Marina Bay home sales show positive signs

Private home sales in the suburbs have been showing sign of strain as the increasing number of new completed condominium units compete for the increasingly limited number of buyers, which could be further limited due to loan limits, a downtown project seemed to be bucking the trend and pulling in sales in the luxury apartment sector.

Marina One Residences in the Marina Bay precinct secured half of the total number of home sales in October alone. But that could also be due to the fact that it was the only new launch in the month. 334 units of the 1,042-unit condominium were sold at the average selling price of $2,228 psf. However, sales were still lagging behind its initial preview launch when earlybird discounts were given, and sale prices hovered between $1,960 and $3,100 psf.

Marina ONe iprop watermarkDevelopers are finding it harder to attract the buying crowd and have found they are now more sensitive to pricing as it became more difficult to secure bank loans. Though the price fight is not evident yet, as buyers are still willing to fork out a considerable amount for properties in good locations, it may only be a matter of time before the cracks show. Especially since 2015 and 2016 will see an even bigger influx of completed private homes in the market.

For now, developers are focusing their efforts on selling remaining units at previously launched projects such as DUO Residences, Coco Palms and Lakeville condominium, thus holding back on new launches. Will this drive consumers towards other property types such as executive condominiums (ECs) and resale HDB flats or will they continue to seek better deals with the existing private property market?

Glimmer of hope for Private resale homes?

Although the total number of private resale homes sold were lower in October than September, prices have begun to rise slightly. According to latest data, non-landed private home prices rose 0.4 per cent in last month. In suburban districts often popular with buyers such as Bishan, Toa Payoh, Little India, Geylang and Queenstown, prices rose 0.6 per cent. Transactions and prices of prime district properties however remained quiet, falling in fact by 0.3 per cent.

Okio Residences in Balestier.

Okio Residences in Balestier.

Have overall property prices fallen sufficiently? And have they reached the lowest point of the property cycle? If so, how long will this low point last? Private property prices have been low for quite some time now, maintaining a steady level in terms of pricing and transaction volume for almost half a year. The government has said that they will not relax the cooling measures anytime soon, perhaps in fear of a huge and quick rebound which may bring prices up even higher than before the curbs were put in place. They could also be giving the measures a bit more time to sink in, to further bring down home prices and getting the industry and public used to these measures.

Property experts are expecting prices to decline even further in the short term. Would this be the best time to invest? And how would you go about investing? Is it best to move away from residential property into commercial property? Or are there certain property types with hidden long term value?

Private resale homes – Dip in sales volume and prices continue

The number of resale transactions of private properties have dipped across the board and that in turn has affected the pricing index reflected by the SRPI (Singapore Residential Property Index). SRPI figures showed a 0.7 per cent drop in September, despite hopes that the market will rebound after the Hungry Ghost Festival.

STeven SuitesProperty analysts are reporting an imbalance in the expectations of home sellers and buyers. Stronger holding power of home sellers have meant that fewer properties were exchanging hands and they have instead opted to hold on to their properties till the market turns around. With the exception of shoebox apartments it seems. There was a price gain there of 0.4 per cent. This could be a clear indication of the preferences of buyers in the current market situation and perhaps provides an inkling of the months ahead.

One of the most affected property sectors are the luxury homes. Although buyers and investors of these high-end properties may not be detoured by the additional levies and loan limits, they may be deterred by the buying restrictions. And as the number of unsold luxury properties increases, developers are now offering discounts to entice them back into the fold.

As 2014 draws to an end, many may be wondering how the property market will fare in 2015. As the government has recently announced that the property cooling measures are not likely to ease in the near future, property analysts are expecting a 8 to 10 per cent decline. What will that mean for the overall market and will any particular property type stand out? Will the drop in private home prices mean a similar drop in HDB resale flat prices or will the demand for resale flats rise as more turn towards this less expensive option?

What carrots do Property developer dangle?

With competition heating up in the property scene, developers are finding it increasingly difficult to find ready buyers. The stakes are now higher and thus the incentives offered have been interestingly varied. From discounts to free furniture, rental guarantees, holiday and travel memberships; and even sports-car discounts and diamonds! The “carrots” may now be actual “carats”!

Mon JervoisQingjian Realty has recently offered one-carat diamonds in a lucky draw for Bellewoods executive condominium (EC) e-applicants. 20 diamonds for that matter. Buyers of the Highline Residences in Kim Tian road can look forward to a 3-year “lifestyle membership” which includes limousine rides and complimentary golf privileges at the Ria Bintan Golf Club. Most of the developers are offering these incentives as a way to market and spur renewed interest in their previous launches. These offers help protect their selling prices whilst balancing the expectations of buyers who may
have purchased units in the initial phases. Would this holding back on offers affect the response during first-phase launches? Whilst some may rest a little on their laurels and wait for possible offers in future launches, buyers who are keen to select their prime units may still prefer to strike while the iron is hot and go for first releases to ensure they get a unit they truly want.

At the Infinium cluster-homes in Kovan, IG |Development was offering a $200,000 Mercedes to the first 3 buyers but later withdrew the offer in place of price discounts of $100 psf on their first 3 units sold. That would mean savings of up to $500,000. But if it’s a vehicle you’d like, UIC and SingLand are partnering with Aston Martins to provide discounts on their cars for buyers of three-bedders and bigger units at Mon Jervois.

But as the supply of new homes may trickle come 2015, will developers continue to dangle these incentives or will the property market make a U-turn and head up the charts on selling price alone?

