More going for BTO flats

Or so the numbers show. January marked the first launch of HDB’s new BTO flats for 2014, each new flat were oversubscribed by 1.6 times for first-timers and 3.5 times by second-timers. The location of these new launches were the main draw – two projects were situated in Punggol and many young couples and families were excited about the new waterfront living in this new town.

Matilda PunggolPhoto source: URA

Development and expansion in Punggol have been rapid, especially since it has been earmarked as the Punggol 21 township development plans under URA’s Draft Masterplan 2013. It promises to deliver a waterfront lifestyle living deep inland when previously only the outskirts, mainly in the East, of Singapore had the privilege of these sort of housing options. Although it may take some years yet before it is fully developed, the next decade may shift the focus into this area and as more families bring up their children there, no doubt popularity of its properties will also increase. And buying early may be the wisest choice yet. Private properties in the area include Ecopolitan, Watertown and Rivertrees Residences and executive condominiums such as Waterwoods, Prive and A Treasure Trove. It will be interesting to see which other new launches may move into the area this year.

Rivertrees condoAnd since HDB’s policy change in July last year, singles are now able to purchase 2-room flats directly from HDB and the subscription rate is a high 27.7. But the government has committed to offering up to 5,000 of such flats this year, with 30 per cent reserved for singles. There may be even more left in the basket for singles as the number of families going for 2-room flats are on the decline. Will this mean a change in the demand for 3-room resale HDB flats?

Triple the Subscription at Skypark Residences in Sembawang

506 units at Skypark Residences Executive Condominium (EC) in Sembawang, and 1, 604 applicants. That’s more than triple the number of units available.

This new EC will feature a 1, 250 sqm Skypark 50 meters above ground. Nothing to rival that of the Marina Bay Sands of course, but as high-rise living becomes more the norm than the exception, having a piece of greenery of your own might be more precious a commodity in the near future than you think. Applications came mainly from HDB upgraders and larger multi-generational families.

Skypark Residences ECPerhaps the possible lack of new EC projects in the few years to come have driven buyers to jump on this last opportunity of 2013 to upgrade. Created as a stepping stone for HDB owners into the private property market, executive condominiums have become a rare public-private housing hybrid which has immense potential especially since it becomes a private property after five years and owners can then sell to foreign buyers after ten years. The projected number of new EC launches in 2014 is two.

But there’s still time yet. Bookings will open on 16 November. Prices are expected to range between $720psf to $800 psf. Will more be wiling to bet their chances at applying for an oversubscribed executive condominium in a quiet neighbourhood or purchase a ready-to-live unit in a completed or almost completed suburban condominium? Are long-term benefits on the minds of property buyers or are short-term capitals what they are gunning for?

Will PRs go Private?

Now that Permanent Residents (PRs) have to wait 3 years upon receipt of their PR status before purchasing their first resale HDB flat, will they opt for the quicker route to owning property in Singapore and go private?

Alana BungalowIf they do, the private mass-market condominium and EC (executive condominium) market will happily reap its fruits. While the possible decrease in demand for resale HDB flats may mean that Singaporeans hoping to upgrade to the private property sector may now find it difficult, more PRs may be taking their place in keep demand for non-landed properties high.

The HDB resale market is expected to drop 15 to 25 per cent, according to industry experts. But they are hopeful that suburban residential private condominiums will continue to pique the interest of PRs who might not want to spend money they will never get back on rental and would rather invest in new developer homes.

Primo ResidenceHas the price gap between public and private housing widened? Or the better question might be, is this widening the desired effect? What about the government’s objective of helping Singaporeans upgrade from HDB to private property? Not forgetting the in-between housing category of executive condominiums (ECs), are the ECs filling up that gap efficiently and reasonably enough?

Singapore’s new Waterfront enclave?

If you have your own means of getting to places, do not particularly need to be near MRT stations and fancy having an unobscured view of the sea, you might want to look towards Jalan Loyang Besar.

Yet mainly uncluttered, precisely because it is not near any MRT station , nor an upcoming one, the Jalan Loyang Besar area has been transformed to include several new private condominiums. Some of the residential projects are just a walk away from the beach and Pasir Ris Park.

Ocean Front Suites

The most recent launch, in March this year, is the 58-unit Ocean Front Suites by Regal Realty. 10 units have been sold thus far, for between $1,4999 to $1,574 psf. Shoebox apartment units are available as well, starting from 406 sq ft at $600, 000 to $650,000. At these prices, they are highly affordable to buyers looking to invest in a worthwhile property. It is a 946-leasehold property dated from 1937.

Other properties in the vicinity are mainly 99-year leasehold condominium units such as Sea Esta, Ripple bay, Seastrand and Watercolours executive condominium (EC). The 376-unit Sea Esta is already completely sold following its launch in June 2012. Far East Organization’s Ripple Bay and Seastrand are also almost 90 per cent sold.

Watercolours ECIf you’re looking to quickly move into a completed home, then there is the 71-unit Bluwaters 2. Other projects include Coastal View Residences and Celadon View. Apartment rentals are considerable, mostly coming from expatriates working in the Tampines area. Rents at the Lighthouse condominium currently stand at $2, 500 to $3,100 per month for a two-bedder.

Chris International director Chris Koh is expecting prices in this are to rise as other developments sprout in the years ahead.

The case of the shrinking condominiums

Unit size, that is. It used to be that a one-bedder in 2008 measured an average of 678 to 947 sq ft. From 2010, they measured 538 to 678 sq ft. When the minimum becomes the maximum, it may be the sign of times.

 

One of the latest new properties offered - Natura condominium at Hillview Terrace.

Natura condominium at Hillview Terrace.

