Luxury market boosts overall real estate figures

Ironically one of the markets which first took the hit when the property cooling measures kicked in is now the one keeping the numbers looking good.

GoodwoodResidencesFor her relative political and economic stability, Singapore is considered a haven for the rich who are hoping to park their wealth somewhere safe. And real estate here are considered stable long-term assets; not so much for those in for speedy turnarounds or hoping to make a quick buck in short-term rentals, but for investors looking at long-term capital appreciation.

Recent numbers released by the Urban Redevelopment Authority (URA) has shown a 76 per cent increase in sales of luxury apartments worth above $5 million this year. Some of the best sellers in this segment were Ardmore Three, Leedon Residence, Goodwood Residence and Gramercy Park.

GramercyParkProperty prices of city fringe units also rose 0.2 per cent though prices in the suburbs fell 0.5 per cent. But property analyst are seeing the market possibly bottoming out this and next quarter as the incline of the price drops have been gradually reducing.

There were a high number of completed units entering the market in the earlier part of the year, but as developers held back on major launches for a couple of quarters, it gave the market a few chance to do some catching up in terms of sales volume. The prolonged period of low interest rates may also push consumers to pick up deals now rather than later.

Private home prices on the rise?

Twin-Peaks3Prices of completed private condominium units rose 0.3% in April, though analysts are putting it up to a technical rebound. After a relatively good start to the year, private home prices have fallen 1.1% in March based on the Singapore Residential Price Index (SRPI).

Some completed residential projects have seen promising signs of buying activity. The recent upward price adjustments could have been due to higher pickup rates of central region private homes such as units at OUE Twin Peaks and Ardmore Three.

Although the rise of home prices this year has been tentative, across the board prices have increased by more than 50% since 2009. Small apartment units lead the way with a 62.8% rise, followed by a 57.7% increase in non-central region units. Central region home prices are now 30.9% higher taking March 2009 as a point of comparison.

Ardmore THreeLast year saw a dip in luxury, prime district properties while this year, the increased supply of new completed private apartment units have pushed prices of units in the non-central regions down. Buyers remain cautious in their purchasing approach and are more price-sensitive though projects in prime locations and whose developers offer fresh new incentives will continue to bring in sales.

Slower pace of private property price decline

Resale private apartment prices have been on the decline since its peak earlier in the decade, after the effects of property cooling measures kicked in and fuelled by a recent building boom. But the pace of decline has slowed down 2.1 per cent last year, in comparison with 2014. The URA property price index indicated a 3.7 per cent fall last year as compared to 2014’s 4 per cent.That may be a sign the market is finally stabilising, and sellers are no longer pressed or enticed to sell quickly.

St. Regis Residences on Orchard Road.

St. Regis Residences on Orchard Road.

The resale private property market did however report some profit losses. For example, some resale units at St. Regis Residences registered losses of $542,30 up to $4.78 million for a 4-bedroom penthouse.

2015 saw a total of 4,999 resale transactions of private properties, up 22 per cent from the year before, though still a far cry from the 10,598 in 2012. Property analysts are expecting a continued decline in prices, though at a slower rate, as buyers and sellers are still taking time to adjust to the loan restrictions and also now to cope with the new interest rate hikes. Buyers are however gradually acclimatising to the current market situation where new properties are priced affordably and resale property prices may not be drastically reduced, and thus are re-entering the market albeit with some care.


A+ sales for Ardmore Park

Marina Bay and Sentosa Cove are some of the well-known areas for luxury properties. But don’t forget Ardmore Park. This district 10 prime spot is one of the most prestigious locations on mainland Singapore and has managed to hold on to its highly priced calling card in the midst of a luxury property market slump.

Nouvel Ardmore 1Although the number of sales may have dipped over the past two years, prices have been consistent. Part of the reason could be the holding power of the property owners in the area. In light of the rising property prices all around, home owners or investors may be choosing to hold on to their Ardmore properties simply because it may be difficult getting similar properties within the same size and price range in the current market. Median selling prices psf is currently at $3, 311.

