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.

 

Slower pace of private property price decline

Resale private apartment prices have been on the decline since its peak earlier in the decade, after the effects of property cooling measures kicked in and fuelled by a recent building boom. But the pace of decline has slowed down 2.1 per cent last year, in comparison with 2014. The URA property price index indicated a 3.7 per cent fall last year as compared to 2014’s 4 per cent.That may be a sign the market is finally stabilising, and sellers are no longer pressed or enticed to sell quickly.

St. Regis Residences on Orchard Road.

St. Regis Residences on Orchard Road.

The resale private property market did however report some profit losses. For example, some resale units at St. Regis Residences registered losses of $542,30 up to $4.78 million for a 4-bedroom penthouse.

2015 saw a total of 4,999 resale transactions of private properties, up 22 per cent from the year before, though still a far cry from the 10,598 in 2012. Property analysts are expecting a continued decline in prices, though at a slower rate, as buyers and sellers are still taking time to adjust to the loan restrictions and also now to cope with the new interest rate hikes. Buyers are however gradually acclimatising to the current market situation where new properties are priced affordably and resale property prices may not be drastically reduced, and thus are re-entering the market albeit with some care.

 

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.

New home sales up in November

The Poiz Residences near Potong Pasir MRT station sold almost 80% of its 350 units launched last month. Median prices were at $1,440 psf. Elsewhere, newly released units sold at the previously launched Sky Vue in Bishan clocked in at 59 units, with an average selling price of $1,552 psf. Other best sellers include Principal Garden and Thomson Impressions.

poiz-img-001Photo: The Poiz Residences in Potong Pasir
In total, 423 units were sold in November, making it a 79 per cent rise in new private home sales last month. Properties in the city fringes fared especially well, with transactions almost doubling that of October. This could be due to more new developer launches in November as compared to a quiet October.

Thomson ImpressionsMoving ahead, location and selling prices will be the main focus for buyers as most are out for a bargain. Take the executive condominium (EC) market for example, 186 units were sold last month without any major EC launches based on the relevance of ECs and also their attractive pricing. Executive condominiums are a hybrid of private and public housing. Buyers can apply for HDB grants to purchase these properties and after 10 years, they attain a private condominium status, often elevating the value and selling price of the units.

Property analysts are expecting 2016 to be a fruitful year for developer launches which are reasonably and affordably priced, at good locations near MRT stations or schools. Suburban projects might struggle a little as competition with new resale private condominiums (those which have just reach completion) drive supply up.