Sellers’ Stamp Duty rates tweaked

From March 11, the staggered rates which sellers have to pay should they resell their properties within stipulated time periods will be reduced. Previously, properties sold within a year of purchase were subjected to a 16 per cent seller’s stamp duty (SSD), the rates are at a staggered 12 per cent for properties sold within 2 years, and at 8 per cent and 4 per cent for those sold within 3 and 4 years respectively.

SingaporeskylineThe new tweaks to the regulation means that sellers now only have to pay 12 per cent stamp duty for properties sold within a year, and then at the staggered rates of 8 and 4 per cent for those sold within 3 and 4 years respectively. Whiles some buyers might have missed out on this new ruling by a day, the effect of the change on buyers who have purchased for the long-term will be minimal. This slight change in the property cooling curbs may provide a more fertile environment for property investment and some buyers may be interested in making headway with a second or subsequent property.

Whether this will boost home sales this year remains to be seen, but property analysts are expecting a slow and muted effect on the market. While the change may not translate to actual figures, with property analysts expecting only a 3 per cent increase on the previously projected 8,000 property transactions for 2017, what it does create is an atmosphere of positivity and a sense of hope. Any tweak by the government, however slight, could be seen as an indication of the market bottoming out, and following a period of market stabilisation, investors are hopeful that the market will eventually recover.

Weak rental market not an obstacle for investors

While the weakening rental market may have been putting pressure on investors, the concurrent weakening private property prices are opportunities to some. While the leasing market has slowed down considerably, the property-purchasing market has been gaining speed, especially in the last quarter or so.

TRE ResidencesThe overall genial atmosphere in the private residential property market over the past few months have brought property investors back into the heat of things. As more newly completed properties enter the market and new projects such as The Clement Canopy and Grandeur Park Residences were launched to affirmative responses early in the year. Overall private home prices fell at the slowest rate in 3 years, which could point to an increasingly stabilising market.

It would be prudent however for investors to take into consideration that the property cooling measures have not yet been lifted, though some signs of relief have been provided earlier this month. In the past, profits of up to 60 per cent could be reaped in the short-term, but the long-term potential of a property, rather than quick turnarounds or a dependency on rental profits, will be at the heart of a good investment henceforth. Property analysts advise investors to consider cash-flow, calculate mortgage and maintenance costs carefully while keeping a portion aside for periods of negative cash flow when  the property is unable to be tenanted.

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.

February’s dip in resale flat prices points to market stabilisation

February was a little slow for the resale HDB flat market as prices fell by 0.3% and transactions by 8.5%. This was following a promising start to the year. But industry experts are not too quick to dismiss the possibilities for the sector as the year moves ahead.

ClementiHDBflatThe slight dip last month was most likely due to the post Chinese New year lull which is a common occurence. Rather than being indicative of a falling resale flat market, the decline simply points at a stabilizing  market enironment. Though resale flat buyers paid about $2,000 less than market value across  the board, some HDB estates continued to clock more than 10 transactions and at prices above market value

In Bedok, some buyers paid $10,000 and more for their resale flats while in Clementi, some transactions closed at $4,000 above market value. That comes as no surprise as these are mature HDB estates where demand is high. There were also some recent private property launches in the vicinity, for example the Clement Canopy, which may have had some residual effect on the resale HDB  flat market.

Aerial view of HDB flats in Ang Mo Kio

Aerial view of HDB flats in Ang Mo Kio

There were however a couple of HDB towns which did not post as promising figures despite being popular locations for flat seekers. In Queenstown, the lowest below-market prices were clocked at $12,500,  followed by $10,000 in Ang Mo Kio. Prices of 3-room flats rose by 0.2% while executive flat prices fell by 1.7%. Overall, prices of resale flats in mature estates rose by 1.1%.

 

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.

Property cooling curbs working in China

Many Asian-pacific countries have placed property cooling curbs on their housing and real estate industry as prices climbed rapidly within the past half a decade. Cities such as Hong Kong, Tokyo, Sydney, Melbourne, Beijing, Shanghai and Singapore are facing not only space and housing issues but also rapid inflation and increasing property prices.