Unique to the Ardmore Park location is its commitment to luxury. Unlike other luxury property areas such as Marina Bay and Sentosa Cove where there are a mix of smaller and average-sized apartments, Ardmore Park only has large-sized, spacious units. At the freehold Ardmore Park condominium, each unit averages 2, 885 sq ft.

What will the architectural landscape of Ardmore Park look like?

What will the architectural landscape of Ardmore Park look like?

Other condominium developments in the area include the 118-unit Ardmore II which was ready for occupation in 2010; the Sculptura Ardmore, Le Nouvel Ardmore and Ardmore 3 which are all being constructed. Units at Ardmore 3 have been sold between $3, 160 and $3,485 psf. But with rental reaching $18, 118 a month, home owners may not be in any of a hurry to divest of their investment. With an eye on the global macroeconomic situation, any movement upwards may mean increased activity in the luxury property market. When will the market see a revival?

90 per cent of Marina Bay Suites sold

Luxury properties may not be hogging industry headlines right now, but from the looks of it, sales of high-end apartments may not be slipping as much as we think. Buyers know what to look out for, if the 90% of units sold at Marina Bay Suites is anything to go by.

Marina Bay SuitesAThe residential private condominium development is situated next to The Sail @ Marina Bay and has already received its Temporary Occupation Permit (TOP). 198 of its 221 units have been sold at an average of $2, 700 psf. Singaporean buyers made up half of the owners of units in the establishment and Indonesians, Malaysians and Chinese made up majority of the other buyers.

Though Marina Bay Suites has yet to be launched, units sold have been through previews in Singapore as well as in Malaysia and Indonesia from as far as five years back. One of the highest priced units sold was a penthouse for $19.3 million. Out of the 23 units left are 2 four-bedders and 2 penthouses above the 48th floor. Mr. Thomas Tan, head of residential marketing at Raffles Quay Asset management is certain all will be sold by the end of this year.

Marina Bay Financial Centre

With the fast and furious development of the area since the inception of Marina Bay Sands, the Marina Bay Financial Centre and other private condominiums, prices of units of residential property in the area, such as Marina Bay Residences, have risen from $2,000 to as much as $3,000 psf since 2006. By the looks of it, the area could indeed be a money-making machine.

Singapore’s Luxury home prices remain stable

In most countries across Asia, high-end properties are seeing a considerable rise in prices. Only in Singapore and Hong kong, where property cooling measures were implemented, did prices remain stable.

While luxury homes here saw a 0.6 per cent dip in prices, in other major Asia cities such as Beijing, Shanghai, Bangkok, Kuala Lumpur, Manila, Jakarta and Mumbai, prices leaped an average of 6.1 per cent year on year. Singapore is the only city where year on year high-end home prices fell, at 4.3 per cent.

Corals at Keppel Bay.

Corals at Keppel Bay.

Which city saw the largest jump in luxury property prices? Jakarta – with an increase of 8.7 per cent in Q1, that is a whooping 32.9 per cent year on year. Kuala Lumpur and Beijing saw steady quarterly rise in property prices as well. But it is worth noting that the Chinese government is quite aware of a possible property bubble and may be clamping down on building and investments soon. Jones Lang LaSalle‘s head of Asia Pacific research, Ms Jane Murray, is predicting a fall of up to 5 per cent for high-end property here in SIngapore. As population and economic growth slows, the same is expected of the property market.

Have investors veered away from Singapore properties to focus on real estate  elsewhere in Asia and are Singaporean investors doing the same? As property cooling measures continue to kick in, will they deter home buyers even further? What will it mean for Singapore’s real estate market and is this the intended purpose of the property cooling measures?

