Sentosa Cove units fetch high prices once more

There was a time when luxury properties on Sentosa fetched luxurious prices. That time was more than 2 years ago. The property cooling measures have hit home since their implementation over the past couple of years however, and sales number sand prices have dropped with the imposed additional stamp duties and loan restrictions.

TheOceanfrontBut there may be light yet in the horizon. Recent sales of 2 units at The Oceanfront condominium apartments in Sentosa Cove luxury enclave have soared above the $2, 000 psf range despite their lack of a waterfront view and their low-floor  Previous sales, which were few and far in between, have gone as low as $1, 190 psf. That was a $463 psf loss on a $1, 653 psf second-storey apartment at The Coast. Considering the fact that most mass-market homes on the mainland are already going at the $1,000 psf range, prices have declined substantially since its peak in 2008.

Will investors with deep pockets continue to pick up deals on the island, especially as prices dip? And will those who have already purchase units on this exclusive waterfront-living enclave continue to hold off on selling in wait of prices rising in the future? How much more will prices be able to rise and will the competition with units on the mainland only become fiercer?

Future new private homes in 2 estates

Toa Payoh is well known for its attractiveness as a mature HDB estate, well chocked with amenities and commanding considerable prices for the resale HDB flats. However, the private condominiums in its midst are far and few in between

TreVistaTreVistaBut that might soon change as a private residential site near Braddell MRT station has been put on sale which might yield new 99-year leasehold properties in the future. Since the Government Land Sales Programmes (GLS) is planning to reduce the number of plots going up for sale, bidding for this prime site was keen, with 14 bidders going in with the highest coming from Evia Real Estate and their partners, Maxdin and Gamuda at $345.86 million. Selling prices of the new property is expected to range between $1,450 psf and $1,550 psf.

Just like Jurong and Lakeside, developers are expecting pent-up demand for private condominium apartments in Toa Payoh to work in their favour. The newest launch here, which has been for sometime now, is Trevista.

Hundred Trees on West Coast Drive.

Hundred Trees on West Coast Drive.

Another popular site which went up for sale under the GLS programme is one at at the Sungei Pandan waterfront at West Coast. With the possibility of yielding up to 600 homes in an area near the Westgate and Jem shopping malls, the Science centre and the future high-speed rail terminal in Jurong East, this 99-year lease term site is expected to fetch $370 million at auction. Nearby properties such as Waterfront @ Faber, Infiniti and Hundred Trees, have all fared well with some having sold out.

 

 

 

Smaller private homes popular with HDB Upgraders

Whether for occupation or investment, HDB dwellers moving into the private property market are setting their sights on smaller units below 100 sqm priced between $750,000 and $1.05 million. Median sizes of purchased non-landed homes have fallen to 85 sq m.

This could be a good indicator for developers and resale private condominium sellers of the pricing sweet spot in upcoming launches. Prices of completed transactions of non-landed homes have fallen 5.4 per cent. But private property owners who are purchasing within the market are snapping up bigger units of up to 110 sq m. This could be due to the fall in prices since 2013 and the affordable total quantum pricing.

Pollen&BleuThe number of foreign property buyers have also decreased slightly, with most now targeting luxury homes tagged above $5 million. In addition to Singapore’s political and economic stability, established infrastructure and education standards, value-for-money property options continue to draw foreign investors despite increased stamp duties.

As the market acclimatises itself to the new dynamics of the Total Debt Servicing Ratio (TDSR) framework, increased stamp duties and other property cooling measures, the buyers may gradually re-enter the market. With the promise of new launches coming up in then next few months, the numbers could see a turnaround soon.

Fewer new private property launches

Despite lower sales of new private home last month, the percentage of sales based on the number of units launched, was positive.

The lower sales figure was mainly due to the lack of new property launches. But the take-up rate of the 499 units launched was at a happy 128 per cent in May. The take-up rate was only 84 per cent in May this year, compared to 82 per cent in April 2014. Considering the 21 per cent fall in sales in the first 5 months of this year, the leap last month is a promising sign.

HighparkResidencesLeading the sales were suburban launches at Botanique at Bartley, Northpark Residences in Yishun and The Panorama in Ang Mo Kio. Median selling prices were $1,232 psf at The Panorama, $1,292 psf at Botanique at Bartley and $1,397 psf at Northpark Residences. Competitive pricing may have lowered prices on some newer launches and this could have attracted buyers back into the market. There were even reports of private funds or group of investors who have picked up 16 units at 111 Emerald Hill.

In the months ahead, the number of new property launches will remain low, which may in turn affect figures. But instead of looking at across-the-board figures, sussing out potential deals in previous launches which are re-launchning new units could be the way to get ahead of the pack. Upcoming launches to look forward to are Gramercy Park in Grange Road and High Park Residences in Fernvale.

Resale private apartment prices remain level

Last month’s resale private non-landed property prices remained flat, which could be a sign that the market is bottoming out.

