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16 May

New Homes sales halved

New properties rode the big wave earlier this year in the first quarter. Now, the tide has brought them back on the ground.

Sant Ritz near Potong Pasir MRT station.

Sant Ritz near Potong Pasir MRT station.

But the reason may not be because the fish are not biting. There are simply fewer launches in April. Although new home sales saw a spike in March, industry analysts are putting it down to pent-up demand following January’s cooling measures. Are April’s numbers more reflective of the actual effect of the property curbs? As the heat from Q1′s fever dies down, home buyers who are shopping for a home may be holding back in wait of potential launches in the coming months.

The most recent launches were Sant Ritz in Potong Pasir , Jade Residences in Upper Serangoon, Cosmoloft in Balestier and The Siena at Farrer Road. Data from the Urban Redevelopment Authority (URA) indicated 104 units sold at the 214-unit Sant Ritz, at an average of $1,494 psf. At Jade Residences, buyers snapped up nearly half of the 171 units at a medai of $1, 592 psf.

cosmoloftBuyers are becoming more savvy, and are increasingly not only drawn by a property’s location but also design and potential investment value. Do buyers now have the upper hand and will developers be pressed to lower selling prices? CBRE executive director of residnetial Joseph Tan believes that buyers now draw the line at properties ranging between $900 to $1, 600 psf. Properties selling above that price line may not see as many takers. For now.

Deputy Prime Minister Tharman Shanmugaratnam’s statement last month which spoke to the unlikelihood of more cooling measures could also mean buyers are now in less of a hurry to buy up properties and can well afford to play the waiting game. It may seem like a supply glut could be near, but as soon as population increases, and depending on how fast a rate, demand will soon rise as well. Is it better to buy now than to wait for prices to drop?

Upcoming launches include KAP Residences at King Albert Part, Corals at Keppel Bay, Liv on Sophia near Dhoby Ghaut MRT station and Stratum in Pasir Ris.

7 May

Property curbs brought in revenue

What did all the previous rounds of property cooling measures bring to the table?

$1 billion. In tax revenue.

Financing Your HomeFollowing January’s new Additional Buyer’s Stamp Duty (ABSD) hikes, in February and March $158 million were added to the taxman’s coffers. The ABSD is now up to 15 per cent. $580 million came from foreign buyers, were 3, 041 homes were sold since December 2011. Singaporeans and Permanent Residents (PRs) forked out $386 million for 7,269 homes. ABSD was introduced in 2010, and since then, home owners have paid up a total of $66.6 million of this levy.

Foreign home buyers have retreated somewhat, with a 36 per cent drop from last year. The ABSD currently stands at:

  • 15 per cent for foreign buyers
  • 5 to 10 per cent for Singaporeans and PRs
Starlight Suites condominium.

Starlight Suites condominium.

Since new home sales have continued to push on, strongly, despite the measures, the ABSD may not have entirely been a deterrent nor an aid to managing home prices. Property developers are also helping to bolster the market by providing discounts, rebates and other incentives to home buyers.

Many buyers are willing to suffer a little now and buy when they can, rather than wait for something that may or may not happen. As the population continues to grow, they are perhaps preemptive of the future where rental could be a considerable means of income and should homes become out of reach for their children.

16 Apr

New private homes sales may match 2012′s high

D'nest condominium.

D’nest condominium.

If anything, worries about the property cooling measures affecting the property market in a big way should be allayed, for now, by the way Q1′s new homes sales figures go. March’s sales gave it a big boost, as buyers returned after the Chinese New year  lull in February. Many buyers were first-timers, and out of the 5,564 units launched in Q1, almost all (5,533  units) were sold.

Property developers had kept launches out of the market in February, and the release of numerous new properties near MRT stations in March could have made up for the pent up demand from buyers who flooded the showflats and new property launches in March, snapping up units in new suburban condominiums such as D’Nest, Urban Vista, Bartley Ridge and Sennett Residence.

