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.

Australia’s property and housing market feels the chill

Tighter loan restrictions and a supply glut – these issues may not be affecting only Singapore’s property market. It seems in Australia, the same has threatened to shake the markets.

SYdney PropertyPhoto: Sydney

Property prices which were soaring, especially in major Australian cities such as Sydney and Melbourne, have now come down, as the approval for multi-unit properties have fallen 12.7 per cent last November. Developers of high-rise, multi-unit properties have found it harder to secure approvals as a supply glut looms in the near horizon.

The banks have also tightened their lending, and new regulations have made it more difficult for foreign investors to pick off large number of properties. This in turn has affect the construction industry in Australia, and have come at an most unfortunate time as the government has hoped it will plug the hole left behind by the lagging mining industry.

That said, there are still many considerable new properties which are highly valuable. Most importantly, they need to fit well with the investor’s or buyer’s needs and portfolio. Factors such as financial feasibility and longevity, short- and long-term leasing potential and margin of development of the district will continue to guide investors in making their purchasing decisions.

A stable year for Singapore’s property market?

Resale HDB flat prices have fallen only 1.5 per cent last year, as compared to 6 per cent the year before. Industry experts are not expecting prices to fall much more this year and in fact last quarter saw a 0.2 per cent rise in HDB resale flat price index. But that may not mean a sudden rebound of HDB flat prices as the options available to home buyers have now increased, especially as private home prices have fallen and more are now eligible to purchase new BTO flats directly from HDB.
Poiz Residences2Photo: Poiz Residences

HDB has announced that they will be rolling out up to 18,000 new flats this year, 3,000 more that last year. Private properties are now more affordable as developers have caught on to buyers’ affinity to total quantum selling prices. Last year, private property prices dropped 3.7 per cent overall, and a 0.5 per cent fall was registered last quarter of 2015.

The number of new property launches in the 4th quarter propped up new property prices with launches such as Principal Garden, The Poiz Residences and Thomson Impressions. Prices of new units in the city fringes fared well with no price changes. Landed property prices however fell 10.4 per cent over the last 2 and a half years, with prices falling 4.4 per cent last year alone.

Property analysts are watching the market closely as they are expecting the interest rate hikes to put a strain on those servicing home loans, especially as the property cooling measures concurrently remain.

Buyers picked up properties worth $102.27 million at auction

Rising interest rates and restricted loan options may have amounted in more properties going under the hammer this year. Though the number was not drastically different from last year’s, the total property value fetched at the auctions was much higher. The total value of properties sold at auctions this year is currently at $102.27 million, the highest in these past 5 years. Last year’s total auction value was $72.5 million.

LuckyHeightsBungalowPhoto: Bungalows at prime locations could have high projected values.

Residential properties were the main draw at these auctions. And figures have been on the rise since 2009. A total of 34 properties were sold at the auctions this year, and out of that 26 were private homes. That is almost double of the 46 per cent of private properties in auction in 2013. Property analysts are expecting the list of residential mortgagees to grow next year as the combined effect of a dampened rental market, increase in supply of completed homes, interest rate hikes, prevailing property cooling measures and a general sense of a slowing economy, sinks in.

One of the largest sales this year includes $16.3 million single-storey bungalow at Branksome Road. The projected value of its redevelopment may have made it a bargain buy, even at the hefty price. For developers and investors hunting for a worthy investment, these mortgage sales may be fertile ground.

Luxury tucked away – Seletar Hills

For now, the district of Seletar and its surroundings are fairly quiet and laid-back. But all that may soon change as the area is being redeveloped as part of the North Coast Innovation Corridor.

The exclusive Seletar Hills Estate in its midst holds a great deal of potential with the serene environment it provides as well as its proximity to town. A 999-year leasehold landed housing project is being built there at the moment –  Luxus Hills is currently in the seventh phase of its development and will feature 28 terrace units and 4 semi-detached houses. These landed properties are developed by Bukit Sembawang Estates whose other properties include Skyline Residences and Paterson Suites.

