Luxury condominiums going at lower prices

$2,200 psf to $1, 800 psf.
$3.7 million to $3.4 million.

That’s how far lower the prices for high-end luxury apartment units are going for.

Perhaps it’s a case of when the going gets tough, the tough gets going, at lower prices. It’s no secret that while luxury properties are the creme de la creme for property agents and developers, when investment money is slow in coming, these are one of the hardest to sell.

Hallmark residencesAnd the going looks like it is going to be tough for quite some time more. Property developers are struggling to move unsold stock, and depending on whether their holding power is strong enough, they may be forced to make other moves sooner. There were news earlier on this month that developers are looking to convert condominiums into serviced apartments as the pressure of the deadline to sell looms closer.

At MCL Land’s Hallmark Residences in Bukit Timah, the uncompleted condominium development is already advertising sales of units at discounts of up to $300,000. A 969 to 990 sq ft 2-bedroom unit was originally priced at $2 million but is now at a lower $1.8 million. Since its release of the first 20 units in January, 5 have been sold. They are however planning for a proper launch sometime in the first half of 2014. At the 999-year leasehold St Regis Residences on Tanglin Road, prices have dropped from $4,653 to $2, 349 psf. Of the over 10,000 private homes still under construction in the prime districts 9, 10 and 11, nearly half remain unsold.

Once again the story of low demand versus high supply dogs the real estate industry. With the government’s many cooling measures, a bubble is unlikely to happen especially since loans are harder to get. It will be interesting to see how the property market plans for a rebound.

Reduced BTO launches will not affect resales market

2013 was a year of new BTO HDB flats. With a sales launch almost every couple of months, it may have taken the shine off resale HDB flats. Coupled with the decreasing COV prices, will this mean a a weakening resale market?

National Development Minister, Mr Khaw Boon Wan recently announced that starting 2014, HDB’s “massive construction programme” will slow as the pent-up demand for public housing units have been largely elevated by the continuous supply of BTO flats over the past 3 years. Industry analysts are not expecting the resale market to be overly affected by this announcement, especially since the pool of buyers usually have different motivating factors. Most BTO flat applicants are young families and first-time buyers. Now that application rates have fallen from 5.3 to 2 in 2 years’ time, there seems reason enough for the authorities to put the brakes on the building programme.

East Lawn Canberra HDB FlatIn comparison, the resale market has suffered slightly, with stricter loan limits, competition from the private property market, and recent COV prices have come to show for it. With the median at an all-time low, many are wondering if the cease of supply of new HDB flats will once again bring resale flat prices up. But this may be unlikely, at least for the next half year or so. As long as the loan limits and private residential options remain and especially since demand has been largely fulfilled,

It will be an interesting year for Singapore’s real estate sector. Which way will the wind blow?

Singapore Re-zoned for homes

In the next decade, be prepared for half a million new homes as land everywhere around the island will be re-zoned to home Singapore’s growing population. With plans for most of them to be in the Paya Lebar and Greater Southern Waterfront areas. In the Holland Village, Kampong Bugis and Marina South areas alone, 14, 500 new homes are expected to take root.

Tampiens North

In the greater scheme of things, 3 other major districts are expected to see a boom in residential properties, both public and private:

And planning even further ahead past 2030, the Paya Lebar area will welcome up to 500, 000 new homes as there are plans to move the Paya Lebar airbase to Changi East, yielding 800ha of land for re-zoning purposes.

BidadariThis shift of land use and rearrangement of population across the island is all part of a growing country’s historical progress, and depending very much on how Singapore’s economy performs in light of the global situation will determine other policies which may in turn affect the direction property growth takes. But in the meantime, prospects seem positive and for a quick investment turnaround, shoebox apartments in the suburbs are still considered one of the most profitable investments.

New but discounted

Some new properties are already slashing selling prices as the weakening property market is sending developers into somewhat of a frenzy. In bids to move more units before the festive season, various properties across the island are offering discounts. Will these recent moves be enough to woo buyers back?

Changing the landscape of the Bugis-Rochor district is this immense mixed-use development. Photo by www.theDuoResidences.com.

Changing the landscape of the Bugis-Rochor district is this immense mixed-use development. Photo by www.theDuoResidences.com.

Alex Residences near Redhill MRT station was one of the latest private residential developments to make such such a move. Only to be launched next weekend, the 429-unit condominium is set to launch at $1, 600 psf, lower than the Echelon next door, which sold for an average of $1, 745 psf at its launch around the same time last year. All units at the Echelon have been sold. The Alex Residences might be aiming for the same fully-sold status, and hoping the lowered prices will make it more palatable for investors.

One of the hardest-hitting reasons behind the recent lull in activity is the newly introduced debt-to-income cap. Home buyers are now no longer able to take loans of larger amounts since their income essentially is their own limiting factor. With starting prices of $760, 000 for a small 476-sq ft one-bedroom apartment to just around $2 million for a 1, 044 sq ft three-bedder, they might just hit the target market. Targeted for occupancy by February 2019, Alex Residences could be banking on the fact that resale units along the Alexandra Road and River Valley stretch have reportedly rose by 9 per cent for the last two years. Rental prices have also gone up by 4 to 6 per cent.

Sky Vue2Other properties which may have their price tag lowered at Sky Vue in Bishan and Duo Residences in Bugis. Is this an opportune time to enter the property market and which properties are worth the wait and risk?

