The rise of the Private Homes

Prices, that is. Private home prices look like they are on the way up. As suburban land prices steadily head upwards, a total of 22 per cent in 2012 alone, prices of new private properties may follow suit. 20, 879 private units were sold in January to November last year, boosted mainly by the regular supply of residential sites from the Government Land Sales (GLS) programme.

Cashew Crescent Terraces

And in 2013, as long as the supply of land sites continue, demand may be sustained at a respectable level. While the new private homes market is expected to do relatively well this year, they may stay just under last year’s numbers. The Government is keeping a close watch on the shoebox apartments sector and has implemented a cap on the number of non-landed private homes outside of the Central area. Property developers may find a drop in buyers due to subsiding rental demand.

However, landed property seem to top of the leader board with a 9.7 per cent increase, the largest rise in the private property sector. Is this because investors are expecting further rise in prices this year or at least within the next two years? Resale condominiums have also reflected a 3.4 per cent increase, though at a much slower pace compared to 2011′s 8.4 per cent.

Studio MarneForeign interest in the luxury segment is increasing, as more Chinese flock back to the market, especially as China’s economy improves. Reports reflect a hike in the numbers of Chinese buyers of properties above the $5 million mark.

If Singapore’s real estate market continues to walk the current path, it certainly puts big beams on property investors and sellers’ faces. In terms of the overall property and housing market however, uncertainty is masked. Are we heading towards the point of no return? Or is this merely healthy growth?

Mount Sophia and Wilkie Highlights

A bungalow at Wilkie was sold recently. $24 million was the number. No, not the selling price, merely the profit made. An old building that was possibly bought for only $450, 000 ($48 psf) in 2005 seems almost impossible. But the search on Realis, URA’s real estate transaction website, shows that there were not other transaction since then. Other similar transactions of landed property went for $561 psf in 1996 and $779 psf in 2001.

The site was bought by Roxy-Pacific for $24.5 million. Zoned for residential development, the 9, 321 sq ft site could possibly yield 85 one-bedders. With its close proximity to many creative art schools such as School of The Arts, La-Salle College of the Arts and Nanyang Academy of Fine Arts, it is set to gain popularity, if not already.

Wilkie 80

The relatively quiet enclave adds to the exclusivity, with a quaint little park at the top, and some boutique hotels and eateries along the way, not to mention its expensive and desirable city fringe location, properties in this area have been flying out from under the radar in recent years. Populated usually by low-rise apartments, some new properties have been popping up here. 8 Mount Sophia, 1919, Mount Sophia Suites, Wilkie 80, Wilkie Studio are just a few of the private apartments available for sale.

On another note, bungalows and landed properties may be popular with home investors and upgraders this year. Areas such as Thomson, Tanglin, Bukit Timah, Lornie and Sentosa Cove of course, are just a few areas to do some home-spotting.

Good Class Bungalows – Fewer sales but Prices Up

2, 400 in 39 gazetted areas. 49 sold in 2012. That’s the GCB real estate market for you.

Good class bungalow in Binjai Park.

Good class bungalow in Binjai Park.

Despite the property cooling measures implemented last year, the buyers are still biting and the prices remained resilient. Although the restrictions of a 16 per cent seller’s stamp duty and 60 per cent loan-to-value ratio may have stopped some in their tracks, the psf pricing of these rare commodities have risen 10 per cent to $1, 276 psf. The limited supplies definitely has a part to play. But perhaps as more are investing for the longer term and are more likely to be home occupiers, they may be willing to pay more. GCBs can be found in the Nassim, Dalvey, Tanglin, Binjai Park, Leedon Park, Ridout Road, and Chatsworth Road area.

The highest selling Good Class Bungalow in 2012 was one in Ridout Road which went for $60.6 million. Bought for $37 million by former goldman Sachs banker Thomas Chan, it changed hands in late March and now belongs to the Tecity Group which falls under the control of the family of the late OCBC Bank chairman Tan Chin Tuan. The second most expensive GCB sold, in Leednon Park, was for a much lower amount at $33 million. At 10, 800 sq ft, it holds six bedrooms and a pool.

The value of these bungalows seem only set to rise in then new year, though perhaps at a slower pace, depending on whether the weak market sentiment set about by the Europe debt crisis will take a turn for the better. Even as Singapore braces herself for slower growth this year, the global economy will affect Asia perhaps in a bigger way this year than the last.

Many units in High-end residential projects unsold

At least 8 residential property developments are reaching the end of their 2-year sales deadline and if they do not sell all their units by the stipulated date, the property developers will have to foot the deadline extension bill to buy themselves more time.

Martin No38Most are high-end private apartments such as The Marq on Paterson Hill, Hilltops in Cairnhill Circle, Scotts Square in Scotts Road, Martin No. 38 and Residences at Emerald Hill. One of the reasons cited for the dip in sales in the high-end market was the additional buyer’s stamp duty. Foreign home demand seems to however to going way off the charts to the luxury landed properties in Sentosa Cove with a number of bungalows going for sky-high prices of late.

