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13 May

HDB Resale flat sales lowest in 16 years

The numbers are low but the prices may not be so. Is this a case of rare treasures raking in high prices?

HDB’s reports have shown that there were only 4,335 resale flat transactions in Q1 of this year, as compared to the average of 8,000 for the first quarters in previous years. However resale flat prices have continued to increase with a 1.3 per cent rise this year. Albeit slower than the 2.5 per cent increase from Q4 of 2012, it is still a 0.6 per cent rise when compared year on year.

Photo by HDB.

Photo by HDB.

The latest property curbs could have had a part to play here. HDB flat buyers can now only loan up to 35 per cent (previously the cap was at 40 per cent) from HDB and bank loans are now capped at 30 per cent of the household income. Thus with these restrictions, some may now not be unable to upgrade to larger flats and thus taking away a considerable pool of buyers from the resale HDB flat market. PRs who previously form a significant number of buyers, may also be out of the picture as they are now subjected to an additional 5 per cent tax on their first home.

Skypeak @ Bukit Batok. Photo by HDB.

Skypeak @ Bukit Batok. Photo by HDB.

But with the drop in flat buyers, there is in turn an increase in flat renters. HDB reported a 15 per cent rise in subletting transactions, to 7,410 this quarter. The money is coming through rental now as more HDB owners hold on to their flats, hoping to reap in enough profit to help them make the leap to private property.

This, plus the number of new HDB flats being launched and built last and this year, have drawn buyers away from the resale market. Which type of resale flats are seeing the most activity? Is there now less competition for the larger 4 and 5-room flats? Are 3-room flats the current “hot property”? Come July, singles will also be able to purchase new flats directly from HDB. Will this impact the demand for the smaller 2 and 3-room flats?

10 May

Marina Bay’s Allure

Just at the edge of the Central Business District (CBD), right in the centre of Singapore’s newest entertainment hub and with a view to die for, it’s not wonder properties at Marina Bay are drawing the well-heeled crowd in. With the intention of cultivating this area as the new Financial district, commercial units are being built and occupied at a rapid pace. As a happy spillover, residential properties nearby are enjoying the business it brings in. Companies and individuals with cash to spend are taking the the area due to the proximity and high-end address it provides.

Marina One residential project with 1,042 new condominium units. Photo by marina-one.org.

Marina One residential project with 1,042 new condominium units. Photo by marina-one.org.

The Marina One development expected to complete by 2017 looks set to bring in even more money, both commercial and residential. Jointly developed by Temasek Holdings and Khazanah Nasional’s M+S, it will have a 341,000 sq m gross floor are and a gross development value of $7 billion.

Surrounding developments such as The Sail @ Marina Bay and V on Shenton are also seeing positive response over time. The Sail @ Marina Bay for example launched for $980 psf in 2004 but has more than doubled to $2, 180 as of the past 15 months.

V on Shenton condominium.

V on Shenton condominium.

Marina Bay Suites sold one of the most expensive units in the area at $3, 313 psf. Median prices were at its peak in Q3 of last year at $2, 229. In the beginning of 2012 it was at $1, 926 psf.

Despite the dampened buying interest following January’s property tax hikes, tenants looking to rent homes nearby will continue to keep investment at a healthy level. Rental yields for apartments in Marina Bay are between 2 and 3 per cent. Median monthly rents range from $5.25 to $6 psf. Compared to rentals in other prime districts, it’s higher than their $3 to $5 psf median. It also helps that the proximity to the CBD and shopping and entertainment belt also helps keep selling prices high so whether its short or long term investment you’re looking for, the Marina Bay area may give you the best run for your money.

7 May

Property curbs brought in revenue

What did all the previous rounds of property cooling measures bring to the table?

$1 billion. In tax revenue.

Financing Your HomeFollowing January’s new Additional Buyer’s Stamp Duty (ABSD) hikes, in February and March $158 million were added to the taxman’s coffers. The ABSD is now up to 15 per cent. $580 million came from foreign buyers, were 3, 041 homes were sold since December 2011. Singaporeans and Permanent Residents (PRs) forked out $386 million for 7,269 homes. ABSD was introduced in 2010, and since then, home owners have paid up a total of $66.6 million of this levy.

