sky Habitat, relaunched with encouraging sales figures last week. Prices were quite a bit lower than its launch price of $1, 700 psf. Discounts of 10 to 15 per cent were not rare, with units going at $1, 279 to $1, 590 psf. Perhaps these prices were more realistic and are sitting well with buyers still looking for a potential investment buy.

Sky Vue2In short, private home sales has been affected across the island, but there are still buyers out there looking for property worth their buck. And if the price is right, they might just bite.