All-in-one properties well received by all

Whether it’s home buyers looking for their first proper home or serious property investors looking for opportunities with the stamina to run hard and far, integrated or mixed-use properties are the current big thing in Singapore’s real estate market.

Sky Vue

One of the major developers, CapitaLand is choosing to focus on integrated properties as they see the future in them. Despite the recent clamping down on immigration and foreign employment policies, these massive home and offices (and some even with shops and hotels) properties are set to last. Similar to many other major cities, such as Sydney, Tokyo and Hong Kong, mixed-use developments are increasingly popular, especially with the convenience of amenities nearby, which also makes for a strong calling card for higher rents. Now, isn’t that nice?

This coming from a giant who sold more than 468 homes in Q3 alone, with total sales of over $560 million. That’s a 70 per cent increase from their $166 million in the same period in the previous year. One of their most recent new property launches, Sky Vue in Bishan, was the main bait, reeling in 433 sales at an average of $1, 401 psf in October.

Sky Vue2News out there is that up to four (and perhaps more) integrated projects will be launched this and next year. And if you’re thinking of jumping on the bandwagon, it would be wise to keep an eye on the movements and launches in the market through property updates and seminars.

New high for Executive Condominiums

A new record for selling prices of executive condominiums may be struck this week, with the launch of the latest offering in this property market – Sea Horizon near Pasir Ris beach.

Sea Horizon ECAt $ 800 psf, it is the highest so far for ECs, according to industry players.  The 495-unit development is a hybrid between public and private housing and will be situated at the junction of Pasir Ris Drive 3 and Pasir Ris  Rise. Rare to most public properties, this one will have most units enjoying an unobstructed sea view. This could be part of the reason for the high prices.

Sea Horizon will have a range of 71 sqm two-bedders to 160 sqm five-bedders and penthouses from 129 to 160 sqm. A closer look at recent executive condo launches will reveal that prices have been on the high side of late. Several launches have come close to $800 psf. Punggol’s Ecopolitan EC was tagged with selling prices of around $799 psf.

EcopolitanWill EC prices stop short at $800 psf? Probably not. Especially with a recent EC plot tender securing a bid which will put selling prices of units at $900 psf. Both property developers and home buyers are targeting this particular property segment as they are considered the best-selling and most stable in terms of long-term investment. With the private property market  taking a hit due to recent cooling measures, interest is expected to increase. Another EC, SkyPark Residences on Sembawang Drive is expected to launch in September. Are executive condominiums truly fulfilling its purposes as a stepping stone for Singaporeans to enter the private property market? Or could it merely be a calculated option which would eventually compete with private properties ?

90 per cent of Marina Bay Suites sold

Luxury properties may not be hogging industry headlines right now, but from the looks of it, sales of high-end apartments may not be slipping as much as we think. Buyers know what to look out for, if the 90% of units sold at Marina Bay Suites is anything to go by.

Marina Bay SuitesAThe residential private condominium development is situated next to The Sail @ Marina Bay and has already received its Temporary Occupation Permit (TOP). 198 of its 221 units have been sold at an average of $2, 700 psf. Singaporean buyers made up half of the owners of units in the establishment and Indonesians, Malaysians and Chinese made up majority of the other buyers.

Though Marina Bay Suites has yet to be launched, units sold have been through previews in Singapore as well as in Malaysia and Indonesia from as far as five years back. One of the highest priced units sold was a penthouse for $19.3 million. Out of the 23 units left are 2 four-bedders and 2 penthouses above the 48th floor. Mr. Thomas Tan, head of residential marketing at Raffles Quay Asset management is certain all will be sold by the end of this year.

Marina Bay Financial Centre

With the fast and furious development of the area since the inception of Marina Bay Sands, the Marina Bay Financial Centre and other private condominiums, prices of units of residential property in the area, such as Marina Bay Residences, have risen from $2,000 to as much as $3,000 psf since 2006. By the looks of it, the area could indeed be a money-making machine.

Spot apartments selling below $1,000 psf

In the current real estate landscape, private apartment units going for less than $1,000 psf are rare. Or sold out.  But there are still some units on the market at affordable prices.

The Interlace private condo apartments on Depot Road.

The Interlace private condo apartments on Depot Road.

Some of these units are in private residential projects such as A Treasure Trove, D’Nest, H20 Residences, Palm Isles, Riversails, Riversound Residences, Stratum, Seastrand, The Beverly and The Interlace. With the sheer number of units available at massive project, The Interlace, it has the most number of units available for sale at 216. Median selling price is slightly higher at $1, 053 psf. The good range of property types include three- and four-bedders as well as penthouses and garden homes.

Riversails has 108 units of its 920 apartments available for sale at one of the lowest median selling prices of $854 psf. At Toh Tuck Road, the 118-unit The Beverly, each unit serviced by a private lift, 7 units were still on the market for an approximate $826 psf.

The Beverly on Toh Tuck Road.

The Beverly on Toh Tuck Road.

This might be good news for buyers looking to buy new properties. Though new homes may be smaller in size as compared to resale homes, it may be just right for those looking to invest or who prefer good location to a large space. And don’t hold your breath yet for newer launches offering selling prices below $1,000 psf. Industry analysts are expecting most new launches to offer units at above the mark.

Moving forward, property experts are expecting buyers to continue on their buying spree, but with more caution. They might be more selective and prefer smaller homes at a lower price quantum. Property developers may also be more cautious and precise with their pricing, to target buyers who may be more susceptible to slight price differences. With most developers having a strong holding power, it could be a tussle between them and the buyers.