Privatised HUDC Shunfu Ville’s Collective Sale bid

HUDC – a word much used and loved in the 80s. Much of these larger flats were privatised in the 90s and early millennium and thus became quite sought-after in the property market. Considered private residential properties, these rare projects are often gated, have their own maintenance, and are in relatively quiet spots.

Some of the more well-known HUDCs include Laguna Park, Pine Grove condominium, Lakeview, and Chancery Court. A few have been sold en bloc, such as Farrer Court,  Amberville and Minton Rise. One of the current privatised HUDC, Shunfu Ville along Upper Thomson, is trying for a collective sale which if successful, could fetch $1.9 million per unit for the owners.

PineGroveCondoThe estate is almost 30 years old, and that age usually calls for some rejuvenation. With its proximity to a number of good schools such as Ai Tong School, Catholic High School and Raffles Instituition, and also to the current Marymount MRT station and upcoming the Upper Thomson Line, the spot is prime for private condominium apartments. It is also relatively tucked away and has a good amount of greens surrounding and developers will have a considerable amount of plus points to work with.

If sold, the area could yield 1,100 new units. However, a nearby collective sale bid by Thomson View Condominium has not been successful, and it will be interesting to see if this tender, which closes on 27th of October, garners interest from developers.

 

Private property market – The road ahead

The outlook for private properties seems a little vague for the moment. Though the market seems to be enjoying a respite, with prices maintaining its current level, and prices have risen slightly over the past two months, property experts are expecting an overall fall of 3 to 4 per cent in the Singapore Residential Price Index (SRPI) this year.

Buyers looking out for good deals are picking up units across both the central and non-central regions. Recent increases in the SRPI could be due to the rise in number of transactions especially in the central regions with 0.6 and 0.2 per cent increases in June and July respectively.

WoodhavenThe rental market, however, has remained weak, especially in the suburbs. And as rents begin to fall in the central regions, many tenants are making quick comparisons and opting to move into more centrally-located properties instead. For example, a private 2-bedroom condominium unit in Woodlands is being rented out for $2,000 a month, which is comparative to leasing a 3-room HDB flat.

But for buyers and investors who are considering purchasing private properties, investing in bigger resale or new properties may be preferable as smaller units will be facing fiercer rental competition once many of these units reach completion next year.

Sell now or later?

In real estate, it is often a timing game. How do you exactly know when to sell and when to buy? If you’re currently looking to sell your property, what should you be looking at for when making your decision of whether to sell now or later?

Just like buying a home, you first have to figure out why exactly you are selling. Is it to finance a new home upgrade, to invest in another property, or because you need the money urgently? The push factors are often stronger than you think when it comes to how much and how quickly you are willing to sell for.

KingsfordWaterbayAnother important question to ask yourself is “How much is my property worth?” Aside from getting a trustworthy real estate agent and valuator, spending a bit of time doing your own market research will help you determine where your property stands. A quick look at property websites, some of which provide tools to help you keep track of property trends and transacted property prices, or checking out resale HDB flat prices from the HDB website as well as attending property talks and seminars are just a few of the many ways to hone your pricing skills.

Market competition is also an important factor which affects pricing. Have a look at how other properties similar to yours are currently prices for a guide to pricing your property. But that said, if you know what qualities your property has above others in the market, list them. These may help you price above the market median. You do however have to be prepared to justify these premium prices and once you are confident the edge your property has, you will have a relatively easy time asking for higher prices. Location and proximity to transport nodes or schools are often a big plus; and sometimes the configuration of rooms, quality of renovation and age of the property could also be added to your property’s calling cards.

 

Higher future demand for ECs?

Recent news of the income ceiling for new HDB and ECs (executive condominiums) flats possibly being raised have brought about a wave of questions from the market. Will this increase competition for new BTO flats? How will the resale HDB flat market be affected? Will the private property sector see lower or higher demand?

Since ECs and mass market private homes often go after the same pool of buyers, raising the income ceiling for ECs may mean increasing competition for the latter. With the higher income ceiling of $14,000, buyers who were previously ineligible for executive condominiums may now find themselves able to purchase these unique public-private hybrid properties, drawing them away from the private property market.

Sol AcresECs are considered public housing and buyers are able to take advantage of available housing grants for this property type. After 10 years, they become private property, which considerably ramps up their sale value. Buyers who have previously had to turn to private properties at much higher prices, and who are now eligible to apply for ECs will no doubt be in glee. The difference between an EC and a private property is about $300 psf and buyers comparing private homes and ECs in the same vicinity may come up with savings of up to $250,000. Not an amount to be scoffed at.

One recent EC offering, Sol Acres, have since sold 294 units. Upcoming EC launches are expected to give pricier private mass market homes without the calling cards of a good location, a run for their money. Prices of ECs usually stand at around $800 psf whereas private homes go from $1,000 psf and up.

