New launches expected but at staggered timings

The market is somewhat dense with many units unable to leave the sales shelves. But the buying crowd is expecting new launches to whet their appetite. And perhaps this is the indirect way to help move existing properties as new properties provide grounds for comparison. A few more choices may just help the buyer make up his mind.

Though, developers are also equally wary about providing too many choices. This may tilt the market the way of the buyer and sellers may find themselves cannibalising on one another’s properties. Instead, the consumer can look forward to a steady flow of new property launches over the second quarter, but at staggered timings.

The Sorrento condominium

The Sorrento condominium

In Q1, only 7 new properties were launched. Q2 may see as many as 11 new launches. Starting the ball rolling is The Sorrento. Sales began over the weekend at $1, 380 to $1, 600 psf. It’s situated on West Coast road and has an offering of 131 units of one- to three-bedders.

And if you’re looking for something to do on 1 May, the labour day holidays. You can visit the showflats of Commonwealth Towers. This massive 845-unit project is developed by Hong Leong Holdings. Response at its preview last Sunday was indicative of its potential, drawing a crowd of 1, 500. Selling prices are expected to be around $1, 600 to $1, 800 psf.

Commonwealth TowersMost of the other projects expected to enter the market are in the city or at the city fringe districts. They include The Crest, Highline Residences, Amber Skye, Kallang Riverside, Pollen & Bleu, Marina One, Waterfront@Faber, Bijou and Coco Palms. Industry analysts are already expecting this second quarter to fare much better than the last, with 500 to 800 new private home sales.

68% drop in private home sales

In comparison to 2013′s Q1 home sales figures, the chasm is deep. And so are moods in the real estate market.

Private home sales have been on the decline for some time now. And recent figures are not exactly uplifting. Buyer sentiments are pessimistic, as the loan curbs implemented last year takes its toll on buyers and sellers alike.

Hillford Retirement Home
It has become much harder for buyers to secure loans, with the Money Authority of Singapore’s Total Debt Servicing Ratio framework in place. Buyers can no longer loan as much as they would like, which may place them just out of reach of their target property. The lack of new property launches this quarter has also dampened the mood somewhat. And property developers have been slow in introducing new units into the market as they are now accutely aware of a softer market.

Some properties nevertheless have beat the odds and continued to enjoy brisk sales. Topping the list is the 281-unit The Hillford in Jalan Jurong Kechil. Since its launch in January, units have been completely sold. Next up are a couple of neighbouring properties in Sengkang – Rivertrees Residences and Riverbank @ Fernvale. Most of the units went for an average of $1,000 to $1, 100 psf. Industry analysts are wondering if this could signify that buying power for suburban private properties will now hover around this ceiling.

Rivertrees condoThe rest of the year may see a tussle of prices between new and resale properties. As developers cut prices to make sales, resale home sellers may be forced to face the competition head on.

New private residential projects breezing into Marine Parade

With its proximity and accessibility to the city centre, and its seaside township feel, properties in Marine Parade have always been an easy breezy sell. But it has been sometime since new properties were launched hence news of upcoming projects might bring a fresh round of excitement.

A new launch to look forward to is the Marine Blue (working title) project whose building is underway across Parkway Parade Mall, developed by CapitaLand.

Coralis condominium.

Coralis condominium.

Other properties which are garnering some eager eyeballs area:

Some of these properties are older resale homes, but some new units  will soon be ready for occupation, with the Silversea possibly receiving its TOP (temporary occupation permit) by end of April. Marine Blue units are expected to sell at a promising $2, 000 psf, which may then also bring up prices at the neigbouring Silversea condominium. Most of the units have been sold at the 383-unit Silversea since its launch in 2009. Recent sales clocked at $1, 714 psf. At the Coralis, which was completed in 2013, sales stood at $1, 842 psf.

