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.

 

Slowing down of property market slowdown

The first quarter of 2015 has proved to be a slow one for the property industry. But the slowdown has lost some speed. Compared to the previous quarters, the decline for both private and public housing was at around 1 per cent for the past three months.

Property prices and sales have been slowing down since mid-2013. In the resale HDB flat market, prices have fallen for 7 consecutive quarters and private property prices have fallen 6 quarters in a row. What will the rest of the year hold for these market segments?

Northpark Residences1For the private property sector, property analysts are predicting:

  1.  A further dip in prices as the number of unsold units are on the rise.
  2. Continued fall in rental prices as more completed new homes enter the fold. The decline in the first quarter of the year was 1.7 per cent; rental prices fell 1 per cent in the last quarter of 2014.
  3. As interest rates rise, home owners and developers may be pushed to lower prices further to secure deals. The competition between resale and new properties may also heat up.
  4.  A 5 to 8 per cent fall in private home prices for the year as buyers delay their market entry, possibly waiting for prices to fall further before making a buy.

In the HDB resale flat market, the prospects seem slightly more positive:

  1. HDB resale prices are expected to fall at a slower pace of 4 to 7 per cent and perhaps even stabilise.
  2. But as more new BTO (build-to-order) flats and ECs (executive condominiums) are completed this year,  flat owners may feel the imminent pressure to sell their existing flats at lower prices in order to move into their new units.

A fall in home prices seem inevitable this year, but the good news may come in the form of increasing sales and reaching a balance between sellers and buyers in terms of home prices.

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.

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 HDB flats – The 2015 outlook

Across the board, property prices dipped slightly last year, and it was the same in the resale HDB flat market. The last month of 2014 showed a 10 per cent fall in prices, and the Minister for National Development, Mr Khaw Boon Wan, has mentioned an estimated single-digit drop in prices this year.

SeaHorizonECResale flats in mature estates are however holding their own. Prices remained resilient mainly due to the rarity of units in these saturated estates and good locations. In non-mature estates such as Bukit Batok, Bukit Panjang, Choa Chu Kang, Hougang, Jurong East, Jurong West, Punggol, Sembawang, Sengkang, Woodlands and Yishun; resale flat prices fell 0.9 per cent in December, while a rise of 0.2 per cent was reflected in the mature estates sales figures.

The price decline was mainly attributed to stricter mortgage servicing ratio limits and a tightening of immigration  policies. Singapore permanent residents are now required to wait 3 years before being allowed to purchase resale flats.

But it were the larger four- and five-room flats which experienced the fall more than three-room resale flats whose prices remained level. And on the higher end of the public housing spectrum, executive flats prices rose 1.8 per cent. As a rare commodity, a hybrid which crosses smoothly from public to private housing, executive condominiums are much sought after. Though the recent close launches of a few EC projects are the same time may have reduced the percentage of uptake per development.

Industry experts are expecting sales to remain low in the first 2 months of 2015, and pick up after the Lunar New Year, perhaps even a slight rebound in the later half of the year.

Executive Condominiums – Now’s the time

If you are a second-time HDB property buyer, and are looking at upgrading from a HDB flat to an executive condominium (EC) – the time may be now. Before the resale levy really kicks in.

The TerraceImplemented in Dec 2013, the levy applies to ECs launched after Dec 9 the same year and as most of the EC launches from now on will be for units launched after Dec 2013, a levy of $15,000 to $50,000 will apply. And that’s no small sum to scoff at.

Executive condominiums have long been the way to move from public to private housing for most middle-class Singaporean families. As young couples now see this as one of the best ways to start their families, competition for the same properties have never been fiercer. As a hybrid between public and private housing, ECs will become private properties following a ten-year period. There is a income ceiling for applicants however, of a combined household income of $12,000.

As bids for EC land plots dip, mostly due to a saturation of launches in the last few months, prices and sales volume may not hold as well moving forward. Currently, ECs which just escape this resale levy include Bellewoods, Bellewaters, The Terrace, Lake Life and The Amore. They each boast their own unique selling point, with unblocked views at The Terrace, basement carparks at The Amore, nature-inspired landscapes at Bellewoods and resort-living lifestyle atmosphere at Bellewaters. Combined with options of units such as penthouses and condominium facilities, it’s the only logical step up for HDB upgraders.