 

Raised Income ceilings for HDB and EC flats

In the months ahead, the HDB market may see some significant changes.

In his National Day Rally speech on Sunday, Prime Minister Lee Hsien Loong announced a raise in income ceilings for new HDB flats as well as ECs (executive condominiums). The income ceiling for HDB flats could be raised from $10,000 to $12,000 and for executive condominiums, from $12,000 to $14,000. Just four years a, the income ceiling for ECs was raised to $12,000 but apparently income levels have risen since then. The government are also making it easier for lower-income households to purchase 2-room flats. The Special Housing Grant (SHG) will be raised from $20,000 to $40,000, giving them the financial support they truly need.

Forestville Executive Condominium.

Forestville Executive Condominium.

And to promote stronger familial ties plus cater to the growing group of young families who prefer to live near their parents, a new Proximity Housing Grant will help buyers who wish to live near their parents or married children secure their new flat.

This could be good news for buyers and home-seekers, as more applicants may then find themselves eligible for a new BTO flat or EC. But will there be more applicants now vying for available units. And how will this move  possibly affect the resale HDB flat market?

 

Property – To buy or not to buy now?

Since the implementation of property cooling measures by the government agencies, property prices have fallen at a gradual pace and seem to have currently reached a plateau. Some may have been waiting for an opportunity to hop into the property buy-sell train, but others may be concerned about whether they should sell now or later.

How do you decide if the time is now or later?

The WaterlineThere are a few fundamental questions to ask yourself:

  • Need or want?

Of course, owning a home of your dreams is the ultimate desire for most. And so it is a want. But you will need to evaluate your situation very honestly – do you absolutely need a new place? Or could it wait? Are you hoping to merely flip a property for profit, or have the ability to hold out for the best deal? If you answer is “Need”, then you have to a few other considerations to take care of.

  • What’s in the piggy bank?

Do you have enough left in your savings and monthly earnings, after setting aside sufficient funds for your monthly bills, every day expenses and insurance to manage the risk of buying a home? Besides having enough to make your monthly mortgage, most people may not realise the need to have an amount within your savings for very real and unforeseen situations such as periods of unemployment or health issues.

  • Are there advantages or pros? 

Is the price on the property you are hoping to buy right? If there is room for negotiation, which is why an experienced real estate agent is a boon, and the mortgage calculator helps you compare rates and tells you that the interest rates are prime, then perhaps the time truly is now.

Shoebox apartments – Supply over demand?

Shoebox apartments – affordable total quantum price, relatively easy to rent and maintain, limited numbers. That used to be the case when these small units were first marketed a couple of years ago. But as developers caught onto the small apartments trend and churned out more of these units, their numbers have increased significantly.

Parc Centros private condominium on Punggol Walk.

Parc Centros private condominium on Punggol Walk.

By 2017, the number of these shoebox apartments with floor area of approximately 500 sq ft, will rise by another 700. Instead of being mostly concentrated in the city and prime districts, they will now be in the Hougang, Punggol and Sengkang areas in residential projects such as A Treasure Trove, Bartley Residences, The Promenade@Pelikat, Parc Centros, River Isles, Jewel@Buangkok and La Fiesta.

Expatriates are usually keen on renting out properties near their workplace, usually near the Central Business District. But as businesses are moving out into the various regional commercial hubs, so may their search for rental properties. What may however be deterring them from renting out these small studio apartments could be the rental prices.

Rental prices of small studio apartment are now at $2,000 to $2,200 per month, down from $2,600 in 2013. These prices are now nearing that of renting out an entire HDB flat, which could prove to draw tenants away from the private property rental market. Could this then in turn increase the demand for resale HDB flat?

Choa Chu Kang’s Executive Condominium Future

With 11 bids for an EC (Executive condominium) site in Choa Chu Kang, it looks like the estate may be looking at 490 new homes in the next 5 years. The avid response could be due to the huge decrease in land supply this year and the possibility of the government further reducing the supply of land in the next year. In 2012, 6 EC sites were released in the second half alone; whereas this is the only EC site release by the government in the first half of  this year.

The BrownstoneCompared to last year’s EC site sales in Choa Chu Kang, the current site went for lower bids, and selling prices are expected to hover around $800 psf. The previous sites which were sold last March and September last year are however, closer to the Choa Chu Kang MRT Station.

Though there are 7 EC properties waiting in the wings for their big debut, and despite news that the EC vacancy rate was at 14.1 pre cent in Q2, developers are positive about the potential earnings from these public-private hybrid properties and are confident about the uptake. In Q2 alone, there were 2, 232 unsold EC units.

But if sales at last weekend’s launch of The Brownstone EC were anything to go by, the developers have little to worry about. 185 units were sold in the weekend alone, making it one of the most-sold EC launches this year.