SilverseaHigh rental prices are expected to hold up and  future transport links such as the Eastern Region Line which will pass through Tanjong Rhu, Marine Parade, Siglap, Bedok South and Upper East Coast Road may only mean rising value in properties in these districts.

New home sales up in February

After much news about home sales taking the hit, a rebound has brought some cheer to February.

Mainly lead by new suburban property launches, analysts are hoping that this is a sign of the market stablising. Excluding sales of executive condominiums, the Urban Redevelopment Authority released data showing a 28 per cent rise of private home sales of 724 units as compared to January’s 565 units.

2 launches in the Sengkang area, Rivertrees Residences and Riverbank @ Fernvale, made up majority of the sales. 218 units of the 495-uni Rivertrees Residences were sold at a $1,111 psf median while 211 units were sold at the 555-unit Riverbank @ Fernvale at an $1,033 psf average.

Rivertrees condoThe future however may lie in the hands of the property developers. Depending on their pricing structure and strategies, the buying public may respond correspondingly. Some older projects with units yet unsold, as well as resale units may find themselves competing intensely with lower-priced newer properties. But if recent sales are anything to go by, finding the sweet spot that hits home with pocket-conscious home buyers will bring the crowd back into the market.

Buyers who are looking for a good deal may find themselves searching for less salable units in older projects which may still be worth the investment depending on their location and potential for future development. March may be the turning point of this delicate dance between buyer and developer. What will the month show in terms of sales volume and prices?

Resale home sales slightly dented by New properties

As more new properties continue to launch, resale homes are seeing a slight dip in sales volume as many opt for the former. Resale home prices also fell a 0.4 per cent in June. This is a steeper decline compared to the 0.2 per cent drop from April to May. Industry experts are not too alarmed by the drop as the June holidays usually mark a decreased interest in property sales and buyers could also have been waiting out the rising interest rates. Another reason could be that resale home  owners were asking “optimistic prices”.

Liv on SophiaThere is some debate over whether this decline will deepen and lengthen. Some analysts noted that secondary property market sales volume has decreased from two-thirds of the total transacted sales to only one-third since the last quarter of 2008. But others defer on the point, saying that less than a quarter of declining sales does not necessarily indicate the future demise of the secondary market and despite a dip in sales volume, resale home prices remain high.

In the current market where new is constantly available, the competition is high and thus investors are seeing more potential in the primary housing market. But who is to say that when the market is saturated, buyers will not turn back to the secondary market with its pluses. Buying the right property in the right location early usually means higher potential, but as the society changes and as global economies adjust to one another, there are always possibilities of older properties rising in value over the years.

La Fiesta condominium in Sengkang.

La Fiesta condominium in Sengkang.

It should also be noted that the drop in resale prices was the largest in the Central Region. Outside of the central region, prices of private properties rose  0.5 per cent following a 1.5 per cent drop in May. Property prices are unlikely to rise much more in the quarter as the market adjusts to the stricter financing rules imposed by the Monetary Authority of Singapore (MAS) last month. However, most buyers are still strong in liquidity thus able to hold on to their properties thus prices are also unlikely to drop.

Residential property market may go either way

Differing data from the Urban Redevelopment Authority (URA) and the Singapore Real Estate Exchange (SRX) has put investors and industry on tetherhooks about the outlook for the rest of the year.

Jewel @ Buangkok

Jewel @ Buangkok

While URA data reflected 1, 806 new private homes sold in May, at a 23.8 per cent hike from May, SRX data showed that only 605 resale properties were sold at a 21 per cent drop from May. When both sets of data are at opposite ends of the spectrum, it makes one wonder if the cooling measures had indeed made a difference.

Much of the sudden spike in rise in home sales could be due to the recent launch of new condominium developments such as J Gateway and Jewel@Buangkok. Most activity are however in the new home sector. For resale homes, a year-on-year comparison shows a 30 per cent drop from 5,675 in 2012 to 3, 965 this year. For most part, it may be indicative of the effectiveness of the government’s cooling measures in 2013. Thus far, the curbs this year have put a damper on resale home sales with the rise in additional buyer’s stamp duty to 7 per cent for Singaporeans buying a second home and 10 per cent for a third or subsequent property, and a tighter rein on home loans.

