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.

Tenants calling the shots

Tenants are now calling the shots in the private apartment rental market. From lower rental prices and shorter leases to property renovations, some are even demanding specific furniture, new utensils and linen.

SeaHorizonEC

Photo: Sea Horizon executive condominium in Pasir Ris

Property rental prices have been coming down, especially as property prices have fallen over the last few years, and supply have increased substantially. Landlords are now finding it harder to find tenants willing to sign the standard 2-year leases which were commonplace in the past. Now most tenants are asking for shorter leases of 6 months as they know they are able to secure another place at a cheaper price should they wish to do so after the lease period. Private property rents have fallen 4.6 per cent in 2015, with rents in the outside central region (OCR) feeling the heat more with a 5.6 per cent fall. Rental prices of city fringe properties fell 4.9 per cent.

Property experts are expecting a 9 to 10 per cent vacancy rate this year, with rental prices falling 8 per cent. There will be approximately 26,467 new private property and executive condominium units made available this year, pushing supply up to an record high. Coupled with the authorities clamping down on immigration and a weak global economy, the prospects may seem a little dim. With investors and landlords not able to secure rental yields, the market may see an influx of units being sold; mortgage auctions may also find themselves having quite a few more units at hand.

Singapore’s Interlace on World Architecture Map

The Interlace condominium on Depot road has achieved international acclaim with a top-prize win at 2015’s World Architecture Festival, selected from 338 projects. In the jury were celebrated architects and professionals such as English architect Peter Cook, Japanese architect Sou Fujimoto and Neri & Hu Design and Research Office founding partner Lydndon Neri.

The InterlacePhoto: The Interlace

Lauded by the festival judges as “bold, contemporary architecture and thinking”, the 31-block Interlace designed by Ole Scheeren won the World Building of the Year award. Their hexagonal stacked concept won the judges over with their innovative alternative to tower blocks or clusters which provide options to housing types and unit/block dimensions. German architect, Ole Schereen is also working on the DUO mixed-use development on Beach road.

Oasis TerracesPhoto credit: Oasis Terraces by Multiply Consultants

Some of the other winners at the Festival included Oasis Terraces in Punggol and Homefarm, a proposed urban retirement housing project by Spark Architect. Oasis Terraces, a integrated polyclinic and integrated neighbourhood centre developed by Serie + Multiply Consultants, took away the prize in the Commercial Mixed Use – Future projects category while Homefarm won in the Experimental-Future project category.

 

 

 

ABSD deadline looms

Properties launched 5 years ago are now facing their deadline to sell their units or incur the dreaded Additional Buyers’ Stamp Duty (ABSD). The regulation allows developers a 5-year window period in which to build and sell the the units in a residential project. Beyond this time frame, they will need to pay a 15 per cent duty on remaining units. This impacts the final selling price, which will see even fiercer competition from newer launches and other resale properties.

Mon Jervois

Photo: Mon Jervois private apartments

What some developers do is to purchase their own units, if the cost of paying the ABSD supersedes the losses otherwise. Properties launched before mid-2013 have mostly sold all their units, but launches after the Total Debt Servicing Ratio (TDSR) framework kicked in tell another story. Non-Singaporean developers have an even tougher job as they need to sell their units within 2 years of completion or incur hefty fines and pay for extensions.

Prices of unsold units at these projects facing the deadline have already come down since their launch. At Kingsford@Hillview Peak for example, the media selling price have fallen from $1,340 psf to $1,288 psf in about 3 years. More than half of the 512 units remain unsold.

A similar story is told at The Trilinq in Clementi where 220 of its 775 units has sold by the end of 2015 at median prices of $1,329 psf. When it was launched in Q1 of 2013, the average selling price was at $1,545 psf.  It is not only the larger scale projects which are facing the deadline pressure. The 109-unit Mon Jervois apartments also saw a drop of $235 psf in the last 2 years. The project is approximately 43 per cent sold.

 

Home prices along Downtown Line go to town

As expected, the newly completed Downtown MRT stations have brought much cheer not only the commuters but also to owners of properties in their vicinities.

The SkywoodsPhoto credit: Skywoods.com.sg

Since the Downtown Line began operating some of its stations last December, prices of properties near these stations have already seen an increase in interest, units sold and also rental prices. Private apartment prices have risen from $1,523 psf to $1,592 in the last quarter, up 4.5 per cent from the previous quarter. Out of the 18 stations now operating include long-awaited ones along Bukit Timah and Upper Bukit Timah such as Tan Kah Kee, King Albert Park, Sixth Avenue, Beauty World, Cashew, Hillview and also Bugis, Little India and Rochor stations along Rochor Canal and Sungei Road.

The price increase can be observed at private apartment projects such as Eco Sanctuary, where 9 per cent more units were sold by December. The development is now 91 per cent sold. Kingsford Hillview Peak condominium also saw a 3 per cent increase in sales and The Skywoods almost doubled their in the number of units sold.

With the effect MRT stations have on property prices, it would not be surprising to find prices of homes along upcoming Downtown and latest Thomson-East Coast line appreciate in the near future.

Australia’s property and housing market feels the chill

Tighter loan restrictions and a supply glut – these issues may not be affecting only Singapore’s property market. It seems in Australia, the same has threatened to shake the markets.

SYdney PropertyPhoto: Sydney

Property prices which were soaring, especially in major Australian cities such as Sydney and Melbourne, have now come down, as the approval for multi-unit properties have fallen 12.7 per cent last November. Developers of high-rise, multi-unit properties have found it harder to secure approvals as a supply glut looms in the near horizon.

The banks have also tightened their lending, and new regulations have made it more difficult for foreign investors to pick off large number of properties. This in turn has affect the construction industry in Australia, and have come at an most unfortunate time as the government has hoped it will plug the hole left behind by the lagging mining industry.

That said, there are still many considerable new properties which are highly valuable. Most importantly, they need to fit well with the investor’s or buyer’s needs and portfolio. Factors such as financial feasibility and longevity, short- and long-term leasing potential and margin of development of the district will continue to guide investors in making their purchasing decisions.

Suburban private home prices waver


Parc EleganceNovember saw a 0.6% fall in private home prices, pulled down mainly by falling figures in the shoebox apartments segment. These units sized below 506 sq ft fared 1.2 per cent better in October than in November.

Property analysts are expecting some selling action in the months ahead, particularly in the non-central suburban private home segment as the surge of completed units and increased interest rates may force the hand of investors who have overstretched themselves. However, the number of sellers may outweigh the number of buyers as competition toughens up.

Properties in the central regions or prime districts of 1 to 4 and 9 to 11 could have fared better as well, with a 4.5 per cent fall in prices in a year-on-year comparison. That is a drop of 13.1 per cent from the peak in May 2013. Industry players have reasoned that properties in the central regions are generally larger in size, which means they also have a higher total quantum price, which makes them harder to find buyers for. Foreign buyers are also expected to pay a 15 per cent ABSD (Additional Buyers’ Stamp Duty), which may have turned some investors off the Singapore property market.

The Boutiq Killiney

Photo: The Boutiq Killiney

As the target audience for the central and non-central regions are quite different, sellers and buyers alike may need to alter their expectations of the market in 2016. In the central regions, some sellers may be ready to let go of their properties as the economy slows, but prices are not expected to fall drastically as the owners usually have the holding power to hang on to their properties till the price is right. In the non-central regions however, where owners and buyers are usually salaried workers, pricing may be more dependent on external forces such as the overall rate of economic growth, employment and mortgage rates, rental potential and debt ratios.