Foreign home buyers have retreated somewhat, with a 36 per cent drop from last year. The ABSD currently stands at:

  • 15 per cent for foreign buyers
  • 5 to 10 per cent for Singaporeans and PRs
Starlight Suites condominium.

Starlight Suites condominium.

Since new home sales have continued to push on, strongly, despite the measures, the ABSD may not have entirely been a deterrent nor an aid to managing home prices. Property developers are also helping to bolster the market by providing discounts, rebates and other incentives to home buyers.

Many buyers are willing to suffer a little now and buy when they can, rather than wait for something that may or may not happen. As the population continues to grow, they are perhaps preemptive of the future where rental could be a considerable means of income and should homes become out of reach for their children.

2 May

Tanjong Pagar – Old School charm with New prices

Altez condominium.

Altez condominium.

Designated as one of the very few conservation areas in Singapore, Tanjong Pagar holds a distinct charm and mixture of the old and new, straddling chinatown and outram and the Central Business District. The Pinnacle@duxton towering over old conservation shophouses outlining the upcoming arts and design enclaves, modern condominiums, hotels embracing the skyscrapers of Shenton Way and old HDB flats just round the corner.

With the new Maxwell MRT station on the Thomson Line coming up within the next decade, this area might once again be vibrating with the heartbeats of a cosmopolitan melting pot. The new MRT station is expected to largely increase the amount of human traffic in the area, including residents from across the Causeway. Shophouses along Tanjong Pagar road have seen a sharp hike in rents in recent years, as new properties along the stretch bring new residents and human traffic to the area. And in turn, as the area becomes more vibrant, rents of residential properties may also rise.

New high-rise residential properties such as Altez, Skysuites@Anson and Spottiswoode Suites; and a mixed-use development along Peck Seah Street all hold a considerable amount of investor potential. Shophouse units along the main road are calling the shots in term of rental prices as well. Recent price appreciation have rised rents to around $4,000 per month on average for a 700 sq ft ground floor unit, to up to $10,000 per month for restaurant owners.

Tanjong Pagar RoadOne of the major concerns about living and running a business in the area could be the lack of parking space. Street parking is almost impossible and there are hardly any parking areas near enough to the business or residential homes in the vicinity. Do homes in this area command higher rents? As compared to other prime district and city centre homes,  is the investment value higher? Once the Pinnacle@Duxton completes its Minimum Occupation Period (MOP), will units in the area flood the resale HDB flat market?

10 Apr

Slow private home sales – The Grange Road effect?

Is this merely a trend that is happening to properties along Grange road or are other city centre properties suffering the same fate? Prime district properties have been nursing a bruise on its sales records since last quarter of 2012. January’s new round of cooling measures with the increased additional buyers’ stamp duty (ABSD) and the threat of possibly more to come, has put the damper on the market even further.

Twin Peaks condominium at Leonie Hill.

Twin Peaks condominium at Leonie Hill.

Even new property launches, which have been selling like hotcakes in the suburbs, along this stretch have been falling flat. The 462-unit Twin Peaks have sold 68 of the 70 units released. Median sale price stands at $3, 157 psf. At The Lumos, although units went for sale as early as 2007, only 18 units have been sold. That is less than half of the 53 units in the high-end residential project.

Even completed projects have found the recent situation to be an uphill struggle. Cliveden at Grange, which was completed in 2011, has sold 80 per cent since its launch in 2007. That’s an average of 18 units per year. The increasing number of new launches in the vicinity certainly have not helped things, neither for the new properties themselves nor their older neighbours. The newbies on the block include iLiv@Grange, Ferra and Opus at Grange.

Cliveden at Grange condominium project.

Cliveden at Grange condominium project.

Resale home prices and sales numbers have already shown a dip. In 2012, only 21 resale homes were sold in the Grange road area. And rental prices have also slowed by 9.3 per cent to $8.49 psf in March 2013.

Will the sky-high prices of these sky-high luxury apartments continue to skim the price ceiling or will they drop as time passes? Industry experts are expecting sales in the area to pick up some slack this year, as the exclusivity of the Grange Road district and corresponding improvements in the Western economies may bring investors back for seconds.

8 Apr

No stamp duty relief for Singles

If you’re thinking of changing homes. And you may find yourself having to rent or find some other way to put a roof over your head for the time between disposing of your old home and getting the keys to your fully furnished new one. If you’re unable to maneuver around that, then get ready to foot the Addition Buyer’s Stamp Duty (ABSD).

