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.

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?

Cluny Cluster – Exclusive prime district

Tucked away near the quiet of the Botanic Gardens, are a cluster of heritage properties with sprawling land and exclusive addresses. These are the homes in the Cluny cluster – namely Cluny Road, Cluny Hill and Cluny Park.

The area consists mainly of landed homes. But all that will soon change. New high-rise condominiums are planned for its midst and these landed properties will welcome their taller comrades as soon as this year.

Cluny Park ResidenceThe latest addition to be launched is the 52-unit freehold Cluny Park Residence. Sales began as early as August 2013 but its proper launch was only last weekend. 12 units have already be sold, and the developer Tuan Sing, is expecting a launch selling price of $3, 000 psf. Nearby, other condominium projects include The Siena, 10 Shelford and Dukes Residences. The last has already been completed in 2011. Prices at 10 Shelford are around $1, 874 psf for a 431 sq ft shoebox apartment. At Duke Residences, median prices were at $1, 576 psf for the past 6 months. Both are freehold properties.

The draw of the exclusive address which is surrounded by good class bungalows and semi-detached houses, and the proximity to good schools, eateries and supermarkets which are just a stone’s throw away, makes good fodder for well-heeled investors.

Luxury condominiums going at lower prices

$2,200 psf to $1, 800 psf.
$3.7 million to $3.4 million.

That’s how far lower the prices for high-end luxury apartment units are going for.

Perhaps it’s a case of when the going gets tough, the tough gets going, at lower prices. It’s no secret that while luxury properties are the creme de la creme for property agents and developers, when investment money is slow in coming, these are one of the hardest to sell.

Hallmark residencesAnd the going looks like it is going to be tough for quite some time more. Property developers are struggling to move unsold stock, and depending on whether their holding power is strong enough, they may be forced to make other moves sooner. There were news earlier on this month that developers are looking to convert condominiums into serviced apartments as the pressure of the deadline to sell looms closer.

At MCL Land’s Hallmark Residences in Bukit Timah, the uncompleted condominium development is already advertising sales of units at discounts of up to $300,000. A 969 to 990 sq ft 2-bedroom unit was originally priced at $2 million but is now at a lower $1.8 million. Since its release of the first 20 units in January, 5 have been sold. They are however planning for a proper launch sometime in the first half of 2014. At the 999-year leasehold St Regis Residences on Tanglin Road, prices have dropped from $4,653 to $2, 349 psf. Of the over 10,000 private homes still under construction in the prime districts 9, 10 and 11, nearly half remain unsold.

Once again the story of low demand versus high supply dogs the real estate industry. With the government’s many cooling measures, a bubble is unlikely to happen especially since loans are harder to get. It will be interesting to see how the property market plans for a rebound.

Sengkang attracts the home-buying crowd

The far-flung places in Singapore are getting more attention from property developers and love from home buyers. Sembawang, Punggol, and now Sengkang.

Rivertrees ResidencesAlong the quiet Sunggei Punggol Reservoir, 1,000 new homes will be enjoying its new residency. 555 units from The Riverbank @ Fernvale and 495 units from Rivertrees Residences. These are all private condominium apartments and both with 99-year leaseholds. Stretching 150 metres along the reservoir, 90 per cent of the units at Rivertrees Residences will be able to boast a waterfront view. Units will include three-bedroom and strata-titled duplex homes.

The developers, Frasers Centrepoint, Far East Orchard and Sekisui House are calling this development one of the “only waterfront landed houses in Singapore, apart from Sentosa Cove“. As expected, prices will likely hover around $950 to $1,150 psf. UOL’s Riverbank @ Fernvale has also garnered much interest, with over 500 cheques collected prior to its launch today. Home buyers may be attracted by the waterfront-living style of apartments and the exclusivity of its location. Coupled with the fact that Singapore is only going to get more crowded, areas such as Sengkang may be one of the last few residential places in the mainland to truly enjoy a bit of space and greenery.

Resale home prices falling

As the supply of new homes continue to serve up options for property buyers, resale homes are somewhat relegated to the back seat as they compete to shine in the property market. The recent Singapore Residential Price Index (SRPI) numbers show that overall non-landed private home prices dropped by 2.1 per cent in October.

Industry experts are seeing an increasingly experienced pool of home buyers and investors who are much more price-sensitive than before. With so many options to compare between, buyers are often keen on newer establishments and tend to hold off looking for a resale unit, preferring instead to look out for new launches in the same area.

Sky Habitat condominium in Bishan.

Sky Habitat condominium in Bishan.

And with property developers offering competitive selling prices, new units are the bees knees especially for young families, professional couples and those looking for a good investment opportunity.  Sky Vue and Sky Habitat in Bishan are examples of recent new property launches which were offering discounted units and affordable and highly attractive prices. And should they be looking at similar resale units nearby, they are expecting them to be priced at least 20 per cent lower.

One other possible reason for the decline could be a weakening rental market. As immigration policies continue to tighten, and developers try all means to increase sales of their newer launches, resale homes might have to be satisfied being the wallflower for now.

Private properties take a back seat

November heralded a boom to the private property market. But as the month draws to an end, so does the interest. In the weekend past, sales were slower and many developers were resorting to price cuts to attract customers.

Clermont ResidencesAt Clermont Residences in Tanjong Pagar, possibly the tallest residential building in Singapore when it’s completed in 2016, approximately 10 units were sold at $3, 000 psf. But that could be due to the high price tags of the units, including a $30 million “super penthouse”. As the property-buying crowd become more experienced, they are leaning towards less expensive options and smaller units in suburban developments are more palatable for the immediate investor.

Alex Residences in Redhill launched just a couple of weeks ago to a good deal of activity, but most of that has tailed off, with only about 20 units sold over the weekend at an average of $1, 680 psf. The other recent new property, DUO Residences fared slightly better, mostly because of its relatively lower prices, especially for something so close to the CBD and Orchard belt.

And now the record launch of close to 9,000 new HDB flats, and the upcoming festive season, will sales dip even lower?

204, 500 properties to be completed by 2016

At 6,508 more units than the 197,566 units projected earlier this year, there will be 204,500 executive condominium and private apartment units built by 2016, according to data released by the Urban Redevelopment Authority (URA).

Completed condominium units are increasing in number as developers pour fresh new stock into the market mix. Despite having held back on some major launches as the year-end lull draws close, the number of properties available in the market continues to rise. Industry experts are however expecting developers to lower their launch prices in order to boost sales.

The CreekFrom the looks of the recent Inflora condominium launch, selling prices, of new properties at least, may indeed be on the slippery slope. But that perhaps might be good news for those looking to invest. Properties in the prime city centre spots are dropping by as much as 0.5 per cent whereas city fringe and suburban areas enjoy continued growth, however slight.

Over the next 3 years, 4, 884 more private homes will be built as National Development Minister, Mr. Khaw Boon Wan considers it “making good progress in our ramp-up of the home-building programme”. The number of HDB flats to be built will remain the same as projected. 1, 355 executive condominiums will be ready within the same time frame. What does this heightened supply mean for Singapore’s housing market and will the population growth be a reflection of a cause of this increased property growth?