Resale condominiums make a comeback

Do not underestimate the power of the trickle-down effect as older resale condominiums leverage on new launches to bring in activity and renewed interest.

LakeGrande

December’s resale private home sales figures were case in point, in particular The Santorini in Tampines. The new launch of The Alps Residences resulted in a spillover of buyers’ interest in surrounding condominiums and though the 597-unit The Santorini was launched more than 3 years back in 2014, it sold 106 units in 2016 alone, compared to only 32 units in 2015.

The overall sentiment is one of hope as buyers, now more driven to purchase and increasingly swayed by lower quantum prices, have been seen to be re-entering the market in the past months. Upcoming new townships such as Bidadari and the Jurong Lake district have been showing up more often on buyers’ radars and interest in the latter is particularly telling especially as the area is flagged in the Government’s development plan as the next central business district.

thealps

The 710-unit Lake Grande development in the Jurong Lake district has already sold 553 units and nearby, Sim Lian’s Wandervale and Treasure Crest executive condominium (EC) projects have also sold 1,003 units. With the government holding back on the release of land sales, the resale condominium market may hopefully continue with its winning streak this year. Most of the sales developers received last year were from older developments launched before 2016, Commonwealth Towers, Coco Palms, Bellewoods and Bellewaters, just to name a few.

Prime land plots released for H1 of 2017

Out of the 5 residential sites which were released under the Government Land Sales (GLS) scheme‘s confirmed list for H1 of 2017 are 3 sites which may see heated competition from bidders – one on Jiak Kim Street where the Zouk nightclub used to stand, another on Fourth Avenue right next to the Sixth Avenue MRT station and yet another on Woodleigh Lane, near the new Bidadari township and Woodleigh MRT station.

rmaisonThese 5 sites are expected to yield up to 2,330 new homes, about 50% more than the 1,560 units yielded by land released in the first half of this year. Bidding on the last few sites released this year have gotten developers and property analysts excited about the potential volume and size of land plots to be released next year, but the authorities have kept it conservative thus far, having released only 10 sites on the reserve list. This includes 1 mixed-use site and 2 commercial sites.

It is possible that the Government is concerned about the stock of unsold executive condominiums (EC) currently in the market. In addition, most of the units sold this year were purchased by investors and not true home-occupiers. The Monetary Authority of Singapore has also recently flagged their concern about rising vacancy rates in the private property market. This combination of factors may have influenced their decision on how much land supply to release in 2017. Only 1 EC site was released on the confirmed list and another on the reserved list.

HDB flat prices rise slightly in November

A 0.2% rise in resale HDB flat prices may bely the fall in sales volume in November due to a possible trickle-down effect from heightened activity in the new Build-to-order (BTO) flat segment.

bidadariNovember’s launch of BTO flats was the largest in the year, with flats in Kallang/Whampoa and Bidadari garnering the biggest response from applicants. With flats in these areas oversubscribed, some may have decided to skip the wait and go for resale flats instead. The overall buying sentiment in the HDB market may have also received a boost from the launch.

In a year-on-year comparison, prices are however 0.7 lower than that in November 2015 while resale volume is 7.1 per cent higher. The figures are not surprising since resale HDB flat prices have been stabilising over the past year while sales volume is largely dependent on demand and the option of new flats. Flats in mature estates continue to command high prices and in that, the property cooling measures may not have had that kept selling prices high and most sellers are not in a hurry to let go of their flats, until the time when keys to their new flats are ready for collection.

NorthwaveECPrivate property prices may have declined in single-digit percentages, and while that narrows the gap between smaller non-landed private property units and more expensive public housing options such as executive condominiums (EC), resale flat prices have budged only slightly which may not be sufficient for those who fall between these price segments. Prices of resale HDB flats are expected to have up to a 0.5 per cent price rise in 2017.

 

2017 to welcome more land supply

Recent tenders on land plots have received more than positive responses from developers, plus the inventory of unsold units have diminished. This may mean the authorities are likely to release more sites in 2017 to replenish land supply.

fd1a3ab7647f44a684a37926cd526cb6The government held back on land sales in the earlier part of 2016 when unsold stock ballooned. But as buyers slowly returned to the market, investors picked up bulk sales and developers closed en bloc deals, competition for available land have been obviously heating up in the past months. If land supply continues to diminish, developers may be forced to bid even more aggressively and thus push up private property prices, in particular in the executive condominium (EC) market.

Some of the highest-bid land sites this year included a Martin Place plot which went to First Bedok Land for $595.10 million, and a mixed residential and commercial plot with a winning bid of $301.16 million by Qingian Realty. A white site on Central Boulevard was also sold to Wealthy Link for $2,568.89 million in November. There were 11 sites on the Urban Redevelopment Authority’s (URA) reserve list in H2 of 2016, with possibly up to 15 more added to the list by H1 of 2017.

The Ministry of National Development (MND) will however be more selective about where the new sites will be released, likely avoiding areas where large amounts of unsold inventory remain such as Redhill and Commonwealth.

