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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.

22 Apr

Bought landed property. What did you really land?

With the rise of high-rise properties in Singapore, landed homes are becoming very much the rarity it is. But surprisingly, you can still buy a landed home for as little as $2 million, which is in the same range as a condominium unit in the suburbs. In Geylang and MacPherson, there are a number of landed properties tagged with that price.

Freehold or Leasehold? What other criteria would affect the price of landed property? Belgravia Villas in Ang Mo Kio.

Freehold or Leasehold? What other criteria would affect the price of landed property? Belgravia Villas in Ang Mo Kio.

According to URA’s real estate data, at least 10 freehold landed properties were sold for under $2 million last year. The cheapest was a 1, 841 sq ft property in Geylang which went for $792,000. That is $392 psf for you, less than half of some suburban condominiums. But these finds are few and far in between. Usually the plot size of these landed homes are smaller, such as a 893 sq ft terrace house in MacPherson which sold for $1,133,000. One of the rarest sales last year was a landed home in the prime district 10 on King’s road. The terrace was sold at $800,000.

But since sale of landed properties are limited to Singaporeans (foreigners are usually not allowed to buy landed homes), prices and demand are surprisingly lower than you think. Landed properties are valued mostly for the land alone. Thus size definitely matters.The condition, age and location of the property all come into play as well of course.

Jansen cluster terrace homes in District 19.

Jansen 8 cluster terrace homes in District 19.

Landed home prices rose 7.3 per cent in 2012; as compared to resale freehold condominium prices which rose 2.3 per cent. Leasehold suburban condominiums rose 3.4 per cent in the same period. Property agents and industry players have been seeing a rise in the number of landed home buyers within 35 and 40 years old. Previously most buyers are above 40 years old.

So if you find a good landed property deal, could it be too good to be true? Perhaps.

There are a number of hidden costs to punch into the calculator before you sign on the dotted line.

  • Land size
  • Age of the property
  • Condition of the property
  • Location
  • Parking spaces
  • Quality of the neighbourhood
  • Restoration and renovation costs

One should also take note of the number of years remaining on leasehold properties. Since demand in the resale market for properties with limited number of years left on the lease might lower the selling price quite substantially.

9 Apr

100% condo sales few and far in between

Rare are the new condominium launches which see a “Fully sold” sign plastered on their boards within a few months of launch. Though most may eventually reach a 100% sale status, they are taking longer to do so. This depends on the location of the property and the number of units available for sale, of course, but so far, the top scorer has been Seasuites in Pasir Panjang Road, at 85 per cent of its 52 units, with an average psf price of $1,650.

Seasuites condominium in Pasir Panjang.

Seasuites condominium in Pasir Panjang.

A strong runner-up in the race is Urban Vista in Tanah Merah. Considering it just launched mid-March, this 582 unit condominium project is selling exceedingly well with 77 per cent already sold. Average prices are $1,350 psf. March’s other big launch, D’Nest in Pasir Ris also sold a cool 76 per cent of its 912 units at $920 psf.

Private condominiums are still selling well, with new trumping resale. But there are 9 more months left of the year, and what will keep or halt the sale momentum? Chances are new properties which check the right boxes will win the race:

1. Good location
2. Competitive pricing
3. Comparison of other residential projects nearby

In 2012, most of the properties which reached a fully sold status were launched in the early part of the year, and most of them were one or two-bedders or studio apartments. Will 2013 see a reprise of last year? Or will the cooling measures change it up?

27 Mar

March Madness in the property market

Fears that the private property market may see a big dip in sales volume and prices could be temporarily set aside following news that 300 more new homes were sold in March, till date.

Shoebox apartments were top sellers for HDB upgraders. Seen here is the Bartley Ridge condominium.

Shoebox apartments were top sellers for HDB upgraders. Seen here is the Bartley Ridge condominium.

Over the weekend, four new property launches at D’Nest near Pasir Ris MRT station, Bartley Ridge in Mount Vernon, Urban Vista and Hillion Residences at Bukit Panjang. If things keep up, March new home sales could very well overtake January’s 2, 016 figure. February’s numbers are understandably lower due to a shorter month and the Chinese New Year.

Despite these positive numbers, some property analysts say things will not be like before, when a new condominium would sell out within 2 to 3 months. What may happen now is a situation where the preview sees heated response, where choicer units are snapped up, leaving the rest of the units to sell slowly throughout the year.

Kingsford Hillview Peak condominium in Upper Bukit Timah.

Kingsford Hillview Peak condominium in Upper Bukit Timah.

And of course, properties near MRT stations will go at a quicker pace, mostly targeting young couples. The D’Nest residential project is the prime example, with almost 600 units sold. Its proximity to the Pasir Ris MRT station is one of its main selling points. This Friday, Kingsford Hillview Peak in Upper Bukit Timah will be launched. Is this the one you have been waiting for? Are we expected to see more launches coming up soon and what will the response be then?

26 Mar

Suburban condominiums may be in for a downturn

The recent property measures seemed to have been forgotten, but its effect may just be taking root. Despite all the suburban homes which developers have been launching and selling this first quarter, it may be headed towards a limp finish.

Urban VistaOnly 1,544 resale homes were sold up till March 12, maybe hitting 2, 200 by the end of the month. But this is a far cry from the 3, 647 homes sold in the last quarter of 2012. In 2011, 3,761 homes were sold on a year-on-year comparison. Recent private residential apartment launches such as Sennett Residences, D’Nest and Urban Vista may pick things up by the scruff of the neck and pull numbers up after all. Since their launches, 1,400 new homes have been sold, including three other property launches.

