No rise in private property market sales yet

Though the dip in private home sales is not as drastic as expected, with a 1.3 per cent decline in the first half of 2014, industry experts are expecting the same rate of decline for the remaining half of the year.

The restrictive home loan situation was the main deterrent as it has meant that buyers may no longer be able to loan as much as before and that has limited their possible property purchases. The Total Debt Servicing Ratio (TDSR) limits the total monthly debt repayment to 60 per cent of the borrower’s gross monthly income. For buyers who are already servicing a home loan or other loans, the amount they are able to loan will be lesser as well.

CIty GateThe smaller and more affordable units will seem more attractive than before. Or units such as dual-key apartments which allow bigger families to stay together may be more affordable should the cost be shared. As June was a relatively quiet month for new launches, figures from the next quarter will be more telling. In the first half, less than 5, 000 private homes were sold. Buyers can look forward to a few more launches in the coming months, including mixed-use development, City Gate at Beach road, The Crest in Prince Charles Crescent, Highline Residences in Tiong Bahru and Marina One in Marina Bay. Indicative prices of units at City Gate will range from $1, 900 to $2, 200 psf.

Will there be a surprise market rebound? Or will it decline further?

Bidadari – Property with longevity?

Where bustling and ever-so popular Bishan stands,used to be cemetery land. When it was first redeveloped in the early 80s, no one would have imagined the boom it enjoys today.

BidadariPhoto credit: HDB

Now it could be Bidadari’s turn. Already the new HDB flats to be built have garnered buyers’ interest and private landed residential properties in the area are also welcoming the attention. Surrounded by the quiet and exclusive atmosphere of Bartley, Mount Vernon, Sennett Estate and Upper Serangoon, Bidadari has been slated for development into a public housing precinct and a private property enclave.

Nearby Potong Pasir and Bendemeer have already seen their share of new properties coming up. HDB is planning 10,000 new homes in the area under the HDB Master Plan 2014, and up to 1,000 new private homes are expected to secure their place by end of 2015.

Nin residences at Bartley

Nin residences at Bartley

Considering the age and population density in the estate, there is a huge space for development, which could also mean potential for properties. So far, private condominium sales have been brisk. New developments in the area include Nin Residences, Bartley Residences, The Venue Residences, 8@Woodleigh. There are already some schools in close proximity, such as St. Andrew Junior College, Maris Stella High School and Stamford American International School. A new retail development, Market Square, is also on it’s way up.

Though demand for properties here may not seem to be as high as the neighbouring Bishan or Toa Payoh, one must not forget Bishan’s history. Their day will come, and perhaps it is just a matter of time.

More new home sales bring cheer

If the 55.2 per cent rise in new home sales last month is anything to go by, the property market may have more than a glimmer of light in the horizon.

The Sorrento condominium

The Sorrento condominium

  • New launches no doubt helped in pulling the numbers up. The 3 most recent new launches were:
  • Lakeville in the Jurong Lake District
  • Sky Habitat in Bishan
  • The Sorrento on West Coast Road

Kallang RiversidePrices of units at the above developments ranged between $1, 319 to $1, 414 psf. Suburban home sales are still going strong, though considerably lower than the same month last year. 65 per cent of units sold were away from the city centre and city fringe areas. Only 3 per cent of the total sales were from properties in the city center.

Property prices however are well below the expected range. Developers have priced units as much as 10 to 15 per cent lower in order to move units; or market specific units with special selling points, such as penthouses or units with unique furnishings.  With this month’s launches, Commonwealth Towers, Waterfront@Faber and Kallang Riverside, figures may finally pass the 1,000 mark this year. A sign of more positive things to come in 2014, perhaps.

Sengkang attracts the home-buying crowd

The far-flung places in Singapore are getting more attention from property developers and love from home buyers. Sembawang, Punggol, and now Sengkang.

Rivertrees ResidencesAlong the quiet Sunggei Punggol Reservoir, 1,000 new homes will be enjoying its new residency. 555 units from The Riverbank @ Fernvale and 495 units from Rivertrees Residences. These are all private condominium apartments and both with 99-year leaseholds. Stretching 150 metres along the reservoir, 90 per cent of the units at Rivertrees Residences will be able to boast a waterfront view. Units will include three-bedroom and strata-titled duplex homes.

The developers, Frasers Centrepoint, Far East Orchard and Sekisui House are calling this development one of the “only waterfront landed houses in Singapore, apart from Sentosa Cove“. As expected, prices will likely hover around $950 to $1,150 psf. UOL’s Riverbank @ Fernvale has also garnered much interest, with over 500 cheques collected prior to its launch today. Home buyers may be attracted by the waterfront-living style of apartments and the exclusivity of its location. Coupled with the fact that Singapore is only going to get more crowded, areas such as Sengkang may be one of the last few residential places in the mainland to truly enjoy a bit of space and greenery.

What’s the situation with the rental market?

The sheer number and speed of new homes entering the market is bound to have some effect on the rental market. And indeed the cracks are beginning to show. Even in areas where resale properties have been commanding considerable rents, there have been signs of price compression. In the River Valley stretch, a four-bedder at Aspen Heights used to go for $5,700 just two years ago, but now $5,000 is the norm. With new properties such as RV Edge coming into play, comparison may make for stiffer competition in the rental front.