According to the Urban Redevelopment Authority’s (URA) data of new home sales, March alone saw 2,793 units sold, breaking the previous record of 2,772 in July 2009. It goes to show that despite the cooling measures, demand is well ahead in the race to balance property prices and inflation at large.

Shoebox apartments were top sellers for HDB upgraders. Seen here is the Bartley Ridge condominium.

Shoebox apartments were top sellers for HDB upgraders. Seen here is the Bartley Ridge condominium.

Property analysts are however not expecting similar sales numbers this month, since March’s bumper crop of new units would have satisfied the pent up demand from previous months. D’Nest emerged the clear winner with 699 units of its 912 units sold. Once again, location and proximity to transport were cited as top reasons for great sales.

11 Apr

Tighter rules on property specs to help protect buyers

The showflat looks great and so did the photos you saw in their brochure. But could you be getting less than what you bought? Much less?

The authorities here are tightening up on rules surrounding grey areas and misrepresentations by property developers and sellers. Developers who play with numbers when pricing the property, or intentionally mislead the buyer on the amount of usable floor space they will eventually possess, will be severely dealt with by law, with stiffer fines, penalties and even jail terms and sales suspensions.

Do showflats really provide a clear picture of what you will get? Photo courtesy of ThinkStock.

Do showflats really provide a clear picture of what you will get? Photo courtesy of ThinkStock.

Developers now have to reveal all discounts, including vouchers of any sort and stamp duty reimbursements. Showflats will also be required to show the exact space of the finished unit. Where previously some show units have used higher ceilings and glass panels where brick walls should be to create a sense of space, they now have to follow strict guidelines so that buyers will know that “what they see is what they get”.

This most recent move by the Government on improving the Housing Developers (Control and Licensing) Act is a positive step towards creating a more professional property and real estate industry, plus a necessary safeguard to provide buyers with the appropriate tools and paths for legal redress on one of the most expensive investments in their life. The bill was passed through Parliament on Monday.

18 Feb

New homes are January’s Hot Property

Mass market. New Homes. Four words which made property developers’ day in January this year. Their streak of good fortune continued well into the new year, following their rise in popularity over the last quarter of 2012. In January alone, nearly two-thirds of developer sales went to suburban condominiums. 1,287 new homes were sold in January, more than twice the number of homes sold in last December.

Q Bay

A lowdown on January’s hot sellers:

1. QBay Residences in Tampines – 372 units sold. Prices dropped from $1, 050psf to $985psf.
2. La Fiesta in Sengkang – 404 units sold.
3. D’Leedon in District 10 – 263 units sold. Developers offered up discounts of up to 15 per cent.

Property developers have been actively putting up offers of discounts and rebates, and these have perhaps proved too enticing and attractive to pass for property buyers and investors. Loan-to-value ratios have also been dropping, which could have given buyers new reasons to refinance and pull out all stops for smaller suburban units, hoping to reap in the benefits over the long term.

Trilinq condo

Wary of new property curbs in the near future, the positive sales figures might possibly be a knee-jerk reaction to the new cooling measures, and property analysts are expecting the response to slow over then next few months. However, DWG‘s senior manager, Lee Sze Teck, has expressed that since new major launches, such as The Trilinq near Clementi MRT Station, are expected next month, numbers may still reflect a happy high.

12 Feb

Far East Organization came out tops in 2012

They were the top seller of private homes last year, selling 10 per cent of the total 22, 290 private residential property sales. The best sellers within the Far East Organization stable of new properties were The Hillier in Hillview and Watertown in Punggol. City Developments were second with 1,674 in total sales, with Bartley Residences and The Palette scoring top marks.

Watertown condominium. One of the first new properties to be launched in Punggol this year.

Watertown condominium. One of the Far East Organization’s top-selling properties launched in Punggol last year.

