West Coast soon abuzz with new properties?

Without question, the west coast has a vibe of its own. A sense of excitement, freedom; a buzzing undercurrent of work and play. So the government’s recent release of a 16, 378 sq m land site on West Coast Vale could potentially mean an even more vibrant district in as soon as half a decade’s time.

AYEPhoto credit: LTA

The plot of land released for sale is under the government’s reserve list, which also means the sale will only go through if the bids meet the minimum set by the government. With its prime location near the Ayer Rajah Expressway and West Coast Highway, and schools such as Nan Hua Primary School, The Japanese School and Commonwealth Secondary School, the area is ripe for a new residential condominium or strata landed housing project.

The neighbouring Parc Riveria may be a good gauge of the potential this new site holds. The land which Parc Riveria stands on was acquired only last year and another private condominium nearby is The Trilinq.

The TrilinqThe government has been more cautious of late with the  release of land for sale under the government land sales programme as the market is becoming more saturated. What may hold developers back from bidding for this site is its distance from MRT stations and other amenities. It may however mean quieter and more exclusive environments which young couples or families looking for a property near schools in its vicinity.

Bungalow of Tan Tock Seng’s descendant sold for $145 million

Is paying $145 million for a landed house over the top? Well, there is a first for everything.

The recent sale of a 25,741 sq ft freehold bungalow at 9 Cuscaden road is the first foray into Singapore’s property market for Hong Kong tycoon, Stanley Ho who has made billions through the gambling industry. The bungalow was put up for sale by Tan Tock Seng’s descendants and the site is zoned for hotel redevelopment with a plot ratio of 4.2. The bungalow was originally the family home of Tan Tock Seng’s great-grandson, Tan Hoon Siang and was put up for sale for between $160 to $170 million just last month. Named Villa Marie, it was presumably named after Mr. Tan’s second wife, Marie Windsor.

BungalowsStanley Ho’s Shun Tak Holdings paid $145 million for the prime site, the highest ever paid for a landed property and at $2,145 psf, it is all eyes on what is eventually built. Because of how it was zoned, the transaction was made sans the Additional Buyers’ Stamp Duty (ABSD), which could be a real positive, considering how much the deal cost. Though zoned for hotel redevelopment, there is also the possibility of building residential units up to 20 storeys high. Could Orchard road be seeing a new residential block or hotel in its midst? Will other landed properties possibly be seeing more activity soon?

 

No signs of weakening China property market

Shanghai and Shenzhen – both super cities for properties. Home prices in these 2 top-tier cities have not waned despite China’s government tightening rules on the property market.

Savannah Hong KongIn April this year, home prices in Shanghai and Shenzhen continued to rise 2.3 and 3.1 per cent respectively. Though the numbers are slightly lower than March’s 3.7 and 3.6 per cent, in light of economic instability in other countries, this is a good sign. Even within China, where internal restructuring, higher global competition and weakening demand have began to put the brakes on their economy, the property sector continues to enjoy the momentum of growth.

Just over a year, home pieces in Shanghai  have risen a whooping 62.4 per cent and that in Shenzhen have grown 28 per cent. Across 70 cities in China, home prices are now 6.2 per cent higher, a further increase from the 4.9 per cent in March. Besides buying in the mainland, Chinese investors are also buying up properties in various other international cities such as Vancouver, Sydney, Melbourne, Hong Kong; and countries such as New Zealand, Malaysia, Cambodia and Thailand.

Canada HouseEven while property prices in first- and second-tier countries continue to accelerate, third-tier cities are also beginning to post positive growth after a period of declining interest and sales. Policy makers are however concerned about the excessive lending and rising debt levels and may be prompted to tighten lending rules and implement further measures.

Promising year ahead for landed properties?

At least in the Good Class Bungalow (GCB) segment apparently. Property analysts are predicting a 5 per cent price growth this year following promising response in the first quarter alone.

Despite economic slowdown and stock market volatility earlier in the year, this luxury landed property sector has seen a pick-up in sales volume as Singaporean investors are turning their sights on home ground once more, after a few seasons of investing in overseas propeties. Property agents have reported buyers making serious offers as compared to just a quarter ago in the latter part of 2015.

Leedon Road GCBRecent sales of GCBs included one at Swettenham Close at $1,354 psf. A total of 33 GCBs were sold in 2015, a similar number is expected for this year. Perhaps property owners have lowered their expectations and asking prices, and buyers are also enticed by the rarity and land area these bungalows provide. Many are upgraders or investors while sellers tend to be those whose children have flown the coop and are looking to downsize to more manageable properties. Rental yields for these large-sized properties have been diminishing, and these properties also tend to have higher property taxes and maintenance requirements.

Buyers may be more willing to take the bite this year as prices have already fallen 15 per cent since its peak in 2013, and further price declines will be unlikely. As these landed properties are also far and few in between, they may be quicker to pounce on a deal as it will not be easy finding similar options.

