Waterfront Living moving inland

Moving away from the coastlines, waterfront living has become more available inland. Aligned with the Urban Redevelopment Authority’s (URA) Masterplan, Singapore’s landscape will evolve to include many man-sculptured green areas and waterways, with enhanced island-wide connectivity and a movement of population and property towards less mature districts and estates.

And it is only logical that building and property-development in these areas have ramped up in recent years. Besides government-built HDB flats, private condominiums have also been mushrooming in these developing districts.

Near Sungei Serangoon, just beside the Serangoon Park Connector, is the 1,165-unit Waterbay condominium. This 99-year leasehold condominium boasts a wide array of 1- to 5-bedroom apartment units, 2 swimming pools and even a childcare centre and 6 retail outlets. The waterfront views promise to bring a sense of living in a city but away from the buzz of a city.

In Punggol, there is the Watertown condominium, a mixed-use development that harnesses the beauty of nature and the Punggol Waterway while providing the convenience of city living with its extensive collection of integrated commercial and retail outlets.

With Punggol set to be the creative cluster in the North Coast Innovation Corridor which will also include Woodlands, Sembawang and the future Seletar Regional Centre, this outlier may soon be the latest town on the block to watch.

Executive living in Executive Condominiums

Despite the number of new private condominiums out in the market, executive condominiums (ECs) are still one of the more popular property types out there. Being the hybrid property they are, they provide buyers an option that allows them to transition comfortably between public and private property market.

EcopolitanPhoto: Ecopolitan Executive Condominium

Sold as public property, buyers are able to take advantage of the grants provided by the Housing Development Board (HDB). Though income ceilings apply, they have been raised to $14,000 last year and that has possibly opened the door to more applicants. And one of the best parts is after 10 years, ECs are considered private properties and thus increases their inherent value considerably.

Developed and built by private developers, many of these executive condominiums used to be situated in not-so-ideal locations. But as Singapore becomes more built-up, many new ECs are now quite conveniently located, near schools, transport nodes and many other amenities and shopping malls.

BellewoodsECPhoto: Bellewoods EC

Take the Ecopolitan EC for example, it is situated near the Punggol MRT station, Waterway Point, Punggol Waterway Park, Coney Island and just a 20-minute drive away from town. It will receive its Temporary Occupation Permit (TOP) this year and will no doubt inject much life into the Punggol HDB estate.

Another new EC, Bellewoods in Woodlands, can also look forward to being serviced by the upcoming Thomson-East Coast MRT line, with their proximity to the Woodlands South MRT station. Both properties are developed by Qingjian Realty and look set to be some of the more prominent projects in these blossoming estates.

Private condominium prices hold steady

The fall in completed private condominium prices was gentler last year at 3.5 per cent, compared to the 5.7 per cent from the year before. Prices are expected to hold steady this year as a dip in supply of properties in this sector bring prices to a plateau.

Jewel CDL

Photo: Jewel @ Buangkok

Demand for smaller apartments of up to 500 sq ft in size, have been weakening as their numbers, especially in the suburbs, have been on the rise in the past couple of years. Investors have found them more difficult to rent out in the dulling leasing market and those outside the central region or further from regional business hubs may find themselves competing for the same tenant pool. Tenants now prefer units with larger floor spaces with just slightly higher rents.

Sale prices of completed private properties within the central regions however have fallen more sharply as they usually come with a higher total quantum price. Compared to the many newer properties which have found a sweet spot with their total selling price, units in these central or prime districts see fewer overall transactions.

As the volume of unsold completed condominium stock diminishes and with the fewer launches expected this year due to cutbacks on land supply, resale properties could expect a happier year ahead.

Resale HDB flat prices stabilising

HDB resale flat prices fell a mere 1.5% last year, buoyed by a 0.2% rise in the last quarter of 2015.

Skyline Bukit Batok HDB BTO FlatPhoto credit: HDB

With the lowered prices of resale HDB flats, there may be an increase in sales volume this year as buyers have found many of these sans-COV (cash over valuation) resale units more affordable. Price-wise, property experts are looking at a 1 – 2 per cent movement, with prices staying quite stagnant this year. More young couples and upgraders may also be moving into the private property market as the total quantum prices of units have come down to a much more palatable level.

According to Minister for National Development Lawrence Wong, resale flats are mostly selling at market value, with prices comparable to that of 2011. Some of the property cooling measures which have been implemented since that which have taken effect, and which may continue to do so include the mortgage servicing cap of 30 per cent, the 25-year maximum loan tenure limit, and a 3-year waiting period for permanent residents before they are allowed to purchase resale HDB flats. Demand may also have waned as singles are now able to purchase new 2-room BTO flats directly from HDB and 18,000 new flats are to be rolled out this year with the first launch in February.

Though this may point to the market bottoming out by end of 2015, two consecutive quarters of price increase is required before a clear sign of a market rebound can be confirmed.

ABSD deadline looms

Properties launched 5 years ago are now facing their deadline to sell their units or incur the dreaded Additional Buyers’ Stamp Duty (ABSD). The regulation allows developers a 5-year window period in which to build and sell the the units in a residential project. Beyond this time frame, they will need to pay a 15 per cent duty on remaining units. This impacts the final selling price, which will see even fiercer competition from newer launches and other resale properties.

