New home sales yet to show significant change following SSD tweaks

Perhaps the recent changes in Sellers’ Stamp Duty (SSD) regulations may have no effect on the property market, or it might have a considerable effect. Whichever direction things might go, it is still too early to tell. Sales of new properties following the March 11 announcement has yet to show significant signs of change in terms of concrete figures, but the tweak has however boosted interest in new launches as shown in the response from the public at recent show flats such as that of Marine Blue and Park Place Residences.

MarineBlueCondoWhile earlier launches of The Clement Canopy and Grandeur Park Residences generated positive sales during their launch weekends, things have slowed down in the time following. That is however the general real estate market trend and is no cause for alarm. Most property analysts are glad for the change as it will bring about positive sentiments in the buying market, which could mean more energy, move net and direction in the months ahead. They are not certain this relaxation of the property cooling curbs will have a big impact on the market but are nevertheless happy the government has taken this step in moving forward. The next most likely impact would be the push for those caught in a dither of to-buy-or-not-to-buy.

On the other side, the Federal Reserve has raised their interest rates to 1 per cent and that could affect home loan rates, in turn diminishing demand from property investors.

 

More private land sites up for collective sale

With improving sentiments in the real estate industry, land and property owners are beginning to test the waters once more with new freehold sites and shophouses up for collective sale.

Goh&GohBuildingAn exciting prospect comes in the form of the Goh & Goh Building in Upper Bukit Timah. The 4-storey building is a mixed-use site currently consisting of 7 residential units and 7 shophouses. It has recently been put up for collective sale with a tag of $120 million. Situated right at the doorstep of the Beauty World MRT station and next to the Bukit Timah Shopping Centre and Beauty World centre, it is a delicious plot of prime land indeed. And a sale could be on the way as almost 80 per cent of the building’s owners have already given their consent for the go ahead of the collective deal.

Properties in the area have been selling swiftly and developers who are looking to replenish their land bank in the area will no doubt keep a keen eye on this land. The area has further potential for development, in terms of infrastructure and amenities. It is also situated in between the Upper Bukit Timah, Bukit Timah, Bukit Batok and Jurong Kechil areas where both local and international schools dominate. In fact, neighbouring land plots have already been earmarked for hotels, hospitals and other residential or mixed-use properties.

Hillbrooks CondoAfter taking into account the $15 million development charge the successful bidder is estimated to have to pay, property analysts expect the land rate to hover around $1,460 psf and the winning developer could possibly accommodate around 100 residential units in the new project.

January’s private home sales plateau

After a slight rise of 0.1 per cent in December, January’s completed private home prices remained flat. There were some rise and fall in the different districts but overall, non-landed residential property prices evened out on a plateau.

CreekBukitTimahThat may not necessary be a negative as signs of stabilisation are generally expected of the year. Property analysts say that some of the zero per cent month-on-month change could also be due to the availability of smaller units with a higher psf pricing schedule. Besides shoebox apartments, studios and one-bedders, family-size units in new developments are also now smaller in size than before.

Small apartments aside, prices of completed condominium units in the central region did rise 0.7 per cent after a 0.3 per cent dip in December. In the non-central regions however, prices went the other direction with a 0.6 fall following a 0.5 per cent increase the month before.

26NewtonThe private real estate market could however be looking at more resale properties entering the pen soon as most buyers who have purchased investment properties in 2013 will have completed their 4-year holding period this year. This means they are no longer tied down by the cooling measure which requires them to pay a seller’s stamp duty should they sell their property within 4 years following the purchase. Whether the sector is ready for this influx of properties while pulling themselves sluggishly out of the lull remains to be seen.

Property cooling measures to stay put

National Development Ministry Lawrence Wong has recently mentioned that the curbs placed on the property industry are here to stay as demand for property not declined.

HillsTwoOneThough property prices may have fallen, the dip has been gradual and slow. Coupled with the fertile bedrock of low interest rate and affordable quantum pricing of residential properties, the authorities may be afraid of a sudden and unmanageable spike in demand from investors should the curbs be lifted anytime soon.

And their fears may not be entirely unfounded as the market has been showing budding signs of recovery in the past couple of months. Demand, in particular for smaller units in well-located properties, from local and foreign investors alike, have been on the rise while prices are beginning to hold steady. Pent-up demand from previous quarters of muted activity have meant a rise in sales volume.

SignatureECYishunBigger Central Provident Fund housing grants will be included in the upcoming Budget talks, which may sustain resale HDB flat volume as more buyers qualify for subsidies. Resale volume for the public housing sector has already risen 7.8 per cent last year. As demand for resale flat increases, so will pricing and sales volume. A stabilising resale flat market could also mean an increase in the number of HDB upgraders who are buying off the private property market, in turn boosting sales in the private housing sector as well.