But if you’re thinking that prices might start dropping, it might be way to early to wish for a christmas present. Industry experts say property developers are unlikely to drop the prices as this may affect their reputation and stir up unpleasant sentiments amongst earlier buyers. However they might give incentives such as stamp duty absorption or rental guarantees.

Ultimately, it might just boil down to a matter of how much holding power these developers have and how the immigration and housing policy change over the next year.

Hot property alert – Seletar Hills

In an enclave surround by greens, just off the grid enough to be comfortably private with a growing number of amenities nearby, the old estate of Seletar Hills is getting a revival, it seems. Property buyers are increasingly looking out for homes in that areas, landed private homes to be specific. These semi-detached and terrace houses are the target of both local and foreign professionals.

Seletar View Cluster housingAlthough only accessible by car or limited buses, it is nevertheless drawing attention. The new aerospace park and Seletar Airport nearby are probably impetus enough to warrant investors seeing a possible rise in value of properties there. The Greenwich V mall boasts a new Cold Storage supermarket and the district is also in the process of welcoming another shopping mall, The Seletar Mall, by 2014. It’s an area which has yet to see many high-rise condominium projects, with the newest residential developments being The Greenwich.

Even though at least a decade old, the older condominium projects such as Nim Gardens and Mimosa Park, have already seen a 12 per cent rise. With another 1, 000 units entering the property market within the next five years, it could be the next dark horse in Singapore’s real estate scene.

Sentosa Cove home prices reach yet another high

At $32.5 million, more than $4 million more than the previous high of $28.2 million in 2010. The 10, 111 sq ft bungalow at Ocean Drive was sold at $3, 214 psf.  As one of the only areas where foreigners can purchase landed properties, Sentosa Cove has been seeing hearty responses from property investors this last quarter.

Sentosa Cove Bungalow.

The prestige, luxury and exclusivity of Sentosa Cove has lured many foreign home buyers to the area and Urban Redevelopment Authority (URA) data has shown a rise of 1.1 per cent in landed property alone. Overall, the residential property prices rose 0.6 per cent.

Across on the mainland, Serangoon landed properties registered the highest growth with a 33 per cent gain. 156 properties were sold in the third quarter of this year alone. As land becomes more scarce and home sizes shrink, landed properties have become rare and thus reflected in their sales value. Do you know how much your landed property is worth and what should be watching out for when purchasing an existing landed home? How should you work out the numbers and how much should you put aside for reconstruction, renovation and maintenance?

New private homes sales up 84% in a month

Certainly not a margin to be scoffed at. At a 3-year high, new private non-landed residential properties have been enjoying a cool ride on the property wave. The National Development Ministry reported numbers of up to 26,800 HDB flats, 22,400 non-landed private homes and 1,100 landed homes nearing completion by 2014. Though these numbers were pre-dated to before the announcements of the home loans curb, industry players are nevertheless positive about the future outlook for the real estate market.

Skies Miltonia private condominium in Yishun with an expected TOP of 2016. 

A year-on-year comparison with 2010 will show that the number of new home sales by developers within the first 9 months of this year has already topped that of a full year in 2010 – and we still have 3 months left of 2012. Knight Frank research head, Png Poh Soon is expected the year’s total to reach 21,000.

Reasons for the pickup of sales in September could be due to the comparably low number of sales in August due to the Hungry Ghost Month as well as the narrowing gap between resale and new units. But this might mean that the pricing of new launches will determine their uptake and demand in the months to come.

Property investment not as easy as before

For cash-rich property investors who have holding power, buying property right now might be a win-win situation. But for the other folks out there, its risky business.

City Square Residences at Kitchner Link used to go for $1000 psf in 2009. Now it is going for $1,600 psf.

In the 1960s, properties went for between $10,000 to $100,000. Now resale private properties are going for hundreds of thousands, and most of them crossing the million dollar mark. Landed property prices are going off the charts as well. In 2006, flipping properties within a few months and making back your downpayment amount of a few hundred thousand, if not more, kept the momentum going in the real estate market. Then came the 2008 crisis. Property buyers who dared to foray into the then-unstable property market might have made a tidy sum if they had been able to hold on to their properties, but now, making a 100 or 200 per cent upside is no longer a guarantee.

Need to live near schools along the Bukit Timah stretch? Units at Cascadia private condo apartments are available for rent.

As the government delivers on their promise to roll out more HBD flats and with new properties nearing completion within the next two to five years, another roller coaster ride might be in the the books. Instead of the fast lane, property investors might now have to take a slow but steady route – through rental. What this would mean is that investing in smaller units, or units which are easier to rent out in popular locations, could be the way to go. As long as Singapore remains a stable hub of trade and commerce in the region, the demand for rental units will exist. The motivation behind property investment decisions may need to change. Don’t hope for a windfall. Rather, give more thought to the type of property which will give you long-term returns.