Aerial view of suburban neighborhood, Wuhan, Hubei, China on 11th March 2016. (Photo by Jie Zhao/Corbis via Getty Images)

Aerial view of suburban neighborhood, Wuhan, Hubei, China on 11th March 2016. (Photo by Jie Zhao/Corbis via Getty Images)

The Chinese government has been placing curbs upon curbs on their real estate industry, with perhaps conflicting sentiments as the sector accounts for a large part of the country’s economic growth. But housing prices have been skyrocketing at an alarming rate and for the first time in the past few years, the measures seem to be taking effect.

In Shenzhen, currently the country’s hottest market for new homes, property prices have fallen 0.5 per cent after consecutive dips over the past 4 months. In Shanghai, prices fell by 0.1 per cent, also following a 3-consecutive-month decline. While prices remained unchanged in Beijing, the stabilisation is a start to possible price deflation. News of a possible reduction of land release by more than 3 times that released in 2016 could further reign in price increase.

Park yoho venezia Hong Kong propertyThe price-increase in January was reflected in the smallest number of cities in a year. Home prices have fallen in 20 cities while 45 out of 70 cities saw a gain in prices, down from 46 in December last year. Part of the reason could be the curbs placed not only on buyers but also on banks. Some bank branches in major Chinese cities such as Beijing, Guangzhou and Chongqing have recently increased mortgage rates for first-time buyers. China’s central bank is likely to have even stricter restrictions on credit and housing loans put in place, in particular targeting developers and households, in order to prevent a property bubble.

 

New Tanah Merah condominium show flat draws thousands

Grandeur Park Residences premiered its show flat to a grand crowd last weekend as they thronged the Tanah Merah site in all eagerness. It will officially open for purchase on March 4.

GrandeurParkResidencesMost of the potential buyers were there to suss out the new 720-unit residential project situated near the Tanah Merah MRT station. Its proximity to the MRT station and location has no doubt attracted keen eyes. Most have spotted this new project for its rental and investment potential.

As more than half of the units in Grandeur Park Residences are one- and two-bedders, the more palatable quantum prices is a big draw for investors. Prices of the 2-bedroom apartments start from $700,000. Though the developers expected a big crowd at the launch of the show flat, the response has been overwhelming and is indeed a positive sign.

ParkPlaceResidencesThere has been glimmers of hope in the resale flat and rental markets just within the first month of 2017. The new condominium market has also been faring well even before the start of the year. And there will be at least 2 other major launches coming up in the months ahead, such as Seaside Residences in Siglap and Park Place Residences in Paya Lebar. Thus even though analysts are hesitant about calling it a good year for the market, consumer confidence is once again building up.

Resale condominium market in gradual recovery

Could a slice of sunshine be sliding its way back into the local private property market? Resale condominium prices have risen 1.1% in January and it’s a bigger increase than the 0.5% in the last 2 months of 2016.

RivervaleCrestAnd as expected, non-landed private residential properties located in prime districts lead the way, with a 1.9% month-on-month increase. Central region properties also gained 1.5% in terms of prices while that of suburban properties rose by 0.4%. In a year-on-year comparison, resale prices were 0.3% higher than in the same period of 2016.

In some districts, resale properties exchanged hands at lower-than-market value, though the price difference at minus $4,000 is lesser that the $5,000 in December. District 23 posted more than 10 resale transactions in January alone and selling prices went as high as $2,000 above market value.

GrandeurParkResidencesThough the year is still young, it could be a budding sign of the things to come for the rest of the year. Property analysts are not expecting sharp rebounds anytime soon, though the stabilisation of prices and an increase in sales volume would already be sufficient to signify market recovery, albeit a gradual one. What could also be seen from the market data was that sellers were beginning to moderate their asking prices, possibly with pressure coming in from new property launches and completed new units entering the weak rental market.