Raised income ceiling for HDB grants – Help or Hurt

The income ceiling for the application of HDB grants was raised last year, and till date, the policy change has helped more than 1,500 household secure new or resale HDB flats. Previously, the income cap was $12,000 for executive condominiums, $10,000 per household  or $5,000 for singles. Following the adjustment in August last year, the income cap is now $14,000, $12,000 and $6,000 respectively.

Westwood ResidencesThe Housing Board has cited rising income and an increased demand for public housing as push factors for the change. Some property experts however feel that the move has hurt the private property market as these are potential private property buyers whom the market may have lost out on and whom may have cost taxpayer’s more burden. However, these buyers could also have been sandwiched between the public and private housing markets, unable to afford the latter nor the former without a CPF housing grant.

From the 11,833 new HDB flats and 6,464 resale flats sold within the last year, about 5 per cent and 15 per cent of the purchases would not have been made prior to the income ceiling revisions. The last time the income ceiling was raised by $2,000 was 5 years ago in 2011. The question remains if it is a matter of eligibility or affordability of existing public housing units which detracts a possible remaining group or groups of buyers who may still be unable to purchase resale units despite securing all possible grants.

 

Properties up north gaining popularity

Up north in what was once woodlands is the growing township of well, Woodlands. The estate is groomed to be to the next Regional commercial and business hub where HDB flats, private condominiums and industrial buildings and regional offices reside, all in this area so close to our neighbouring Johor Bahru and where this rural outpost used to be densely populated with only rubber trees.

BellewoodsECTogether with the Seletar Regional Centre and the Punggol Creative Cluster, the Woodlands Regional Centre will form the North Coast Innovation Centre. The region will be efficiently serviced not only with the Woodlands MRT station and bus interchange, but also the upcoming Thomson-East Coast Line which is prepped for operation as early as 2019.

Some of the condominiums which have come up in Woodlands include Northoaks, The Woodsvale and the Bellewoods and Northwave executive condominiums (EC). The latter two being ECs, are rather prime properties as they hold the benefit of being both public and private housing,  Bellewoods EC, situated at the intersection of Woodlands Avenue 5 and 6, do not lack in the suite of amenities and facilities of any other private condominium. It has a clubhouse, indoor gym, tennis court, swimming pool, playground, jogging trail and waterside dining pavilion.

NorthwaveECAwarded the Highly Commended Best Executive Condo Development (Singapore) at the Southeast Asia Property Awards and with a TOP (temporary occupation permit) date of 2017, the 99-year leasehold EC consists of a mix of 2- to 5- bedders in all its 561 units. As it was launched prior to the resale levy rule implemented in December 2013, buyers who have previously purchased a subsidised HDB, DBSS or EC flat are also exempt from paying a resale levy which could be a huge plus as it could save them up to $55,000.

CDL reports positive growth despite property lull

With a whooping 60.1 per cent spike in net profits in the third quarter, City Developments (CDL) seems to be shaking off the market gloom early. Their Q3 net profit rung in at $170.3 million.

gramercyparkPositive public response and strong sales from their properties, both local and international, have contributed to their recent success. At their latest launch, Forest Woods condominium, sales have hit the 70% mark at the considerable price of $1,400 psf. The project has a total of 519 units. They are fully sold at their 616-unit Jewel@Buangkok condominium development and almost all of its 40 units released at the 174-unit Gramercy Park have also been snapped up.

At the 944-unit Coco Palms condominium in Pasir Ris and the 638-unit The Brownstone executive condominium in Sengkang, they are also 91 and 80 per cent sold respectively. Such promising numbers considering the current global economic uncertainty will put them ahead of their competitors and help them pave a strong foundation for the journey ahead.

The Brownstone ECCDL also has properties overseas which are doing well, including the Hanover House project in Reading, Britian. The group is also expanding their suite of investments into other areas such as hotel operations, investment properties and management. Moving forward, investors can looking forward to more international properties being added to the list of potential investment opportunities.

Executive condominiums top August property sales

August was a good month for the executive condominium (EC) market, with all 3 top sellers coming from this particular property sector, namely – Treasure Crest in Sengkang, Sol Acres in Choa Chu Kang and Bellewoods in Woodlands.

Bellewoods ECUnderstandably, there were not many major property launches in August with only 590 units launched in the month at Victoria Park Villas in District 10. A total of 805 units were sold, less than half of the 1,921 sold in July, with 41 per cent of the month’s sales coming from ECs. But demand for these rare hybrid public and private properties seems to be rising.

The price gap between ECs and private properties may be closing in as resale private property prices continue to dip though there is still a considerable distance between these 2 property types. The median selling prices of all 3 top EC developments below $800 psf whereas average prices for private apartments are mostly above the $1,000 psf range.

Sol Acres Besides comparison with ECs, new developer launches have also been fighting market competition from completed resale units, providing discounts and other incentive schemes to entice buyers. As a hybrid between public and private housing, EC buyers can tap on HDB grants and subsidies in the initial purchase and after 10 years, are able to leverage on the private property status of their property, harnessing the full capacity of a private resale condominium.