Offers galore in blossoming EC market

Executive condominium launches in the recent months haev proved attractive to the buying crowd, especially after years of quiet on the ground.

But with 7 more launches planned for the later part of the year, will the market be poised for a saturation point? Or will buyers welcome the competition and options? Most of the new launches will be near existing EC sites in the North and North-east regions, which could mean stiffer competition for the developers.

Westwood ResidencesOne project which may however prove promising is the Westwood Residences in Boon Lay. Together with Lake Life EC, they could the only 2 executive condominiums in Jurong since 2010. The rarity, coupled with the pent-up demand could means buyers may be willing to pay slightly higher than average prices for units here as compared to ECs elsewhere. Property experts are expecting the median prices for ECs launched later this year to hover between $750 to $770 psf.

Currently, the average selling prices for ECs are at around $800 psf. But buyers have not been particularly responsive to this pricing level and with the introduction of thousands of new units over this and next year could bring the competition higher and prices lower. The dip in resale HDB and private condominium prices since the high in 2013, would also mean that ECs have to priced realistically in order to entice HDB upgraders and buyers.

As the market segments react to one another, the EC being hybrid between private and public properties, may also find themselves having to price themselves appropriately between these two market segments.

 

New properties on a fresh new ride

And hopefully it will be an upwards ride.

May 2014 was a good month for the new private home market. Mostly due to the large number of properties launched, 1,487 units were sold. But after that huge spike, sales have held steady at around 300 to 400 units sold per month, with December’s showing a little lower due to the festive season.

KingsfordWaterbayThe numbers have however increased significantly in March this year, from 390 units sold in February to 613 last month. The results are promising, but there has been a few recent launches of new units at previously launched developments and also a release of pent-up demand after the Chinese New Year festivities, which could account for some of the positive vibes.  Most of the sales came from Kingsford Waterbay with 155 units sold and Sims Urban Oasis with 107 units sold. New launches are pulling out all the stops to get buyers’ attention. Competition will be high as more launches are planned for the year, thus getting first dibs with the buyers’ pool is crucial for developers.

Suburban properties are often priced below city fringe and central district properties; at 22 per cent lower than city fringe and 43 per cent lower than central region homes. Lower quantum prices seems to be the factor helping to close deals, as the property cooling measures do not work in favour of most middle-income buyers. The Skywoods and Symphony Suites projects seemed to stacked up better, but sales at Northpark Residences and Botanique @ Bartley may very well give them a run for their money soon, looking at the response from the public.

The outlook for the market this year seems spotted, with possible glimmers of hope but also tough restrictions which may put a damper on sales volume and prices.

 

The private home gentle wave

It’s an up and down ride for the private non-landed property market for more than a year now. Across the board, non-landed resale home prices dropped 6.2 per cent last year. Prices of homes in the central districts dipped an average of 7 per cent last year, though there were good months when some segments managed to bounce back slightly before falling again. That could mean that things were mainly level though there are outliers.

Duchess ResidencesResale private apartment prices fell 0.2 per cent last month, with a 3.9 per cent fall compared to the same month last year. But some city fringe properties bounced back with an average price rise of 0.4 per cent. Part of the yoyo-ing in prices could be due to the Chinese New Year period in February and buyers were just coming back into the fray in March.

The second quarter of this year would be a crucial point in almost determining how the rest of the year will flow, at least up to just before the Hungry Ghost month. Though the ride has been more a gentle wave of price fluctuations rather than a roller coaster ride, property experts are however not expecting a drastic change in prices unless there are major policy changes or a major interest rates hike.

The year could be a relatively quiet one with bright sparks and dull moments along the way, but the basics of good location and lowered total quantum prices will still move units.

Encouraging response from recent property launches

Over the weekend, show flats at two new condominium launches were packed to the rafters with eager buyers and those shopping for a good deal. Affordability and proximity to transport seemed to be the biggest crowd pleasers at these two developments.

Northpark Residences saw more than 70% of their 430 units sold with most of their buyers being Singapore citizens. Prices averaged at $1,300 psf. A 431 sq ft studio apartment for example, went for $612,000 while five-bedders with an average floor area of 1,432 sq ft sold at approximately $1.89 million.

Botanique @ Bartley2At the Botanique at Bartley, most of their units, about 70%, were all priced below $1 million. Definitely wallet-friendly for the middle-upper class household in Singapore and also more plausible for those who need a home loan. And they boasted the options of turning two- and three-bedders into dual-key apartments. Situated in the midst of quite a few schools such as the Paya Lebar Methodist Girls’ School (PLMGS), Maris Stella High School and the Australian International School, the property was quite the hot target for local and foreign buyers alike. Although only 300 units were put up for sale over the weekend, almost half have been sold. The most popular units were the one- and two-bedroom apartments starting at $598,000 for one-bedders and $798,000 for two-bedders.

