$1-billion bid for Stirling road land plot breaks record

A $1 billion bid for a piece of land at Queenstown made history as the first time a residential site under the Government Land Sales (GLS) programme scored such a high offer, almost $300 million more than the previous record.

queenspeakcondoChina-based developers Logan Property and Nanshan Group put the bid of $1.003 billion in for the 21,109 square metre plot in Stirling Road. The site had been on the GLS reserve list since 2010 and consists of a 2 adjoining land plots. It was triggered for sale only last month after a bid of at least $685.25 million was put in for the site.

But the billion-dollar bid certainly takes things to a whole new level. The previous highest ever bid was $925.7 million from MCL Land and for a pure residential site, the record stood at $682.8 million for the site where Costa Del Sol condominium now stands. At 20.6 per cent higher than the winning bid for the nearby Queens Peak condominium, the latest $1billion bid may set a new record for the Queenstown area in terms of cost per square foot. With a maximum permissible gross floor area of 954,328 sq ft, the bid will translate to $1,050 psf per plot ratio.

Commonwealth TowersThe Stirling Road site is close to Buona Vista, and placed strategically between the Central Business District and Jurong East regional business hub which makes it the prime spot for rental properties. Despite the existence of many other private properties in the area, developers do not seem intimidated, possibly as most investors of units in the area would have sold them by the time this new development is ready and will in fact be looking for new investment opportunities. There could also be a rebound of foreign investment interest following Bandar Malaysia‘s recent collapse.

Resale non-landed residential property prices hold steady in April

After 5 consecutive months of climbing figures, resale condominium prices have steadied themselves in April. Resale transactions fell by 21 per cent as a number of new launches drew the attention of buyers and investors in the past couple of months.

Thomson Impressions2Though the numbers are still shy of that during the peak of 2010 and 2013, things have been looking up for the private property market this year. Year on year, private resale prices and transaction volume were 1.8 and 48 per cent higher than in April last year. In comparison with March 2017, April’s resale private property market numbers dipped slightly. Prime district property prices fell 1.2 per cent last month while prices of units in the city fringes and suburbs rose 1.2 per cent.

In the 5 months prior, private resale prices have risen 0.6, 0.3, 0.9, 1 and 0.8 per cent from last November to March this year. The improving market sentiments seem to be reflected in the overall above-market-values which rose to $5,000 from $0 in just a month. Districts which posted the highest median above-market-values at $37,000, and had more than 10 resale transactions, were District 16 and 21. Despite higher resale activity in the city fringes, District 11 which consists of Newton and Novena, posted the highest negative median above-market-value of -$40,000.

the-crestThe year is almost at its mid-point and the latest new launches have boosted numbers in the new private home sales market, but how will the resale private property sector fare in H2?

Changes in the public housing landscape?

The ratio of home owners living in private homes versus HDB flats have been rising. The proportion of HDB flats in Singapore’s total housing stock is also smaller now compared to 10 years ago despite more public housing being made available with the government’s moves in the last few years to ramp up supply of new flats.

HDB flats STB photoPhoto credit: Singapore Tourism Board

Last year, with just slightly more than 1 million HDB units, the percentage of public housing stock stood at 73 per cent. In 2006, with 880,000 units, the proportion was 78 per cent. Respectively, the number of private condominium units and landed homes was 372,0000 and 243,000 with the percentage growing from 22 to 27 per cent within a decade.

Does this signify Singapore’s rising living standards and that more are now able to afford private housing? How has the functionality and affordability of public housing changed over the years? Recent government reports indicates that the percentage of BTO flat buyers who defer on their purchase after they have been invited to collect their keys is now less than 2 per cent. This could mean that more are now taking better stock of their finances and are able to make sustained payments for their new flats despite rising prices. The resale market could also be stabilising as more are finding it easier to sell off their existing flats within a reasonable grace period.

Bidadari HDB flats 2Photo credit: Housing Board (HDB)

National Development Minister Lawrence Wong has however reminded buyers to take into account market fluctuations when computing the financing of their new home with proceeds from sales of their existing flat. In provisional cases where buyers are unable to find buyers for or let go of their existing HDB Flat, the government does offer time extensions and exercise some flexibility for example waiving the required forfeiture payment.

Luxury properties popular with investors once more

Luxury property seekers are coming back into the market as transaction figures show. Robust sales of units at Gramercy Park on Grange Road certainly seems to attest to that.

gramercyparkThe high-end luxury apartment project near Orchard road has sold almost half of its 174 units. Across its two 24-storey towers, 81 units have been sold, 11 of which were from the launch of its South Tower last onto. Most of the buyers were foreigners and Singapore permanent residents from China, Indonesia, Malaysia, Hong Kong, Taiwan, India, France, Britain and the United States. 24 per cent of the buyers were Singaporean.