Mon Jervois

Photo: Mon Jervois private apartments

What some developers do is to purchase their own units, if the cost of paying the ABSD supersedes the losses otherwise. Properties launched before mid-2013 have mostly sold all their units, but launches after the Total Debt Servicing Ratio (TDSR) framework kicked in tell another story. Non-Singaporean developers have an even tougher job as they need to sell their units within 2 years of completion or incur hefty fines and pay for extensions.

Prices of unsold units at these projects facing the deadline have already come down since their launch. At Kingsford@Hillview Peak for example, the media selling price have fallen from $1,340 psf to $1,288 psf in about 3 years. More than half of the 512 units remain unsold.

A similar story is told at The Trilinq in Clementi where 220 of its 775 units has sold by the end of 2015 at median prices of $1,329 psf. When it was launched in Q1 of 2013, the average selling price was at $1,545 psf.  It is not only the larger scale projects which are facing the deadline pressure. The 109-unit Mon Jervois apartments also saw a drop of $235 psf in the last 2 years. The project is approximately 43 per cent sold.

 

Home prices along Downtown Line go to town

As expected, the newly completed Downtown MRT stations have brought much cheer not only the commuters but also to owners of properties in their vicinities.

The SkywoodsPhoto credit: Skywoods.com.sg

Since the Downtown Line began operating some of its stations last December, prices of properties near these stations have already seen an increase in interest, units sold and also rental prices. Private apartment prices have risen from $1,523 psf to $1,592 in the last quarter, up 4.5 per cent from the previous quarter. Out of the 18 stations now operating include long-awaited ones along Bukit Timah and Upper Bukit Timah such as Tan Kah Kee, King Albert Park, Sixth Avenue, Beauty World, Cashew, Hillview and also Bugis, Little India and Rochor stations along Rochor Canal and Sungei Road.

The price increase can be observed at private apartment projects such as Eco Sanctuary, where 9 per cent more units were sold by December. The development is now 91 per cent sold. Kingsford Hillview Peak condominium also saw a 3 per cent increase in sales and The Skywoods almost doubled their in the number of units sold.

With the effect MRT stations have on property prices, it would not be surprising to find prices of homes along upcoming Downtown and latest Thomson-East Coast line appreciate in the near future.

A stable year for Singapore’s property market?

Resale HDB flat prices have fallen only 1.5 per cent last year, as compared to 6 per cent the year before. Industry experts are not expecting prices to fall much more this year and in fact last quarter saw a 0.2 per cent rise in HDB resale flat price index. But that may not mean a sudden rebound of HDB flat prices as the options available to home buyers have now increased, especially as private home prices have fallen and more are now eligible to purchase new BTO flats directly from HDB.
Poiz Residences2Photo: Poiz Residences

HDB has announced that they will be rolling out up to 18,000 new flats this year, 3,000 more that last year. Private properties are now more affordable as developers have caught on to buyers’ affinity to total quantum selling prices. Last year, private property prices dropped 3.7 per cent overall, and a 0.5 per cent fall was registered last quarter of 2015.

The number of new property launches in the 4th quarter propped up new property prices with launches such as Principal Garden, The Poiz Residences and Thomson Impressions. Prices of new units in the city fringes fared well with no price changes. Landed property prices however fell 10.4 per cent over the last 2 and a half years, with prices falling 4.4 per cent last year alone.

Property analysts are watching the market closely as they are expecting the interest rate hikes to put a strain on those servicing home loans, especially as the property cooling measures concurrently remain.

Suburban private home prices waver


Parc EleganceNovember saw a 0.6% fall in private home prices, pulled down mainly by falling figures in the shoebox apartments segment. These units sized below 506 sq ft fared 1.2 per cent better in October than in November.

Property analysts are expecting some selling action in the months ahead, particularly in the non-central suburban private home segment as the surge of completed units and increased interest rates may force the hand of investors who have overstretched themselves. However, the number of sellers may outweigh the number of buyers as competition toughens up.

Properties in the central regions or prime districts of 1 to 4 and 9 to 11 could have fared better as well, with a 4.5 per cent fall in prices in a year-on-year comparison. That is a drop of 13.1 per cent from the peak in May 2013. Industry players have reasoned that properties in the central regions are generally larger in size, which means they also have a higher total quantum price, which makes them harder to find buyers for. Foreign buyers are also expected to pay a 15 per cent ABSD (Additional Buyers’ Stamp Duty), which may have turned some investors off the Singapore property market.

The Boutiq Killiney

Photo: The Boutiq Killiney

As the target audience for the central and non-central regions are quite different, sellers and buyers alike may need to alter their expectations of the market in 2016. In the central regions, some sellers may be ready to let go of their properties as the economy slows, but prices are not expected to fall drastically as the owners usually have the holding power to hang on to their properties till the price is right. In the non-central regions however, where owners and buyers are usually salaried workers, pricing may be more dependent on external forces such as the overall rate of economic growth, employment and mortgage rates, rental potential and debt ratios.