2 months of declining new private home sales nothing to fret about

The roller coaster ride of the real estate market has hit a gentle slope with regards to the new private home sector as sales volume fell for the 2nd month in a row since April, mainly due to the lack of new launches in recent months.

MartinModernWith 1, 024 homes sold directly by developers in May, the number of new private homes sold registered a 34 per cent drop from the 1,558 units sold in April. This follows a 12.5 per cent fall from March. The year-on-year figure also showed fewer homes were sold last month than in May 2016. To be fair, only 339 new units were launched in May compared, about 5 times less than the 1,616 units launched in April and no new executive condominium (EC) units were launched last month.

The 2 months of declining sales are nothing to fret too much about as the number of new private homes sold in the first 5 months of the year has surpassed that in the same period last year. 5,723 units were sold from January to May this year. Property analysts expect the buying momentum which began in the earlier part of the year to carry on through the rest of H2 as buyers are beginning to realise that the market has probably reached or is nearing the bottom after 3 years of declining prices.

HundredPalmsPhoto credit: hundredpalmsresidences.com

June however could be a challenging month for the market since it is the school holidays. But H2 looks to be promising with the expected launch of a number of new projects including the executive condominium development Hundred Palms Residences, Martin Modern and Le Quest.

Market recovery uncertain despite rise in resale condo prices

May was a rather good month for the resale private condominium market as prices rose 0.4% and sales volume increased by 17.4%. In comparison with the same month last year, prices have risen 1.5%.

CreekBukitTimahAll signs seem to be pointing to a market recovery after 3 years of lacklustre performances. However, some property analysts are taking a more conservative stance with regards to the recent price adjustments. The leasing market remains weak and rental prices have fallen, putting additional pressure on an already-weak market hence the market is still a ways from bottoming out. Private property values have fallen 11.6 per cent since the peak in Q3 of 2013.

skyline-residencesPrices of resale properties in the core central and city-fringe regions have shown improvements with a 1.1 per cent rise from April. In the suburbs, prices fell slightly by 0.4 per cent. A moderate look at the current situation would more likely than not mean a gradual rise in prices over the course of a year rather than a quick and immediate recovery. A recent hash of high land bids and the gradually diminishing stock of unsold private homes do however seem to be beacons of light, however dim, pointing towards the promise of a market stabilisation at the least. Positive sentiments and sales at new project launches and continued low interest rates may add icing to the cake if developers can have it and eat it too.

 

New residential property in Melbourne’s South Yarra

With an estimated 38,000 new homes needed per year Melbourne as the city’s size and population grow (targeted to reach 2.4 million by 2030), being one of the first to jump into the depend of the pool might give you an upper hand when demand overshadows supply.

YarraOne1

While the city centre properties in Melbourne might already cost you considerably more than it would have less than a decade ago, options of suburban properties near regional hubs or in smaller townships may cost less but still have the potential for long-term growth. And now property agencies are keen to help buyers save on property purchases as stamp concessions for off-the-plan property purchases in the state of Victoria will be removed from July 1.

Launching this weekend is the Yarra One, located near the Royal Botanic Gardens in South Yarra. Located conveniently near dining, shopping and entertainment options, with supermarkets such as Woolsworth and Coles nearby, the 26-storey Yarra One consists of 268 luxury freehold apartments. The project is heralded by Eco WorldSalcon Ya1 Pty ltd and will be designed by renowned architectural firm, Fender Katsalids Architects. This is essentially a mixed-use development as the ground floor will host a myraid of cafes, restaurants, retail and lifestyle entities. Available for sale will be 2-, 3-room units and also penthouses. The new project will also have facilities such as a rooftop garden, spa, gym, library and wine bar.

New suburban homes continue to lead sector sales

New non-landed homes are still hot on the list of home seekers and property investors, local and international, as April’s figures have shown. Sales have remained above the 1,000-unit mark for the second consecutive month and the 1,500 units sold in April alone was double that of the same period last year.

ArtraRedhillOne of the factors contributing to the continuing demand could be the changes in property cooling measures which took place in March this year. Consumer’s confidence have risen considerably thus leading to higher home sales including a larger appetite for units even in older launches. The number of units sold in previously-launched developments remained fairly steady across March and April, with 1,079 and 1,001 sold in the 2 months respectively. Some of the more popular projects included Parc Riviera and Commonwealth Towers.

Suburban properties fared particularly well, with 966 transactions closed in April. 558 units were sold in the city fringes and 30 in the core central region. New launches which were well-received included Seaside Residences in Siglap and Artra in Redhill. The former sold 419 units at an average price of $1,736 psf and the latter, 126 units at a median of $1,646 psf.

SeasideResidencesThere had been previous concerns about the large volume of unsold inventory  and with more new units entering, a supply glut might disturb the market slightly. As the supply and rate of new homes diminishes however, there might be a possibility for new homes to be priced higher in the near future. How will this market sector fare as we move on into the mid-year? Will the positive sentiments continue well into the second half of the year?