RV Edge in the River Valley area, just off the Orchard road belt and the Central Business District.

RV Edge in the River Valley area, just off the Orchard road belt and the Central Business District.

For the next couple of years, the rental market is expected to suffer, whether in terms of lower rental prices or longer periods of vacancy. This year alone, there are 17, 458 vacant units for rent by the end of Q3. Some home owners had bought resale units at the peak, and now may find themselves having to come down on the prices or risk a longer wait before finding a tenant. Next year, 19,302 new private home units will be ready for occupation. Combine that with 19, 727 in 2015, and stricter immigration and labour policies, the rental market may be facing some tough challenges moving ahead.

Shoebox apartments and smaller condominium units were popular for the past year. But now, it seems supply has larger overshadowed demand. The dip in rental prices were most obvious here, with a 10 per cent decrease. A two-bedroom apartment at Cote d’Azur in Marine Parade for example, which would have been rented out at $3,000 per month last year is only going for $2,700 in the current market. New homes at Silversea and The Shore Residences which will be ready soon, may only lower the prices even further. And landlords who are eager to recoup their capital may have to lower prices in order to secure a tenant in order to make their mortgage payments.

Shore Residences on Amber Road

Shore Residences on Amber Road

As supply of HDB flats reaches a saturation point, and lower sale prices mean more HDB owners are upgrading to private properties and renting out their HDB flat, the options for tenants have opened up tremendously. That also means they are more likely to compare or wait for the best deal, putting landlords at a disadvantage. The prediction is a 5 to 10 per cent drop come 2014. Will governmental policies be likely to change to the benefit of home owners anytime soon?

Private properties take a back seat

November heralded a boom to the private property market. But as the month draws to an end, so does the interest. In the weekend past, sales were slower and many developers were resorting to price cuts to attract customers.

Clermont ResidencesAt Clermont Residences in Tanjong Pagar, possibly the tallest residential building in Singapore when it’s completed in 2016, approximately 10 units were sold at $3, 000 psf. But that could be due to the high price tags of the units, including a $30 million “super penthouse”. As the property-buying crowd become more experienced, they are leaning towards less expensive options and smaller units in suburban developments are more palatable for the immediate investor.

Alex Residences in Redhill launched just a couple of weeks ago to a good deal of activity, but most of that has tailed off, with only about 20 units sold over the weekend at an average of $1, 680 psf. The other recent new property, DUO Residences fared slightly better, mostly because of its relatively lower prices, especially for something so close to the CBD and Orchard belt.

And now the record launch of close to 9,000 new HDB flats, and the upcoming festive season, will sales dip even lower?

Waterfront Singapore

URA Master Plan 2013As an island country, waterfront living seems like it should be a buzz word. And it certainly will be, come as early as 2023. A new blueprint, the Draft Master Plan 2013, for nation planning has been put in place, with promises of more and better homes, and a more sustainable green and ecological living environment. National Development Minister, Mr Khaw Boon Wan, has said in his blog post that “the underlying philosophy of making Singapore an endearing home and a clean, green, livable city remains unchanged”.

About half a million new homes have been planned for new housing areas. These include Bidadari, Tampines North and Punggol Matilda. Other older HDB estates will also see the injection of some new blood, in Sembawang, Yishun, Hougang and Choa Chu Kang. A strong focal point of the Master Plan is the Greater Southern Waterfront, a 1,000 hectare development along the south coastline.

Punggol Matilda HDB1And as recent property news have signaled, the Kampong Bugis and Marina South areas will be a hotbed for private residential home activity, with the possible yield of 13, 000 new homes. Out of the 13,000, 9,000 private properties are designated for the Marina South area, which will only be developed once the Thomson Line is completed in 2017 or 2018. And cyclists may have something to cheer for, with URA setting the wheels in place to make Singapore more cyclist-friendly.

As the nation becomes more congested, it now becomes less practical to travel too far from home for work, and the constant development and setting up of regional commercial centres will make the most sense. The Woodlands Regional Centre and North Coast Innovation Corridor are just two of the many scattered around the country.  There were also talks about a new commercial centre in Punggol, and new industrial sites at the Seletar Aerospace Park, and also in Defu and an area called 2 West near the Nanyang Technological University. Since properties near commercial and financial hubs usually fetch the highest prices,  could this also cause property prices to rise overall?

Red hot Redhill

Location, location, location. And then again, location. Top of the list on adding digits to a property’s selling price is where the property is situated. Being close to the Central Business District and also the Buona Vista science parks makes Redhill the prime spot for property sales.

Though part of their popularity comes from the lower prices of 99-year properties, recent launches have set the bar. Alex Residences, which launched just this week had an average selling price of $1, 650 psf. This is quite close to the $1, 795 psf for the 508-unit Echelon nearby. All units at the Echelon have been sold out. Ascentia Sky which is situated near the Echelon went for $1, 709 psf.

Alex ResidencesThe overall housing market has seen a little less action in the rising prices front, though the number of transactions of private properties sold remain high. New homes in particular now come with a smaller price tag, and those looking to sell their resale units may find themselves having to match these competitive prices.

On the other hand the rental market in this area, though stable, has not been especially vibrant. Prices have remained at around $4.22 psf to $4.54 psf  over the past 12 months. But industry experts think that if you can hold out for about 7 years, the outlook may look rosier.