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.

 

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.

Grand opening launch for Grandeur Park Residences

The latest property development in Tanah Merah has sold more than half of its units over a weekend. Grandeur Park Residences reported strong sales with at least 58 per cent of its 720 units sold during its launch.

GrandeurParkResidencesSmaller apartments seem to be popular once again as the project sold most of the 96 one-bedroom units made available during the launch. Selling prices averaged $1,350 psf. The location, in close proximity to the Tanah Merah MRT station, could be one of the main factors pushing buyers to seriously consider the long-term and rental potential of the property. The condominium project which is also close to the Changi Business Park also has two- to five-bedders with prices starting from $550,000 for a one-bedder and $700,000 for a two-bedroom unit. Though the rental market is weak at the moment, buyers are counting on the property market rebounding by the time the project is ready for occupancy.

GrandeurPark2
Following the first private condominium launch this year of The Clement Canopy, response at the Grandeur Park Residences launch may be an expression of pent-up demand which could release keen albeit selective buyers back into the fold. However, the eagerness to snap up smaller units mean a lower overall quantum which may keep market figures low or at best level.

January’s private home sales plateau

After a slight rise of 0.1 per cent in December, January’s completed private home prices remained flat. There were some rise and fall in the different districts but overall, non-landed residential property prices evened out on a plateau.

CreekBukitTimahThat may not necessary be a negative as signs of stabilisation are generally expected of the year. Property analysts say that some of the zero per cent month-on-month change could also be due to the availability of smaller units with a higher psf pricing schedule. Besides shoebox apartments, studios and one-bedders, family-size units in new developments are also now smaller in size than before.

Small apartments aside, prices of completed condominium units in the central region did rise 0.7 per cent after a 0.3 per cent dip in December. In the non-central regions however, prices went the other direction with a 0.6 fall following a 0.5 per cent increase the month before.

26NewtonThe private real estate market could however be looking at more resale properties entering the pen soon as most buyers who have purchased investment properties in 2013 will have completed their 4-year holding period this year. This means they are no longer tied down by the cooling measure which requires them to pay a seller’s stamp duty should they sell their property within 4 years following the purchase. Whether the sector is ready for this influx of properties while pulling themselves sluggishly out of the lull remains to be seen.

New property launches in Clementi and Choa Chu Kang drew crowds

When a new condominium becomes available in a mature estate, it usually excites the crowd. Especially if the estate has not had a new launch for sometime.

iNzExecCOndoPhoto credit: www.inzresidence-ec.sg

Demand for new private residential units have been on the rise since late last year and pent-up demand following the year-end festive season plus the affordability of units at The Clement Canopy in Clementi have brought in the crowds at its launch last weekend.

195 units from the 505-unit The Clement Canopy has already sold on its first weekend of the launch – that is almost 80 per cent of the 250 units released. This new development leans heavily on 2-bedroom units with almost 40 per cent of the apartments sized between 635 to 732 sq ft and priced between $850,000 to $1.2million.

ClementiCanopyPhoto credit: http://clementcanopy.info

The growing interest in the property could be precisely because of the reasonable quantum prices. The project’s green features and location also adds to the potential resale value of the units as some buyers who have been waiting for drastic changes in the property market make the decision to strike when the iron is hot. The discounts of $6,000 to $12,000 afforded buyers over the weekend may also have sweetened deals of course.

Elsewhere, the iNz executive condominium (EC) was also launched to welcoming response. Developed by Qingjian Realty and situated in Choa Chu Kang, it is the first EC to be launched this year. E-applications for the project will end on March 5.

 

Resale condominium market in gradual recovery

Could a slice of sunshine be sliding its way back into the local private property market? Resale condominium prices have risen 1.1% in January and it’s a bigger increase than the 0.5% in the last 2 months of 2016.

RivervaleCrestAnd as expected, non-landed private residential properties located in prime districts lead the way, with a 1.9% month-on-month increase. Central region properties also gained 1.5% in terms of prices while that of suburban properties rose by 0.4%. In a year-on-year comparison, resale prices were 0.3% higher than in the same period of 2016.

In some districts, resale properties exchanged hands at lower-than-market value, though the price difference at minus $4,000 is lesser that the $5,000 in December. District 23 posted more than 10 resale transactions in January alone and selling prices went as high as $2,000 above market value.

GrandeurParkResidencesThough the year is still young, it could be a budding sign of the things to come for the rest of the year. Property analysts are not expecting sharp rebounds anytime soon, though the stabilisation of prices and an increase in sales volume would already be sufficient to signify market recovery, albeit a gradual one. What could also be seen from the market data was that sellers were beginning to moderate their asking prices, possibly with pressure coming in from new property launches and completed new units entering the weak rental market.

 

Winning $292 million West Coast Vale land sales bid

Properties in West Coast have been garnering tons of interest lately. One of the latest offerings in the area is the Parc Riviera condominium, and nearby the Clement Canopy also recently launched last weekend.

parcriviera3Thus a winning bid of $292 million for a 99-year leasehold site in West Coast Vale probably did not come as a surprise. The bid was won by China Construction Development, with 8 other bidders vying for the same site. Second in line was MCC Land (Singapore) with a bid of $289.9 million. The affordable quantum was likely what drew the bidders as the plot was one of the last to be offered up for tender last year under the Government Land Sales Programme. The site was launched on December 7.

Considering the final bidding price of $592 psf is 7.4 per cent higher than the $551 psf paid for the neighbouring Parc Riviera project, the developers must be optimistic about the prospects of the property market. Parc Riviera is closer to the Ayer Rajah Expressway though the proximity of the Jurong Lake District and malls such as Jem will help in marketing the property to potential buyers.

parcriviera2Developers have been seen to be more aggressively bidding for land plots in recent tenders as most are hoping to replenish their land banks and preparing for better times ahead as the property market is seen to be bottoming out.

Demand for well-located properties remain high

Properties near MRT stations often bring in the buying crowds. And there will be 2 such properties to look forward to in the first half of 2017.

GrandeurParkResidencesThe first is the 720-unit Grandeur Park Residences which is expected to launch in March, near the Tanah Merah MRT station. It’s proximity to transport, the inclusion of a childcare centre and 2 shop units is expected to add value to project. 1- to 5-bedroom units here will range between 420 sq ft and 1,450 sq ft in size. And if prices at the neighbouring The Glades are anything to go by, the units at Grandeur Park Residences may be priced between $1,300 to $1,400 psft.

Situated near East Coast Park and the upcoming Siglap MRT station, is the 843-unit Seascape Residences. With sea views and as one of the first private condominium projects to come up in the area in the last decade and a half, this new project along the coastline may make quite the splash on its launch. Prices are expected to hover between $1,550 to $1,650 psf.

SeasideResidencesDespite a weak economy and the property cooling measures, demand for new homes remain resilient and while buyers may be more selective with their purchases, properties which are well-located and offer competitive pricing will still sell. Interest rates remain a uncertain factor impacting market sentiments however, as sudden spikes may affect demand.

Launches of new projects can often boost sales of new homes across the board and this first quarter could very well already set the tone for the rest of the year.