The back-and-forth quick-step between sellers and buyers is a dance familiar to market players, but they are expecting further falls in prices of 3 to 6 per cent, especially in the suburban resale property market. In the Central regions and prime districts, prices have fallen considerably since its peak in 2013, and thus it’s not surprising to find a rise in resale volume of late. Investors who have been on the lookout for prospective buys will be quick to jump on these units.

SimsUrbanOasisIn the suburbs, it is another picture altogether as prices have held relatively steady despite the property cooling measures. But the sheer number of new units entering the market, combined with the weakening leasing market, may bring an about-change soon. In addition, the per sq foot prices of newer condominium units have increased, due to their smaller sizes. What this could mean for the market is an expected further fall in prices as resale units will have to compete with the newer developments and the total quantum prices become more important for buyers.

But the industry could well expect and enjoy an increasingly positive resale volume as up to 6,000 resale units are projected to change hands this year.

 

Rebound in resale private non-landed property market?

If sales volume are anything to go by, signs of the resale private property market rebounding could be imminent.

Since the fall of prices of resale units to equivalent of or lower than new private non-landed properties, the number of transactions have increased significantly. Within the first 4 months of 2015, transaction volume has seen a 20.7 per cent increase. Resale properties are often ready for immediate occupancy and rental, thus buyers tend to favour these units to new ones in order to skip the wait of building and construction. The rental opportunities to be had within the few years it takes to build a new residential property could be quite substantial. And oftentimes, resale units tend to have a bigger floor area.

PebbleBayCondoThough the number of transactions, 1,411 from January to April this year, is still lower than the 2,203 in a year-on-year comparison with the peak in 2013, property analysts are upbeat about the market as the year moves on. It could show that buyers are finally getting used to the cooling measures, in particular the TDSR (total debt servicing ratio) framework, and realising that the market could be reaching a plateau. Sentiments could be that this is the time to buy, before prices and interest rates start climbing again.

The promising signs could be seen across the island, though more markedly in Districts 5, 10, 15 and 23. Some of it could be due to the fall in prices over the past year, and some the potential of having the future Downtown MRT line in close proximity. Even the Central region’s luxury properties have seen a recent boost in sales numbers of 24.2 per cent, most evident in Districts 9 and 10.

 

Private resale home prices stabilising

With minimal fall in prices over the previous couple of quarters, could this be a sign that resale private property prices are stabilising? Could buyers be getting used to the current home prices and are coming back to pick up deals before a possible rise? Will the predictions of a 4 to 8 per cent drop in property prices this year continue on its track or will buyers buck the trend?

Botanique@BartleyThe NUS Singapore Residential Price Index (SRPI) has indicated a 2.2 per cent fall in resale condominium prices over the last 12 months. But since the first quarter of 2015, the fall has been more gradual and marginal, considering the expected 5 per cent year-on-year fall in prices per month in the last quarter of 2014. The next couple of months could be the watershed for the property market. A slow and small drop in prices could indicate a possible bottoming out of the market.

Part of the reason for last month’s 0.1 per cent fall in April could also be due to the high transaction volume. The recent new property launches of Botanique at Bartley and Northpark Residences may also have had a trickle-down effect on the resale market, in particular properties in the proximity of these 2 launches. Another promising bit of news is the 0.4 per cent rise in the prices of small apartment units up to 506 sq ft. A much untested market, particularly in the suburbs, as more commercial businesses move out of the central region and into the heartlands, the demand for these units may change in the next few years.

Waterfront living in Iskandar – UMCity Medini Lakeside

Aptly named UMCity Medini Lakeside, the new development in Nusajaya, part of the Iskandar project in Malaysia, is developed by United Malayan Land (UM Land). Despite recent news about a possible supply glut in the Iskandar regions, in particular Southern Johor, the Malaysian developer is upbeat about the response to this new project as most of the existing developments are high-rise residential areas. One of the most recent launches in the same area was the RM2.5 billion River City @ Danga Bay.

UMCityMediniLakesidePhoto credit: UM Land

UMCity Medini Lakeside is situated next to a lake in Medini, and will feature 3 serviced apartment blocks, an office tower and a retail mall. Unlike residential units, serviced apartments may have an upper hand in terms of the extra values in service and maintenance. The units sold are “guaranteed” a 6 per cent annual return rate and investors will receive free stays at these apartments and similar brand apartments outside Malaysia. The 3 apartment blocks will be managed under the Shama Medini, Ozo Medini and CItadine Medini names. Nearby, there is another serviced apartment block, the 310-room Somerset Medini Nusajaya.

With all that building and construction activity going on in the Iskandar region, the next question might be how the government plans to bring businesses and internally or externally import a suitable population into the area. In the U.S and China, there have already been examples of ghost towns which are built up with hardly anyone living in them. How then would the authorities be able to combat this possibility and what have they already done to ensure a smooth passage to their desired goal or a bustling hub?