En bloc sales take centre stage this year

Yet another former HUDC estate has been put up for collective sale. Serangoon Ville situated in Serangoon Ave 1 has been made available for en bloc sale and the selling price is expected to be between $400 million and $430 million. The costs will be high for this land site as an additional $200 million to $220 million is required to intensify the land and to refresh the land lease by 99 years. The estate was privatised only in 2014 and has 69 years of lease left.

SerangoonVillePhoto credit: Google Maps Singapore

Property players and watchers are expecting developers to bid efficiently for this land site that averages out to be $720 psf per plot ratio, particularly since recent sales of ex-HUDCs such as Eunosville and Rio Casa were closed successfully and above asking prices. Currently, Serangoon Ville houses 7 blocks of 244 apartment units, including some maisonettes, with sizes ranging between 1,625 sq ft and 1, 733 sq ft. One redeveloped, the 296,913 sq ft plot could potentially yield 750 to 900 units.

2 other former HUDCs – Tampines Court and Florence Regency – are already in the process of putting their estates up for sale. The latter is planning to commence signing of their collective sale agreement in July this year. This year’s healthy new home sales has possibly boosted developers’ confidence in the market’s stabilisation and future recovery.

But with the number of private land sites being sold and private estates sold en bloc, one cannot but help to wonder how Singapore’s real estate sector will look like in 3 to 4 years’ time. Add the Bidadari township into the mix, the market might be seeing a huge entry of public and private housing within the next 5 years. Rents have been sliding due to the increased number of completed and available properties in the recent couple of years, how will the market react then?

Good class bungalows apple of high-net-worth buyers’ eyes

Land is rare in Singapore, hence the value of freehold properties. And if you own the land on which the property stands, the value of your asset could be even higher. And the rarities of rarities, sizeable landed properties oftentimes in exclusive enclaves surround by greenery and in prime locations, are the few and far in between Good Class Bungalows (GCBs).

BinjaiParkGCB1These highly sought-after and equally pricey landed properties are often considered long-term investments, especially by high-net-worth individuals or even exclusive funds. In the whole of Singapore, there are only 2,500 of these GCBs which are of at least 1,400 sq m (or the estimated size of a quarter of a football field) and 2-storeys tall. In addition to the size, the liveable “roofed area” can only take up 35 per cent of the entire plot of land, ensuring a majority of open space.

Out of these 2,500 Good Class Bungalows left in Singapore, 65 have been gazetted for conservation. Most of these are situated in areas where Singapore’s first plantations were located, including Bukit Tunggal, Caldecott Hill and Cluny Hill. Prices of GCBs vary from the expensive to the well, very expensive. In less centralised districts such as Caldecott and Binjai Park, these properties tend to be priced slightly lower than those in prime districts such as Nassim Hill and the surrounding Tanglin area such as Bishopsgate and Chatsworth. It is not uncommon to see prices of $20 million and up for these rare cream of the crop properties. And with the property sector feeling more upbeat this year, the second half may see more Good Class Bungalows transactions taking place.

 

 

Resale non-landed residential property prices hold steady in April

After 5 consecutive months of climbing figures, resale condominium prices have steadied themselves in April. Resale transactions fell by 21 per cent as a number of new launches drew the attention of buyers and investors in the past couple of months.

Thomson Impressions2Though the numbers are still shy of that during the peak of 2010 and 2013, things have been looking up for the private property market this year. Year on year, private resale prices and transaction volume were 1.8 and 48 per cent higher than in April last year. In comparison with March 2017, April’s resale private property market numbers dipped slightly. Prime district property prices fell 1.2 per cent last month while prices of units in the city fringes and suburbs rose 1.2 per cent.

In the 5 months prior, private resale prices have risen 0.6, 0.3, 0.9, 1 and 0.8 per cent from last November to March this year. The improving market sentiments seem to be reflected in the overall above-market-values which rose to $5,000 from $0 in just a month. Districts which posted the highest median above-market-values at $37,000, and had more than 10 resale transactions, were District 16 and 21. Despite higher resale activity in the city fringes, District 11 which consists of Newton and Novena, posted the highest negative median above-market-value of -$40,000.

the-crestThe year is almost at its mid-point and the latest new launches have boosted numbers in the new private home sales market, but how will the resale private property sector fare in H2?

