Property cooling measures likely to remain

The economic slowdown and diminishing growth rates are causes for concern not only for the Singapore government, but also for consumers and businesses.

National Development Minister Lawrence Wong has recently spoken about the property cooling measures which were implemented in succession over the past three years. He has mentioned that they are likely to remain at this time of uncertainty as a response to “global context and environment”.

Kingsford HIllview PeakProperty prices have fallen 10.8 per cent since Q3 of 2013 and prices fell 1.5 per cent in the third quarter of this year, bringing it to the 12th consecutive quarter of price decline. The real estate industry currently faces stagnation and though interest rates are low, many are looking for higher yields. He has warned against creating an environment rife with property speculation and has said that capital inflow might create a volatile and highly-speculative atmosphere which will result in property market fluctuations.

With the high number of completed units entering the market this year, and with unsold inventory rising, the property cooling measures may be helpful in keeping the delicate market balance. As of Q2 this year, there were 21,500 unsold and uncompleted private homes, the lowest ever recorded, indicating a possible shift of influence from the seller to the buyer. The government has also held back on the launch of land sites earlier this year.

Meyerise2Property analysts are not surprised by the government’s move to keep the property curbs in place, though sudden pace changes and steeper declines might prompt the government to reconsider relaxing the rules sooner.

Forest Woods condominium in Serangoon selling fast

Keeping unit prices at the new Forest Woods condominium below the $1 million mark seems to be a good move by developer, City Developments (CDL).

forestwoodsBuyers are attracted by the prime suburban location and its proximity to the Serangoon MRT station which speaks volumes since location is still a key mitigating factor for most tenants. The fact that the Serangoon MRT station is a major interchange node connecting between different MRT lines, is linked to a bus interchange and also a huge shopping mall, NEX, are all bonuses. And as property prices have been falling for a couple of years now, buyer sentiment is that they will not fall any further, and are taking the opportunity to buy now before interest rates potentially rise in the later part of the year. The $6,000 to $12,000 early bird discount may also have enticed some to seal the deal early.

forestwoods2All the one- and two-bedroom apartments launched at Forest Woods have sold out and the median selling price currently stands at $1,400 psf. The development has a range of units ranging from 506 sq ft one-bedders to 2,185 sq ft penthouses. As of Sunday evening (the project was launched last weekend), almost 65% of the units were already sold. One of the three penthouses available was also sold at $2.85 million. Almost 90 per cent of the buyers were Singaporeans, with the rest being permanent residents or foreigners from China, Indonesia, Malaysia, Taiwan, Vietnam and Switzerland.

China real estate sector – impending bubble by 2018?

Property analysts are wary of a possible property bubble in China, especially after property prices in Shenzhen rose 60 per cent in a year. Despite the government’s attempts at curbing the rapid price rise, consumer fervency has spread from first and second tier cities to third and lesser-known cities and townships. The speed and extent at which China’s real estate sector is growing has economists concerned about an impending bubble and possible market crash. Some analysts have pegged 2018 as the year when things might take the turn for worse.

rafflescityshenzhenPhoto credit: CapitaLand

The fact that China’s banking sector is closely tied to the real estate industry, any shift in the dynamics may rattle the country’s economy. Akin to the property bubble in the United States in 2008, the fact that loans have increased to take up 71 per cent of new lending, up from 24 per cent within 8 months, indicates an increase that could be based on many gaps in the system.

Property prices are climbing so quickly that concerns for a sharp and drastic fall are well-founded. The unsubstantiated value of homes may cause an eventual collapse of the banking system as it becomes riskier for banks to loan such large amounts of money without a certain way of recouping the losses should the market fall. Having assets at hand which have no value or are not in demand will not bode well for individual property owners, funds nor banks.



Fall in Q3 Private home prices

Private home prices have been falling for the past 3 years, 12 consecutive quarters to be exact, and it’s currently at it’s lowest in 7 years. Last quarter’s fall was the steepest at 1.5%. So it does seem like the property cooling measures which were rolled out at around the same time have worked. And while the authorities are committed to continue having them in place, the real estate industry might have to bite down hard and stay the course.

threebalmoralEffects from the general global, regional and local economic markets have trickled down to the property sector as worry about the job market and a weakening economy affects demand and risk-taking. Though interest in high-end core central region luxury properties may have improved, prices have yet to completely made a turnaround. Home prices in this segment fell the hardest at 1.8 per cent following a 0.3 per cent rise in Q2. Landed property prices also fell 2.2 per cent while previously in-demand city fringe properties saw a 1.3 per cent fall.

As the last quarter of the year will possibly see more new property launches in comparison to Q3 which was relatively quiet, and HDB rolls out its next launch of 5,090 new BTO flats in Bedok, Bidadari, Punggol and Kallang/Whampoa HDB estates in November, will existing unsold stock and resale private homes be on the receiving end of added pressure and competition?

