Home rental market softening

Rents for both HDB flats and private condominiums have been falling. The number of leases transacted per month have also dipped.

olina-lodgeThe weakening economic situation might be lengthening its stay as the job market remains soft and the hiring of expatriates is on the decline as well, indirectly affecting rental demand. The influx of new completed private condominium units and increase in number of HDB flats being sublet have also pushed rental prices and volume down in recent months.

In September, private non-landed property rental prices fell 0.6 per cent while HDB flat rents fell 0.3 per cent. In a year-on-year comparison, prices have fallen 4.6 and 4.5 per cent in the previously-mentioned property sectors respectively. Weak rental demand have also impacted property sales as resale private condominium prices have been reported to be shrinking, especially with added pressure from new completed units and new project launches.

hdb-flat-rentalStrangely however, core region property prices have increased despite the district leading the drop in condominium rents at 1.8 per cent. City fringe properties bucked the trend with a 0.2 per cent rise as the quantum rental might be more affordable to foreign tenants who also want to live in convenient and popular locales.

In the rest of 2016, the rental market may stagnant while in wait for the new year. As most of the completed projects were rolled out this year, 2017 may be the turning point for both the rental and resale markets. Property analysts are expecting rents to fall by a further 5 per cent before a possible rebound.

Government to strike a balance in HDB market

With the resale HDB flat market holding firm and prices of resale flats still high, the government has promised to look into shortening the wait for new HDB flats while monitoring the effect of exorbitantly-priced resale flats especially in the downtown areas.

Pinnacle DuxtonThe current wait for applicants of a new BTO (build-to-order) flat is now 3 to 4 years, with some having to wait as long as 6 years. But the wait may soon be shortened to 2 – 3 years, according to National Development Minister Lawrence Wong. For now, applicants who need a flat sooner are opting to ballot for units under the Sale of Balance Flats (SBF) scheme, usually from a pool of units in developments which are nearing completion but have yet to be sold.

Foreigners may be surprised by the high prices for public housing in Singapore (in most countries, public housing areas are rundown and hardly in demand). And while Singaporeans can be proud of a solid and stable public housing sector, the fact that prices were skyrocketing over the past decade, and could potentially happen again if not kept in check, has the government on their toes.

tampinesgreenhdbThe recent discussion about the high resale value and potential value-appreciation of HDB flats in downtown areas such as at Pinnacle@Duxton has resulted in proposals to have different resale market rules for these units – such as a longer MOP (minimum occupation period), higher resale levies and shorter lease periods. As of now, 18 resale units of the 174 transactions at Pinnacle@Duxton have been sold at $1 million or more.  Keeping the public housing system fair will take some skilful tweaking as the population and economic landscape of the future is vastly different from that of 40 years ago.

Hong Kong’s property market strong despite cooling measures

Unlike Singapore where the public housing sector is strong and almost 80 per cent of the population lives in a Housing Board (HDB) flat, in Hong Kong only 21 per cent live in a public housing unit and even then, it takes them a minimum of 3 years for a successful application. Though both cities have large population, the density is higher in Hong Kong where land restrictions are greater and unlike Singapore, they hardly have means of reclaiming land and expanding liveable space vertically is one of their only solutions. It comes as no surprise then, that unit sizes and liveable floor areas are shrinking.

hongkongpropertyMany could say that Hong Kong’s real estate fluctuations is very much like its undulating terrains, with steep climbs and equally slippery downhill slopes. Property cooling measures were rolled out in Hong Kong in 2012, around the same time as curbs were implemented in Singapore as well. But it still takes an average Hong Kong household 19 years to save up enough to purchase their own home compared to the 5 years for a Singaporean household.

Though property prices did fall in February, they rebounded to the levels comparable to 2015’s peak in September this year, possibly indicating renewed interest in Hong Kong real estate from mainland buyers. Numbers seem to show that more mainland Chinese are favouring Hong Kong properties over Singapore properties, possibly since Singapore’s property market has been seeing consecutive quarters of muted growth since last year.


Resale DBSS flats scoring high prices

Recent transactions of 3 DBSS (Design, Build and Sell Scheme) units at Park Central in Ang Mo Kio has almost reached the $1 million mark. For public housing, this is certainly a bit of a coup for the property situated near the Ang Mo Kio MRT station. But compared to normal 5-room HDB flats in Ang Mo Kio Ave 1 went for as much as $880,000, the $980,000 selling price for a 5-roomer at Park Central which just reached its 5-year MOP (minimum occupation period) in July this year sounds perfectly normal for this district.

parkcentralThe DBS Scheme was suspended in 2011 due to the soaring prices, culminating in Centrale 8 in Tampines, developers have been setting for these projects, which are privately developed though they are technically public housing. DBSS units can be sold once the 5-year MOP is reached. Some other DBSS projects which entered the resale market this year were City View @ Boon Keng, Natura Loft in Bishan and Parc Lumiere in Simei. A unit at the former was sold earlier this year at a record-breaking $1.1 million. One of the first DBSS projects which became eligible for resale in 2014 was The Premiere in Tampines.

Now could be the time for DBSS to take their time in the limelight as new HDB flats are incorporating more design features and condominium-like facilities and facades. Property analysts are expecting the DBSS gloss to lose its shine in about 10 years’ time.


