October’s new home sales up 128 per cent this year

With more that 1,252 new private homes sold in October, new home sales have risen 145 per cent from the 509 units sold in September and 128 per cent in a year-on-year comparison with 2015 when 549 units were sold.

thealpsresidences4The sudden spike may have been due to pent up demand after the slower months of the June school holidays and Hungry Ghost month in August, plus the launch of major projects in the later part of Q3. The 2 new property launches which garnered most of the sales were The Alps Residences in Tampines and Forest Woods in Serangoon Central. Each sold more than 300 units which made up 55.7 per cent of October’s sales. Other projects which consumers actively seemed out such as Stars of Kovan, The Trilinq and Kingsford Waterbay all sold only 30 units each, though understandably as these are much older launches.

Property analysts put the sudden rise in sales, a 15-month record high in fact, to the affordable prices put out by developers. Despite the slower economic outlook, consumers know a good deal when they see one and are willing to invest in what they consider to be long-term investment-worthy properties. Forest Woods is situated close to the Serangoon transport hub – the MRT station, bus interchange and NEX shopping mall – which could account for its popularity.

forestwoodsForest Woods was the top seller last month, with 364 units going at an average of $1,078 psf. Smaller units were purportedly gaining traction with buyers once more. Shoebox apartments, though aplenty in the market, remain affordable and property analysts report a direction change from investors who have turned their attention from riskier financial products back to the more stable property market.

 

Property market in the doldrums in Q3

The local property market seems to have taken a harder hit in the third quarter as both sales and rental figures fell. While the decline was not drastic or sudden, it nevertheless points to possibly tougher times ahead.

alexresidencesOverall property selling prices fell 1.5 per cent while rental prices dropped by 1.2 per cent. The general global economic gloom, fears of inflation and growing unemployment rates have given way to a sense of impending recession. Buyers are likely to be more careful with their finances and though property is a good way to hedge excess funds, investors are likely to weigh yield potential even more seriously should the negative sentiments persist.

The private residential market seems to be the most affected as vacancy rates rose. Property analysts report more positive sales in the resale rather than the new homes segment, possibly because there were fewer new residential project launches in Q3. Resale property sales clocked a 15.7 per cent increase while new homes sales fell by 12 per cent.

tampineshdbIn the resale HDB property market, prices continued to stabilise, with no significant rise nor fall. However, the number of transactions recorded fell by 5.5 per cent. Currently, overall private home prices have fallen 2.6 per cent.  With only 2 months left to the year, property experts expect a slight fall in prices and transactions in the private property market, which largely dependent on market sentiments may result in a final 3 to 4 per cent decrease for 2016.

New home sales dip in June

June and July are traditionally slower months for the local property market as the school holidays are followed by the Hungry Ghost month. The lower numbers may also have been due to the lack of new launches.

Kingsford HIllview PeakLast month, only 536 new private non-landed units were sold, about 49 per cent lower than the 1,058 units clocked in May. Despite the huge fall in market figures, property analysts remain positive about the journey as numbers have reached a plateau and the fluctuations between quarters have been minimal.

Following the slew of cooling measures implemented by the government over the past few years, th market has cooled considerably. In a year-on-year comparison to 2015, the 536 units sold is 43 per cent higher than the 375 units sold last year.

Suburban homes were the best sellers in May, with developments such as Kingsford Waterbay, The Glades and Kingsford Hillview Peak managing to sell off some of their unsold stock. Median selling prices were at $1,185 psf, $1,402 psf and $1,315 psf respectively. In previous months, sales were largely  boosted by developers offering discounts, but the units sold in June were not heavily discounted, signifying the return of buyers to the market as they gradually come to realize that prices will not come down much more.

Completed private home prices fall further

Completed resale private non-landed property prices have dipped further in May, following a slight increase the month before. The muted sales could have also been a reflex response to the recent Brexit vote though in the long term, property analysts are not expecting the fallout to be too drastic.

FulcrumPrice decline of apartments in the central region were the lowest, with prices falling only 0.5 per cent last month, almost evening out with the 0.4 per cent rise in April. Properties here have the location advantage and will be unlikely to see a sudden price depression anytime soon. Astute buyers are however still out for the hunt and are likely to look towards properties in this areas for good deals. In the current market, buyers who lack holding power may find themselves having to let go of their properties within a time period, and may be more open to price negotiations.

As more new properties were launched in the last couple of months, activity from this segment may have also stimulated the resale private property sector and the spillover effect of positive market sentiments could have caused a slight blip in April’s price rise. Small apartments below 506 sq ft saw the steepest fall of 1.1 per cent as competition in the rental market heats up and prices continue to fall with high supply against lower demand.

