Property market showing signs of awakening

Sturdee-ResidenceAlthough property prices have been falling, the show of interest from the buying public has never really waned, instead they are now simply more aware of their options and have become more selective in their investments.

Signs that the market lull might be broken soon have come from the positive take-up of units in 2 recent launches at The Visionaire Executive Condominium (EC) and The Sturdee Residences. 158 units were sold the 632-unit The Visionaire EC at a median price of $811 psf while prices averaged at $1,550 psf at the 305-unit The Sturdee Residences. Buyers at the private residential project have gone mainly for the smaller one- and two-bedders though 3 of its 8 penthouses have already found new owners. Two of the 1,830 sq ft penthouse units were sold at $3.2 million each.

Gem REsidencesThe Parc Life EC and private residential project Gem Residences will launch this weekend. Private condominium Stars of Kovan is expected to launch next month. The latter is a mixed-use development consisting of 390 residential units, 5 strata terraces and 46 shops. Prices are expected to range between $1,550 to $1,600 psf. E-applications for Parc Life have already exceeded the 660 units available and there is hope that uptake will be on the uptick at both these projects.

Private home prices dip for 10 consecutive quarters

The delicate balance between population growth, economy growth and housing provision is not an easy one to strike. And Singapore as a young nation, will have to learn quickly as land is limited but the number of completed units to enter the market in the next couple of years is set to reach 23,000.

Cairnhill Nine CapitaLand

Photo credit: Cairnhill Nine by CapitaLand

Private property prices have been dipping for 10 consecutive quarters now, and the market will be under even greater pressure in the months ahead as supply continues to increase while demand remains stagnant. Rental prices are expected to fall even faster than sale prices and the global economic situation does not seem to be helping. Prices have fallen 9.1 per cent since Q3 of 2013 and non-landed suburban properties in the OCR (outside of central region) fell the hardest.

Part of the reason for the falling figures could be the cutback on land sales by the government and the consequent lack of new launches. Only 953 units were launched in Q1, but property players are expecting the momentum to pick up as the year moves on.

It the first quarter’s numbers were anything to go by, with sales rising 7.2 per cent to 2,847 units, volume may have increased across both the new and resale private home markets.

 

Rental market bodes well for HDB flats

The rental market has been on the downhill slip as a fresh crop of completed new private homes hits the market this year. Competition for an increasing limiting tenant pool will prove to be tough for private property landlords, but HDB flat rental prices are holding out well despite the softening rental market.

Paterson SuitesCore central region private apartments seem to be suffering the most with the global finance, oil and gas sectors in turmoil. Expatriates working here and their families have been moving out of the country, scaling the tenant pool for luxury and high-end prime properties down even further. For example, a 3-bedder in a 1,600 sq ft unit in Paterson Suites which would have tenanted at $7,000 in January is now offering $5,800 in rent.

Serangoon HDB flatPrivate property rental prices fell 1 per cent in March, while HDB flat rents fell just 0.1 per cent. Changes in immigration policies have reduced the foreign workforce in Singapore and those remaining may have to work around a smaller housing allowance, hence many private properties may be out of their rental budget. HDB flats are a fair and affordable option. For locals or HDB upgraders who have to rent a home while waiting for their new BTO flat or condominium to be built, private units often prove to be too expensive as well. Will the positive rental yields for the HDB flat market boost the sales figures for this sector?

 

 

Upper Thomson – Foodie and Nature Haven

Upper Thomson is quickly coming into its own as the next foodie, nature and lifestyle haunt, especially with its connectivity heightened by the upcoming Thomson-East Coast MRT line. This leafy North-east suburb will soon be just a short train trip away from the town centre, the CBD and even the other ends of the island.

183 LonghausThe number of new condominiums, hip food and beverage outlets and educational centres springing up in its midst has made Upper Thomson a much sought-after area for property investment. Condominiums which have been or are being built at the moment include Thomson Grand, Adana Thomson, Thomson Impressions, Thomson Three, The Panorama and most recently – 183 Longhaus.

The latter is developed by TEE Land and is essentially a mixed-use concept which will fit in superbly with the nearby landed homes and indie businesses. Despite being a low-rise 4-storey project, it will feature 10 commercial units and 40 apartment units including 14 penthouse units ranging from 88 to 110 sq m. The amenities such as banking facilities and the Thomson Community Club, and transport options such as bus stops and the circle and Thomson-East Coast line MRT stations nearby are big pluses; not to mention the MacRithchie and Lower and Upper Pierce reservoirs are just round the corner.

Adana CondoDespite the temporary inconvenience residents of Upper Thomson might have to endure as major road and tunnelling works are underway, the future for this suburban district looks bright.

How deep is the property market well?

