2016’s demand for properties level with last year’s

Though it may seem like the property market took a turn for the worse this year, figures have shown that the level of demand has remained similar to last year’s.

peak-cairnhillProperty prices have fallen 10.8 per cent since the 2013 peak and perhaps it is precisely this decline of home prices that have kept buyers coming to the table, more so this year than the previous few which have been dull partly due to the property cooling measures implemented since 2013. Some property agents have in fact reported up to a 50 per cent increase in sealed deals this year, indicative of increased buyer’s interest and number of project launches.

The market inertia in terms of the property cooling measures and interest rates may also have been push factors in enticing buyers back into the market. Resale property sales have been strong with 5,587 transactions closed in the first 3 quarters of this year, up 18 per cent from 2015. Developers have also been pricing new units more competitively this year, giving the resale market a run for their money.

the-crestCity fringe and central region resale properties were particularly popular with buyers though some may still be waiting for better deals.  And as property analysts predict a further 3 to 3.5 per cent drop in prices for the rest of the year, the market seems primed for owner-occupiers though those considering investing in properties should wait a little more to get the most out of their buck.


New private homes with strong attributes still a draw

Amidst speculations of a bottoming-out real estate market, the 3 major project previews over the weekend might be good indicators of market fluctuations in the months ahead.

38-jervoisPhoto credit: Prominent Land

Judging from the strength of public response from recent launches, new private non-landed developments with strong attributes such as good locations, usually those near MRT stations and shopping malls, and affordable quantum prices will take market headlines for now. Buyers are not entirely shrinking away from making purchases, but they may be pickier as the choices available outweigh the current demand.

City Development’s (CDL) latest private residential offering of the Forest Woods condominium clocked an encouragingly positive level of sales in its recent launch, perhaps leading the way for the next few launches coming up – Queens Peak on Dundee Road in Queenstown, Parc Riviera in West Coast Vale and 38 Jervois in Jervois Road.

forestwoodsThe last of these projects is a rather exclusive boutique offering of 27 units developed by Prominent Land. At 38 Jervios, units range from 474 sq ft one-bedders to 1,098 sq ft two-bedders plus penthouse study with prices averaging $2,100 psf and up. Buyers can expect to fork out $1.08 million for a one-bedroom unit to $1,81 million for a 3-bedroom unit. 6 of the 27 units will be penthouses.

Although these new private homes may push sales figures past the 1,000 a month mark, property analysts do not yet expect a sudden market uptick as prospects of the economy remain lacklustre.

Property cooling measures likely to remain

The economic slowdown and diminishing growth rates are causes for concern not only for the Singapore government, but also for consumers and businesses.

National Development Minister Lawrence Wong has recently spoken about the property cooling measures which were implemented in succession over the past three years. He has mentioned that they are likely to remain at this time of uncertainty as a response to “global context and environment”.

Kingsford HIllview PeakProperty prices have fallen 10.8 per cent since Q3 of 2013 and prices fell 1.5 per cent in the third quarter of this year, bringing it to the 12th consecutive quarter of price decline. The real estate industry currently faces stagnation and though interest rates are low, many are looking for higher yields. He has warned against creating an environment rife with property speculation and has said that capital inflow might create a volatile and highly-speculative atmosphere which will result in property market fluctuations.

With the high number of completed units entering the market this year, and with unsold inventory rising, the property cooling measures may be helpful in keeping the delicate market balance. As of Q2 this year, there were 21,500 unsold and uncompleted private homes, the lowest ever recorded, indicating a possible shift of influence from the seller to the buyer. The government has also held back on the launch of land sites earlier this year.

Meyerise2Property analysts are not surprised by the government’s move to keep the property curbs in place, though sudden pace changes and steeper declines might prompt the government to reconsider relaxing the rules sooner.

Home rental market softening

Rents for both HDB flats and private condominiums have been falling. The number of leases transacted per month have also dipped.

olina-lodgeThe weakening economic situation might be lengthening its stay as the job market remains soft and the hiring of expatriates is on the decline as well, indirectly affecting rental demand. The influx of new completed private condominium units and increase in number of HDB flats being sublet have also pushed rental prices and volume down in recent months.

In September, private non-landed property rental prices fell 0.6 per cent while HDB flat rents fell 0.3 per cent. In a year-on-year comparison, prices have fallen 4.6 and 4.5 per cent in the previously-mentioned property sectors respectively. Weak rental demand have also impacted property sales as resale private condominium prices have been reported to be shrinking, especially with added pressure from new completed units and new project launches.

hdb-flat-rentalStrangely however, core region property prices have increased despite the district leading the drop in condominium rents at 1.8 per cent. City fringe properties bucked the trend with a 0.2 per cent rise as the quantum rental might be more affordable to foreign tenants who also want to live in convenient and popular locales.

In the rest of 2016, the rental market may stagnant while in wait for the new year. As most of the completed projects were rolled out this year, 2017 may be the turning point for both the rental and resale markets. Property analysts are expecting rents to fall by a further 5 per cent before a possible rebound.