Freehold site to yield potential landed homes in Orchard road

The Orchard road belt has not seen landed homes in its midst, or at least new ones, for quite sometime now. They are few and far in between and usually cost more than an arm and a leg. But a freehold residential site near Orchard road worth $72.8 million might potentially yield landed homes.

OneTreeHillGardensThe One Tree Hill Gardens site measures at 39,063 sq ft and currently consist of 6 maisonettes and 7 apartment blocks or $1, 864 psf in asking price. The units here are of considerable sizes, ranging from 1,916 to 4,682 sq ft. Should the development succeed at a collective sale, each home owner could receive anything between $4 to $11 million. What the site could potentially yield are 13 detached and semi-detached houses. Considering the prime district, the rarity of landed homes across the board and more so in the centre of town, and the lack of sizeable residential sites readily available for redevelopment, marketing agent Knight Frank is confident of the interest the site will garner. Recent sales of sites in Grange Road, Cuscaden Walk and Hullet Road have all drew considerable bids of $190.5 million in total.

The area surrounding the One Tree Hill Gardens site is in itself an exclusive enclave of high-end apartments and some landed homes. Add on its future proximity to the upcoming Orchard Boulevard MRT station along the Thomson-East Coast Line and up goes its value.

Rise in new private home sales volume

The number of new private homes sold last year have risen on the back of declining prices in the primary private home sales market. Fighting against predictions of a languishing private residential sector, new private home sales have held up in 2016 with 8,136 new units sold, 9.4 per cent higher than 2015’s 7,440.

SantoriniBuyers have been picking up units directly from developers, aided by a couple of pushes from low interest rates an and lower selling prices. Though 2016 was a slow year for Singapore’s real estate industry in terms of home prices, the number of transactions clocked have surprisingly went against all odds. While private home prices have fallen over the past 3 years, market sentiments have begun to pick up last year and increased interest and availability of one- and two-bedroom units whose total quantum prices were more palatable for the general buying public and investors alike.

In Q4 of 2016, 2,480 new units were sold, the highest number in a quarter for the year. Despite the year end’s usual market lull and only 90 new units launched in the last quarter, December’s sales were positive with suburban projects leading the way with 231 sales, followed by 112 in the city fringes and 24 in the core central region. Last month’s best seller was The Santorini in Tampines which sold 26 units at an average price of $1,046 psf.

Fierce bids for Perumal Road land site

A mixed-use land site on Perumal road which could potentially yield 200 private homes and an entire floor of commercial spaces have attracted bullish bids from property developers since its release in November last year.

Sturdee-Residence11 bids have been placed, the highest at 4.4 per cent more than the next in line came from Low Keng Huat at $174.08 million. The second highest bid came from China Construction (South Pacific) development. The keen activity in the land sales sector could translate into a competitive primary and thereafter secondary market which will in turn mean a ready pool of buyers who are ready to spend after the prolonged market lull over the past few years.

Average selling prices at this site is expected to hover around $1,700 psf due to the high land cost and also its proximity to the Farrer Park MRT station and other amenities such as City Square Mall and Mustafa Centre. The neighbouring plot where Sturdee Residences stands only lodged at $787 psf.

The lack of land sites available for sale in the earlier part of 2016 could have resulted in pent up demand from developers who are looking to replenish their lank banks in preparation for 2018 and beyond when market recovery is expected to happen. Property analysts are already seeing signs of market stabilisation and developers who prepare ahead of the recovery could just catch buyers at an opportune time.

 

Hong Kong’s property prices expected to rise further

As one of Asia’s, if not the world’s, most expensive cities to live and work in, it comes as no surprise that the real estate in Hong Kong is one of the world’s costliest.

onekaitak_2

Photo credit: www.onekt.com.hk

Despite the Hong Kong government‘s repeated attempts to cool the market, with implementation of stamp duties and laying down of other purchasing restrictions, property prices in Hong Kong have continued to climb. And things could be heating up even more this year as even Mr Li Ka Shing, the country’s richest man, predicts the market still have room for property prices to climb further. In November last year, private property prices reached a peak unseen since 1979 when the data was made available by the city’s rating and valuation department.

Although there has been some political unrest, mostly civil, in the city and interest rates have been on the rise, there is still space apparently, for slight rise in prices this year. It will not be a smooth ride up, but there will be increments made nonetheless. China Overseas Land and Investment for example has listed the prices of their latest private residential development in the former Kai Tak airport area for almost 20 per cent higher that the same which were sold in August. In a city where liveable land is scarce, developers have been known to pay exorbitant prices for land sites, for example the record ids for sites in the same Kai Tak airport area for US$1.8 billion or S$2.58 billion.