Resale non-landed residential property prices hold steady in April

After 5 consecutive months of climbing figures, resale condominium prices have steadied themselves in April. Resale transactions fell by 21 per cent as a number of new launches drew the attention of buyers and investors in the past couple of months.

Thomson Impressions2Though the numbers are still shy of that during the peak of 2010 and 2013, things have been looking up for the private property market this year. Year on year, private resale prices and transaction volume were 1.8 and 48 per cent higher than in April last year. In comparison with March 2017, April’s resale private property market numbers dipped slightly. Prime district property prices fell 1.2 per cent last month while prices of units in the city fringes and suburbs rose 1.2 per cent.

In the 5 months prior, private resale prices have risen 0.6, 0.3, 0.9, 1 and 0.8 per cent from last November to March this year. The improving market sentiments seem to be reflected in the overall above-market-values which rose to $5,000 from $0 in just a month. Districts which posted the highest median above-market-values at $37,000, and had more than 10 resale transactions, were District 16 and 21. Despite higher resale activity in the city fringes, District 11 which consists of Newton and Novena, posted the highest negative median above-market-value of -$40,000.

the-crestThe year is almost at its mid-point and the latest new launches have boosted numbers in the new private home sales market, but how will the resale private property sector fare in H2?

$653 million asking price makes Eunosville largest collective sale

Should the asking price of between $643 to $653 million for the HUDC estate of Eunosville truly go through, it would be the largest collective sale of late as it surpasses the $638 million paid for Shunfuville last year and the expected $450.8 million asking price for Rio Casa in Hougang which went on sale last month.

EunosvilleAnd it would mean each unit owner at the Sims Avenue estate would receive $780 to $790 psf or $1.9 to $2 million approximately. The estate has already reached the 80 per cent requirement for consent and the sheer size of the estate would be a dream for the winning developer. The 376, 713 sq ft site currently holds 225 maisonettes in 10 blocks and upon redevelopment, could yield 1,035 units of approximately 90 sq m each.

With 70 years left on its lease, $181 million on top of the bid will be required for intensification and a new 99-year lease. The site is just 100 metres away from the Eunos MRT station and strong showings at recent property launches show that buyers are still keen on new launches at good locations. Recent sales at Grandeur Park were a good example. All 420 of the units available at the launch were sold with the first weekend at the average price of $1,350 psf.

GrandeurParkResidencesThough bidding will be prudent as developers are keenly aware of the completion and sales deadlines imposed by the qualifying certificate and additional buyer’s stamp duty, some may be willing to put more into sites with long-term potential as land banks have been running low for the past year or so.

Minimum purchase price for Malaysian properties may increase

Foreign ownership of properties in Malaysia have been out of the news for awhile. And as popularity of homes in Iskandar Malaysia has risen, especially amongst Singaporean investors, the Malaysia government may be considering raising the entry price bar for foreigners, in turn making it easier for Malaysians to own property.

KL Kepong PropertyAs the ringgit continues to weaken, the Malaysian government may increase the minimum purchase price for foreign buyers of Malaysia properties. The move may not affect foreign buyers as much since the currency exchange rates still favour them for now. The Housing Minister Noh Omar says the motivation behind the possible policy change is to give Malaysias more options and availability when it comes to property ownership.

The minimum purchase price for foreign property buyers has been raised twice in the last 20 years and currently stands at RM1 million (S$318,000). State governments are however allowed to set their own limits. The Penang state government has for example set their minimum purchase price at RM800,000. The government is in discussion on the 2 options in which the policies can be adjusted – 1) to raise the floor price of RM1 million per property or 2) to set the minimum purchase price in US dollars for all foreign buyers.

But before the new policies are implemented, will there be increased fervency for Malaysian properties, especially in states popular with foreign buyers such as Penang, Malacca, Kuala lumpur and the Iskandar Malaysia region?

Winds of change in local property market

A decade or so ago, owning a second or third property might be the fastest way to secure your retirement funds or to even accumulate a tidy little kitty. Investment properties were considered a surefire way of earning additional income, but in the climate of today, property owners and investors have much more factors to consider and competition to battle against.

SunshinePlazaResidencesWith the rental market weakening, property agents are finding that it takes twice as long and also many more viewings before a property is successfully tenanted. And even then, for much less than before. Some property owners have had to reduce rents by almost half. Leaving the units empty are simply not an option for some investors as the rents go towards the mortgage or mortgages of their properties. It is after all better to have less help than none at all.

SerangoonHDBflatFor new investors looking to enter the market, the environment is a lot tougher than before. Considerations such as whether there is a large pool of HDB flats available for rental nearby, the long-term potential of the property, competition from other new launches or even within the same property, whether the local and global economy will affect businesses and commercial hubs nearby thus reducing the pool of foreign tenants, and so forth.

Before the market makes a complete recovery, a possibly lengthy period of stabilisation will ensue, despite the governments having made some allowances in the are of the property cooling curbs.