Property Price Rise in 2013

The dawn of a new year may bring great joy for property sellers as property experts expect a continual rise in property prices. Rising land costs may be the leading cause of the rise. And low interest rates will keep the buyers coming. Non-landed mass market homes are again expected to be the first in the race, running far ahead with a 10 to 15 per cent rise. The luxury property sector is also expected to rise, but at the lower margin of 3 to 5 per cent.

Singapore property condo

Neck in neck with the suburban mass market private homes are Executive Condominiums (ECs). This particular property type has been enjoying spectacular success with home buyers this year, and especially this quarter. By the end of 2012, the target sales of EC units will hit 4000. That’s still more than the number of units sold in 2010 and 2011 combined.

Despite the government’s efforts to cool the market, it seems to have a life of its own and the growth is too strong to be suppressed. What were the government’s motivation behind the cooling measures, and is it enough that those aspects are controlled, leaving those who can afford to push up overall prices? Or should the authorities be doing more to ensure that the little people and the middle class is still able to afford what they can.

Demand and supply. The balance awaits scrutiny. And the guessing game continues.

2nd Homes, Timeshares, Fractional & Shared Ownership: Which is Right for You?

You may have recently browsed through glossy brochures with photos of luxurious resorts, set amid sandy, crystal clear beaches and exotic rainforests in beautiful tropical locations such as Phuket or Bali, and may have been immediately excited about the prospect of having a luxurious villa to visit several times a year for a seemingly small sum. But before you set your mind set on the holiday home of your dreams, do stop to understand the different ownership options available, so that you can pick the right choice that best suits you and your family’s needs.

A holiday home in tropical paradise

1. Timeshares

Timeshares have been around for a long time, hence it should not be surprising that many Singaporeans are most familiar with the concept of buying a “right” to use a property which lets them travel around the world. Timeshares have the advantage of offering life membership, and they also allow users to travel frequently to a favorite resort at a cheaper rate than they would get by booking it through normal routes. However, one drawback of timeshares is that they are often sold on a “right to use” basis, and sharers do not actually own the actual property itself. It can also be difficult to get a reservation at a timeshare resort during the peak seasons, such as Christmas and Chinese New Year.

2. 2nd Homes

With the rapid rise of local property prices in recent years, Singaporeans have started to look overseas for more value-for-money housing options, where, for the price of a 3-room HDB flat, they can buy a spacious 4-bedroom bungalow in a gated community enhanced with 24-hour security. In particular, Iskandar Malaysia, with its rapid economic development and close proximity to Singapore, has been growing in popularity with locals looking for a weekend or future retirement home. But although 2nd homes offer many benefits, one concern is that buyers are limited to spending their holidays at the same place over and over again, which may not be suitable for those who like to travel to a different place every year.

3. Fractional Ownership

Fractional ownership programs are relatively new to the local market, and have evolved in response to the demand for an alternative to timeshares and 2nd home ownership. The concept is simple: the ownership of a villa or resort home is broken up into “shares”, in such a way that each owner may own 10% of a resort home, sharing an equal ownership with 9 others. While owners of a fractional share can benefit from the appreciation in value of the property, buyers should be sure that they intend to re-visit the same location over and over again, and that they are sure that that specific accommodation is what they are looking for.

A winter holiday home

4. Shared Ownership

For those looking for the flexibility of having various holiday locations to choose from, but who also want to benefit from the capital appreciation which 2nd homes and fractional ownership programs offer, a shared ownership program may be the answer. One such program, the Hideaways Club, allows investors to buy into a property investment fund, under which shareholders retain full ownership of the various properties held under the fund. Investors also become members of a private Member Club, which allows them to use any of the properties throughout the year.

As shared ownership programs allow investors to diversify their property investment portfolio across a wide range of geographical markets, they provide an appealing option to those looking for the combination of investment with a luxury jet-setting lifestyle. However, as shared ownership is a relatively new concept, buyers should do their research on the overall demand for resale shares of the specific fund, so they have a good understanding of the potential gain or losses of their investment – before taking the plunge.