Jurong – the second CBD?

The central business district (CBD) may always retain its title as the  financial hub of the nation. But regional hubs are gradually becoming popular with businesses who are drawn by the cheaper rents and increasing flexibility of the suburbs.

The east has Marine Parade and the seaside, then there is Punggol and its new waterways, now Jurong will have its own lake and residents will soon be able to have waterfront living, working for a multi-national company just a couple of mrt stops away, and shop on the way home at the shopping malls. Connectivity and accessibility will soon no longer be a major consideration.

LakevilleThe building and expansion of infrastructure in Jurong has been going on for over a decade now and with a new Jurong Lake Gardens, the Science centre, MRT stations and bus interchanges, shopping malls and other commercial facilities choc-a-block in the district, the outlook for the once industrial estates is set for a big change. Not forgetting, the area will also have its own Ng Teng Foong hospital next year.

Sales and rental prices of HDB flats in the area are expected to rise by up to 20 per cent once the facilities are completed. Property analysts are likening it to some of the more popular HDB estates such as Bishan, where proximity to facilities and accessibility boosted home prices over the years.

Private properties in the Lakeside district also looks set to rise in price as it becomes an almost “exclusively private residential” district. Condominiums here fetch up to $1, 000 psf for new units and at the most recent launch of the Lakeville condominium, prices went up to $1, 300 psf.

The icing on the cake – The rail terminal which will connect Singapore and Kuala Lumpur. The future looks exciting for Jurong.

Toa Payoh’s facelift

As one of the oldest mature HDB estates in Singapore and HDB’s second satellite town, Toa Payoh has a past which evolved with the growth of the nation. As more new towns such as Punngol, Sengkang and even newer ones in the future such as Bidadari come up, older estates are welcoming timely upgrades.

And it is now Toa Payoh‘s turn as the popular estate saw an overwhelming response to the BTO HDB flats launch a couple of weeks ago. With it’s central location, full-fledge sets of amenities, MRT stations, bus interchange and established schools in its midst, it’s an estate which will stand its own for a long time to come.

TreVista in Toa Payoh Made up of mostly HDB flats, there has hardly been any new private homes launched in the district for almost three years now. However, a plot of land near  the MRT station has been put aside for development, and should a private property be launched in the spot, it will be sure to bring in the buyers and fetch high prices.

In the current market, resale flats sales have dipped from 25 to 15 per quarter, but rental prices and value appreciation of private properties in Toa Payoh has remained stable. Average prices stand between $1, 121 psf to $1, 460 psf with monthly rents currently between $3,60 to $4,10 psf. The private apartments in the area now are Trellis Towers, Oleander Towers and Trevista.

The years ahead hold great promise for the estate and its continued growth seems imminent.

Up and coming district – Jalan Besar

As properties in the city centre become increasingly out of reach for the average investor hoping to gain a footing in the property industry, more are turning to the city fringe areas such as Marine Parade, Kampong Glam and Novena. Now, the Jalan Besar and King George’s Avenue districts could also be attracting buyers.

CitronThough the private homes market in the area has softened in the past year due to mortgage limits, its proximity and increasing popularity with the young and hip crowd and potential connectivity with future MRT lines in its midst, has renewed interest from investors. An area in King George’s Avenue has also been gazetted for future HDB blocks. One completed condominium apartment block in its vicinity is the City Square Residences, which during its launch drew huge crowds looking to purchase smaller units for rental purposes. Other private residential properties include Parc Somme and Kerrisdale.

Buyers waiting for new options can keep an eye out for private residential properties such as The Citron Residences on Marne road. Property experts are positive about the potential rental yields of smaller apartment units in the area as the district continues to bring in a variety of new businesses. Currently rents for smaller apartments in the area go for as much as 4 per cent more.

City Fringe wins once more

From Marine Parade to Novena to Kampong Glam, areas surrounding the busy city centre and central business districts are some of the best spots for property investments and this has hardly changed over the years.

The mixed-use development DUO at Ophir road was one of the latest offerings late last year. This year, another similar residential-cum-commercial project join their ranks – the City Gate on Beach road. But before these giant developments came into play, the Concourse Skyline condominium apartments were already in place. This 360-unit property was priced at $1, 590 psf at its 2008 launch. Despite 101 of its units remaining unsold, existing units have gone for as much as $2, 075 psf in the last quarter of 2013.

CIty GateWith the large number of incoming units from City Gate, which is targeting a price range of $1,900 to $2, 000 psf, these remaining units at the Concourse Skyline may be up for some fierce competition. Developers, Hong Fok Land, may experience some pressure to lower prices in order to meet the “All sold” status.

City Gate will sit on the site of the former Keypoint and will feature 188 commercial units and 311 apartment units ranging from one- and two-bedders to the increasingly popular dual-key units. Penthouses will vary in size, from 484 sq ft one-bedders to 1, 819 sq ft four-bedders. The wide variety of units will draw buyers with different intentions in mind, but with such a prime location, the only thing that might stop consumers in their tracks is the strict loan limits.