Private home sales down in Q3

Despite recent new launches, private home sales remained lacklustre as the third quarter registered  lowest sales figures since 2008. Only 1,596 new homes were sold in the last 3 months, though 648 units were sold in August alone, signifying a plausible comeback.
 Tre ResidencesSome of the more popular residential properties were the newer ones such as Highline Residences, Seventy St Patrick’s, Lakeville, Eight Riversuites, and some new launches from projects such as The Panorama. As per previous years, post Hungry Ghost Festival meant home buyers were once again eager for new deals and were actively seeking property purchase opportunities.

Across the board, 6,030 private properties were sold in the first 3 quarters of the year, almost half that of the same period last year. Much of the decline was due to weakening demand in the primary market, which could be a result of the tightening home loan limits implemented in June 2013.

Upcoming launches of Sophia Hills, Tre Residences and Symphony Suites might bring renewed activity into the market and possibly close the year on a high. But most of the attention will be in the executive condominium (EC) market as the drought of new launches in this sector welcome new launches of Lake Life, Bellewoods and Bellewaters.

A little east-side enclave – St. Patrick’s road.

The Thomson-East Coast MRT line looks set to have a big effect on properties near the future MRT stations. The exclusive area of St Patrick’s road is but just one of them. With a station in Marine Parade situated nearby, properties in the area may see a big boost in home prices as the future MRT line will cut down travel time to the city.

Grand DuchessAlthough situated in the prime district 15, near good schools and many other amenities such as the 112 Katong and Parkway Parade shopping malls, the Marine Parade library, and the market and town centre just a stone’s throw away, sales has been far and few in between for a long time. But private home rental prices has held steady. With new property launches coming up, buyers may now consider these properties in all seriousness, with their potential for high rental yields.

Currently, only a few private apartment blocks stand in its vicinity, such as the St Patrick’s Residences and the Grand Duchess @ St Patrick’s. New launches planned for the months ahead include Seventy St Patrick’s and Amber Skye. Despite the harsh conditions of the TDSR framework, buyers may be drawn to the area by its exclusive and lush surroundings, the convenience of amenities and schools just streets away, and the evergreen plus point of a MRT station nearby.

Pinnacle @ Duxton almost ready for resale market

50-storeys high with sky gardens and sitting at the top of an excellent location, the Pinnacle @ Duxton will soon be ready to enter the resale market as the five-year minimum occupation period (MOP) comes to an end in December this year. Will the peak of resale HDB flats prices be found in this exclusive public housing development? And how many of the flat owners will be looking to sell? In the current market lull, will more be looking to rent out their units instead?

It seems the resale market can ready themselves for some high prices. Ahead of time, one seller who has received special permission to sell the unit has had more than 50 viewings and offers of up to $830,000 for the 90 sq m four-room HDB flat.

Pinnacle @ Duxton was awarded the 2011 Urban Land Institute (ULI) Global Awards for Excellence. Image by HDB.

Pinnacle @ Duxton was awarded the 2011 Urban Land Institute (ULI) Global Awards for Excellence. Image by HDB.

With a total of 1, 848 units in the massive 7-block development, there will no doubt be competition, though most of the units being put up for sale now are four- and five-room flats. Prices nearing the million dollar mark will be expected. Even the Minister of National Development, Mr. Khaw Boon Wan, has said that when units at the Pinnacle are ready to hit the market, “there will be many millionaires there”.

Those who are ready to sell may be those who are hoping to move into the private property market as the amount they might earn from the sales could be double, if not triple the amount they originally paid for the units. When they were sold in 2004, five-room flats were priced only at $345, 100 to $439,400 while the four-bedders cost $289,000 to $380,900. Considering the prime location of it being near MRT stations, new businesses, a hip area of cafes, restaurants and pubs, the bustling Chinatown stretch and the Central Business District, it’s not surprising that public housing in the area has continually received high-priced offers. Most five-room flats in the Tanjong Pagar and Cantonment Close area have fetched above $800,000.

The only thing that might stop buyers from coming would be the mortgage limits. But as the market awaits the day the regulations are relaxed or policies changed, flat owners may continue to hold on to their asking prices, at least at this iconic building.

Varied market response to declining property prices

Home prices in both the private and resale HDB markets have continued to dip in the second quarter of 2014. In the first three months of the year, the decline was 1.6 per cent. Perhaps buoyed by the increased number of launched in Q2, the rate of decline was somewhat less steep at 1.3 per cent the quarter past.

Rezi 3 TwoBuyers who have been on the lookout for opportunities such as this may be happy to find that more than a few property developments have been offering discounts. Though the overall number of sales have picked up in the second quarter, mostly due to new launches, the private homes market saw a more obvious slowdown in both the city centre and suburbs. The drop was 1.5 per cent in the city centre and 1.1 per cent in the suburbs. Properties in the city fringe fared better with a 0.6 per cent drop, an improvement considering the 3.3 per cent dive in the earlier part of the year.

But there are those who are concerned about the longevity of their investment should they purchase now. The question they may ask is, is this the lowest prices can go? If I were to buy now, will the prices continue to drop? Though property analysts are doubtful that the prices will bottom out anytime soon, they are expecting the maximum of a 5 per cent decline.

As long as the supply continues at a steady pace, prices will not vary far from the current levels. Perhaps true change will only come with a shift in policies. Considering the elections will be here in a couple of years’ time, the time leading up to that might be a period of uncertainty.