So new homes seem to be doing well. But resale homes may be at the opposite end of the success spectrum. Most owners are keeping their current private home, what with the increased ABSD (Additional Buyers’ Stamp Duty) and tighter loan limits which were part of January’s property cooling measures. And it seems they are not so quick to lower their prices as well, unlike developers who have dangled discounts and other incentives to new home buyers.

What the ABSD has done is to increase the stakes for property owners who are looking to buy their second home. There will now be a 7 per cent stamp duty. And owners of completed homes may not see the urgency to offload their current property, perhaps only with the exception of those looking to downgrade. But until resale HBD flat prices drop, they may not act so quickly as well.

Activity will not wane in the private property market, but instead, it seems like it may be the battle between new and resale. Which will you go for?

21 Mar

Rise in property prices at Iskandar Malaysia

As planning, building and construction continue at the Iskandar Malaysia project development site, property investors are catching on quickly and lapping the residential properties all up. The recent hike in property prices definitely seem to say it all. Property agents from both sides of the causeway have reported an astounding and sudden spike in foreign interest and sale prices of property in the area.

Taken at the iProperty.com Expo: International Collection, Marina Bay Sands Expo Centre, Oct 2010

Taken at the iProperty.com Expo: International Collection, Marina Bay Sands Expo Centre, Oct 2010

Is it mere hype or can this activity be sustained and for how long? Will there be a time where investors find themselves holding on to lesser than they had hoped for?

Property agents have been busy showing potential investors the show houses and apartments in the territory and even in Singapore,  Malaysian property launches and expos have been garnering renewed interest. The fervent buying could also be due to various countries in Asia tightening their foreign property investor policies, countries such as Hong Kong, China and Singapore. This could be driving investors to look elsewhere in Asia and even in Europe and the States.
Puteri Harbour

The Puteri Harbour scheme, featuring luxury waterfront villas, apartments, serviced residences, hotels and commercial developments, have been one of the top picks so far. The promise of good international schools such as Malborough College in the vicinity has also helped rakes in some interest from expatriates. Waterfront properties in Danga Bay and Permas Jaya have done equally well.

A faint indication of how  the prices have changed since 2006 when Iskandar was first launched can be seen in the prices of bungalows in Ledang Heights:

  • In 2006 – RM25 to RM30 psf
  • In June 2012 – RM60 to RM80 psf
  • In 2013 – RM100 to RM120 psf

Prices have risen more than five times the initial launch. Pure speculation or true reflection of what future the Iskandar development holds? Will you be looking to invest in Malaysian properties and do you know where to begin? Don’t forget to keep a lookout for useful tips and learn how to plan your finances for long term investment from industry analysts and experts at property events, seminars and launches.

18 Mar

Busy weekend for New Properties

Property showrooms were abuzz last weekend. With buyers looking to buy following the January cooling measures. Developers are hoping to tap into the pent-up demand which has been on hold since early this year. As the dust settles in the HDB market following its series of announcements after the Budget talks last week, the private property market is taking the chance to capture as much interest as they can now.

D'nest condominium.

D’nest condominium.

Hoping to catch some fishes are D’Nest near Pasir Ris MRT station, Sennett Residence and The Trilinq. Residential properties in the CBD areas may also need to watch for the launch of Far East Organization’s mixed use commercial property SBF Centre. When complete, the influx of 196 office units and 48 medical suites may bring business to other residential properties in the vicinity.

Units at D’Nest were going for an average of $999 psf but there is an early bird price of $920 psf, but that is after the 7 per cent direct discount to temper the sting of the additional buyers’ stamp duty. Launch prices are set at $498,000 for a small 484 sq ft one-bedder to $1.15 million for a 1, 270 sq ft four-bedder. This Pasir ris condominium is set to receive its Temporary Occupation Permit  (TOP) in 2017. Prices of surrounding condominiums might benefit from its overflow and one should take note that its developer, CDL, still have space left for further development in the same area. Might we expect new residential projects nearby soon?

In Potong Pasir, Sennet Residence which as has already sold 70 per cent of its 332 units, sold 175 last Wednesday alone. Units there are priced at $1, 450 psf and the area which is largely yet untapped by new HDB launches, have drawn interest from private property buyers in the past. If new properties enter the market later this year, this might be a spot to watch.

12 Mar

New HDB flats 30% cheaper

National MInister Khaw Boon Wan has pledged last Friday to keep prices new HDB flats 30 per cent cheaper, keeping to their promise to help Singaporeans own a home.

Their aim? To make new HDB flats affordable once again, before the property bull run which sped well ahead since 2005, to have one in a non-mature estate paid off within “four years of salary”.  Current HDB flat prices are at about “5.5 years of salary”.

HDB Flats THinkStockThe Government’s new moves and announcements are clear indications that they plan to play an active part in Singapore’s real estate situation, at least in providing “alternative housing options”. Beyond price stabilisation, Mr Khaw has said that bringing down BTO flat prices are also part of the property cooling measures.

He has also raised a series of questions pertaining to Singapore’s long term housing plans:

  1. Should Housing Board flats continue to be an appreciating asset or return to being treated simply as a social need?
  2. Should the HDB build to meet sophisticated tastes or go back to the basics?
  3. How to keep flats affordable while continuing to encourage couples to be prudent?
  4. How should public housing respond to the needs of an ageing population?
Tampines Green Forest BTO Flats. Photo by HDB.

Tampines Green Forest BTO Flats. Photo by HDB.

There is still the issue of whether these low starting prices of HDB flats will be kept around the same affordable rates or will resale HDB flats continue their flight to higher heights. This may only be revealed in 10 to 15 years’ time but how immigration and housing policies are structured may very well be the rudder that steers the ship. To troubled waters or calm ones. Those at the helm will have an important role to play. And they have to act now.

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