Property developers have been shrinking condominium sizes to make them fit into the pockets of buyers. And these are not restricted by area, across the board, homes are getting smaller. Shoebox apartments have been the focus these past couple of years, but now, it’s not only the studio apartments which are put under the microscope. Two and three-bedroom units have also been getting the slice. For example, a three-bedder in Natura at Hillview Terrace measures 635 sq ft, that’s even smaller than the smallest one-bedder unit launched in 2008. And before 2008, the same would have gotten you 1,500 sq ft.

As Singapore’s population rises, the challenge to contain all in livable conditions fall not only in the hands of the Government, but also on private developers. High land costs, labour costs, material costs have all contributed to the situation. It’s either higher prices or smaller spaces. Or both. But does this mean buyers now pay less? As competition increase, property developers find themselves fighting for the same crowd of buyers, and trying to put out products which fit into their price points.

Midtown Condominium at Hougang.

Midtown Condominium at Hougang.

Most buyers are willing to fork out $1.5 million for their first or second home, especially since loan limits have been tightened in the most recent round of property curbs. But experts are less concerned about the small size of shoebox apartments than two and three-bedders. They have voiced their concern that while it is reasonable for one person to live in a 500 sq ft studio space, it may not be so for small families to live within 600 to 700 sq ft. And these not only apply to private condos, but also to ECs (executive condominiums).

The trend looks set to continue, but is there any more space left to shrink? What quantifies “livable” space and are Singaporeans getting the quality of life they need?

Executive Condominiums back in the fray

As the price gap between ECs and private condominiums continue to widen, more buyers are choosing the former. Why? It may not be because they are unable to afford a private condominium, but for the same price, they get more space in an executive condo. If you have $800,000 to spare, you can either get a 780 sq ft private condominium unit, or a 1, 100 sq ft EC unit almost the size of a 5-room HDB flat.

Heron Bay Executive Condominium in Upper Serangoon View.

Heron Bay Executive Condominium in Upper Serangoon View.

Current prices for private condominiums are above $1,000 psf. For ECs, they hover around $538 to $809 psf. At The Topiary in Fernvale, 185 EC units were sold for between $600 and $809 psf. Waterbay in Punggol went for slightly less at $538 and $73 psf. Heron Bay sold between $612 and $809 psf.

And what you get in an executive condominium may not necessarily be lesser than a private apartment. Ground-floot units, for example, at Heron Bay EC in Upper Serangoon have private pools with Jacuzzis. Sky terraces and many other fancy facilities are increasing the potential value and attractiveness of these public-private housing hybrids.

Topiary Executive Condominium in Fernvale.

Topiary Executive Condominium in Fernvale.

And not forgetting that ECs can be sold in the private property market after their Minimum Occupation Period of 5 years, why wouldn’t the competition in this sector be tough?The Government has already placed some  restrictions earlier this year, capping the size of EC units to 1, 722 sq ft and limiting the sale of Dual-key apartments (units with separate entrances) to multi-generational families. But will this be enough? Is this market something to watch for and will control be necessary? Will this trend result in an eventual increase the prices of executive condominiums or will it decrease the price of private condos?

Outdoor space loophole – Who benefits?

Current property policies do not  disallow developers to sell free spaces for profit. What free spaces? The space, for example, that comes with your EC “sky suite” or “sky terrace”. The developers may not have paid development charges on them, yet they are charging sky-high prices for this open spaces which adds loads of bucks on an otherwise normal apartment unit.

Forestville EC

Who truly profits from this use of outdoor space? Could the property buyers have thousands, if not hundreds of thousands, on units which claimed to come with huge outdoor areas?

Housing minister, Khaw Boon Wan, has said on his blog that these open spaces were originally meant for developers to create communal spaces for residents and to promote greenery. Instead, you get a few penthouses and sky suites with private open spaces. How would other residents and buyers feel about this? If you’re the buyer of these units, would you think it’s fair to have paid the prices you’ve paid for space which the developer basically got for free? Or do developers have a free say and free play about how the space they bid for are used? What guidelines are there for such spaces?

Photo by the Ministry of National Development

Photo by the Ministry of National Development

In his blog post titled “Who gets short-changed?“, Mr. Khaw also mentions that for the space of one penthouse, the developers could have sold two or more units, each at a higher psf price. Although there are no hard and fast rules for the use of such spaces, for now,  the intention of its use as communal space may be misappropriated even further in future. Also, buyers may not know, but they are unable to cover up or enclose these ‘open’ spaces which came with their units.

Expect some changes. Soon.

Properties with Pluses

Facilities previously considered bonuses or frills in luxury properties are now included more and more even in mass market condominiums. Sky gyms, yoga terraces, spa lounges, private jacuzzis, infinity pools, concierge services, aromatherapy gardens and even a community garden, yes where you can grow organic fruits and vegetables for your dinner table. It’ll be intriguing to see what else developers come up with in new launches planned for the year ahead.

Echelon

So then, what do luxury residential developments have to do to get the upper hand and justify their high prices? Well, at Hamilton Scotts, luxury apartment along Scotts Road near town, features en suite sky garages for each unit. So in Sentosa, you can sail right up to your doorstep, and here you drive up to yours. And The Marq at Paterson Hill, you get lap pools with a scenic view overlooking Orchard Road.

Hamilton Scotts

Hamilton Scotts

Property experts said that this growing trend could simply be an indication that the market is getting more competitive. However, there is a possibility that buyers will then increasingly take them for granted and begin to expect more for the prices they are paying. Do property buyers really know that they are paying for these extras, or would they rather have a simple unit in their ideal location? Will a sub-market emerge from this and spice up the already heated property sector?