Private non-landed resale property prices continue to rise in June

After a couple of quarters of positive performances, resale private home sales have continued on an upward path last month.

6DerbyshireJune’s resale condominium prices rose by 0.9%, the highest in the last 3 years. In comparison with the same month last year, it has risen by 2.2% and the resale index reached 171, comparable to that in May 2017. Though it may not be the sharp rebound industry players are hoping for, it is nevertheless a positive sign pointing towards possible market recovery.

1,065 private resale condominium units were sold last month, up 51.1% from the 705 units sold in June 2016, but down 12.5% from the 1,217 units sold in May this year. Part of the decline could be due to the June school holidays, as many families and buyers could be out of the country or occupied with other activities. Property experts are expecting the momentum which picked up at the beginning of the year to continue well into the second half of 2017.

ReflectionsKeppelBayThe core central region saw a 1.3% rise in resale values, followed by a 1.1% in the suburbs. Prices of resale units in the city fringes remained unchanged but properties in Newton and Novena received the most attention, with buyers paying up to an average of $40,000 above market value for units here. Resale condominiums in district 4 did not fare as well, with buyers paying an average of $120,000 below the median price.

The weakening rental market however continues to weigh heavily on the minds of buyers and investors as competition for tenants in the outside-central-region remains high due to the increased volume of completed properties in these districts.

Luxury property market gearing up for bigger and better H2

In less than 10 days’ time, a new luxury property in Robertson Quay will be launched, and hopefully to continued positive response from buyers.

MartinMOdernThe demand for upmarket luxury properties have been encouraging this year, after a few quarters of falling prices and lacklustre sales. GuocoLand’s Martin Modern will perhaps hit the market at just the right time as buyers have been gradually filtering back into the market. The 450-unit property is one of the larger-scale high-end residential to launch in the Robertson Quay area for the last 8 years and units are expected to be released in phases.

Projected to launch on July 22, the 99-year leasehold Martin Modern condominium is situated between Martin Place and River Valley Close. Prices of the units are expected to hover around $2,300 psf with the smallest apartments starting at $1.8 million, higher than the average transacted price of $1,969 psf for units at the neighbouring Martin Place Residences.

MartinPlaceResidencesThe development will hold two 3o-storey towers with apartments ranging from 2-bedders to four-bedders. The 150 two-bedroom units will be sized at 764 sq ft, while there are also other options such as two-bedders plus study, three-bedders, premium three-bedders and four-bedders. The largest units being the four-bedders, will range from 1,701 sq ft to 1,798 sq ft.

The targeted completion date will be in 2022, and by then the Great World MRT station on the Thomson East-Coast line, which is just a 5-minute walk away, will be ready and in action.  The developers are expecting a proportionate mix of owner-occupiers and investors picking up units at the launch.

3-month short term rental of private homes now allowed

Though the short-term lease of properties on sites such as Airbnb is still not legal in Singapore, leasing of private homes for a period of 3 months is now allowed. Under previous regulations which was implemented in 2009, the minimum rental contract period was 6 months. 

Cavenah LOdgeLandlords and tenants alike may rejoice as this means greater flexibility in terms of negotiating lease arrangements. For tenants looking for an option to serviced apartments or hotels, an entirely new market has opened up as those who were in between housing options (e.g. renting a place while waiting for renovation work to be done in their current or future home) or in Singapore for short-term study or work purposes. 

This welcome change stems from a public consultation exercise in 2015 which showed a majority of its respondents supporting a shorter minimum lease period. This new move may bring good cheer for some private home owners though it may not be much of a change for agents specialising in rental properties as the yields for short-term rents are considerably lesser than say a one- or two-year contract. Property analysts are not expecting much change in the rental market as landlords may still favour longer contracts as it saves them the trouble of waiting on new tenants. 

The rules are already in place and take effect immediately. Violations of the regulations may warrant fines of up to $200,000. 

En bloc sales take centre stage this year

Yet another former HUDC estate has been put up for collective sale. Serangoon Ville situated in Serangoon Ave 1 has been made available for en bloc sale and the selling price is expected to be between $400 million and $430 million. The costs will be high for this land site as an additional $200 million to $220 million is required to intensify the land and to refresh the land lease by 99 years. The estate was privatised only in 2014 and has 69 years of lease left.

SerangoonVillePhoto credit: Google Maps Singapore

Property players and watchers are expecting developers to bid efficiently for this land site that averages out to be $720 psf per plot ratio, particularly since recent sales of ex-HUDCs such as Eunosville and Rio Casa were closed successfully and above asking prices. Currently, Serangoon Ville houses 7 blocks of 244 apartment units, including some maisonettes, with sizes ranging between 1,625 sq ft and 1, 733 sq ft. One redeveloped, the 296,913 sq ft plot could potentially yield 750 to 900 units.

2 other former HUDCs – Tampines Court and Florence Regency – are already in the process of putting their estates up for sale. The latter is planning to commence signing of their collective sale agreement in July this year. This year’s healthy new home sales has possibly boosted developers’ confidence in the market’s stabilisation and future recovery.

But with the number of private land sites being sold and private estates sold en bloc, one cannot but help to wonder how Singapore’s real estate sector will look like in 3 to 4 years’ time. Add the Bidadari township into the mix, the market might be seeing a huge entry of public and private housing within the next 5 years. Rents have been sliding due to the increased number of completed and available properties in the recent couple of years, how will the market react then?

