Property measures not hurting Malaysian property sales

And more are flocking to the local label of the new Puteri Cove Residences. This new luxury condominium is developed by local property developers, Pacific Star and DB2, with sea and harbour-view units up for offer, local investors seemed to have taken a liking to this new property.

Puteri Cove Residences. Photo by Pacific Star Singapore.

Puteri Cove Residences. Photo by Pacific Star Singapore.

450 of the 600 residential, 56 Soho and 340 serviced property units were sold within a week of its launch. Upon its targeted completion in 2017, this mixed-use development will also include a waterfront promenade housing eateries, retail stores, commercial businesses and clinics. Located strategically between the Second Link at Tuas and the Woodlands Causeway, it’s poised to have a brisk flow of traffic. Units consisted of one- to four-bedders between 600 to 4,100 sq ft. Prices ranged between RM 1, 180 (S$457) to RM 1, 580 (S$612) psf.

Most buyers were Singaporeans, followed by Malaysians and Indonesians. And with talks in the way between Singapore and Malaysia to improve transport infrastructure, such as the Kuala-Lumpur  expressway and a train system between Singapore and Johor Bahru, investors in the know are looking at long-term profitability. Will new Iskandar region properties continue to woo Singaporean investors?

68% drop in private home sales

In comparison to 2013′s Q1 home sales figures, the chasm is deep. And so are moods in the real estate market.

Private home sales have been on the decline for some time now. And recent figures are not exactly uplifting. Buyer sentiments are pessimistic, as the loan curbs implemented last year takes its toll on buyers and sellers alike.

Hillford Retirement Home
It has become much harder for buyers to secure loans, with the Money Authority of Singapore’s Total Debt Servicing Ratio framework in place. Buyers can no longer loan as much as they would like, which may place them just out of reach of their target property. The lack of new property launches this quarter has also dampened the mood somewhat. And property developers have been slow in introducing new units into the market as they are now accutely aware of a softer market.

Some properties nevertheless have beat the odds and continued to enjoy brisk sales. Topping the list is the 281-unit The Hillford in Jalan Jurong Kechil. Since its launch in January, units have been completely sold. Next up are a couple of neighbouring properties in Sengkang – Rivertrees Residences and Riverbank @ Fernvale. Most of the units went for an average of $1,000 to $1, 100 psf. Industry analysts are wondering if this could signify that buying power for suburban private properties will now hover around this ceiling.

Rivertrees condoThe rest of the year may see a tussle of prices between new and resale properties. As developers cut prices to make sales, resale home sellers may be forced to face the competition head on.

Jurong private properties in demand

For those who are not used to living in the west, the lure may not be strong. Not yet perhaps. But as it changes from the industrial, remote ‘wild west’ into a well-greased regional commercial and education hub, many have seemed to change their minds.

LakevilleThe 695-unit Lakeville at Jurong West Street 41 has sold so well last weekend that the developers, MCL Land had to release 50 additional units to its original release of 150 units. Most buyers were Singaporeans, and they purchased mainly two- and three-bedders. A total of 180 units were sold thus far, at an average of $1, 300 psf. J Gateway, which was the last westside property launched since Lakeville, sold at an average of $1, 480 psf.

Despite constant reminders that the property market may be on a downturn, the response has buoyed the mood of the real estate market. This could however be due to the lack of private properties, especially new ones, in this neck of the woods. New amenities such as the Ng Teng Fong General Hospital and Jurong Community Hospital, and new commercial properties promises of more jobs, and better services, which could drive up rents of both HDB and private properties in the area.

Commonwealth TowersSlightly more inland, Commonwealth Towers, which will be linked to Queenstown MRT station, could be the next property to watch. This 99-year leasehold property will likely be launched in May, with mostly one- and two-bedders in its massive 895-unit development. If nearby condominium prices are anything to go by, buyers could be looking at prices of between $1, 300 to $1, 700 psf.

New home sales up in February

After much news about home sales taking the hit, a rebound has brought some cheer to February.

Mainly lead by new suburban property launches, analysts are hoping that this is a sign of the market stablising. Excluding sales of executive condominiums, the Urban Redevelopment Authority released data showing a 28 per cent rise of private home sales of 724 units as compared to January’s 565 units.

2 launches in the Sengkang area, Rivertrees Residences and Riverbank @ Fernvale, made up majority of the sales. 218 units of the 495-uni Rivertrees Residences were sold at a $1,111 psf median while 211 units were sold at the 555-unit Riverbank @ Fernvale at an $1,033 psf average.

Rivertrees condoThe future however may lie in the hands of the property developers. Depending on their pricing structure and strategies, the buying public may respond correspondingly. Some older projects with units yet unsold, as well as resale units may find themselves competing intensely with lower-priced newer properties. But if recent sales are anything to go by, finding the sweet spot that hits home with pocket-conscious home buyers will bring the crowd back into the market.

Buyers who are looking for a good deal may find themselves searching for less salable units in older projects which may still be worth the investment depending on their location and potential for future development. March may be the turning point of this delicate dance between buyer and developer. What will the month show in terms of sales volume and prices?