Property prices in Singapore have been falling since 2014, 10 consecutive quarters to be exact. In the first quarter of this year, HDB flat prices have stabilised at 0.1 per cent while private property prices have dipped 0.7 per cent. In 2015, HDB flat and private property prices fell an average of 0.4 and 0.9 per cent respectively.

Kingsford WaterbayPhoto: Kingsford Waterbay condominium 

HDB flat prices have begun to stabilise of late, though some property analysts are still expecting a further drop in the second half of the year as 25,000 new BTO flats reach completion this year. A good 30 per cent of these new-flat buyers are upgraders and home owners, not investors, which means they will be looking to sell their existing HDB flat in order to finance their new flat. This will bring a new slew of units into the resale HDB flat market. Though the demand for resale flats has not waned much, the rise in supply may put the ball in the buyers’ court.

 Photo: Clementi Gateway BTO flats

Similarly in the private property and EC (executive condominium) market, buyers will need to time their upgrading manoeuvre in order to manage cash flow, thus some may be in a rush to let go of their existing unit which could put further pressure on the market which will be seeing 21,906 new private condominium and 4,561 EC units enter its midst this year. How will the property sector perform in this crucial second quarter of 2016?

High vacancy rate hits property rental market

The days of brisk rental demand for private apartments could be going as the high number of vacant private property units in the market reached a record 10-year high at the end of 2015. Rents have fallen 4.6 per cent last year and analysts are predicting a 6 per cent drop this year.

Cassia EdgePhoto: Cassia Edge condominium

With the sheer number of new condominiums and smaller units introduced into the market in the last five to ten years, the opportunities for investors with varying financial capabilities have expanded vastly. Many of them have purchased smaller suburban units for investment purposes but 2016 may not bode well for those looking for a quick turnaround in terms of resale or rental of these units. The number of new condominium units hitting the market this year will mean increased competition for a diminishing tenant pool which will squeeze rental prices downwards. Many landlords are already finding it difficult to find tenants with the same asking prices as before, and have found it necessary to lower prices by 10 to 20 per cent.

Districts 19 and 20, which includes Bishan, Ang Mo Kio, Hougang, Punggol and Sengkang, will have the highest number of new units in their midst this year – approximately 8,200. This is despite the fact that rental prices have not risen much in these districts over the past 3 years. Property experts are however positive about the huge redevelopment of the Seletar Aerospace park which may continue to provide the demand for rental units. In the eastern districts however, demand may be waning as expatriates working in the hard-hit financial and banking sectors could be leaving the country.

Foreign buyers favour luxury properties in Singapore

Private apartments up to the size of 506 sq ft, more popularly known as shoebox apartments, have been having a hard time finding new owners as prices of completed units fell 1.1 per cent. However, non-central region private apartment prices rose 0.3 per cent in February and central region units have fared surprisingly well.

St Regis ResidencesThe recent sale of a $15million St. Regis Residences penthouse may have given the owner in a $3.3 million profit margin and given last month’s figures a boost despite the low sales volume. Overall, private property prices rose 0.4 per cent last month, following a 0.2 per cent rise in January. The luxury property market has not been in the best of health last year, but things may be taking a turn for the better.

Though property analysts are conservative about their predictions of a market turnaround this year, it is nevertheless a glimmer of light. With rising home prices in London and Hong Kong, foreign buyers are taking a second look at properties here in Singapore for investment purposes. Approximately 92 per cent of the sales and subsales transactions registered in the core central region come from foreign buyers.

Sturdee-ResidenceProperty investors with less holding power may be pushed to sell their units, in particular the smaller ones as rental prospects have dimmed, as oil, gas and marine sectors wobble.

2016 Budget – Cooling measures to stay

In this year’s Budget, there was no mention from the authorities on the easing of property cooling curbs which property players have said are part of the reason behind diminishing growth in the sector.

Are buyers looking outside of Singapore for investment opportunities?

Are buyers looking outside of Singapore for investment opportunities?

The property cooling curbs have put the brakes on plans for many investors and even home buyers who now have their loan options rather severely restricted. The total debt servicing ratio (TDSR) framework limits the amount that can be loaned based on a percentage of the borrower’s monthly income.  Levy on the additional buyers’ stamp duty (ABSD) which increases the final buying price on a property, and many buyers and investors have shied away from putting their monies on local properties. They are instead looking outside of the country or into other kinds of investment opportunities.

The stock on unsold homes set to enter the market this year may depress prices even more but some analysts consider the government’s move to stand firm on their decision a wise one. As property prices are still high, and interest rates still considerably low, there is still space for them market to grow, albeit a little slower.

CIty GateThat will keep any possibility of a bubble at bay and though conservative, may be the best plan in the midst of a shaky global economic situation. Though private property prices have been falling, resale HDB flat prices have stayed stagnant for quite awhile now, which begs the question of who really benefits from these property cooling measures?