Executive condominiums top August property sales

August was a good month for the executive condominium (EC) market, with all 3 top sellers coming from this particular property sector, namely – Treasure Crest in Sengkang, Sol Acres in Choa Chu Kang and Bellewoods in Woodlands.

Bellewoods ECUnderstandably, there were not many major property launches in August with only 590 units launched in the month at Victoria Park Villas in District 10. A total of 805 units were sold, less than half of the 1,921 sold in July, with 41 per cent of the month’s sales coming from ECs. But demand for these rare hybrid public and private properties seems to be rising.

The price gap between ECs and private properties may be closing in as resale private property prices continue to dip though there is still a considerable distance between these 2 property types. The median selling prices of all 3 top EC developments below $800 psf whereas average prices for private apartments are mostly above the $1,000 psf range.

Sol Acres Besides comparison with ECs, new developer launches have also been fighting market competition from completed resale units, providing discounts and other incentive schemes to entice buyers. As a hybrid between public and private housing, EC buyers can tap on HDB grants and subsidies in the initial purchase and after 10 years, are able to leverage on the private property status of their property, harnessing the full capacity of a private resale condominium.


More luxury homes above $5 million sold this year

The difference is 198 per cent – for Indonesians keeping their cash overseas without declaring it and in Indonesia for at least 3 years. And that whooping amount is possibly pushing wealthy Indonesians to pick up luxury properties in Singapore before the new law kicks in. Singapore will soon be sharing financial information with Indonesian authorities.

The TomlinsonAt the moment under a tax amnesty scheme, Indonesians pay a tax rate of 4 per cent and upwards on properties or funds outside of Indonesia. The rates are increased in stages up to 10 per cent up till March 2017, when the amnesty closes. It is uncertain if the information shared will be of both real estate and funds, but some buyers are understandably moving their monies into real estate ahead of time.

Local properties priced at $5 million and above have been attracting interest from Indonesians who have been closing deals quickly over the year. The number of such properties sold this year have already far surpassed last year’s, by almost 4 times. 30 properties valued at $5 million and above have been sold this year as of August, compared to just 8 the whole of last year.

Whitley ResidencesMost Indonesian buyers see the potential of high-end Singaporean properties and have been keeping an eye on the market, waiting for an opportune time to pick off prime properties. A total of 189 purchases, and possibly more as declarations of nationality is voluntary, were made by Indonesians from January to August this year.

Home loan refinancing may become easier

Property cooling measures putting a kink in your investment or financial planning? There may be some relief in that arena soon.

money-imageDespite emphasis that the property cooling measures are here to stay, the Monetary Authority of Singapore (MAS) is fine-tuning part of the regulations to help owner-occupiers take a quicker step towards purchasing their own home. The current total debt servicing ration (TDSR) framework is strict and keeps a huge number of borrowers from refinancing their loans by taking advantage of the low interest rates; only properties purchase before the implementation of the TDSR framework in June 2013 can be exempted. Soon, all owner-occupiers will be able to apply for exemption from the TDSR rule and more home buyers will be able to refinance their loans more easily.

For buyers purchasing properties for investment purposes, current regulations stipulates that these loans can only be refinanced above the 60 per cent TDSR threshold if application is done before June 2017 and the borrower commits to a debt reduction plan. But now,the borrower only has to commit to replay at least 3 per cent of the loan’s total outstanding balance over 3 years.

Treasure CrestThese moves will help those who might have been affected by the oil and gas industry lapses and weakening global economy and who may need help with their existing home loans. The TDSR will still apply for new loans and industry experts continue to expect a certain amount of foreclosures on property owners who may have overstretched themselves financially or have been hit hard by unexpected income adjustments.

New homes in District 10 – Victoria Park Villas

Soon to nest in the midst of District 10 will be 106 semi-detached houses and 3 bungalows totalling 403,000 sq ft.


Victoria Park Villas is a new development by CapitaLand situated in the junction of Coronation and Victoria Park Roads. Prime area indeed as it is only a 10-mins walk away from Farrer Road and Tan Kah Kee MRT station, not to mention having the selection of many choice schools down Bukit Timah road.

Launching tomorrow, 3 Sept, these 109 homes making up Victoria Park Villas are 99-year lease properties projected to sell at around $2,000 psf. Though on the high side, consumers will have to realise that having your own land even for awhile, will cost. The property sizes will range between 2,153 to 3,835 sq ft for semi-detached houses and 10,904 sq ft to 11, 539 sq ft in floor area for the 3 bungalows. Prices are expected to reach $12 million for the latter. Other similar properties in the King’s Drive, Hillcrest road and Greenwood Avenue have sold for between $906 to $1,351 psf last year.

Ventura HeightsNew cluster landed properties are not a dime a dozen, thus the property size, exclusivity and location Victoria Park Villas offer may very well be worth its calling price. CapitaLand has previously offer deferred payment schemes for their other properties such as d’Leedon, The Interlace and perhaps soon, Sky Habitat and Marine Blue as well. Will they be likely to extend the scheme to their upcoming projects once they are completed?