Up and coming district – Jalan Besar

As properties in the city centre become increasingly out of reach for the average investor hoping to gain a footing in the property industry, more are turning to the city fringe areas such as Marine Parade, Kampong Glam and Novena. Now, the Jalan Besar and King George’s Avenue districts could also be attracting buyers.

CitronThough the private homes market in the area has softened in the past year due to mortgage limits, its proximity and increasing popularity with the young and hip crowd and potential connectivity with future MRT lines in its midst, has renewed interest from investors. An area in King George’s Avenue has also been gazetted for future HDB blocks. One completed condominium apartment block in its vicinity is the City Square Residences, which during its launch drew huge crowds looking to purchase smaller units for rental purposes. Other private residential properties include Parc Somme and Kerrisdale.

Buyers waiting for new options can keep an eye out for private residential properties such as The Citron Residences on Marne road. Property experts are positive about the potential rental yields of smaller apartment units in the area as the district continues to bring in a variety of new businesses. Currently rents for smaller apartments in the area go for as much as 4 per cent more.

Smaller apartments gaining popularity once again

Just a couple of years ago, there were debates about whether homes were becoming too small for comfort as the 500 sq ft studio apartments or shoebox units took the market by storm. Some shunned small units, preferring instead to go for larger ones with a lower psf price.

But now as loan limits are truly showing their might, buyers are favoring smaller apartments once again due to their lower quantum prices and the ease of rental. Though not all are flocking to shoebox units, after all, young families do need a reasonable amount of space, the average home size has dropped to 947 sq ft from June last year. And for HDB upgraders, their chances to move onto the private property market might have become slimmer, especially if size is a major consideration. The average 4-room HDB flat is around 969 sq ft.

CIty GateOne- and two-bedders have increasingly become more popular with buyers as they are usually within their budget and investors find them easier to rent out. URA figures in fact also showed that new residential properties have also featured smaller units, with the average size being 753 sq ft. But this hardly comes as a surprise as home size has been shrinking since 2009.

The other popular property  type is the dual-key apartment which provides the atmosphere of having two separate living spaces within the same home. Some of these units share the same entrance but separate facilities such as kitchens and toilets, while others share the same facilities but have separate entrances, providing privacy for bigger families and offering more rental options.

As we progress into the second half of the year and the market evolves in reaction to buyers demand and supply of land, will developers be quick to re-strategize and cater to the majority?

$1 million sweet spot for home prices

The average affordability ceiling for properties have dropped by almost $200,000 ever since the Monetary Authority of Singapore (MAS) placed curbs on loans. The average price home buyers can now afford, or are willing to fork out, is $1 million. Properties between the total quantum range of $800,000 to $1. 2 million generally sit better with buyers. The range used to be wider, with homes reaching $1.4 million selling just as well.

LakevilleDevelopers have been quick to realize the shift and have been offering considerable discounts or competitive pricing for new launches. Smaller units such as studio apartments and one- or two-bedders have also performed better than their larger counterparts. About 8,254 homes priced between $700,000 and $1.2 million were sold during the last year. Properties which were offering more affordable units, such as the Coco Palms in Pasir Ris which launched units at $980 psf, were able to garner more sales.

And for buyers hoping to secure a home below $500,000 there are now more available, and more sold. In the last year, 291 units below $500,000 were sold from June 2013 to June 2014. Comparing to the year before, only 61 units were sold within the same time frame. Buyers consider smaller units easier for both occupier and rental purposes, plus most HDB upgraders rate affordability of homes as between $900,000 to $1 million.

Bijou – Far East Organization’s first Dual-key SOHO

Whether you’re looking for a place to call home or seeking out the best property investment deal, location and design are often top of the consideration list. Thus, when something comes along that has both, savvy buyers will naturally gravitate towards it. The latest property by Far East Organizrtion – the freehold Bijou, is one such property.

Though dual-key apartments have been in the limelight for sometime now, most units have a separate smaller area with its own entrance but without its own facilities such as a kitchen and toilet. Bijou’s dual-key apartments however, are designed much like the much-desired maisonette, with one entrance but entirely distinct living spaces upstairs and downstairs, each with their separate kitchen and toilet. It’s extremely suited for rental since it maintains your and your tenant’s privacy. It’s almost as good as buying one condominium unit but owning two, without having to pay additional stamp duty and taxes.

Bijou1Combined with their french-inspired garden landscapes and rooftop garden views of the city, this exclusive 5-storey residential development only has 24 of these dual-key units in its 120-unit, which makes it all the rarer. Entering the market as the first dual-key SOHO, the freehold Bijou is located in one of the fastest-rising areas under URA’s latest Master Plan 2014. With the development of the Greater Southern Waterfront and the regional commercial hubs in the Pasir Panjang district, the influx of a burgeoning workforce seems more than likely. Traveling to the Marina Bay Financial Centre will also be much quicker, and as a mixed-use development, Bijou will also have retail and dining options right at its doorstep.

As the Singapore landscape changes in big ways, so will the property market and areas which have once been put on the back burner will not come into the forefront.