ECs not so easy for buyers

Executive Condominiums (ECs) were first launched at the turn of the century, and these hybrid property types had legs in both the public housing and private property sectors. This scheme was launched by the Housing Development Board (HDB) thus buyers can apply for various government grants and loans. After an ownership period of 10 years, they will become private properties and their investment value more often than not, increases, some rather significantly too.

Their main purpose was to help HDB owners move into the private property market, especially the “sandwiched” class who are unable to afford private properties but yet do not qualify for HDB flats, and ECs quickly gained momentum in the first decade of the 21st Century as buyers found the space they received, the governmental benefits and the potential long-term gains a boon. In 2010, the revival of this sector created a huge rise in quantity and prices of ECs.

Sea Horizon Executive Condominium.

Sea Horizon Executive Condominium.

Even though executive condos are still popular to date, the tighter loan curbs mean those who are unable to receive HDB grants and have to take private loans are now only able to receive up to 80 per cent of the price of the property and have their loans capped at 30 per cent of their gross monthly income. With prices of ECs coming up to the $1 million mark and beyond, this has largely reduced the number of eligible buyers, not forgetting that there is a $12, 000 monthly household income ceiling for EC buyers.

Upcoming EC launches in Woodlands and Sengkang will be a good gauge of market response and affordability of units. Should the price points be right, there may not be a lack of buyers. Currently, there are still remaining unsold units at ECs such as Skypark residences, Waterwoods, Forestville, Twin Fountains, Sea Horizon, Ecopolitan and The Tampines Trilliant.

Smaller apartments gaining popularity once again

Just a couple of years ago, there were debates about whether homes were becoming too small for comfort as the 500 sq ft studio apartments or shoebox units took the market by storm. Some shunned small units, preferring instead to go for larger ones with a lower psf price.

But now as loan limits are truly showing their might, buyers are favoring smaller apartments once again due to their lower quantum prices and the ease of rental. Though not all are flocking to shoebox units, after all, young families do need a reasonable amount of space, the average home size has dropped to 947 sq ft from June last year. And for HDB upgraders, their chances to move onto the private property market might have become slimmer, especially if size is a major consideration. The average 4-room HDB flat is around 969 sq ft.

CIty GateOne- and two-bedders have increasingly become more popular with buyers as they are usually within their budget and investors find them easier to rent out. URA figures in fact also showed that new residential properties have also featured smaller units, with the average size being 753 sq ft. But this hardly comes as a surprise as home size has been shrinking since 2009.

The other popular property  type is the dual-key apartment which provides the atmosphere of having two separate living spaces within the same home. Some of these units share the same entrance but separate facilities such as kitchens and toilets, while others share the same facilities but have separate entrances, providing privacy for bigger families and offering more rental options.

As we progress into the second half of the year and the market evolves in reaction to buyers demand and supply of land, will developers be quick to re-strategize and cater to the majority?

$1 million sweet spot for home prices

The average affordability ceiling for properties have dropped by almost $200,000 ever since the Monetary Authority of Singapore (MAS) placed curbs on loans. The average price home buyers can now afford, or are willing to fork out, is $1 million. Properties between the total quantum range of $800,000 to $1. 2 million generally sit better with buyers. The range used to be wider, with homes reaching $1.4 million selling just as well.

LakevilleDevelopers have been quick to realize the shift and have been offering considerable discounts or competitive pricing for new launches. Smaller units such as studio apartments and one- or two-bedders have also performed better than their larger counterparts. About 8,254 homes priced between $700,000 and $1.2 million were sold during the last year. Properties which were offering more affordable units, such as the Coco Palms in Pasir Ris which launched units at $980 psf, were able to garner more sales.

And for buyers hoping to secure a home below $500,000 there are now more available, and more sold. In the last year, 291 units below $500,000 were sold from June 2013 to June 2014. Comparing to the year before, only 61 units were sold within the same time frame. Buyers consider smaller units easier for both occupier and rental purposes, plus most HDB upgraders rate affordability of homes as between $900,000 to $1 million.

Orchard road’s West end revamp?

A little off the main stretch, but nearer the exclusive Botanic gardens and Tanglin stretch of sprawling private homes and foreign embassies, the West end of Orchard road looks set for a revamp as MRT stations and other area redevelopment plans are in the works for this spot.

The TomlinsonA MRT stop which is part of the latest Thomson Line is planned just next to the Camden Medical Centre and targeted to be ready by 2021. Now may be the time developers will consider expanding or redeveloping land and older properties around the area. There have been movements in the recent years, with the latest property being St. Regis Residences. Sales at this luxury property has not always been positive however. Prices of $4, 653 psf in 2007 have since almost halved to $2, 399 psf.

Older properties in the same area, such as Cuscaden Residences and The Tomlinson, however fetch a lower sales price, and may be more palatable to those seeking an investment. But due to the relatively large size of most apartment units in the area, it also narrows the target audience. Those who are able or willing to purchase properties here will be limited as it may be more difficult to rent out. At The Tomlinson, the average resale price is $1, 896 psf.

Will the new MRT line bring refresh the market even as luxury homes sales are on a decline? Will the possibility of future collective sales of older condominiums be an incentive to purchase now?