Private home sales – Will the decline continue?

The property market has been softening. The decline seemed inevitable, especially as completed new private homes flood the market in the upcoming year or two.

Not surprisingly, shoebox apartments saw the largest dip in sales as the number of units are somewhat saturated. Buying power is also now lower and buyers who were initially looking at these units for investment may no longer be able to get the loans they need.

 

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.

Rental issues such as the age, functionality and location of resale units now have to compete with the newer and sometimes faster property models. In the central districts, the decline in rents and sales of apartments were most evident. This could be due to the number of unsold high-end properties in these areas. Even suburban condominiums are feeling the heat as many expatriates shun them as they often do not provide the convenience and exclusivity they desire.

Whether the effect will transfer to the HDB resale market also awaits to be seen. As HDB upgraders who are moving to their completed units will have to let go of their HDB units within a specified time period, many may be in a hurry to let go of their units and possibly at lower prices than before as the market gets competitive. Pair this up with a diminishing market for smaller units as singles are now able to purchase new flats from HDB directly, as well as a smaller pool of permanent residents, the property market seems to be in for quite the turn this year.

Even as more new property launches are promised, how private home sales fare the next quarter may set the mood for the rest of the year.

Commonwealth – Properties not so common

Considered on the city fringe, just a little way off Alexandra which is an area popular with expatriates, Commonwealth may see renewed buyers’ interest as new private condominiums enter the mix.

The latest launch is Commonwealth Towers on Commonwealth Avenue. It will be officially launched on May 1 and is expected to be priced at $1, 600 to $1, 800 psf, it is relatively more expensive than similar properties in its vicinity, such as Queens condominium, Alexis, The Metropolitan, Ascentia Sky and The Anchorage private apartments. These are older residential developments and units are available on the resale market. Rental demand has been strong, though property experts are expecting competition to heat up once the newer condominiums are up and running.

The AnchorageAccording to URA figures, rental prices at the Queens averages at $4.32 psf per month. Sale prices were at $1, 350 psf. The Alexis commanded even higher prices at $6.65 psf and units sold at an average of $1, 939 psf, possibly because at 2 years old,  it is much newer than the Queens which was completed in 2002. Also, a third of the 293-unit The Alexis are shoebox apartments and are easier to rent out.

Alexis @ Alexandra CondoHowever the tightening foreign workforce rulings and immigration regulations may prove challenging for landlords looking to rent out their property especially with the rise in new units in the Redhill and Tiong Bahru area. Competition will always be present, but good location, providing attractive rental conditions and ultimately good timing may beat all that.

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.

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?

Cluny Cluster – Exclusive prime district

Tucked away near the quiet of the Botanic Gardens, are a cluster of heritage properties with sprawling land and exclusive addresses. These are the homes in the Cluny cluster – namely Cluny Road, Cluny Hill and Cluny Park.

The area consists mainly of landed homes. But all that will soon change. New high-rise condominiums are planned for its midst and these landed properties will welcome their taller comrades as soon as this year.

Cluny Park ResidenceThe latest addition to be launched is the 52-unit freehold Cluny Park Residence. Sales began as early as August 2013 but its proper launch was only last weekend. 12 units have already be sold, and the developer Tuan Sing, is expecting a launch selling price of $3, 000 psf. Nearby, other condominium projects include The Siena, 10 Shelford and Dukes Residences. The last has already been completed in 2011. Prices at 10 Shelford are around $1, 874 psf for a 431 sq ft shoebox apartment. At Duke Residences, median prices were at $1, 576 psf for the past 6 months. Both are freehold properties.

The draw of the exclusive address which is surrounded by good class bungalows and semi-detached houses, and the proximity to good schools, eateries and supermarkets which are just a stone’s throw away, makes good fodder for well-heeled investors.

HDB dwellers invest in shoebox apartments

With a private home market which fell 40 per cent last year, 2014 looks like it might continue to be in the home buyer’s favour. But more HDB dwellers have been snapping up shoebox apartments in light of the fall in home prices.

J GatewayConsidering the fact that most HDB flats are more than 500 sq ft in size, these smaller homes are more likely than not for investment purposes. In 2013, 13.3 per cent of private home transactions were from HDB dwellers, with them making up a whooping 62 per cent of sales in the shoebox apartment category.  Some of the more popular choices from this group were the Bartley Ridge, J Gateway and D’Nest condominium developments.

But it seems buyers are letting their nest eggs lay for longer, with secondary home sales dropping to a 10-year low. With smaller apartments being possibly easier to rent, with its overall lower rental price, it is an easy entry-level property investment and suited to HDB owners who are looking to ease their way into the private property market.

Who exactly are still buying up private properties then? The foreign buying force, it seems. The fall in foreigners purchasing homes here is marginal and in fact increased from 6 to 9 per cent in 2013. Mainland Chinese were the top buyers, closely followed by Malaysians and Indonesians.

Banking on new condominium Riverbank @ Fernvale

Even as Singapore’s aerospace and aviation industry takes off, so do the real estate surrounding these hubs. Properties surrounding the Seletar Aerospace Park are increasing gaining speed and may take off in big ways in the future.

At the new Riverbank @ Fernvale private residential development developed by UOL, interest is running high. The 555-unit condominium began selling units last Friday. Situated near the Layar LRT station, with riverfront views of the Punggol reservoir and next to the Lush Acres executive condominium development, it seems reasonably priced, especially since the EC sold at an average of $1, 000 psf when it was launched in July 2013. Selling prices at Riverbank @ Fernvale is expected to hover around $785 psf.

Riverbank Fernvale condoThe project has a range of apartments available, from the $480, 000, 495 sqft one-bedder to the $1.3 million, 1,389 sqft five-bedder. Perhaps riding off the popularity of neighbouring Punggol, Sengkang properties are also basking in a little of the waterfront-lifestyle sunshine. Just one of the few upcoming properties to be built near the Punggol reservoir, it provides inland waterfront living. Nearby, Rivertrees Residences will host a few selected duplex homes which will be one of the only waterfront landed properties besides those in the offshore island of Sentosa.

Residents of the Riverbank can expect a life amidst greenery and a outdoor living environment with the inclusion of a riverside trail. In concrete jungle of a city, this may be the welcome with open arms home buyers wish to go home.