 

More unsold private home stock moved in April

New private home sales fell 11.6 per cent to 745 units last month, though the numbers may be considered to be decent as there were 2 major launches in March which caused a spike in sales volume, the highest in 8 months. The 268-unit The Cairnhill and 216-unit The Wisteria launched in March while the 305-unit Sturdee Residences and 48-unit The Asana launched in April.
The AsanaOlder projects however were finding favour with buyers as the number of transactions on previously launched developments rose from 541 to 619 in April. A few of these projects such as The Trilinq, have reached or will be reaching completion soon and are more of a draw for buyers who wish to move in sooner than later. Developers of some of these properties have also offered discounts and the lower prices are the icing on the cake.

Taking executive condominium (EC) units into consideration, the numbers are even higher. Approximately 400 EC units were sold. At the previously-launched The Terrace EC, the developers have put a buyer-referral scheme where both parties received $10,000 cash vouchers for successful transactions.

The TerraceProperty analysts are optimistic about the shift in tide as sales were spread evenly amongst the 15 top-selling residential projects, a sign that buyers are looking throughout the island, and not simply converging on new launches. Ironically, the government’s insistence on keeping the property cooling measures might have driven buyers back into the market as they realise the curbs may not be lifted anytime soon.

 

Property mortgage sales even include uncompleted units

A weakening rental market and the growing supply of new homes have pushed even more units into the realm of mortgage sales.

Silversea1Even uncompleted units are now going under the hammer. While only 3 properties were auctioned last year, the number have more than quadrupled to 13 in the same period this year. More mortgagees are defaulting on their loans, which could be largely due to the diminishing loans they are now able to secure based on the debt servicing limits, increasing competition in the rental market and an overall property price drop.

Investors who have been dipping their toes into too many properties may be finding themselves unable to service the multitude of loans taken on multiple properties, in particular smaller one-bedders or studio apartments which are only reaching completion in the recent couple of years. Some units at The Greenwich in Seletar and euHabitat for example, in particular smaller one-bedroom apartments priced at $1 million or below, are being put up for auction as their owners are overstretched financially and find it difficult to secure rents sufficient enough to cover their mortgages. Larger penthouses with irregular layouts above 1,500 sq ft and priced above $2million are also finding it difficult to find buyers or tenants as they exceed the budget of many investors but may not yet fulfil the requirements of affluent or high-networth buyers.

The GreenwichSome of the units put up for auction this year include a one-bedroom penthouse in Guillemard Edge, a three-bedder in Bartley Residences and a four-bedder in Silversea condominium in Marine Parade. The latter was sold at $1,529 psf or a total of $3.9million.

 

843 new private homes sold in March

And that is a 8-month high, especially since the last new property launch was 4 months ago – The Poiz Residences in November 2015. That could be the glimmer of hope the local property market has been waiting for, though some analysts are still cautious about a obvious rebound as the government has tightened their grip on land supply this year.

WIsteria YishunThe rise in transactions of new units last month could be partly due to the pent up demand over the Chinese new year lull in February and the lack of new launches in the first 2 months of the year. Only 209 units were launched in February while the number more than tripled to 682 in March. The number of units sold doubled from 303 in February to 843 in March. The 2 new launches in March were Cairnhill Nine and The Wisteria.

Although the government has announced that they will be unlikely to ease up on the property cooling measures anytime soon, some buyers who may have been waiting in the sidelines for better deals may be coming to realise that prices will not be falling drastically this year and may have finally made the purchase move last month.

Overall, market sentiment is picking up and buyers are picking off bargains and affordable units before the winds change. New mass market suburban properties are capturing eyeballs and wallets.

New private homes market dependent on stock

Last month’s new home sales was a little lacklustre. But that could simply be due to the fact that there were no major or new launches in January. Only 146 units from previously launched projects were released. And January is after all known to be a slow month for property sales.

The Wisteria CondoPhoto: The Wisteria condominium 

The GladesThe new property market looks all set to be bright and exciting after the lunar new year, with new projects such as The Wisteria, Sturdee Residences, Wandervale EC (executive condominium) and The Visionaire EC. Property analysts are expecting new private property sales volume to reach 7,000 this year. In 2015, 7440 new units were sold.

Of late, developers are more focused on selling existing stock, with some even offering up discounts and Chinese New Year promotions. At High Park Residences, some 20 units were offered up with $33,888 in discounts while at The Glades, some units were going at a $38,000 discount while most other units had $8,000 shaved off.  Executive condominiums however were the big sellers, with an average of 155 units sold monthly despite there not being any new EC launch in the last quarter.

Resale properties are giving new units a run for their money, with prices rising last month. There may be a fair fight for buyers in the private property market as buyers shop their options and wait out market volatility.