Third time lucky for Tampines Court?

One of the biggest collective sale of a privatised ex-HUDC of the decade may go down should developers go for the $960 million sale price put by for Tampines Court.

TampinesCourtLaunched just this Tuesday, the development has secured 82 per cent approval from the residents and each owner will stand to received $1.7 million from the sale. The 702,000 sq ft Tampines street 11 site currently holds 560 apartment units across 14 residential blocks but could potentially yield 2,100 new private homes in the future. Tampines Court is located in a mature estate with very good possibilities of being redeveloped into an eco-establishment suitable for families.

Property analysts are hopeful for a successful sale this third-time round as the collective sale sector has shown itself to be performing exceedingly well in the last few quarters. This is despite of the $348 million additional charges required to intensify land use and to top up the lease to 99 years. But the home owners are optimistic about current market sentiments. The most recent collective sale tenders include the private property The Albracca in Meyer Road and another ex-HUDC, Serangoon Ville in Serangoon North Avenue 1 and a Stirling road site was recently sold for $1 billion.

There may be a small window of opportunity before the market becomes too saturated with sales bids and also as the government intends to ramp up supply of land sites in H2. Success or not, it may all come down to timing.

Australia’s housing prices may correct following tax hike

Striking the iron while it’s hot might take on another meaning when it comes to the Australian authorities putting pressure on the real estate sector after months of consistent price-rises with a series of property cooling measures.

SYdneyPropertyThe most recent move by the New South Wales state to increase foreign-buyers stamp duties may come at the right time, just as the property market shows signs of cooling. Stamp duties on new home sales to foreign property buyers have risen to 8 per cent of the purchase price. As many new projects are targeted at overseas buyers, the sector may see a major and possibly immediate readjustment of expectations and yields. With the recent tax hike, overseas buyers will now pay 13 per cent of the total purchase price of a property or more in taxes.

Chinese investors are particularly anxious about the recent change as they have formed one of the largest pool of foreign monies from which Australia’s real estate sector draws from. Citizens have expressed concern about the rising housing costs and like most other destinations for mainland Chinese such as Vancouver, Singapore and Hong Kong, property cooling measures have been put in place to curb just that. Banks have also ceased foreign lending and the federal government has placed punitive measures on foreigners who leave their purchased properties vacant.

The risk of introducing more property curbs in current times are nevertheless ever present, especially as Australia has just had a record 26 years of being recession-free. Sharp falls in housing prices may change all that.

Private homes’ rental rates continue to decline

While HDB rental rates inched up ever so slightly in May, private home rents have gone in the opposite direction and fallen 0.8 per cent in May. Compared to the same month last year, rental prices have fallen 3.9 per cent.

Ballota Park condominium in Pasir Ris

Ballota Park condominium in Pasir Ris

In the private home sector, prime district rents fell the hardest at 1.8 per cent while rental prices of units in the city fringes and suburbs fell 0.5 and 0.4 per cent respectively. The number of leases closed last month did however increase by 12.5 per cent from April with 4,650 condominium units rented out in May compared to the 4,134 in April.

HDB rents have risen 0.7 per cent though property analysts are taking it to be a temporary adjustment which is unlikely to be sustainable as the rental market may remain weak through the months ahead. HDB rents are expected to fall 4 to 5 per cent this year while private property rentals are expected to fall 8 to 10 per cent as more units are left vacant and competition for a limited tenant pool applies downward pressure on the market. The entry of new condominium units into the burgeoning market has not aided matters as well and expatriates’ housing budgets have also shrunk, leading to weaker demand in particular for high-end luxury housing.

Much of the future of the real estate sector is dependent on the job market as well. Should the job market take a turn for the better, the number of tenants looking for units nearer their workplace, in the Central Business District or regional commercial hubs, may also then increase.

Resale private home prices fall in Q2

The first month of the second quarter ended with a slight fall in resale private home prices. The shift in the winds could be due to the higher number of new launches in April, with buyers’ attention turing towards new projects instead.

RiversailsOn a brighter note, demand for shoebox apartments seem to be on the rise, with consistently increasing numbers over the months of March and April. Figures for this segment are taken separately and have shown an 0.7 per cent rise in prices for these units with floor areas of up to 506 sq ft in April, following a 1.3 per cent rise in March. Property analysts are however wary of calling it a market rebound as the rental prospects for suburban smaller apartments are not yet on the road to recovery. Though there is a sense of the market picking up, most of the uptick have been focused on the developer sales segment. After a few months without new launches, buyers have returned to the new homes market with fervour, though most are in search of value-for-money deals targeted at property investment rather than on picking out units from the resale sector.

In the districts of 4, 9, 10 and 11, resale private home prices fell 0.5 per cent. Included in the core central region are the Central Business District (CBD) and Sentosa Cove. Prices of private non-landed properties have fallen 13.8 per cent since its 2013 peak and because of the debt servicing ratio limits placed on loans, buyers often have to be more selective of what their loans go towards. New properties are their product of choice for the moment.