LUsh Acres

There are those in the industry who think buyers will continue to purchase properties simply because they can. They have the money to do so, and they will. Mr Colin Tan, research head of property consultancy Chesterton Suntec International believes that “Investors borrow to the hilt because it is silly not to do so. Likewise, they use their children’s names because it is silly not to do so”. But as many of the properties sold are yet built, a truer reflection of this boost in sales could be shown only later in the decade. Currently there are 290,000 completed private homes and executive condominiums, and 100,000 more will be built within the next four years. There might be a one-third increase in private residential units then, and buyers who had counted on raking in rental yields may find themselves in a position to sell when demand weakens.

Whether these moves have driven potential investors overseas is yet to be proven, as new properties are still bringing in the cash. But there is still half a year left. And time may be the best mirror of the true market status.

Suburban mass market home sales up 24%

Over the June school holidays, sales of new private condominiums have picked up speed, following the launches of J Gateway and Jewel @ Buangkok. It propelled new private home sales up by 23.8 per cent with 1,806 units sold in June alone. New private home sales have been increasing since April, with a 5.4 per cent increase in May but the quadrupled increase in June has caught analysts by surprise since sales are usually slower during the school holidays.

J GatewayNot only did the sales numbers rocket through the roof, the total number of homes sold exceeded the total number of homes which were put on the market. 1, 768 units were put in the market, according to URA’s data, but about 50 more were sold. But most developments which sold well were outside of the city centre and prime districts.

Top seller was the 99-year leasehold J Gateway condominium in Jurong East. All except one of its 738 units have been sold at an approximate of $1,486 psf since its launch late June. At Jewel @ Buangkok, units went quickly as well with 80 per cent of its 350 units. Median selling price was $1, 183 psf. Selected city centre properties which sold relatively well were Liv on Sophia. Since its launch in May this year, it has fully sold all its 42 units at a media price of $2, 400 psf. Executive Condominiums also helped boost sales with the recent launch of Forestville EC in Woodlands. 226 units have been sold thus far, at $730 psf.

Forestville Executive Condominium.

Forestville Executive Condominium.

Following such brilliance in June, would July’s numbers be lacklustre due to the newly introduced loan curbs? To counter this new measure, property developers might have more aggressive moves up their sleeves.

Private resale property – Home prices up

Ever so slightly. It could be a sign that Singapore’s property market is staying strong despite global fluctuations and repeated rounds of cooling measures.
Ecopolitan
The recent rise in home prices are mainly due to the 5.5% climb in prices of properties in the city centre, an area which saw a lull for the first couple of quarters in the year. Overall resale prices of non-landed private homes went up by 1.8% in in June, according to data by the Singapore Real Estate Exchange (SRX). Property analysts are careful to declare an overall rebound of the property market however, as the numbers may reflect a smaller number of transactions but at higher psf prices. Though this could indicate a continued rise in property prices, it may not be indicative of buyers’ sentiments.

But as more are coming back to the secondary home market, resale private homes may see a comeback yet. Increasing interest is in smaller city centre or city fringe units. Favored by investors, these properties have a higher rental potential and may be easier to lease for quicker, higher rents. This is despite numbers showing that rents have dropped 0.2 per cent since May, and it’s been five months of consecutive drops. Is this a sign that the market could be looking up in the near future and now is the time to buy?
 Three11

In the suburban home department, resale home sales have dipped somewhat, as more buyers were setting their sights on new properties launched in the recent months. Demand in new homes has been red-hot, as buyers and investors recognise the capital appreciation value of something new.

With the Monetary Authority of Singapore’s (MAS) latest move to rein in home loan financing, one awaits to see if sales transactions are affected, and by how much.