Jurong will have more ECs

When Westwood Residences in Jurong comes up, Lake Life will not be the only new executive condominium (EC) in the Jurong district. Applicants will have better news as prices are expected to hover around the lower end of their price expectation.

Westwood REsidencesWestwood REsidences

Photo credit: thewestwoodresidences.com

Developers are gradually becoming more attuned to buyers’ pricing sweet spot and are more likely to price new units within their affordability range. If response at Lake Life EC was anything to go by, this new executive condominium and its fresh new prices may well be hot property. However, second-timers with a subsidised flat or EC will need to take note that the latest regulatory change will mean they will be subjected to a resale levy of $40 to $50 psf. Upgraders and first-time applicants will however enjoy a discount or subsidy.

Developers, Koh Brothers and Heeton Holdings have indicated an estimated price of $800 psf. The original price range was $790 to $840 psf. Bookings for the new EC units at the 480-unit Westwood Residences will commence on May 30 but show flats will be open by this weekend. The property will lie in the exclusive area of Westwood and just a few bus stops away from the Boon Lay MRT station. It also lauds itself as the first bike-themed development, with a focus on sports and lifestyle related offerings such as an aqua gym, bicycle garage and outdoor mini velodrome.

HDB Resale flats – More affordable now?

Have prices of resale HDB flats reached an acceptable level? Prices and sales volume have been falling, and with the time it has taken for the property cooling measures to sink in, are resale flats now more affordable?

As more executive condominiums (ECs) and Build-to-order (BTO) flats hit the market, owners of existing HDB flats who are upgrading or getting keys to their new flats, in particular second-timers, are pressured to sell their flats within a stipulated time period of 6 months. This, plus the fact that a substantial period of time of steady but gentle decline of resale flat prices may have instilled confidence in buyers who may either see the market as stabilising, with slight or no further chances of price drops.

Bellewaters ECHow much as price really dropped? In a year-on-year comparison, prices have dipped 6 per cent since April last year, and an 11 per cent drop when matched against the peak in 2013. Property analysts are expecting prices of resale flats in non-mature estates to fall a little further of 6 per cent whereas those in mature estates are expected to hold their own for the rest of the year. Three-room and four-room flats also saw a 0.3 per cent price rise while five-roomers and ECs fell 0.8 and 2 per cent respectively.

In the first quarter of the year, the rate of decline in HDB resale flat prices have been the lowest since the fall in 2013, at 1 per cent. This be a signifier of a stabilising market, though 2015 may be the year to watch in terms of future market trends. With the possible General Elections coming up next year, it could also be the calm just before the storm, whichever way the wind blows.

 

Offers galore in blossoming EC market

Executive condominium launches in the recent months haev proved attractive to the buying crowd, especially after years of quiet on the ground.

But with 7 more launches planned for the later part of the year, will the market be poised for a saturation point? Or will buyers welcome the competition and options? Most of the new launches will be near existing EC sites in the North and North-east regions, which could mean stiffer competition for the developers.

Westwood ResidencesOne project which may however prove promising is the Westwood Residences in Boon Lay. Together with Lake Life EC, they could the only 2 executive condominiums in Jurong since 2010. The rarity, coupled with the pent-up demand could means buyers may be willing to pay slightly higher than average prices for units here as compared to ECs elsewhere. Property experts are expecting the median prices for ECs launched later this year to hover between $750 to $770 psf.

Currently, the average selling prices for ECs are at around $800 psf. But buyers have not been particularly responsive to this pricing level and with the introduction of thousands of new units over this and next year could bring the competition higher and prices lower. The dip in resale HDB and private condominium prices since the high in 2013, would also mean that ECs have to priced realistically in order to entice HDB upgraders and buyers.

As the market segments react to one another, the EC being hybrid between private and public properties, may also find themselves having to price themselves appropriately between these two market segments.

 

Resale HDB flats – Sales go up as prices do down?

2014 saw a record low number of HDB resale flats exchanging hands. It could be due to the effects of the property cooling measures, in particular the TDSR (Total Debt Servicing Ratio) framework set by the Monetary Authority of Singapore,  just starting to kick in. Buyers were more wary and more careful in weighing their options while sellers were still unwilling to lower prices. The tussle was just beginning.

SeaHorizonECBut this year, it seems one side is starting to give, slightly; especially for those who need to sell their current flat within the stipulated time of collecting the keys to their new flat, or face forfeiting their deposit. Prices of resale HDB flats have dropped 0.8 per cent in March this year, and the number of transactions increase from 1,148 to 1,349., As the number of new BTO (Build-to-order) HDB flats which will be launched this year decrease, buyers may also begin turning to resale flats to fulfil their needs. Prices of four- and five-room flats fell the most at 1.1 per cent and prices have been dropping since a year ago.

Property experts continued to stick to their forecast of a 5 to 6 per cent drop in resale flat prices this year, and hope for a higher sales volume than last year. It all depends on how the market fares from now till June, just before the traditional lull period of the Hungry Ghost Month.

