Commonwealth – Properties not so common

Considered on the city fringe, just a little way off Alexandra which is an area popular with expatriates, Commonwealth may see renewed buyers’ interest as new private condominiums enter the mix.

The latest launch is Commonwealth Towers on Commonwealth Avenue. It will be officially launched on May 1 and is expected to be priced at $1, 600 to $1, 800 psf, it is relatively more expensive than similar properties in its vicinity, such as Queens condominium, Alexis, The Metropolitan, Ascentia Sky and The Anchorage private apartments. These are older residential developments and units are available on the resale market. Rental demand has been strong, though property experts are expecting competition to heat up once the newer condominiums are up and running.

The AnchorageAccording to URA figures, rental prices at the Queens averages at $4.32 psf per month. Sale prices were at $1, 350 psf. The Alexis commanded even higher prices at $6.65 psf and units sold at an average of $1, 939 psf, possibly because at 2 years old,  it is much newer than the Queens which was completed in 2002. Also, a third of the 293-unit The Alexis are shoebox apartments and are easier to rent out.

Alexis @ Alexandra CondoHowever the tightening foreign workforce rulings and immigration regulations may prove challenging for landlords looking to rent out their property especially with the rise in new units in the Redhill and Tiong Bahru area. Competition will always be present, but good location, providing attractive rental conditions and ultimately good timing may beat all that.

68% drop in private home sales

In comparison to 2013′s Q1 home sales figures, the chasm is deep. And so are moods in the real estate market.

Private home sales have been on the decline for some time now. And recent figures are not exactly uplifting. Buyer sentiments are pessimistic, as the loan curbs implemented last year takes its toll on buyers and sellers alike.

Hillford Retirement Home
It has become much harder for buyers to secure loans, with the Money Authority of Singapore’s Total Debt Servicing Ratio framework in place. Buyers can no longer loan as much as they would like, which may place them just out of reach of their target property. The lack of new property launches this quarter has also dampened the mood somewhat. And property developers have been slow in introducing new units into the market as they are now accutely aware of a softer market.

Some properties nevertheless have beat the odds and continued to enjoy brisk sales. Topping the list is the 281-unit The Hillford in Jalan Jurong Kechil. Since its launch in January, units have been completely sold. Next up are a couple of neighbouring properties in Sengkang – Rivertrees Residences and Riverbank @ Fernvale. Most of the units went for an average of $1,000 to $1, 100 psf. Industry analysts are wondering if this could signify that buying power for suburban private properties will now hover around this ceiling.

Rivertrees condoThe rest of the year may see a tussle of prices between new and resale properties. As developers cut prices to make sales, resale home sellers may be forced to face the competition head on.

Luxury condominiums going at lower prices

$2,200 psf to $1, 800 psf.
$3.7 million to $3.4 million.

That’s how far lower the prices for high-end luxury apartment units are going for.

Perhaps it’s a case of when the going gets tough, the tough gets going, at lower prices. It’s no secret that while luxury properties are the creme de la creme for property agents and developers, when investment money is slow in coming, these are one of the hardest to sell.

Hallmark residencesAnd the going looks like it is going to be tough for quite some time more. Property developers are struggling to move unsold stock, and depending on whether their holding power is strong enough, they may be forced to make other moves sooner. There were news earlier on this month that developers are looking to convert condominiums into serviced apartments as the pressure of the deadline to sell looms closer.

At MCL Land’s Hallmark Residences in Bukit Timah, the uncompleted condominium development is already advertising sales of units at discounts of up to $300,000. A 969 to 990 sq ft 2-bedroom unit was originally priced at $2 million but is now at a lower $1.8 million. Since its release of the first 20 units in January, 5 have been sold. They are however planning for a proper launch sometime in the first half of 2014. At the 999-year leasehold St Regis Residences on Tanglin Road, prices have dropped from $4,653 to $2, 349 psf. Of the over 10,000 private homes still under construction in the prime districts 9, 10 and 11, nearly half remain unsold.

Once again the story of low demand versus high supply dogs the real estate industry. With the government’s many cooling measures, a bubble is unlikely to happen especially since loans are harder to get. It will be interesting to see how the property market plans for a rebound.

Shadows cast on property market

New properties are revving up their engines once more. As the market prepares themselves for these launches, what could the consumer expect?

Resale private properties situated near the sites of new properties to be launched this year may be slightly affected by the prices set by these new kids on the block. And as resale HDB flat prices dip, HDB upgraders may also not have as much as before to spend.   As developers find it harder to attract buyers since some have since redrawn from the investment pool as their finances are restricted by loan limits and mortgage curbs, prices of these new properties may be lower than expected. Properties nearby may then be forced to do the same with their resale units.

