Prices of suburban properties dipping

Prices of new properties in the prime central districts have been rising, even as the market dulls. Suburban homes are feeling the strain put on the market by the influx of completed new homes this year.

The PanoramaBuyers seeking out properties in the suburbs tend to be more price-sensitive, and are often hampered by the total debt servicing ratio (TDSR) framework and the additional buyers’ stamp duty (ABSD), leading to higher competition from an expanding pool of stock for a shrinking pool of ready buyers. Prices at The Panorama in Ang Mo Kio have fell 9.7 per cent since its launch to $1,213 psf and similarly in Clementi, units at The Trilinq are now priced around $1,408 psf, almost 9 per cent lower than its launch price.

In comparison, buyers of properties in the prime central districts are more affluent and are able to afford the prices properties here demand. For example at Robin Residences, selling prices are now hovering at $2,371 psf, 2.4 per cent higher than its launch-price. Buyers of centrally located properties also have stronger holding power and less likely to sell unless the price is right.

RObin ResidencesThe price gap between suburban and central district homes have been widening. Last year, CCR (core central region) new-home price premiums were 81 per cent over those in the OCR (outside central region). As more OCR homes hit the secondary market this year, how will smaller investors handle the competition?

 

Buangkok – The forgotten gem

When the Buangkok name is mentioned, many may remember the time when its namesake MRT station was in the news for being underused; some may still only think of it faintly as the backyard of other more mature townships such as Ang Mo Kio and Hougang. But Buangkok has since come into its own with connectivity on the North-east MRT line and as Sengkang and Punggol continues to grow.

The 616-unit Jewel @ Buangkok private condominium has taken root at this tranquil spot on the island and is just a 3-minute walk away from the Buangkok MRT station.

DnestSituated in between the Eastern and the Northern regions, it is just a short drive away on the Tampines Expressway (TPE) and Kallang-Paya Lebar Expresseway (KPE) from the Changi Business Park, planned Paya Lebar Business Hub and the Singapore EXPO. This makes the property a prime sweet spot for not only home-occupiers but also investors.

95 per cent of the property has been sold and its range of 3-bedders, dual key 4-bedders and penthouses will come into the private market this year. Most of the units boast a north-south orientation thus cutting out sun glare, and also come with smart storage systems and premium home interiors. Another similar property nearby with a 95 percent sales record is the d’Nest condominium which is expected to receive its TOP (temporary occupation permit) status next year.

Luxury apartments in Thailand taking off

Thailand – one of the many South-east Asian countries frequented not only by regional visitors, but also those from countries afar who fancy a spot of sun, great food and even greater shopping. With short-term apartment rental schemes taking off and businesses relocating headquarters regionally, the construction and property markets have seen a boom in the past decade.

Chewathai InterchangePhoto: Chewathai Interchange (photo by TEE Land)

Just a stone’s throw away from the Don Meaung airport, Singapore developer TEE Land is building its first landed property development, Chewarom Residence. The project will have 15 detached and 66 semi-detached houses, and is set to launch in the second or third quarter of this year to prices starting from $194,500 (5 million baht). Though these units are only available to locals due to foreign property ownership rules, this is nevertheless a coup for developers outside of Thailand.

TEE Land also ha a number of other condominium developments in Bangkok and Nonthaburi. One of their most exciting ventures include a 279-unit, 26-storey condominium Chewathai Interchange, which will boast a host of communal facilities such as a sky swimming pool, business centre and 24-hr security. TEE Land’s subsidary, TEE Development, owns 49 per cent of Chewathai.

Hallmark NgamwongwanPhoto: Hallmark Ngamwongwang (photo by TEE Land)

Another 560-unit condominium, Chewathai Petchkasem 27 has a freehold status and will be made available to foreign buyers by September starting from 1.5 million for a 40 sq metre unit. Situated opposite Siam University near Bang Wa BTS station, it will be ready by 2018 and can easily to rented out.

Property auction sales do well in weakening market

Multiple-property owners may face increasing pressure as the market continues to soften. Rental yields and demand have fallen due to slowing global economic growth.

Axis@SiglapPhoto: Axis @ Siglap

Real estate consultancies and auction houses are beginning to see an down-the-middle split in auction listings between owner listings and mortgagee listings. The latter are units put into auction by banks because of owners defaulting on their mortgage payments.

Not only are residential units being put up for auction, but office spaces, shophouses and retail units are also finding their way into these auctions. Home owners are increasingly favouring the path of auction listings are they garner higher exposure and are more likely to attract investors or buyers who may be willing to pay for quality or a good bargain.

Some of the auctioned properties out there are in the million-dollar range, including a 1,776 sq ft penthouse with roof terrace at Axis @ Siglap for $1.3 million, a 13th-floor 1,808 sq ft unit at The Orchard Residences going for $6.2 million and a $16 million single-storey detached Branksome Road house in Tanjong Katong.