If the weekend response and sales were anything to go by, the next few months may not be such dull ones. Is it time the property market picked itself off the floor, dust off and hit the road running? Will the positive effect rub off on older properties in close proximity to these new launches?

 

Higher success rates with HDB priority schemes

More BTO (build-to-order) HDB flat applicants have been successful in securing their units of choice at recent HDB sales launches. Under the Parenthood priority scheme, the number of married parents applying for a unit have dropped from 10,000 to 8,000 last year.

BuangkokParkVista_HDBWhat could this mean for the resale HDB flat market? As property prices drop, more HDB flat buyers may widen their options here, instead of heading straight for the new HDB flats. Some may have location considerations, especially if they have elderly parents or young children preparing to enter specific primary or secondary schools.

In 2013, 26, 494 new HDB flats were released.  But as the supply of BTO flats decrease, dropping to 16, 900 this year, and as most first-time HDB flat applicants successfully receive their flats in time for family-planning; the number of applications under these priority schemes look set to fall as well. Many of these new flats could be in non-mature estates. But as mature estates reach a saturation and before these non-mature estates reach maturation, will resale HDB flats  and private properties be the way to fill in the gaps for buyers looking to live nearer their workplaces, elderly parents or children’s schools? Will temporary rental of condominium apartments or even HDB flats be a stop-gap for this group of home seekers; and will that be an opportunity for investors and landlords of properties near schools and MRT stations?

Private suburban properties faring better

 

For the resale private property market, condominiums in the suburbs seem to be faring better than those in the city fringe and city centre. While prices of city fringe and city centre apartments fell 1.2 and 1.1 per cent respectively last month, suburban resale properties rose 0.5 per cent. The sales volume also remained the same as November despite the expected lull due to the festive season.
Tre ResidencesBuyers are sharpening their skills at spotting good deals, and are going for units which will benefit them the most in terms of location and future value appreciation. Some buyers have even managed to secure purchases at $10,000 less than the market value of earlier transactions in the same development.

What are buyers looking for now? With the property cooling measures in place, the final selling price tag, including taxes and duties, makes or breaks the deal. Buyers are looking for lower price quantums, good locations and potential for future development in the district. Most HDB upgraders are also most likely to search for these suburban homes to stay close to their previous homes.

As 2015 moves along, and more homes become ready for occupation, will the interest for resale properties in the suburbs continue to burn brightly? Or will the spark wane and the market focus shift to other sectors?

City fringe homes find their footing

Filling in the gap between luxury and mass-market homes are the city fringe properties. But sitting in this position means being more exposed to market forces such as a lull in the luxury property market, which may be a good thing as buyers may be looking at cheaper options. But a wider and possibly cheaper pool of options pop up in the suburbs in the form of mass-market suburban homes, this might be the first sector to suffer a backlash.

Sky Habitat condominium in Bishan.

Sky Habitat condominium in Bishan.

There has been a recent drop in city fringe home prices as developers are offering discounts to help boost sales. As the supply of these home increase, about 2,411 new units were launched in 2014, so will the urgency to move units. City fringe homes registered a 5.3 per cent price drop, as compared to 4.3 per cent in the luxury homes market and 2.2 per cent in suburban private homes.

Projects where prices were lowered include The Panorama in Ang Mo Kio, Sky Habitat in Bishan and D’Leedon on Farrer road. Though luxury homes hogged the headlines last year with their decline in sales volume, property analysts are confident that the price decline will be minimal as most owners of city-centre homes will have the holding power to hang on to their properties.

Some luxury homes still making tidy profit

A few months back, luxury, high-end properties were finding it hard to lock down an audience. But apparently even though the number of takers were low, those who did shake on a deal were making a tidy sum.

Ardmore ParkLuxury homes in the Orchard area have been changing hands at high prices. This is particularly evident in the Ardmore Park apartments which brought a profit of $2 million each for the owners of 2 units in this high-end residential development by Wheelock Properties.

Property analysts however, are considering the spike to largely be condominium-specific as homes in the Nassim area did not seem to fare as well. Besides location, the unit-sizes are also indicative of the possible investor profile. Most of the homes at Ardmore Park were similar in size, each measuring approximately 2, 885 sq ft, which meant that buyers of these properties are more likely to me wealthier, with deeper pockets and different investment agendas. A1,335 sq ft unit in Tanglin Park condominium in Ridley park, though considerably smaller in size,  sold for a tidy $1.07 million profit as well.

Grange ResidencesDespite being in the same vicinity, a couple of Grange Residences and Nassim Park Residences units sold at a loss. It could be anyone’s game at the moment, but it seems buyers are becoming highly specific about the development they hope to buy into and competition between projects in the same district could be facing even fiercer competition for the same wallets come 2015.