Dual key apartments rising in popularity

The latest property type on the block has been gathering an increasing crowd of fans. Not surprisingly, since they offer the space and the privacy for larger, multi-generational families, giving them the option of having their family members close, but not too close for comfort.

The concept began with the Housing Development Board and their “Granny flats” in 1986 and the first private properties to pick up on that were the Caspian and 8@Woodleigh. And now, new properties actively set aside a number of units as dual key apartments.

Boathouse ResidencesSome of the latest market offerings to include these units include Seventy Saint Patrick’s, Northpark Residences, Riverbank@Fernvale and Botanique @ Bartley. Older properties with these options include Coco Palms, and The Santorini at Tampines. At the latter, there are 144 dual key units. Most of the dual key units include a two- or three-room unit attached to a studio apartment, with two separate entrances.

In addition to providing privacy, these units also provide a cheaper alternative to buyers who are running an office out of their home. It gives them a separate entrance to their business and a physical separation from their living quarters while saving on transport costs and time.

Plus, it is easier to rent out these smaller units. For longterm investment considerations, these units could also be sold as it is or as a normal unit with the separating structures reconfigured.

Coming up later this year, the Boathouse Residences, developed by Frasers Centrepoint Limited, will also feature dual key apartments.

Affordable units below $1 million at Botanique @ Bartley

Over the weekend, the 797-unit Botanique @ Bartley condominium opened for viewing at pocket-friendly prices. Situated on Upper Paya Lebar road, near Bartley MRT station, the Paya Lebar Methodist Girls’ School (Secondary), Maris Stella High School and The Australian International School, this new property seems like it has all the ingredients for an expensive price tag.

But instead, more than 70% of its units were pricedbelow $1 million, making it one of the more affordable new properties around town. With prices starting at $598,000 for a one-bedder, up to $1.68 million for three-bedders. While most of the units here are smaller, with one-bedroom apartments ranging between 495 to 689 sq ft and 926 to 1, 356 sq ft for three-bedders, the total quantum prices are more palatable with upgraders. A floor area comparision will however reveal that at $1, 300 psf, it is actually priced higher than the nearby Bartley Ridge which went for a median of $1, 296 psf.

Botanique@BartleyDeveloped by the UOL Group, the Botanique @ Bartley will feature “flexi” units, referring to the two- and three-bedders which can be converted into dual-key apartments. Some of UOL’s other properties include the popoular Thomson Three which only has eight units left unsold, Seventy St Patrick’s and Riverbank@Fernvale.

The rest of the year might not be hectic on the new private property front, with more attention possibly given to executive condominiums, thus supply might not necessarily overtake demand. How will that impact both the private and public housing markets?

Condominium prices wavering

It may be a year of fluctuations for the private non-landed property market. Condominium sales have been slow, though it picked up slightly in February.

Both new and resale private condominiums were affected by the market slowdown, much of it attributed to the TDSR (Total debt servicing ratio) framework set by the Monetary Authority of Singapore (MAS). But some property analysts are also connecting the dots between the lowered Cash-Over-Valuation (COV) prices of resale HDB flats. When COVs were high, potential HDB upgraders were able to leverage on these to leap into the private property market by using the COVs as part of the cash down payment for their new private homes. With the lack of this financial impetus, more are finding themselves in between an rock and a hard place when it comes to scaling up.

Sims Urban OasisWeaker buyers may find themselves having to hold back for now while those with the financial abilities will still be able to well afford what the market currently offers, and perhaps even more so as prices have been coming down for sometime now.

There has however, been a shift of interest from newer units to resale ones, in favour of larger floor area. HDB buyers have been purchasing units with an average of 926 sq ft in size, while private buyers leaned towards units averaging 1,119 sq ft in size. The sweet spot of affordability is now between $1.28 million to $1.46 million for private buyers and $950,000 to $1,09 million for HDB upgraders.

Yishun’s new private condo on the block – Northpark Residences

This weekend, there might be something to look forward to in the form of the 920-unit Northpark Residences preview launch. Part of Northpoint City, which will be an integrated development featuring the Northpoint Shopping Centre, Nee Soon Community Club, and links to the Yishun MRT station and bus interchange, these new units will bring life to the sleepy town.

Developed by Frasers Centrepoint Homes, the project will be ready by 2018. With the developer’s good track record with mixed-use developments such as Changi City Point, Compass Point and even overseas with Sydney’s Central Park, buyers may be able to rest a little easier should they wish to invest in this new project.

Northpark Residences1Since these new property types have held up well so far, with good responses from sales at projects such as The Hillier, The Centris at Jurong Point and Bedok Residences, Northpark Residences may be able to enjoy similar success. With its proximity to transport and amenities, rental at these mixed-use properties are usually in higher demand.

Units at Northpark Residences will be put up for sale later this month and as a guide; at Frasers Centrepoint Homes’ most recent launch, Rivertrees Residences, were sold at an average of $1, 050 psf.

Fall in resale private property prices

Buyers and property investors are becoming increasingly wary of the influx of new properties into the market, rising interest rates, the unchanged Additional Buyers’ Stamp Duty (ABSD) and the Total Debt Ratio Framework (TDSR). Resale private non-landed home sales figures indicated a 1.6 per cent drop in January.