With April’s price decline, could the bottom of the property cycle be in sight?

New suburban homes continue to lead sector sales

New non-landed homes are still hot on the list of home seekers and property investors, local and international, as April’s figures have shown. Sales have remained above the 1,000-unit mark for the second consecutive month and the 1,500 units sold in April alone was double that of the same period last year.

ArtraRedhillOne of the factors contributing to the continuing demand could be the changes in property cooling measures which took place in March this year. Consumer’s confidence have risen considerably thus leading to higher home sales including a larger appetite for units even in older launches. The number of units sold in previously-launched developments remained fairly steady across March and April, with 1,079 and 1,001 sold in the 2 months respectively. Some of the more popular projects included Parc Riviera and Commonwealth Towers.

Suburban properties fared particularly well, with 966 transactions closed in April. 558 units were sold in the city fringes and 30 in the core central region. New launches which were well-received included Seaside Residences in Siglap and Artra in Redhill. The former sold 419 units at an average price of $1,736 psf and the latter, 126 units at a median of $1,646 psf.

SeasideResidencesThere had been previous concerns about the large volume of unsold inventory  and with more new units entering, a supply glut might disturb the market slightly. As the supply and rate of new homes diminishes however, there might be a possibility for new homes to be priced higher in the near future. How will this market sector fare as we move on into the mid-year? Will the positive sentiments continue well into the second half of the year?

Consistent growth in private resale property prices

For the fifth consecutive month, resale private home prices have had a good showing. Can we hope for a market recovery? Perhaps not quite yet, but there is no reason not to feel good about the turnaround.

THeSienaCondoMarch’s numbers were the highest in 2 and a half years with the resale index hitting 168.8 with an improvement of 50% in the number of units sold. Market prices have also been creeping upwards with sellers now beginning to set asking prices above the market rates. Overall, private resale property prices rose 0.5 per cent last month and were 2.2 per cent higher than the same month last year.

In the same year-on-year comparison, resale transactions grew by 77.5 per cent last month with 1,058 units sold. That is 51.8 per cent higher than the 697 units sold in February. Prime district property prices rose 0.4 per cent while 0.7 per cent and 0.4 per cent increases were registered in the city fringes and outlying suburban regions respectively.

Though the numbers are still lower than when the property market was at a few of its peaks in 2010 and 2013, the consistently improving numbers reflect an overall positive market sentiment. As the half-year mark draws closer, the numbers from the second quarter will be more crucial in determining the direction for the rest of the year.

Another HUDC estate tries for collective sale – Rio Casa

HUDCs certainly seem to making the news this year as yet another HUDC estate tries for an en bloc sale. Earlier last month, Braddell View became the last HUDC to be privatised and Shunfuville successfully completed their en bloc journey in May last year.

RioCasaHUDC HougangThis time, Rio Casa, formerly called Hougang N3 is trying their hand at the collective sale game. The process was surprisingly easy as 80 per cent approval was achieved within 3 weeks. Bidding is expected to hover around $450.3 million for the 286-unit site. If successful, each unit owner will receive $1.5 million which is approximately $586 psf. The property has about 73-years left to its lease and the new owner will have to fork out $57.5 million for a new 99-year lease. In addition, $141.5 million will be required for site-intensification.

Kingsford WaterbayThe site should be quite desirable as it features 200m of riverfront and greenery views with schools such as Holy Innocents’ Primary and High Schools and CHIJ Our Lady of the Nativity nearby. With the recent uptick in buying sentiments and the competitiveness in the Government Land Sales segment, developers may pay for the site despite its slightly pricier tag. There are considerations however, as the site is not near any MRT station and the nearby Kingsford WaterBay has unsold units remaining. It is still however early days and the Hougang area has a deep potential for redevelopment which may very well happen in the decade ahead. The tender for the site closes on May 23.

Outlook hopeful despite fall in private home prices

After 14 consecutive quarters of declining private home prices, slivers of light are shining through – the suburban condominium market has seen a tad more activity with prices rising slightly; and for most part, the rate of decline has slowed.

SantoriniThe fall in prices of private homes stood at 0.5 per cent last quarter, similar to that in the last quarter of 2016. Suburban non-landed property prices have in fact posted a growth of 0.1 per cent after 13 straight quarters of decline. The positive figures in the suburbs could be due to the many new projects in areas outside of the central region which launched to much success in the earlier part of the year. These included developments such as The Clement Canopy in Clementi and Grandeur Park Residences in Tanah Merah. Previously-launched projects such as Parc Riviera and The Santorini also re-marketed their units resulting in favourable response from buyers.

Property analysts also contributed some of the uptick in buying sentiment to recent changes in the property cooling measures. Though the impact may not be obvious and immediate, it has nevertheless helped to inject some optimism in the market. Though the expectation is for property prices to fall 1 to 3 per cent in H1, the second half of the year should see prices stabilising and 2017 may just end on a happier note.