Beijing and Australian governments struggling to rein in runaway home prices

Runaway property prices in some major cities have had their respective governments scrambling to rein in the market.

beijing-tongzhouIn Beijing for example, regulations pertaining to online real estate portals have been set, resulting in 15 such sites having had to remove misleading information from their website. False advertising is rampant and could have had a part to play in the skyrocketing of home prices in Beijing. Many online sites promise “limitless potential for price gains” and even fengshui advice, boosting an atmosphere that is ripe for speculation. The government fears that uncontrolled price increases will result in household debt and ballooning bank credit risks and generally creating a sense of uncertainty and discontent on the grassroots level. This latest move is on top of other rules already implemented in attempt to cool the market in the Chinese capital. Minimum down payment for a second property has already been increased from 50 to 60 per cent and purchase of a third property is disallowed.

SYdneypropertyIn Australia, a surging housing market also has the Australian government trying to relieve the pressure on a possible property bubble which is in danger of bursting, with dire consequences for the economy, possibly even the first recession in 26 years. They have issued warnings to banks for the latter to curb home lendings, in particular to investors. Almost 50 per cent of the home loans taken out from Australian banks are from investors.

Interest rates have been at a record low, accounting for the heightened number of loans, which in turn has caused property prices to rise exponentially, with that in Sydney rising 104 per cent and in Melbourne, 88 per cent. Household debt has already risen to 189 per cent, one of the highest in the world and many Australian households now find themselves ladened with hefty home mortgages, which could be problematic should unemployment or a recession take place.

Private home prices on the rise?

Twin-Peaks3Prices of completed private condominium units rose 0.3% in April, though analysts are putting it up to a technical rebound. After a relatively good start to the year, private home prices have fallen 1.1% in March based on the Singapore Residential Price Index (SRPI).

Some completed residential projects have seen promising signs of buying activity. The recent upward price adjustments could have been due to higher pickup rates of central region private homes such as units at OUE Twin Peaks and Ardmore Three.

Although the rise of home prices this year has been tentative, across the board prices have increased by more than 50% since 2009. Small apartment units lead the way with a 62.8% rise, followed by a 57.7% increase in non-central region units. Central region home prices are now 30.9% higher taking March 2009 as a point of comparison.

Ardmore THreeLast year saw a dip in luxury, prime district properties while this year, the increased supply of new completed private apartment units have pushed prices of units in the non-central regions down. Buyers remain cautious in their purchasing approach and are more price-sensitive though projects in prime locations and whose developers offer fresh new incentives will continue to bring in sales.

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.

Australian properties getting pricier

When the property cooling measures kicked in for the Singapore property industry, many investors turned to overseas properties. Properties in Australia, the United Kingdom and Malaysia were particularly favoured by Singaporean buyers as these were the more popular overseas education spots for local students.

Sydney Mosman FlatBut it seems the property prices in Australia are gaining momentum. For 10 quarters in a row, prices have risen, led in particular by a leap in home prices in Sydney. Across the board, prices have risen by 1.6 per cent but in Sydney, prices have been reported to grow by 13 per cent on a yearly basis. Australians are seeing this as a threat to the affordability of their city and once again broaches the topic of immigration.

Banks’ interest rates are however considerably lower now, down to 2 per cent in May this year. Has this allowed or enticed more to secure a loan and how will this eventually affect the industry when rates start rising and might there be a danger of the rehash of the United States’ property bubble here? The Australian authorities have already tightened the loopholes in their foreign investment policies and foreign property buyers now have to abide by stricter rules under the Australian Foreign Investment Review Board. Ultimately, it may be up to the policy makers to steer the market in a direction which balances on the knife edge between economic growth and nationalism.

Sentosa Cove units fetch high prices once more

There was a time when luxury properties on Sentosa fetched luxurious prices. That time was more than 2 years ago. The property cooling measures have hit home since their implementation over the past couple of years however, and sales number sand prices have dropped with the imposed additional stamp duties and loan restrictions.

TheOceanfrontBut there may be light yet in the horizon. Recent sales of 2 units at The Oceanfront condominium apartments in Sentosa Cove luxury enclave have soared above the $2, 000 psf range despite their lack of a waterfront view and their low-floor  Previous sales, which were few and far in between, have gone as low as $1, 190 psf. That was a $463 psf loss on a $1, 653 psf second-storey apartment at The Coast. Considering the fact that most mass-market homes on the mainland are already going at the $1,000 psf range, prices have declined substantially since its peak in 2008.

Will investors with deep pockets continue to pick up deals on the island, especially as prices dip? And will those who have already purchase units on this exclusive waterfront-living enclave continue to hold off on selling in wait of prices rising in the future? How much more will prices be able to rise and will the competition with units on the mainland only become fiercer?