HDB rental market stable

The rental demand for HDB flats has remained stable for most of the year. Though there was a slight rise in February and March, the take-up rate has sbeen sliding since August last year. But since April, demand has remained stable for the next three months.

Yishun HDB FlatRent prices for whole HDB flats now hover around $2, 300 per month. And since most tenants are fresh graduates or foreign students, they are likely to want to sublet to make rent. How then has the subletting quota affected tenants who wish to rent out part of their rented HDB flats? In January, rules were set to restrict the “formation of foreigner enclaves in HDB estates”. But figures have shown that hardly any HDB block has gone over the quota. With the exception of those nearer MRT stations and town centres. Tenants can search online for the quota of the specific HDB block they are interested in renting a unit in.

With more new flats being rolled up quarterly, what worries the industry more is the oversupply of flats for rent. Though prices of private properties are flat-lining, home loans are proving equally, if not more, difficult to secure. This means HDB upgraders may now re-think their plans to sell, instead, keeping their flats and renting out rooms to pick up profits which may go towards funding their targeted private property purchase.

As the year edges past the halfway mark, the balance between seller and buyer remains delicate. Which way will the scales tip?

CBD Living on the rise

Despite restrictions in the property market and decreasing sales in the private property sector, more buyers are looking to purchase apartments in the CBD (Central Business District).

Tanjong Pagar CentreLiving just a walk away from the office has its positives. But recent interest has dawned from the promise of change. New mixed-use developments such as GuocoLand’s Tanjong Pagar Centre, will bring live into the sleepy after-hours districts of Shenton way, Raffles Place and Tanjong Pagar and change the fact that CBD living often comes with its fair share of inconveniences such as not having schools, supermarkets or shopping centres which open beyond the normal office hours in the vicinity.

Tanjong Pagar Centre will feature Grade A office spaces, luxury serviced apartments – Clermont Residences and other commercial businesses. It will be linked to the Clermont Singapore Hotel. Just a little way off are other residential options – the Marina One residences. This project will go on sale later this year, and prices are expected to start at $2, 800 psf. There are other new private apartment developments in the pipeline, giving this city-nation a new meaning to city-living. Skysuites @ Anson, 76 Shenton and Altez, just to name a few of the many which have come up in the last 10 years.

76 ShentonWith news of the Southern Waterfront development under URA’s draft masterplan 2013, the area looks set to be booming with activity within the next decade. Considering the fact that rental yields now are already at 4 to 4.5 per cent, higher than the island-wide average of 3.8 per cent, it will be no wonder what the future will bring.

Kovan Haven

Once upon a time, Kovan was a place no one really knew about. Now it’s a little of a wonderland, especially for young families and property investors seeking a good deal.

As an area considered to be exclusive with mostly landed homes and private properties, any new condominium would be greeted with eager arms from HDB upgraders in the surrounding estates such as Hougang and Serangoon. One of the latest offerings in Kovan is the Trilive condominium on Tampines road. With up to 80 per cent of its 222 units being dual-key apartments, it is expected to be exceedingly popular with large families or buyers looking to rent out part of their property while still occupying it, yet without sacrificing their privacy. Units are expected to sell at around $1, 350 to $1, 400 psf.

Trilive KovanAt the neighbouring The Tembusu, units have been selling at an average of $1, 541 psf. It’s wide range of property options, from one- to four-bedders as well as dual-key apartments and penthouses have enhanced their ability to draw in a varied buying crowd.

Other popular properties on the Kovan menu are Bliss@Kovan, Kovan Residences and Kovan Melody. The Heartland Mall and Upper Serangoon Shopping Centre are already in its midst, and the area is steadily adding amenities and facilities to their township, with an upcoming commercial hub in the nearby Serangoon Sub-Regional Centre. Apartments in this area could be looking at potential rental yields in the near future.

Resale HDB flats prices dip

The number of resale HDB flat buyers is diminishing. At its two-year low last month, the number of flats which exchanged hands in May was 1, 320. In April, 1, 484 resale flats were sold. Prices also fell 1.2 per cent in May, the lowest since April 2012 according to the Singapore Real Estate Exchange’s (SRX) price index.

Marsiling Greenview BTO HDB FlatThe most common reason for the drop was the loan curbs. This has prevented many buyers from securing a desired loan amount, thus unless they have a large enough cash reserve, it usually puts a resale flat out of sight. The number of transactions in March and April were more positive but that could be due to the pent out demand following the festive season in January and February. Other possible reasons for May’s drop could be the release of new BTO and SBF (sale of balance) flats by HDB in the same month. The latter SBF flats are usually more popular with location- and price-conscious buyers as they are cheaper than resale flats but yet are situated in mature estates.

But what about HDB upgraders who are have purchased private properties? Unlike private property owners who are not allowed to purchase HDB flats, HDB flat owners are allowed to purchase private properties. But as buyers play the waiting game, resale flat owners are now simply willing to wait, if they can, or rent out their HDB flats. This in turn keeps rental supply high, but that also means they will be likely to compete with private property rentals. As the supply of tenants are kept stable, this could also mean there will be a price-war in the rental market.

How long will the resale market remain weak? Will it be a tough uphill climb?