As the bottom of the cycle seems more clearly in sight, buyers are picking off properties which might be priced rather differently from a few years ago. Property investors are also showing increased interest in luxury developments and the early bird prices at the launch of Gramery Park’s South Tower has drawn quite a few. Prices start at $3.4 million for a 2-bedder and study, $5.1 million for a 3-bedder and $6.8 million for a 4-bedroom apartment. The 2-bedroom units seem to be popular with investors as all of the same in the North tower were sold out. A 5,533 sq ft 5-bedroom penthouse in the North Tower has also been sold at $16.88 million. Properties in prime districts are once again leading the private residential real estate sector and riding on the positive sentiments, things could truly be looking up.

Consistent growth in private resale property prices

For the fifth consecutive month, resale private home prices have had a good showing. Can we hope for a market recovery? Perhaps not quite yet, but there is no reason not to feel good about the turnaround.

THeSienaCondoMarch’s numbers were the highest in 2 and a half years with the resale index hitting 168.8 with an improvement of 50% in the number of units sold. Market prices have also been creeping upwards with sellers now beginning to set asking prices above the market rates. Overall, private resale property prices rose 0.5 per cent last month and were 2.2 per cent higher than the same month last year.

In the same year-on-year comparison, resale transactions grew by 77.5 per cent last month with 1,058 units sold. That is 51.8 per cent higher than the 697 units sold in February. Prime district property prices rose 0.4 per cent while 0.7 per cent and 0.4 per cent increases were registered in the city fringes and outlying suburban regions respectively.

Though the numbers are still lower than when the property market was at a few of its peaks in 2010 and 2013, the consistently improving numbers reflect an overall positive market sentiment. As the half-year mark draws closer, the numbers from the second quarter will be more crucial in determining the direction for the rest of the year.

Winds of change in local property market

A decade or so ago, owning a second or third property might be the fastest way to secure your retirement funds or to even accumulate a tidy little kitty. Investment properties were considered a surefire way of earning additional income, but in the climate of today, property owners and investors have much more factors to consider and competition to battle against.

SunshinePlazaResidencesWith the rental market weakening, property agents are finding that it takes twice as long and also many more viewings before a property is successfully tenanted. And even then, for much less than before. Some property owners have had to reduce rents by almost half. Leaving the units empty are simply not an option for some investors as the rents go towards the mortgage or mortgages of their properties. It is after all better to have less help than none at all.

SerangoonHDBflatFor new investors looking to enter the market, the environment is a lot tougher than before. Considerations such as whether there is a large pool of HDB flats available for rental nearby, the long-term potential of the property, competition from other new launches or even within the same property, whether the local and global economy will affect businesses and commercial hubs nearby thus reducing the pool of foreign tenants, and so forth.

Before the market makes a complete recovery, a possibly lengthy period of stabilisation will ensue, despite the governments having made some allowances in the are of the property cooling curbs.

Grand opening launch for Grandeur Park Residences

The latest property development in Tanah Merah has sold more than half of its units over a weekend. Grandeur Park Residences reported strong sales with at least 58 per cent of its 720 units sold during its launch.

GrandeurParkResidencesSmaller apartments seem to be popular once again as the project sold most of the 96 one-bedroom units made available during the launch. Selling prices averaged $1,350 psf. The location, in close proximity to the Tanah Merah MRT station, could be one of the main factors pushing buyers to seriously consider the long-term and rental potential of the property. The condominium project which is also close to the Changi Business Park also has two- to five-bedders with prices starting from $550,000 for a one-bedder and $700,000 for a two-bedroom unit. Though the rental market is weak at the moment, buyers are counting on the property market rebounding by the time the project is ready for occupancy.

GrandeurPark2
Following the first private condominium launch this year of The Clement Canopy, response at the Grandeur Park Residences launch may be an expression of pent-up demand which could release keen albeit selective buyers back into the fold. However, the eagerness to snap up smaller units mean a lower overall quantum which may keep market figures low or at best level.

January’s private home sales plateau

After a slight rise of 0.1 per cent in December, January’s completed private home prices remained flat. There were some rise and fall in the different districts but overall, non-landed residential property prices evened out on a plateau.

CreekBukitTimahThat may not necessary be a negative as signs of stabilisation are generally expected of the year. Property analysts say that some of the zero per cent month-on-month change could also be due to the availability of smaller units with a higher psf pricing schedule. Besides shoebox apartments, studios and one-bedders, family-size units in new developments are also now smaller in size than before.

Small apartments aside, prices of completed condominium units in the central region did rise 0.7 per cent after a 0.3 per cent dip in December. In the non-central regions however, prices went the other direction with a 0.6 fall following a 0.5 per cent increase the month before.

26NewtonThe private real estate market could however be looking at more resale properties entering the pen soon as most buyers who have purchased investment properties in 2013 will have completed their 4-year holding period this year. This means they are no longer tied down by the cooling measure which requires them to pay a seller’s stamp duty should they sell their property within 4 years following the purchase. Whether the sector is ready for this influx of properties while pulling themselves sluggishly out of the lull remains to be seen.