Out of the top 10 scores, 8 were local companies and the remaining 2 spots were taken by Qingjian Group and Hongkong Land. This is Qingjian’s first time in the top 10 list and its not surprising considering they have been lodging positive responses at GLS tenders.

Part of the reason for their success could be the rising popularity of suburban private homes the last year. Since high-end properties did not do as well, property developers like Wing Tai did not do as well, leaving space for smaller players such as Frangrance Properties and Macly Group. The latter were responsible for small residential projects such as Parc Rosewood, Guillemard Edge, Natura@Hillview and Eon Shenton. Most of these projects feature smaller units of fewer than 150 units, with the exception of Parc Rosewood.

Parc Rosewood condominium in Woodlands

Parc Rosewood condominium in Woodlands

Far East Organization, City Developments and Hong Leong are all pulling their weight in the Government Land Sales tenders. Having legacy sites certainly helps as well.

7 Feb

Property developers discounts may be cut

If you’re waiting to see if the developer of your property of choice might dangle discounts to counter the recent cooling measures, you might have to reconsider. The authorities have caught on to property developers‘ tactics of offering discounts as a means to entice customers to buy new properties, especially since the cooling measures have taken a huge chunk out of the business.
House

But fear not, only the indirect discounts are under review by the Urban Redevelopment Authority. These mostly refer to the rebates and vouchers that the buyer receives only after purchasing the property. Since these are not reflected in the upfront price which the buyer pays, it may make the cooling measures seem ineffective, which also means URA’s quarterly price index based on caveats lodged might not be a true reflection of the market situation.

Property developers on the other hand tend to lean towards indirect discounts as this helps placate early buyers who may not be happy that they had gotten the raw end of the deal. Keeping the upfront price high also helps to keep prices high all around.

Other ways which developers have been trying to help buyers out are through the partial or full absorption of the Additional Buyers Stamp Duty (ABSD) which has been increased in the most recent round of measures. The frequency and fervency of this practice might be what the authorities are watching as it negates the effect of the property measures.

Another concern is also that the true value of the property needs to be conveyed truthfully to the home buyer, but with the discounts and cuts, it might not be the case and it might only confuse consumers. Not forgetting that home loans are based on the property value, thus might buyers be paying more in the end through bank loan interests for a higher priced property?

So are the cooling measures truly working? If it seems that discounts are offered more frequently, then it might be.

24 Jan

Will the property cooling measures bite?

They might. According to DBS Group Holdings chief executive Piyush Gupta, the most recent cooling measures ‘have a lot of teeth and affect everyone’. Some of the biggest teeth include higher additional stamp duty and stricter loan limits. Thus is will somehow impact anyone buying a home, whether it is the first-time buyer or the seasoned real estate investor.

What do the recent residential property prices and sales figure indicate for Singapore?

What do the recent residential property prices and sales figures indicate for Singapore?

Mr. Gupta considers the measures a possible reflection of the Singapore Government’s dilemma balancing between ‘growth versus inflation, and growth versus social stability’. Not surprising since housing was one of the most hotly debated issues at the last elections.

There is speculation that home sales may dip by as much as 30%, in number, not in price. Property buyers may back off for a while but in the near-term, prices are expected to stay high as developers currently do have a strong balance sheet and some holding power. As time goes by, prices are expected to either plateau or dip 5 to 10 per cent, mainly in the prime segment.

As developers continue to buy up land from the Government Land Sales Programme (GLS), they will continue to build new homes at the current market high. And as population is expected to continue to rise, it might not be likely that prices will drop due to a demand-supply imbalance. Stable employment and interest rates will also keep the game going. The tipping point is not yet in sight.

According to a UOB report by Mr Francis Tan and Mr Jimmy Koh , even if home prices were to correct, first-time buyers may take the opportunity to buy thus softening the blow on the market.

Well, in short, whether or not you should play the waiting game, depends entirely on whether you have the time and money to wait, or not wait.

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