Hong Kong’s property market strong despite cooling measures

Unlike Singapore where the public housing sector is strong and almost 80 per cent of the population lives in a Housing Board (HDB) flat, in Hong Kong only 21 per cent live in a public housing unit and even then, it takes them a minimum of 3 years for a successful application. Though both cities have large population, the density is higher in Hong Kong where land restrictions are greater and unlike Singapore, they hardly have means of reclaiming land and expanding liveable space vertically is one of their only solutions. It comes as no surprise then, that unit sizes and liveable floor areas are shrinking.

hongkongpropertyMany could say that Hong Kong’s real estate fluctuations is very much like its undulating terrains, with steep climbs and equally slippery downhill slopes. Property cooling measures were rolled out in Hong Kong in 2012, around the same time as curbs were implemented in Singapore as well. But it still takes an average Hong Kong household 19 years to save up enough to purchase their own home compared to the 5 years for a Singaporean household.

Though property prices did fall in February, they rebounded to the levels comparable to 2015’s peak in September this year, possibly indicating renewed interest in Hong Kong real estate from mainland buyers. Numbers seem to show that more mainland Chinese are favouring Hong Kong properties over Singapore properties, possibly since Singapore’s property market has been seeing consecutive quarters of muted growth since last year.


Fall in Q3 Private home prices

Private home prices have been falling for the past 3 years, 12 consecutive quarters to be exact, and it’s currently at it’s lowest in 7 years. Last quarter’s fall was the steepest at 1.5%. So it does seem like the property cooling measures which were rolled out at around the same time have worked. And while the authorities are committed to continue having them in place, the real estate industry might have to bite down hard and stay the course.

threebalmoralEffects from the general global, regional and local economic markets have trickled down to the property sector as worry about the job market and a weakening economy affects demand and risk-taking. Though interest in high-end core central region luxury properties may have improved, prices have yet to completely made a turnaround. Home prices in this segment fell the hardest at 1.8 per cent following a 0.3 per cent rise in Q2. Landed property prices also fell 2.2 per cent while previously in-demand city fringe properties saw a 1.3 per cent fall.

As the last quarter of the year will possibly see more new property launches in comparison to Q3 which was relatively quiet, and HDB rolls out its next launch of 5,090 new BTO flats in Bedok, Bidadari, Punggol and Kallang/Whampoa HDB estates in November, will existing unsold stock and resale private homes be on the receiving end of added pressure and competition?

Buyers act before impending rates hike

The niggling thought of interest rates possibly rising in the later part of the year may have gotten buyers pumped to seal deals sooner. The interest in 2 new condominiums – Forest Woods in Lorong Lew Lian and The Alps Residences in Tampines Street 86 – both launched last weekend, was overwhelming, leaving their developers happy.

the-alps3Almost half of the 626 units at The Alps Residences have already been snapped up during its launch last Sunday. The project houses a range of one- to four-bedroom apartments and penthouses with sizes ranging from 441 sq ft to 2,486 sq ft and selling at between $900 to $1,200 psf. Similarly at the 519-unit Forest Woods, more than 500 buyers have already make monetary commitments of their interest in the property. The most popular units were the one- and two-bedders and buyers were mostly Singaporeans looking to upgrade or invest in the property market. Units here are going at $688,000 for a 506 sq ft one-bedroom apartment with study to $1.65 million for a four-bedder. Penthouse units go as far as 2,185 sq ft in terms of size.

forestwoods2Property analysts say the fervency could be due to the pent-up demand after the Hungry Ghost month and the lack of launches last quarter plus the overall market sentiment that prices are already at its lowest possible. Physical assets such as land and property are also considered less volatile than bonds and securities as the outlook for the latter seem less secure.

Resale DBSS flats scoring high prices

Recent transactions of 3 DBSS (Design, Build and Sell Scheme) units at Park Central in Ang Mo Kio has almost reached the $1 million mark. For public housing, this is certainly a bit of a coup for the property situated near the Ang Mo Kio MRT station. But compared to normal 5-room HDB flats in Ang Mo Kio Ave 1 went for as much as $880,000, the $980,000 selling price for a 5-roomer at Park Central which just reached its 5-year MOP (minimum occupation period) in July this year sounds perfectly normal for this district.

parkcentralThe DBS Scheme was suspended in 2011 due to the soaring prices, culminating in Centrale 8 in Tampines, developers have been setting for these projects, which are privately developed though they are technically public housing. DBSS units can be sold once the 5-year MOP is reached. Some other DBSS projects which entered the resale market this year were City View @ Boon Keng, Natura Loft in Bishan and Parc Lumiere in Simei. A unit at the former was sold earlier this year at a record-breaking $1.1 million. One of the first DBSS projects which became eligible for resale in 2014 was The Premiere in Tampines.

Now could be the time for DBSS to take their time in the limelight as new HDB flats are incorporating more design features and condominium-like facilities and facades. Property analysts are expecting the DBSS gloss to lose its shine in about 10 years’ time.