New launches versus Completed private homes

As home supply inches towards a new high this year, the public’s attention may now be shifted to the competition between completed new homes and new developer launches.

Property investment was almost a sure thing not long ago, but now 3 to 5 years down the road from the peak of the market, when property prices were high but so were buying sentiment and potential investment yields, units which were launched then are now made available in the physical, adding pressure to the already-gluggy property market.

Private apartment prices in the core central region (CCR) have taken a turn for the better with a 0.4 per cent rise in the first quarter of 2016, following a 0.3 per cent fall in the last quarter of 2015. Luxury properties in the prime districts may once again be welcoming affluent buyers and investors as average unit prices have risen from $2,215 psf to $2,243 psf by the end of last year.

In the city fringes however, private property prices have continued to ebb, falling 0.4 per cent for 2 consecutive quarters now. Out of the central regions (OCR) and in the suburbs, prices fell 0.9 per cent. For the rest of the year, property experts are expecting private apartment prices to stabilise in the central regions while landed and suburban non-landed homes continue to struggle.

Property auction sales do well in weakening market

Multiple-property owners may face increasing pressure as the market continues to soften. Rental yields and demand have fallen due to slowing global economic growth.

Axis@SiglapPhoto: Axis @ Siglap

Real estate consultancies and auction houses are beginning to see an down-the-middle split in auction listings between owner listings and mortgagee listings. The latter are units put into auction by banks because of owners defaulting on their mortgage payments.

Not only are residential units being put up for auction, but office spaces, shophouses and retail units are also finding their way into these auctions. Home owners are increasingly favouring the path of auction listings are they garner higher exposure and are more likely to attract investors or buyers who may be willing to pay for quality or a good bargain.

Some of the auctioned properties out there are in the million-dollar range, including a 1,776 sq ft penthouse with roof terrace at Axis @ Siglap for $1.3 million, a 13th-floor 1,808 sq ft unit at The Orchard Residences going for $6.2 million and a $16 million single-storey detached Branksome Road house in Tanjong Katong.

TanameraCrestPhoto: Tanamera Crest

Affordable units sold below valuation are also available at these auctions, for example a 603 sq ft unit at The Greenwich in Seletar road going for $730,000 and $980,000 for a 1,205 sq ft unit at Tanamera Crest. These suburban units may be good bargains for buyer-occupiers while the higher-end listings are good fodder for investors in the know.

More bulk property and auction sales

The year ahead may be a bumpy one for property developers who have a large inventory of unsold stock and for investors who may have overstretched themselves.

A good many unsold properties may be making their rounds within the local market as sellers, buyers, investors and developers bid against one another to see who gets the best deal. There will be those who need or want to sell, and those who are able to buy when the price is right despite a market slowdown.

Hua Guan Gardens House

Photo: House in Hua Guan Gardens for sale

As more buyers are defaulting on their mortgage as interest rates rise and the market lulls, more homes are going under the hammer in mortgage sales. Last year saw the number of units put up for auction almost double from 47 to 87. Comparing this to 2012, when only a mere 9 units were put up for auction, the numbers have leapt considerably over the past 5 years. Given the quietening rental market and a global economic tossup, some owners are finding it difficult to service their loans. What does this signify? Will private home prices fall this year or will the number of new units coming into the market simply place more options out there for buyers?

The mortgage-sales properties were mostly larger apartments or private landed homes. Though this may mean the market for these properties have shrunk, it is good news for buyers who have been waiting and are ready to buy purchase these rare properties. One such property is a cluster bungalow in Hua Guan Avenue, just off Dunearn road, attractive for its rarity, 4,219 s q ft size, and location. It is situated near King Albert Park MRT station. Other potential money-makers include 2 maisonettes and one former-HUDC unit all sized around 1,600 sq ft and a steal at possibly below $1 million.

Private condominium prices hold steady

The fall in completed private condominium prices was gentler last year at 3.5 per cent, compared to the 5.7 per cent from the year before. Prices are expected to hold steady this year as a dip in supply of properties in this sector bring prices to a plateau.

Jewel CDL

Photo: Jewel @ Buangkok

Demand for smaller apartments of up to 500 sq ft in size, have been weakening as their numbers, especially in the suburbs, have been on the rise in the past couple of years. Investors have found them more difficult to rent out in the dulling leasing market and those outside the central region or further from regional business hubs may find themselves competing for the same tenant pool. Tenants now prefer units with larger floor spaces with just slightly higher rents.

Sale prices of completed private properties within the central regions however have fallen more sharply as they usually come with a higher total quantum price. Compared to the many newer properties which have found a sweet spot with their total selling price, units in these central or prime districts see fewer overall transactions.

As the volume of unsold completed condominium stock diminishes and with the fewer launches expected this year due to cutbacks on land supply, resale properties could expect a happier year ahead.