Tanglin ViewIn areas with potential for redevelopment and growth, such as Alexandra and Tanglin, competition may be fiercer. For example at Tanglin View condominium, the going rate used to be $1,600 psf a year ago, but now the average selling price stands at $1,400 psf. Similarly for Ascentia Sky apartments, prices have dropped from $1,900 psf to the current $1,500 psf.

But there are still profits to be made for private property sellers. Even though prices may not be as high as a couple of years ago, properties which were purchased 10 to 20 years ago may still find suitable buyers. Property prices today are definitely still much higher than a decade ago. Those who were hoping to rake in a quick profit with properties bought less than five years ago may find themselves having to hold on to their properties for slightly longer to wait out this year’s lull.

For the serious home buyer, it could be the prime time to buy.

Panorama : The view up there

Up north in district 20. Up there in the price range too. That’s where units at the newest kid on the block, The Panorama condominium in Ang Mo Kio stood.

As a mature estate, Ang Mo Kio has not had a private property launch for sometime now. The last was Centro Residences, situated just next to Ang Mo Kio hub and bus interchange, and opposite the Ang Mo Kio MRT station. For all its proximity to transport and amenities, the $1, 902 psf price tag is well-deserved. But that was at its peak. In the last quarter of 2013, sales hovered around $1,550 psf. When it was first launched in 2009, prices were much lower at $1, 174 psf.

The PanoramaBut the 698-unit The Panorama is launching at $1, 400 to $1, 600 psf. Those are the launch prices. Does it have legs to take it further up the sales scale, especially with the upcoming Mayflower station on the Thomson MRT Line and North-South Expressway just a stone’s throw away? The number of schools nearby such as St. Nicholas Girls’ School, Anderson Junior College, Nanyang Polytechnic, James Cook University and Australian International School may provide sufficient demand for units either for sale or eventually for rent. The condominium is developed by Wheelock Properties and is targeted for occupation in 2019.

The prices of resale HDB flats in Ang Mo Kio may be more stable compared to those in other HDB estates, which would also translate to a larger pool of ready private property buyers. But that could also mean developers may be less likely to temper the prices of new launches here as demand may be well-matched or even supersede demand. All that remains is to await the actual numbers after its launch.

Home prices down all around

Landed. Non-landed. Private. Public. Across the board, prices of all residential properties seem to have taken a hit in the last quarter.

Prices have dipped, some sectors more than the others, but signs are pointing to a possible slowdown in the market due to governmental curbs and the increased number of new property launches over the last 2 years. With the last price decline registered in 2005, resale HDB flat prices have been on the downhill slope for 2 quarters now. Private property prices have also suffered albeit to a lesser degree, with the lowest prices since 2009.

Mon JervoisMight it truly be the buyers’ market this year? Will this prompt more buyers to jump on the opportunity or are there other factors which might keep them away from the cash register? The tighter loan restrictions such as shorter loan periods, lower debt-to-income limits, and higher stamp duties may still be an obstacle to some buyers, thus sellers eager to cash in on their properties may find themselves having to wait a little longer for a good deal to come by.

Location usually still trumps all, though considerations such as space, amenities and living environment all have a part to play in the final selling price. With more new private condominium launches and new HDB flats pushing their way into the market this year, competition on the rental front is proving tough as well. Buyers now have more options for comparison and may be tempted to wait for prices to drop even further or wait it out for the best deal.

Even prices of suburban private homes, which have been the main stalwart of the property market last half of the year, have slipped 0.6 per cent. And as resale HDB flat prices drop, so have the number of HDB upgraders who may require the cash from the sale of their flats to purchase private homes. In turn, demand for mass-market suburban homes may fall.

Will it be a sombre year for Singapore’s residential property market?

Drop in government land supply

And this will happen come 2014. As numbers in both public and private property markets signal a soon-to-be oversupply, developers are cutting back on the number of land plots they bid for, and the authorities are getting the hint and hence cutting back on the supply of land.

A wise move perhaps to prevent a property bubble, though the first major move could be the tightening of loan limits implemented middle of the year. Only enough land for 11,600 new homes will be released in Q2 of 2014. That is 17.3 per cent lower than Q2 of 2013. The warning signal came in November from the Real Estate Developers’ Association (Redas) and it seems the Ministry of National Development (MND) has kept their ears open and made an announcement on Wednesday regarding the reduction.

THe CrestEven so, the market can expect 65,000 new residential properties to enter the market within the next 3 years. And this is expected to fulfill the housing demands of the population without sacrificing sales figures. 8 plots of land will be put up for sale in the first half of next year, and most of them will be in suburban areas such as Yishin, Sembawang, Sengkang and one at Prince Charles Crescent in Redhill next to The Crest. These plots will also yield some 2, 2000 executive condominiums (ECs).

The market will see the building of more executive condominiums, which may slow the private property market down a little, but still keep the number of new homes in the black. However, these hybrid homes will become available in the open market in 5 years’ time and this slowing down of supply in this sector may be a well-timed move.

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.