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.

Bidadari – Property with longevity?

Where bustling and ever-so popular Bishan stands,used to be cemetery land. When it was first redeveloped in the early 80s, no one would have imagined the boom it enjoys today.

BidadariPhoto credit: HDB

Now it could be Bidadari’s turn. Already the new HDB flats to be built have garnered buyers’ interest and private landed residential properties in the area are also welcoming the attention. Surrounded by the quiet and exclusive atmosphere of Bartley, Mount Vernon, Sennett Estate and Upper Serangoon, Bidadari has been slated for development into a public housing precinct and a private property enclave.

Nearby Potong Pasir and Bendemeer have already seen their share of new properties coming up. HDB is planning 10,000 new homes in the area under the HDB Master Plan 2014, and up to 1,000 new private homes are expected to secure their place by end of 2015.

Nin residences at Bartley

Nin residences at Bartley

Considering the age and population density in the estate, there is a huge space for development, which could also mean potential for properties. So far, private condominium sales have been brisk. New developments in the area include Nin Residences, Bartley Residences, The Venue Residences, 8@Woodleigh. There are already some schools in close proximity, such as St. Andrew Junior College, Maris Stella High School and Stamford American International School. A new retail development, Market Square, is also on it’s way up.

Though demand for properties here may not seem to be as high as the neighbouring Bishan or Toa Payoh, one must not forget Bishan’s history. Their day will come, and perhaps it is just a matter of time.

Resale private home prices down the slippery slope

The tussle between new and resale properties continue to play out as supply continues to outweigh demand and buyers are now pickier with the units they purchase.

There has been recent calls for relaxation of the cooling measures, particularly the Total Debt Ratio Servicing (TDSR) framework which limits the amount of loan buyers can receive, which is largely dependent on their income. Those with a flexible income or commission-based incomes are particularly hit as the main part of their income may not be considered towards their basic pay.

Buyers could also be holding out on new launches as prices have dipped since initial sales launches. CapitaLand’s Sky Habitat recently sold a median of $1, 377 psf last month. But when it was first launched 2 years ago, prices were at $1, 583 psf. There are still a considerable number of unsold units out there and some buyers could be looking out for developers looking to sell off remaining units, which also means resale properties may be struggling to get themselves noticed, unless their price is right.

Sky Habitat condominium in Bishan.

Sky Habitat condominium in Bishan.

And as rental demand also shows signs of weakening, investors are more wary of properties, particularly newer suburban mass-market homes, which are yet untested in the rental market. Some condominiums may have a higher number of units out on lease at the same time, which increases the competition for landlords.

Will this continued decline in resale home prices cause buyers to rethink their property investments? How can you better spot the potential of a property?

More looking to rent private property

Immigration rules have shrunk the pool of foreign workers here in Singapore, and that also meant a lower demand for home rentals. Closely linked to this are the prices and sales of private homes,  which have been on the decline for sometime now.

But the market is starting to look up as the previous quarter saw a increase in demand for private rental homes. The growth is expected to continue into the second half of the year. Though figures are somewhat positive, the number of vacant rental units available in the market also means tenants will have more to choose from and competition will be fierce.

Shore-Residences-Amber-Road.jpgTenants seemed to favour the city fringe areas, as rental budgets have been largely reduced, and price-conscious expatriates are now more stringent with their spending. The Rest of Central Region districts received the most loving from rental home seekers, including areas such as Bishan, Toa Payoh, Little India, Queenstown and Geylang. New private condominium developments in these areas have accounted for renewed interest. Slightly further west, Ascentia Sky, Waterbank at Dakota and The Interlace all in the Alexandra, Depot road region meant up to 2,500 new units, some of which no doubt will join the rental pool. In the East, Waterview in Tampines, Vacanza@East and The Shore Residences will be completed in the first quarter of 2015.

The Loft at Nathan, situated in River Valley on the city fringe.

The Loft at Nathan, situated in River Valley on the city fringe.

Landlords of high-end apartments may continue to see a lack of movement in the rental front. And units are already expected to add to the mix, with the completion of Suites @ Orchard and Loft@Nathan next year.

Landed home prices set to rise

The spotlight has been on new and resale private mass-market homes recently. But with that market reaching saturation, attention is now turned onto landed private homes. Everyone knows how rare these types of property are in land-scarce Singapore, but prices have been falling due to the consumers’ diminishing ability to purchase these expensive properties.

Loyang Rise HouseBut the decline may ease up by end of this year. Analysts are expecting prices of landed homes to pick up next year. This may mean more home owners will hold on to their properties in wait for better prices. This restriction of supply could also be the start of rising prices. In the long run, landed homes do generally hold up in terms of prices better than condominiums. The drop in landed homes prices was only 0.7 per cent, compared to the overall private home prices of 1.3 per cent.

Meanwhile, buyers looking for a worthy landed property to purchase could look at areas such as Bukit Batok, Loyang, Jurong or Sembawang. Terrace houses are usually more affordable than semi-detached or bungalows, and they are usually the first to rise in prices when the property market bounces back.

One possibly glitch is the rental prospects of landed homes. Compared to apartments, they are harder to find tenants for.

Resale HDB flats shrink in number

You may think that with the number of new properties being completed within these couple of years, more HDB upgraders will be in a hurry to sell. But as the figures show, fewer resale HDB flats are put out there in the market as many choose instead to hold on to their flats in wait of the market upturn.

The quicker rise in prices of private mass-market homes could also be part of the reason for this inertia to upgrade. Prices of condominiums have risen 4.8 per cent and coupled with the decreasing ability to receive and maintain a realistic home loan, many may have given up their plans to upgrade, at least temporarily.

Bukit Batok HDB FlatBut it is just as well, since demand for HDB resale flats has also fallen, especially since singles are now able to purchase new flats directly from HDB and permanent residents now have a 3-year waiting period after receiving their PR status before being allowed to purchase a HDB flat.

The first sign of the decline in demand was shown in the COV figures. From a 6-figure sum just not long ago, it is now at a zero median in February this year. Some have even been reported to have sold below valuation price.

It is uncertain how long this lacklustre situation will last, but at least for this year, the market seems relatively quiet.

New private homes still receiving buyers’ love

As expected, even in the real estate downturn, property buyers still know what’s value for their money and properties near MRT stations are always the first to draw the crowds.

The 845-unit Commonwealth Towers near Queenstown MRT station sold 175 homes in the first day of its launch alone last weekend. Most of the units sold were one- and two-bedders, which may signify a change in the buying trends amongst property investors. As buying power decreases due largely to the restrictions in loan limits, buyers are favouring smaller units going for a lower quantum price.

Waterfront@FaberPrices ranged from $721, 000 for a one-bedder to $2.2 million for a four-bedroom apartment. With its prime location, it goes without saying that most investors would be looking at renting out their units. And with its considerable proximity to schools, universities, hospitals and other amenities, this is a good spot to grab.

Waterfront@Faber over in Clementi won over some buyers with its more exclusive 210-units. Prices ranged between $1, 100 to $1, 250 psf. The minimum size for apartments here are 721 sq ft two-bedders. The largest are 2, 292 sq ft four-bedders. There are 11 strata-landed homes in the development, with the remaining 199 being apartment units.

Going by the loving buyers have shown these 2 recent launches, will upcoming launches such as the Coco Palms condominium in Pasir Ris, The Crest at Prince Charles Crescent and Amber Skye at Amber Road receive the same or heightened attention?