New waterfront development in Penang aims to be iconic

Already one of the most popular states in Malaysia for foreign property ownership, Penang will now have a new mixed-use waterfront development named The Light City.

TheLIghtCityPenangPhoto credit: Perennial Real Estate Holdings

A joint venture between Perennial Real Estate Holdings and IJM Corportation, both companies have a 50% stake each in the IJM Perennial Development which will develop the landmark project that stands along the eastern coast of Penang in the Gelugor suburbs, near the Penang Bridge.

The 13.25 hectare project is targeted for a 2021 completion and will have a 4.1 million sq ft gross floor area on which sits the largest convention centre in Penang – The Penang Waterfront Convention Centre, 2 luxury hotels, an office tower, a retail mall and 2 residential developments – The Mezzo and The Essence. The developers hope to elevate Penang’s status as a destination for international conventions, events, exhibitions and retail shopping, and helping to create job opportunities for the state’s residents, to attract tourists and investors.

THeLIghtCityPenang3Photo credit: Perennial Real Estate Holdings

The Light City will be situated just a short drive from the Penang International Airport, which makes it accessible for visitors coming for future events and exhibitions at the convention centre. The 27,000 sq ft Penang Waterfront Convention Centre will contain a 76,000 sq ft multi-purpose hall, grand ballroom that seats 800 and pre-function areas with sea views.

 

Market recovery uncertain despite rise in resale condo prices

May was a rather good month for the resale private condominium market as prices rose 0.4% and sales volume increased by 17.4%. In comparison with the same month last year, prices have risen 1.5%.

CreekBukitTimahAll signs seem to be pointing to a market recovery after 3 years of lacklustre performances. However, some property analysts are taking a more conservative stance with regards to the recent price adjustments. The leasing market remains weak and rental prices have fallen, putting additional pressure on an already-weak market hence the market is still a ways from bottoming out. Private property values have fallen 11.6 per cent since the peak in Q3 of 2013.

skyline-residencesPrices of resale properties in the core central and city-fringe regions have shown improvements with a 1.1 per cent rise from April. In the suburbs, prices fell slightly by 0.4 per cent. A moderate look at the current situation would more likely than not mean a gradual rise in prices over the course of a year rather than a quick and immediate recovery. A recent hash of high land bids and the gradually diminishing stock of unsold private homes do however seem to be beacons of light, however dim, pointing towards the promise of a market stabilisation at the least. Positive sentiments and sales at new project launches and continued low interest rates may add icing to the cake if developers can have it and eat it too.

 

Freehold residential land in Orchard sold for $72 million

Land in Singapore seems to be selling like hotcakes in recent months. As the flow of plots made available under the government land sales (GLS) programme languishes, developers have been eyeing and snapping up plots sold privately. En bloc deals have been monopolising the real estate scene and the latest private land sale was of 1 Draycott Park to Selangor Dredging to the tune of $72 million.

DraycottPark

Photo credit: Google Maps.

What currently stands at the 17,422 sq ft site is a 7-storey apartment block with 8 apartments ranging from 860 to 6,200 sq ft. After a development charge of $15.3 million, the sale translates to $1,787 psf. As the site is zoned for residential development, it could potentially yield 36 new storeys of new apartment units.

Situated in the exclusive yet primely located Claymore Hill and Ardmore Park enclave, near Orchard road and the American Club, the new properties to be built on site are likely to go for between $2,700 and $2, 800 psf just to break even. Thus it will not be unusual to expect prices starting from $3,300 psf, about 10 per cent above recent transacted prices in the area, from the future launch of the new project.

TheClaymoreWhile foreigners account for about 50 per cent of the luxury property transactions in Singapore, the stamp duty rate which now stands at 15 per cent has somewhat kept demand at bay. However, from developers’ recent responses to en bloc and private land sales, the prices they are willing to fork out may signify a quicker than expected recovery to the high-end property segment.

2 more HUDCs try their hand at en bloc sales

On the back of successful collective sales this year, 2 more private residential developments are trying their hand at the process. Tampines Court and Florence Regency are both previous HUDCs, similar to the 2 other properties which sold recently – Rio Casa and Eunosville.

TampinesCourtThe lack of land sites made available under the government land sales (GLS) programme may be the reason behind the success of these recent en bloc sales. Developers’ hunger for land has been reflected in the the high prices paid for recent en bloc deals, and the latter could also be precisely what is bolstering the courage of residents of Tampines Court and Florence Regency.

There are a total 18 HUDC projects built since the 1970s and all have been privatised, with 9 sold thus far, including Shunfu Ville and Raintree Gardens last year. Shunfu Ville could essentially be what got the en bloc ball rolling and more successes were recorded this year. Rio Casa sold for $575 million and Eunosville for $765 million.

RioCasaHUDC HougangFlorence Regency is situated in H0ugang and has a land area of 389,000 sq ft. While it is still in the early stages of the en bloc process, Tampines Court on the other hand already has secured consent from 82 per cent of its residents. The asking price is currently set at $960 million for the 702,000 sq ft plot. At the moment, the property holds 432 maisonettes and 125 apartments. This is however not their first attempt at the collective sale process. The first attempt at $408 million was in 2008 and the second attempt in 2011. Property analysts expect home owners to seek higher prices following recent successes, but also warn against pricing too high as it may discourage developers from bidding.