Consumer awareness crucial for property industry

The local property industry landscape has been changing quite a bit over the past few years, in particular for the consumer. The authorities have been working on transparency and consumers now have more information at their finger tips, and perhaps even more as net prices of de-licensed projects’ will soon be available as well.

singapore-property-authoritiesCurrently, the Housing Development Board (HDB) and Urban Redevelopment Authority (URA) both provide property statistics and data on their websites. The Singapore Residential Price Index (SRPI) by the National University of Singapore (NUS) Institute of Real Estate also provides month-on-month transaction-based information for private non-landed residential properties.

ardmorethreeThere are however some caveats to take into consideration. URA’s quarterly price index for example, does not include the discounts and incentives which developers sometimes provide. Only the net-price will be recorded, thus consumers will do well to take this into consideration when viewing statistics and median monthly transaction prices. The change will take effect this month, which means the price index may have some downward pressure put on it as current figures may be inflated. De-licensed projects which have obtained their Certificate of Statutory Completion and thus do not come under the Housing Developers Rules, such as OUE Twin Peaks and Ardmore Three, are known to provide incentive schemes to their buyers such as 15% discounts and Additional Buyer’s Stamp Duty (ABSD) rebate.

A recent case of a property agent who handled and misappropriated cash handed to him by his client also brings to light that consumers may not be entirely aware of what they are entitled to or what their agents are allowed and disallowed to do. In brief, it is against the law for property agents to handle any cash on behalf of their clients.

Tengah – HDB’s future model estate

There was Punggol, then Bidadari, and now Tengah. It looks ike HDB has big plans for the decade ahead and with 30,000 new BTO flats and 12,000 private homes in the pipelines, this new HDB town estimated to be the size of Bishan, will be setting new heights for future HDB estates. Though the new flats here will reach only a maximum of 15 storeys due to its proximity to the Tengah military airbase.


Photo credit: HDB

HDB is developing Tengah according to the government’s green and sustainable-living dictum, with a 700ha forest fringe surrounding the estate and a 5 kilometre forest corridor linking the town to the island’s western and central catchment areas. Living with nature will be the focus of this new township, it will also feature a host of community fairways, gardens, green play areas, walking and cycling paths and a car-free town centre.

hdb-bto-flats-roh-programmePhoto credit: HDB

The first of the Tengah flats to be launched will be in 2018 and transport-wise, the Jurong Region Line which is to be completed within the next decade, will be the town’s main connection to the rest of the island. The eco-friendly township will consist of 5 districts, namely – Park District, Plantation District, Garden District, Brickland District and Forest Hill District. Each district will be differentiated distinctively while still incorporating green features. The idea behind this is integration instead of replacement – keeping the identity of the current scrubland that Tengah is, spanning Jurong East, Choa Chu Kang and Bukit Batok.

Resale HDB flat prices fall in August

Photo credit: HDB

Photo credit: HDB

Rather than a market rebound, the HDB flat market may have to be content with stabilising prices and sales volume. August saw a 0.7 per cent dip in resale flat prices, led by a 1 per cent fall in 4-room flats, over the past 3 months after a slight rise in July. 3- and 5-room resale flat prices also inched down 0.6 per cent while executive condominium (EC) prices rose 0.8 per cent. The price drop is seen in both mature and non-mature HDB estates.

The Hungry Ghost month may also have had something to do with the drop in sales prices as buyers tend to hold off buying during that month though units with lower selling prices may have transacted hence pulling the average median prices down slightly. Since the market peak in April 2013, HDB resale flat prices have since fallen 11.5 per cent.

Photo credit: HDB

Photo credit: HDB

Property analysts predict a level market for the rest of the year, with price sustainability at best and as long as the economic forecast remains unclear and overall property market sentiment weak, any price rebound will be unlikely. Sales volume has however been rising, a promising sign, though as more new HDB flats reach completion within the next couple of years, more flat owners will be pushed to sell within a specified time period and competition may once again push prices down.

Sustainable and Community-focused projects win HDB Awards

Sustainability and community were the main drivers behind the winners of the Housing Board (HDB) Design and Construction Awards. 11 projects won for the HDB Design Award category and 12 Construction Awards were handed out to construction firms who had done well in the workmanship and structural works area.

Skyville@DawsonNotable winners included SkyVille@Dawson by WOHA Architects and Waterway Ridges by Surbana Jurong Consultants. SkyVille@Dawson features sky gardens for every 80 homes, that not only introduces greenery to the urban landscape, but also provides an area for community gatherings and exchanges. There is also a roof garden which links the 47th floor of each of the 3 blocks and even includes a 400m jogging track.

Waterway Ridges is a massive housing project near My Waterway@Punggol consisting of 7 blocks with a total of 832 units. The blocks are staggered in height and water is the main feature in the development. Harnessing the beauty of rainwater, 70 per cent of this natural resource will be channeled into the waterway by way of rain gardens, vegetated marsh areas and dry pathways.

Waterway RidgesA couple of this year’s winners upgrading projects from HDB’s Remaking Our Heartland scheme and the Neighbourhood Renewal Programme. The first are town centres in East Coast and the latter an upgrading project in Simei Street 1.