The Ministry of Finance (MOF) made this ruling clear late last month, when questions came up regarding stamp duty relief for second and subsequent homes. Married couples get a refund of the additional buyers’ stamp duty (ABSD) if their first home is sold within 6 months of buying a resale one or the completion of a new home.

Photo by HDB.

Photo by HDB.

Singles however, will have no such benefit. Plus they have to first dispose of their first home before they can even put their name down on the dotted line for a new one. Which leaves them perhaps “homeless” for the interim period, however long that might be. 2 years or more if they are waiting for a new condo or HDB flat, and perhaps lesser if moving into a resale unit, provided no renovation is needed. At best, they may need to rent a place for a couple of weeks. But it could very well come up to years of not having a permanent address.

What singles could do during this interim period include:
1. Renting a place
2. Bunking in with a family member of friend
3. Secure an extension of stay with the buyer of their current home

The increased ABSD was implemented to cool the market, especially the investment sector. Thus, concessions are limited to only a narrow band of buyers, namely married couples who are Singaporean citizens. Some industry analysts have voiced their concern regarding this ruling, as singles have as much a part to play in the Singapore economy as married couples and should not be penalised as such, as long as they eventually only own 1 home.

MOF has said that if they extend the circle to include singles, the cooling measures will hardly make a ripple in the market. They are open to reviewing this in the future, but for now, these rulings will stay.

7 Mar

Holland and Bukit Timah properties Big Hit with Expatriates

Despite January’s cooling measures, rental and sale prices of residential properties in the Holland and Bukit Timah areas remain high. A district commonly popular with expatriates, they are getting increasing interest as expatriates move away from the prime areas around town in search of something not too far away, but provides privacy and exclusivity at the same time.

The Trizon condominium in Holland Village.

The Trizon condominium in Holland Village.

Rental alone saw a 4 to 7 per cent rise in comparison to 2012, according to ECG Property. Property agents are seeing a hike in enquiries and requests for short-term leases, usually of a one-year period instead of two.

Property agents have always been familiar with the popularity of homes in Districts 9, 10 and 11, and SLP International‘s research shows that sale prices have risen 8 per cent and new properties along the stretch have brought prices up even more.

New properties along the Holland and Bukit Timah stretch has brought rental and sale prices of units at neighbouring, older apartment blocks up with them as well.

New properties along the Holland and Bukit Timah stretch has brought rental and sale prices of units at neighbouring, older apartment blocks up with them as well.

For example, units at the Trizon command rental prices of $6,500 – $7000 for a three-bedder. Neighbouring Ridgewood Condominium, which is an older establishment, also commands $5000 for a 1, 615 sq ft apartment. The newer One Devonshire condominium along Holland Road has also pulled rental and home sales up along with it.

Property investors could have something to look forward to, with an upcoming residential project at the existing Henry Park Apartments site. It is situated directly across Henry Park Primary School and that could be a plus point for some families.

6 Mar

Suburban location but Prime rental prices.

Even though these apartments and flats are not in the prime central locations, they are holding their own in terms of home rental prices.

Yishun Emerald condominium.

Yishun Emerald condominium.

Mass market private condominiums, especially those in the East and North-east districts are in demand and thus driving prices up. Median monthly rents rose 2.9 per cent to $3.13 psf in Q4 of 2012. And as expected, homes close to MRT stations and near international schools fair better with tenants. And smaller homes, because of their higher psf prices, faired exceedingly well. Apartments in District 28 (Yio Chu Kang and Seletar), have been rising particularly fast to the current $3, 400 per month. Homes in District 21 and 19 performed equally well.

Smaller-size units, and perhaps shoebox apartments, were the top sellers in January and from the way more HBD upgraders are snapping up units here, they may be this year’s hot property. With the government’s tightening noose on immigration policies, HDB flat rentals may suffer first, since new immigrants will tend to fall in the PMEB category of professionals, managers, executives and technicians and their families. Singles looking to venture into the property market also make up a large part of the pool of suburban small apartment buyers.

Savills Singapore reseach head Alan Cheong has observed that most renters have a budget of $2500 to $4000 per month and suburban shoebox units or three-bedders fit right into their wallets. Older apartments with a larger floor space may be priced at the same range as newer but smaller flats.

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