TanameraCrestPhoto: Tanamera Crest

Affordable units sold below valuation are also available at these auctions, for example a 603 sq ft unit at The Greenwich in Seletar road going for $730,000 and $980,000 for a 1,205 sq ft unit at Tanamera Crest. These suburban units may be good bargains for buyer-occupiers while the higher-end listings are good fodder for investors in the know.

Small completed private apartments fare better

Prices of completed private homes have risen slightly in January by 0.1%. That is after a 0.6% fall in December, which could be due to the lack of new launches and the festive year-end lull. The NUS Institute of Real Estate Studies’ (IRES) Singapore Residential Price Index (SRPI) has indicated varied price fluctuations across the different regions. Small apartments up to 506 sq ft fared the best, with a 0.6% rise while units in the central regions fell 0.5%.

This most recent study includes a new segment that looks at 574 private residential developments in 26 districts which were completed between October 2003 and September 2015, which could give a clearer picture of market direction in the recent decade. Some of the projects included in the study were the D’Leedon, Skyline Residences and Silversea condominiums.

The outlook for completed private properties remains conservative for the rest of the year, with prices expected to fall, however slight. Developers and industry players are already calling for the property cooling measures to be lifted, though the authorities seem to be standing their ground, for now. The year is still young, thus global economic shifts in the first half of 2016 may impact the decision-making process for H2. There will still be investment opportunities if one widens the scope to include regional cities.

 

Unsold Condo units – Price cuts and Bulk Sales likely

iLiv@GrangeWith deadlines looming for a number of residential projects launched in last 5 years, buyers and investors may do well to keep a lookout for potential deals. Though developments which have a considerably large number of unsold units may not drop prices drastically, they may be seeking out buyers who are willing to take on bulk sales.

Foreign developers are required to sell all their units within 2 years of obtaining a Temporary Occupation Permit (TOP). That, coupled with the Additional Buyers’ Stamp Duty (ABSD) and the increased number of new units, the market has been a little shaky. Extension charges, pro-rated according to the number of unsold units, will be levied beyond the deadline. Some of the charges can be rather hefty, with $38.2 million at Nouvel 18 and $22 million at The Interlace.

The TrilinqPhoto: The Trilinq

Some of the other properties potentially also facing extension charges include D’Leedon, Goodwood Residence, TwentyOne Anguillia Park and iLiv@Grange. At The Trilinq in Clementi, prices have fallen from $1,545 psf when it first launched, to $1,359 psf. Though property experts are not expecting too much of a price-tweak, the increasing amount of unsold stock in the market may push developers to consider alternative means of cutting down on losses. It looks like 2016 could continue to be the buyers’ market.

Waterfront Living moving inland

Moving away from the coastlines, waterfront living has become more available inland. Aligned with the Urban Redevelopment Authority’s (URA) Masterplan, Singapore’s landscape will evolve to include many man-sculptured green areas and waterways, with enhanced island-wide connectivity and a movement of population and property towards less mature districts and estates.

And it is only logical that building and property-development in these areas have ramped up in recent years. Besides government-built HDB flats, private condominiums have also been mushrooming in these developing districts.

Near Sungei Serangoon, just beside the Serangoon Park Connector, is the 1,165-unit Waterbay condominium. This 99-year leasehold condominium boasts a wide array of 1- to 5-bedroom apartment units, 2 swimming pools and even a childcare centre and 6 retail outlets. The waterfront views promise to bring a sense of living in a city but away from the buzz of a city.

In Punggol, there is the Watertown condominium, a mixed-use development that harnesses the beauty of nature and the Punggol Waterway while providing the convenience of city living with its extensive collection of integrated commercial and retail outlets.

With Punggol set to be the creative cluster in the North Coast Innovation Corridor which will also include Woodlands, Sembawang and the future Seletar Regional Centre, this outlier may soon be the latest town on the block to watch.

Private condominium prices hold steady

The fall in completed private condominium prices was gentler last year at 3.5 per cent, compared to the 5.7 per cent from the year before. Prices are expected to hold steady this year as a dip in supply of properties in this sector bring prices to a plateau.

Jewel CDL

Photo: Jewel @ Buangkok

Demand for smaller apartments of up to 500 sq ft in size, have been weakening as their numbers, especially in the suburbs, have been on the rise in the past couple of years. Investors have found them more difficult to rent out in the dulling leasing market and those outside the central region or further from regional business hubs may find themselves competing for the same tenant pool. Tenants now prefer units with larger floor spaces with just slightly higher rents.

Sale prices of completed private properties within the central regions however have fallen more sharply as they usually come with a higher total quantum price. Compared to the many newer properties which have found a sweet spot with their total selling price, units in these central or prime districts see fewer overall transactions.

As the volume of unsold completed condominium stock diminishes and with the fewer launches expected this year due to cutbacks on land supply, resale properties could expect a happier year ahead.