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7 May

Property curbs brought in revenue

What did all the previous rounds of property cooling measures bring to the table?

$1 billion. In tax revenue.

Financing Your HomeFollowing January’s new Additional Buyer’s Stamp Duty (ABSD) hikes, in February and March $158 million were added to the taxman’s coffers. The ABSD is now up to 15 per cent. $580 million came from foreign buyers, were 3, 041 homes were sold since December 2011. Singaporeans and Permanent Residents (PRs) forked out $386 million for 7,269 homes. ABSD was introduced in 2010, and since then, home owners have paid up a total of $66.6 million of this levy.

Foreign home buyers have retreated somewhat, with a 36 per cent drop from last year. The ABSD currently stands at:

  • 15 per cent for foreign buyers
  • 5 to 10 per cent for Singaporeans and PRs
Starlight Suites condominium.

Starlight Suites condominium.

Since new home sales have continued to push on, strongly, despite the measures, the ABSD may not have entirely been a deterrent nor an aid to managing home prices. Property developers are also helping to bolster the market by providing discounts, rebates and other incentives to home buyers.

Many buyers are willing to suffer a little now and buy when they can, rather than wait for something that may or may not happen. As the population continues to grow, they are perhaps preemptive of the future where rental could be a considerable means of income and should homes become out of reach for their children.

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?

28 Mar

Rental may not earn you your investment money

Especially with property tax revisions in the 2013 Budget. The removal of tax refunds for vacant properties will take a huge chunk of potential income away from individual as well as corporate investors. They can no longer bank on getting money back on units they are holding on to whilst waiting for a good time to rent. Only those with extensive holding power will be able to hold on to their units and wait out the lulls in the real estate market.

Emerald Green condominium.

Coupled with the increase in taxes for luxury properties, more and more resale private residential properties may be pushed back into the market, which unfortunately is dominated by new homes at the moment. This may intensify competition within a saturated market which may or may not see a price drop, depending on how strong a holding power the investors have.

Starting January 2014, the concession for such properties will cease and 2013 might be the year where the price battle between resale and new properties may be fought most intensely. From next January, higher tax rates will apply, 5 different tiers in fact, ranging from 8 to 16 per cent. If luxury properties were not seen to be doing well in the current market, will things take an even worse turn come 2014?

On the other hand, might overseas properties be more promising for investors and how do you get your hands on one? Which countries hold the most potential? Answers could often be best found at property seminars and talks, where you get to pick the brains of property experts and those who have had experience doing just that.

18 Mar

Busy weekend for New Properties

Property showrooms were abuzz last weekend. With buyers looking to buy following the January cooling measures. Developers are hoping to tap into the pent-up demand which has been on hold since early this year. As the dust settles in the HDB market following its series of announcements after the Budget talks last week, the private property market is taking the chance to capture as much interest as they can now.

D'nest condominium.

D’nest condominium.

Hoping to catch some fishes are D’Nest near Pasir Ris MRT station, Sennett Residence and The Trilinq. Residential properties in the CBD areas may also need to watch for the launch of Far East Organization’s mixed use commercial property SBF Centre. When complete, the influx of 196 office units and 48 medical suites may bring business to other residential properties in the vicinity.

Units at D’Nest were going for an average of $999 psf but there is an early bird price of $920 psf, but that is after the 7 per cent direct discount to temper the sting of the additional buyers’ stamp duty. Launch prices are set at $498,000 for a small 484 sq ft one-bedder to $1.15 million for a 1, 270 sq ft four-bedder. This Pasir ris condominium is set to receive its Temporary Occupation Permit  (TOP) in 2017. Prices of surrounding condominiums might benefit from its overflow and one should take note that its developer, CDL, still have space left for further development in the same area. Might we expect new residential projects nearby soon?

In Potong Pasir, Sennet Residence which as has already sold 70 per cent of its 332 units, sold 175 last Wednesday alone. Units there are priced at $1, 450 psf and the area which is largely yet untapped by new HDB launches, have drawn interest from private property buyers in the past. If new properties enter the market later this year, this might be a spot to watch.