Prices of rare HDB flats such as ECs (executive condominiums) remained high however, in fact showing a rise of 1 per cent last month.

Will adjusting HDB income ceiling help “Sandwich class” own a home?

As earning power climbs, the combined household income for an increasing number of families now fall just above the income ceiling for public housing. This puts them just out of reach of a new HDB flat yet still quite a distance away from being able to afford a private property, especially as inflation and the financial stress of providing for a family kick in.

Forestville Executive Condominium.

Forestville Executive Condominium.

The combined household income ceiling for a new HDB flat currently stands at $10,000 while the same for an executive condominium (EC) is $12,000. The income ceiling was last raised in 2011, from $8,000 to $10,000 for HDB flats and $10,000 to $12,000 for ECs. Over the last five years, there has been a significant increase in the number of couples and families falling into the “sandwiched class” of middle-income households in Singapore. Especially as Singaporeans now tend to marry late in life, when the husband and wife’s earning capabilities are at a certain level which puts them just beyond qualifying for a new HDB flat might be facing the most headaches.

Is there a way around it as public housing was originally aimed at helping those in need. But since there might always be a section of the population who will find public housing out of reach and private housing too much of a financial burden or risk, will raising the income ceiling really help elevate their circumstances only to be a burden to yet another group of citizens? What other options are available for these middle class families? Will they be looking at resale HDB flats as the only viable and affordable option?

Could lower resale HDB flat prices be a good thing?

Although HDB resale prices have dipped 0.6% last month, sellers could  turn the seemingly negative into a positive as this may mean that more buyers will see the market as flattening and be willing to purchase from the resale market instead of applying for a new one directly from HDB.

As HDB has been active in rolling out a massive number of new BTO and EC flats in the past few years to comply to demand from citizens, especially young families and multi-generational families. Even singles now have an option of buying new 2-room flats directly from HDB. Previously they could only purchase from the resale market. The increased supply of HDB flats has meant that more families and young couples have been successful in securing their new HDB flat, leaving less buyers for the resale market.

DoverHDB flatBut may sellers find themselves unable to raise their asking prices by too much as most buyers will be restricted by the TDSR (total debt servicing ratio) line which banks now have to toe. Loans will now be capped at 30 per cent of the gross monthly income. Part of last month’s drop in sales volume and prices could be due also to the Chinese New Year festive season.

Industry experts are expecting prices to drop further or maintain its status quo at least for awhile more. Any rise will be short-lived and a temporary anomaly. It may only be a question of how soon the buyers will return to the market. Are they waiting for prices to lower even further? What will make them change their mind and give them the push to purchase now?

EC prices look set to maintain current level

Recent low winning bids on land parcels may not be enough to lower executive condominium (EC) prices, at least not in the near future.

Most of the ECs which are being built or are nearing their TOP (temporary occupation permit) status are situated on land which were purchase by developers at high prices. Combined with rising construction costs and declining private home prices, prices of ECs may also face pressure. Property experts are expecting a similar 5 to 8 per cent fall in EC prices this year, similar to the prediction for HDB resale market and also the private property market.

TheTerraceECAs the price gap between ECs and private properties narrow, buyers may be swayed to the latter which allows them to immediately sell or rent. ECs, being a hybrid of public and private property, are still subjected to public housing rules which includes a minimum occupation period of 5 years before being allowed to sell. After 10 years, executive condominiums do become private properties.

In addition, developers who have secured land at lower prices may still wish to peg their units to current market levels instead of lowering it at first instance. This gives them the allowance of offering discounts later on.

Buyers who have been holding out for much lower prices may have a long wait.

Resale DBSS flats in demand

With four-room resale DBSS HDB flats at The Premiere @ Tampines going for $570,000 to $590,000, a marked rise from its original $278,000 to $410,000 price tags, interest in newer DBSS launches may continue as resale units just became available last year. Units at The Premiere were the first to come on the market.

The Premiere at Tampines

The Premiere at Tampines

The Design Build and Sell Scheme (DBSS) was suspended in 2011 due to the high prices of flats at The Centrale 8 in Tampines. But since its suspension, majority of units at the existing DBSS projects have been successfully sold. At Pasir Ris One, only 53 units are left, with 88 per cent sold, and owners will be receiving their keys in about a months’ time. Trivelis in Clementi only has 28 units left and is ready for occupation. Lake Vista in Jurong West and Parkland Residences in Upper Serangoon have been fully sold.

Property experts are however aware that the earlier of these DBSS developments were launched when property prices were considerably lower, thus allowing for a higher profit margin. Newer projects may have been launched at higher prices. Coupled with the MSR (Mortgage servicing ratio) cap, this may mean a lower yield for future DBSS resale unit sales. With executive condominiums (ECs) and BTO flats covering the needs of most families, the role of the DBSS may not be as relevant today as before.

But demand seems to be quite positive as there will still be buyers who do not mind paying a bit more for units at a good location and with all the interior fittings and finishings done at no extra costs.