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.

Private home sales down in Q3

Despite recent new launches, private home sales remained lacklustre as the third quarter registered  lowest sales figures since 2008. Only 1,596 new homes were sold in the last 3 months, though 648 units were sold in August alone, signifying a plausible comeback.
 Tre ResidencesSome of the more popular residential properties were the newer ones such as Highline Residences, Seventy St Patrick’s, Lakeville, Eight Riversuites, and some new launches from projects such as The Panorama. As per previous years, post Hungry Ghost Festival meant home buyers were once again eager for new deals and were actively seeking property purchase opportunities.

Across the board, 6,030 private properties were sold in the first 3 quarters of the year, almost half that of the same period last year. Much of the decline was due to weakening demand in the primary market, which could be a result of the tightening home loan limits implemented in June 2013.

Upcoming launches of Sophia Hills, Tre Residences and Symphony Suites might bring renewed activity into the market and possibly close the year on a high. But most of the attention will be in the executive condominium (EC) market as the drought of new launches in this sector welcome new launches of Lake Life, Bellewoods and Bellewaters.

New private homes – Sales lacklustre

The hungry ghost month and the lack of new property launches during that time have affected new home sales in August. Sales were down 15% and only 432 units were sold although 351 units in previously-launched developments were put up for sale.

The PanoramaMost of the sales came from suburban properties, especially from newer launches such as The Panorama in Ang Mo Kio and Coco Palms in Pasir Ris. Median selling prices at the former was $1,249 psf and $1,046 psf at the latter. Whilst Eight Riversuites launched around the same time as Coco Palms in May 2012, the Whampoa East property fared better with average prices at $1, 345 psf. Positive sales at these few developments could be due to the lower prices at its re-launch. The Panorama for example saw sales picking up once median prices were lowered during its relaunch in May. It was official launched in January this year.

But in the upcoming months, home sales may see a rebound as new launches in the pipeline bring a surge of buying interest. New launches include Marina One Residences, Highline Residences, Seventy St Patrick’s., and a few executive condominium developments such as Bellewoods and Bellewaters EC.

Property analysts are however cautious about the amount of increase in home sales, and the overall sales figures for 2014. The TDSR (total debt servicing ratio) framework and other property cooling measures such as stamp duties for additional properties, may keep the numbers suppressed. Some developers could also be holding their launches for next year in wait of any policy or market shifts.