5 Mar

Will Singapore homes ever be truly ‘affordable”?

Not for some time yet, according to Finance Minister and Deputy Prime Minister Tharman Shanmugaratnam.

Waterfront living in Sentosa. Is this the area for expansion in SIngapore's future?

Waterfront living in Sentosa. Is this the area for expansion in SIngapore’s future?

Stuck in the part of the property cycle where home prices run high, all are in wait to see if they run even higher. The Government is doing all they can to cool the market. The previous seven round of property cooling measures since 2009 will attest to that. But Singapore’s real estate market still stands for some price correction before it could get moving and complete the cycle it is apparently in.

It will not amaze most Singaporeans to know that housing prices have risen sharply in the past four years. 30 per cent is a huge leap. In the time where the global economy struggles to right itself from its humpty-dumpty fall, Singapore’s economic growth, lower interest rates and strong capital flow has kept the property market buoyant.

Is the private property market quietening? Image courtesy of Singapore Tourism Board

When will homes truly be affordable for the average Singaporean? Image courtesy of Singapore Tourism Board

Even though the cooling measures may have slowed the rate of increase of home prices, the pricing rise is still significant. We return once again to the question of whether the Government should be responsible for keeping market prices low or simply stall the rise in prices, which is inevitable and should be left to market forces to dictate.

Mr Thaman said as ‘Singapore’s highly open economy lives by being global and regional, the Government’s key priority is to raise productivity to a new level”, since raising incomes for the average person and for the median household is at the top of their to-do list for now.

8 Jan

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.

2 Jan

Property makeover for 8 private estates

Under the Estate Upgrading Programme (EUP), 8 private estates will be getting a whole new look by the end of 2014. Although it may not extensively change the property prices, it may nevertheless provide an added incentive to potential buyers and thus benefit the sellers.

Mount Rosei GardenWhich estates are these?

What they will be getting are landscaped environments, fitness equipment, park furniture and wider footpaths, according to the Ministry of National Development. Selection was based on the age, physical condition and scope of improvement. As the areas have begun to look dated and some plagued with drainage and parking issues, the revamp will cost about $29 million.

Marine Parade GRC MP Fatimah Lateef and Potong Pasir MP Sitoh Yih Pin are looking forward to improvements for their wards. In all, there has been a high demand for these government-funded upgrading schemes and Senior Parliamentary Seretary for National development, Dr. Maliki, has reflected strong spport for such programmes as it is aimed at improving community bonding.

All in time for the next election perhaps? Either ways, about 7,000 households will benefit from these estate upgrades, but how much more these new amenities and facilities will bring to the properties in these districts still awaits further analysis.

27 Dec

Old Gold – Queenstown

Not only are home buyers going for glistening new properties, they are now getting more savvy and willing to pay to be in areas with a heritage. Which means areas such as Tiong Bahru and Queenstown are seeing a property boom.

Alexis @ Alexandra Condo

As one of Singapore’s oldest townships, Queenstown, with its proximity to the city, has seen a huge increase in interest and sales. Made up of mostly HDB flats, it is not surprising then, that earlier this quarter, an executive maisonette went for $1 million. Private condominium apartments are few and far in between, namely The Anchorage, Queens and Alexis @ Alexandra. The last in the list only recently received its temporary occupation permit (TOP) this year. Prices of private homes here have risen 5 to 7 per cent and now cost between $1,200 psf and $1,700 psf. At Queens condominium, prices have already risen from $700 – $900 psf to $1, 200 – $1, 400 psf. Home rental prices in this estate range between $3 to $4.50 psf per month.

With the One-North cluster filling up fast in the nearby Buona Vista, could this possibly direct even more property traffic in the Bukit Merah-Alexandra Hill sub-zone? Under the government land sales programme (GLS), 2 plots near the Queenstown MRT Station were recently released and perhaps we could expect a growing number of private condominium units in this area.

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