HDB dwellers invest in shoebox apartments

With a private home market which fell 40 per cent last year, 2014 looks like it might continue to be in the home buyer’s favour. But more HDB dwellers have been snapping up shoebox apartments in light of the fall in home prices.

J GatewayConsidering the fact that most HDB flats are more than 500 sq ft in size, these smaller homes are more likely than not for investment purposes. In 2013, 13.3 per cent of private home transactions were from HDB dwellers, with them making up a whooping 62 per cent of sales in the shoebox apartment category.  Some of the more popular choices from this group were the Bartley Ridge, J Gateway and D’Nest condominium developments.

But it seems buyers are letting their nest eggs lay for longer, with secondary home sales dropping to a 10-year low. With smaller apartments being possibly easier to rent, with its overall lower rental price, it is an easy entry-level property investment and suited to HDB owners who are looking to ease their way into the private property market.

Who exactly are still buying up private properties then? The foreign buying force, it seems. The fall in foreigners purchasing homes here is marginal and in fact increased from 6 to 9 per cent in 2013. Mainland Chinese were the top buyers, closely followed by Malaysians and Indonesians.

Real estate market fluctuations hard to predict

It might be a matter of long and in-depth research. Or perhaps a intuitive touch to reading the markets. Maybe it’s a matter of luck. Whichever it is you possess, perhaps even a combination of all three, the property market has always been a delicate and somewhat temperamental creature to handle. As we reach the end of the first quarter of 2014, many may be wondering if this year of the horse may gallop into the horizon or merely trot on the spot. The three factors creating the most effect on the current real estate market are:

  • Property curbs
  • Weak demand
  • Oversupply of homes
Property-related rules may be updated often, thus it would be helpful to keep track of new or amended rulings.

Where are home prices headed?

For buyers looking for a place to live, it might be a good time to jump in. Those waiting for a market crash to scoop up the best deals may be waiting in vain as that is rather unlikely. Singapore’s growing population will make for a constant demand for housing, and since home buyers usually have a fixed idea of which areas they would rather live in, other factors such as location, proximity to transport and schools, may still determine the price they pay.

Property upgraders may find themselves in a good spot as well. As the private property market becomes increasingly competitive, the price difference between their current and desired property may be diminishing, thus in turn save them a rather substantial amount.

Property investors may be those finding themselves most in a bind as mortgage limitations and rising interest rates create boundaries which may hinder their progress. Analysts advice against hasty decisions as properties may not be the easiest to manage within an investment portfolio. They suggest that investors look at all possible angles when considering a property, such as the number of bathrooms, size and shape of the unit, hidden spaces which may not suit the taste of most buyers etc. All-in-all, investors need to plan for future interest rate hikes, the possible lack of tenancy, financial holding power and governmental policy changes.

When even suburban mass-market home prices fell

 
8 RajaSingapore’s housing market could be bracing itself for a year of tougher times. It has after all enjoyed a rather long period of highs.  Though the initial signs are slight, a 0.7 per cent drop in December, it could be a warning for the year or next couple of years ahead.

As new properties now come with lower price tags, apartments in the resale market may find themselves having to lower their prices as well in order to attract buyers. The biggest decline came in the suburban segment, which may be a bit of a downer for the market since this is the sector which has been faring the best for many consecutive quarters. But the huge number of launches all over the island could have diluted the buying crowd. Investors who would previously have snapped up these properties in a jiffy may also have been hindered by the loan restrictions implemented last June.

Homes in the central districts could however take the hardest beating this year as many are left unsold. As most of the properties head towards completion in the next few years, the housing supply glut may become more apparent. Put into the mix resale properties and the bowl seems rather big, unless of course the population grows, which might cause other issues for the small nation and its limited resources and space.

More going for BTO flats

Or so the numbers show. January marked the first launch of HDB’s new BTO flats for 2014, each new flat were oversubscribed by 1.6 times for first-timers and 3.5 times by second-timers. The location of these new launches were the main draw – two projects were situated in Punggol and many young couples and families were excited about the new waterfront living in this new town.

Matilda PunggolPhoto source: URA

Development and expansion in Punggol have been rapid, especially since it has been earmarked as the Punggol 21 township development plans under URA’s Draft Masterplan 2013. It promises to deliver a waterfront lifestyle living deep inland when previously only the outskirts, mainly in the East, of Singapore had the privilege of these sort of housing options. Although it may take some years yet before it is fully developed, the next decade may shift the focus into this area and as more families bring up their children there, no doubt popularity of its properties will also increase. And buying early may be the wisest choice yet. Private properties in the area include Ecopolitan, Watertown and Rivertrees Residences and executive condominiums such as Waterwoods, Prive and A Treasure Trove. It will be interesting to see which other new launches may move into the area this year.

Rivertrees condoAnd since HDB’s policy change in July last year, singles are now able to purchase 2-room flats directly from HDB and the subscription rate is a high 27.7. But the government has committed to offering up to 5,000 of such flats this year, with 30 per cent reserved for singles. There may be even more left in the basket for singles as the number of families going for 2-room flats are on the decline. Will this mean a change in the demand for 3-room resale HDB flats?