Although buyers are still buying properties, demand and selling prices may not be as high as before. Smaller units seem to be more popular as the total quantum prices of these compact apartments are usually more palatable.

According to the SRPI (Singapore Residential Price Index) compiled by the National University of Singapore Sims Urban Oasis1(NUS), prices of non-landed private homes in the central area were hit the hardest with a 1.9 per cent decline. However, this could mean that the price gap between homes in the central and suburban areas are closing, the rate of decline for the former may be less steep.

Despite the popularity of smaller units with buyers of late, shoebox apartment sales fell 0.6 per cent in February. Developers are also aware of buyers’ preferences for a new unit over a resale one especially with buyers who are intending to purchase a private property for own-occupation purposes.

Moving ahead, property analysts are expecting resale non-landed private property prices to drop by 5 to 7 per cent this year.

Competitive pricing will help Property developer move units quicker

Home mortgage interest rates look set to rise sometime this year, and while new properties continue to come into the market, buyers will be spoiled for choice with executive condominiums, resale private apartments and new condominium units all competing for their attention.

Trilive KovanPricing might then be the differentiating factor in the current property market which is still finding its footing. In January, Symphony Suites in Yishun proved to be one of the best sellers in the non-landed private property market. Prices averaged at $1,010 psf, which was not considered to be on the higher end of the price spectrum. Most suburban properties fared better, making up 62 per cent of the total sales numbers last month. City fringe properties followed behind with 28 per cent and city centre homes took up only 10 per cent.

The TDSR (total debt servicing ratio) continues to be the main obstacle for buyers as the loan amounts they are now able to receive have been largely reduced. However, developers are unlikely to make drastic price reductions as land prices have been high for the past two years.

Contrary to concerns that new properties may outshine previous older launches and resale properties, some older developments have fared well in the last month. Trilive in Kovan sold 22 units at a $1,562 psf median price while 20 units in Jurong West’s Lakeville also exchanged hands at the average selling price of $1, 378 psf.

While the influx of new units and restrictive loan limits may be the way things go for the year ahead, the demand for residential properties may not necessarily have disappeared altogether. It may simply be a matter of buyers taking longer to weigh their options.

City fringe properties – Sales versus Rental prices

Despite a steep drop in prices of non-landed properties in the city fringes, rental prices in these districts seem to be holding up well. In 2014, sale prices in the Rest of Central Region (RCR) fell 5.3 per cent, more than the 4.1 in the central region and 2.2 per cent in the suburbs. Sale prices between city fringe and suburban properties are narrowing, especially with the large number of new city fringe properties introduced last year, paired with the increased ABSD (additional buyers’ stamp duty) and TDSR framework (Total debt servicing framework).

Sims Urban OasisExpatriates may be steering towards the city fringe regions with their exclusivity, proximity and more price-friendly options. Rental prices in the city fringes are around $3.50 to $4.50 psf, compared to $5 sf in the city centre and $3 psf in the suburbs.

With city fringe homes becoming more affordable, and rental prices still considerably high, these properties may be a good investment as resilience in demand and rental seem consistent. One of the latest city fringe residential development to go on sale is the Sims Urban Oasis, just a stone’s throw away from Aljunied MRT station and the future Paya Lebar Central Sub-regional Centre. Prices are starting at $628,000 for a 440 sq ft one-bedder to $1.55 million for a 990 sq ft four-bedder. Other properties in various city fringe districts include TRE Residences in Geylang, Eight Riversuites in Whampoa East, Highline Residences in Tiong Bahru and Sky Vue and Sky Habitat in Bishan.

Low sales for resale homes in January

With city centre homes leading the way, resale home prices seemed to be walking down the same path as the month before, with a dip of 1.7 per cent. Suburban homes’ decline was slightly less steep at 1.1 per cent and across the board, resale homes saw a 0.2 per cent drop in prices. On the bright side, city fringe properties did fairly well, with a 1.5 per cent gain.

The number of transactions were part of the reason for the drop. In January, only 282 private properties were sold, down from 363 in December last year. Other reasons include the loan restrictions and overall lower buying sentiments. With the festive season coming up in a couple of weeks’ time, the numbers for February may not see a drastic pick-up, but from March onwards, the figures will be telling of the year’s property market prospects.

6DeryshireAs the year goes on, industry experts are expecting buyers to pick up on the softening home prices and keep a quick eye out for serious sellers who may have potentially value-worthy offers. There are sellers out there who are still holding on to their asking prices as they wait out 2015. The year could be a tussle between the these two groups. Any extreme asking prices on both ends will be unlikely to do anyone any favours.

Currently, areas with the highest resale home value (Measured by the amount buyers were overpaying or underpaying) of $60,000 are Watten Estate, Novena and Thomson. In Bukit Panjang and Choa Chu Kang, the prices were a negative $31,000.

A major shift in dynamics this year could be caused by the higher interest rates which are likely to happen this year. Buyers may take that into consideration, together with the tightened loan limits, which does not give them much leeway in negotiations. Sellers who are eager to make a sale will do well to consider these limitations as well and understand that it will not be easy for their buyers to easily fork out additional cash.