Overall price decline in Q1 but buying sentiment remains upbeat

Price-declines across the board for private residential, commercial and resale public housing sectors could mean the bottom of property cycle is close. For the 14th consecutive quarter now, private home prices have fallen, the longest period in the past 13 years.

That said, the general market sentiment has recently picked up as slight tweaks in the property cooling measures and a series of new and exciting property launches have gotten buyers’ blood flowing once more. Private home prices have fallen 0.4 per cent in Q1, slightly lesser than the 0.5 per cent in Q4 of last year.

Paya Lebar Quarter_Lendlease PLQPhoto credit: Lendlease 

Values of private residential properties have fallen 11.6 per cent since its peak in 2013, and this difference has probably revived purchasing interest as most buyers still see the potential of well-located properties in Singapore.

Total private home transactions hit 5,202 units in Q1, the highest in 15 quarters thus far. Property analysts are expecting the market to remain bullish and continue its growth barring any unexpected economic circumstances. City fringe properties are faring particularly, propped up by the strong demand for newly launched projects such as The Clement Canopy, Grandeur Park Residences, Park Place Residences and the Paya Lebar Quarter. Non-landed home prices have in fact risen 0.3 per cent in the city fringes and 0.1 per cent in the suburbs. Core central region property prices fell 0.4 per cent however.

ParkPlaceResidencesLanded home prices fell 1.8 per cent last quarter, likely due to the restrictions placed on these rarer commodities. Foreigners are not allowed to own landed properties. On the resale HDB flat front, prices fell 0.5 per cent, though the decline is expected to reverse itself soon, in response to the positive sentiments from the private property market.

Potential for new mixed-use development in Bidadari

Akin to Punggol’s development as a Eco-town, Bidadari, which is lauded as the next “Bishan”, could be shaping up to be a garden township especially as the first private home and retail site comes up for sale in the essentially HDB public housing township.

Bidadari HDB estatePhoto credit: HDB

A 2.54 hectare site next to Woodleigh MRT Station will potentially yield 825 homes and shops and is aimed to be the landmark of the new housing estate. Developers who successfully tender the bid for the land plot will be required to build not only the homes and retail spaces but also a community centre, neighbourhood police branch and carpark, much similar to the requirements of a commercial site listed the Government Land Sales (GLS) programme.

Paya Lebar Quarter_Lendlease PLQPhoto credit: Lendlease

Though the public and community-based requirements may cut into the developers’ margins, property analysts say that these could also be a value-add in terms of being a catchment area to for commercial tenancy and to goose productivity. The private real estate nature of the project is relatable to Lendlease’s Paya Lebar Quarter (PLQ), Central Boulevard‘s white site which was acquired by IOI properties for $2.57 million last year and older sites such as Raffles Hotel and the site which now holds Chijmes. The developer’s proposal will be reviewed by a panel chaired by the Housing Board (HDB). The tender closes on June 13 and industry players are expecting some bids as developmental sites are hard to come by in today’s market.

Stamp Duty changes bring cheer to real estate market

With the recent Sellers’ Stamp Duty (SSD) changes, the real estate market is beginning to feel more upbeat all around.

PLQThe most significant changes were the SSD rates and the fact that sellers who let go of their properties after 3 years will no longer have to pay the sellers’ stamp duty. The Total Debt Servicing Ratio (TDSR) threshold has also been relaxed for properties with  loan-to-value (LTV) limits of 50% and less. The latter move is aimed at helping retirees monetise their properties as many could be sitting on their assets while having trouble with cash-flow or liquidity. Some property owners may wish to cash out on their properties in order to start businesses or send their children for overseas education but find themselves unable to loan enough as the TDSR framework limits the borrower only to amounts totalling up to 60 per cent of their gross income.

All these changes will give buyers a higher sense of security, knowing that they will have more flexibility in managing their finances without having to hold on to their properties should they urgently require liquidity. The crowds at the Paya Lebar Quarter’s (PLQ) residential project – Park Place Residences a couple of weekends ago were a positive affirmation of the improving sentiments in the property market. Property agents reckon that the SSD changes will motivate more people to buy as they now have less restrictions to take into consideration.