LUxus HillsPhoto: Luxus Hills

The surrounding area will soon be very vibrant with commercial and retail businesses including the Seletar Aerospace Hub, Greenwich V and Seletar Mall. Within a short drive or bus ride away are the Ang Mo Kio Town Centre and Compass Point in Sengkang. Situated somewhat midway between Yio Chu Kang, Sengkang and Punggol, and Ang Mo Kio, it’s proximity to the Central Expressway (CTE) also makes it a cinch to get to the Central Business District (CBD) and Orchard belt. The Hougang, Ang Mo Kio, Yio Chu Kang and Buangkok MRT stations are within easy reach.

Each of the Luxus Hills homes are designed to suit multi-generational families and come with four en-suite bedrooms, a guest room and roof terrace.

Other properties nearby include Riverbank, Rivertrees Residences, Seletar Park Residence, The Greenwich and Belgravia Park.

 

Are foreign buyers shying away from Singapore properties?

Foreign buyers seem to be holding back from buying homes here in Singapore. The largest fall were from Indonesian buyers, from 112 down to 39 units in the last quarter. Chinese, Malaysian and Indian buyers make up the rest of the buying clout, though there has also been a decline in all segments.

Private home prices have fallen 1.3 per cent in all regions – 1.3 per cent in the central regions, 1.5 per cent in the city fringes and 1.6 per cent in the suburbs. An accumulation of various factors could have impacted the market:

White Sand HKPhoto credit: GoHome.com.hk

Singapore is often compared with Hong Kong, for its size, population and infrastructure. Why then are property prices in Hong Kong skyrocketing while Singapore properties fight to garner foreign buying interest? One of the main factors could be the proximity of the country to China. Mainland Chinese buyers make up the bulk of the foreign buying pool here and Hong Kong is inevitably closer. Should they wish to travel far out, they often look at countries such as Australia, New Zealand or even the United Kingdom and United States. The yuan has also weakened and with the Chinese economy slowing down, Chinese buyers may also be more selective about their choices.

The Indonesian property market is flourishing and in fact, more buyers, even Singaporeans have been buying into the market. Jakarta and Bali are a few of the cities where buyers’ interest have peaked.

How then can Singapore continue to attract foreign buyers and will mere policy changes affect a change?

Has private property market reached stability point?

Has the private property market possibly reached a point of stabilisation? Figures of late seem to show that while there are slight fluctuations either ways of the scale, the market seems to have somewhat levelled.

Prices of completed private properties seem to have stopped declining and August showed a only a 0.6 per cent fall according to the Singapore Residential Price Index (SRPI). Property analysts have put the slight decline mostly to the increase in completed units in the central regions, the possibility of buyers waiting for post-election policy changes, and the lull in property transactions in the Hungry Ghost month.

Stevesn SuitesSmaller apartment units seem to have fared well though, with prices rising 0.5 per cent in July. Vacancy rates of rental units have risen while rental rates dipped island wide. As long as foreigner labour and immigration policies remain tight, the leasing market may remain weak, especially as the number of completed units are rising in the next couple of years. Resale properties in districts 1 to 4 and 9 to 11 have suffered a hit with a 23 per cent fall in transactions in August.

The next 2 years might be a time to watch for small apartments under 506 sq ft which were purchases for investment purposes. While sellers may not yet be pressured to sell as interest rates now remain low, as the number of these units rise upon completion of many developments launched last and this year, and interest rates fluctuate, the situation may be different come 2017.

 

 

A possible supply glut in Australia property market

Economists are beginning to see possible cracks in the Australia property market as an onslaught of new homes threaten to cause a supply glut by 2017. The property market has been booming for awhile now, with most homes overvalued at 20 per cent. Partly boosted by the central bank’s series of 10 interest rate cuts since 2011, buyers have been snapping up units in one of the world’s most expensive property markets.

GreenSquareProperty prices in Sydney alone have risen 46 per cent in 3 years, with a 24 per cent average rise in the whole of Australia. The latest property offering is Green Square in Sydney, which will yield 10,000 new apartments, adding to the 213, 000 new homes which will be made available across the country. Perhaps some of the reasons for the possible glut could also be the lack of a corresponding rise in income and population growth. Confidence and capital spending have thus reflected this. Tighter lending rules have also effected a 13.1 per cent drop in investor loan growth.

Though buying will not cease or fall immediately, analysts are advising buyers to proceed with caution and to consider their mortgage options for the long term as banking rates will fluctuate and holding power will no doubt be what differentiates the wise investors from those in for a quick buck.