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23 Apr

Homes in Singapore, JB and even Batam.

Remember the Singaporean sitcom Phua Chu Kang? “Best in Singapore, JB and some say Batam”. Now some may be able to say the same about their homes in all 3 cities.

Funtasy Island

Waterfront living might be out of reach for some in Singapore, but at a fraction of the cost, you might just be able to get the same in Batam. With easy accessibility from our shores, Johor Bahru has long been an area investors hone in on. Now there’s Batam, less than an hour’s boat ride away.

Indonsian-based firm P.T Batam Island Marina are the people behind a leasehold development which will open by mid-2014. Named Funtasy Island, it consists of 450 villas and 150 apartments. Already more than half of the villas have been sold, 70 per cent to Singaporeans. Buyers from Europe, the United States make up the rest.

Aqua Villa on Funtasy Island.

Aqua Villa on Funtasy Island.

Just 20 minutes away from the Singapore Cruise Centre and just 16km from Sentosa Cove, the idea of sailing from home to home might just be possible. Think other cities like New York, Sydney and Miami where the waterways are a practical way of travelling between places within their boundaries, Singapore might be joining their ranks soon.

So just how much does a villa at Funtasy Island cost? When they were launched in 2011, they went for as little as $235 psf, which is an average of $500,000 per villa. That might not even buy you a HDB flat in Singapore. A 684 sq ft apartment at the 150-unit The Cove starts at $348,000 and comes with a 8 per cent rental guarantee for five years, especially since there is no restriction on renting the homes out to tourists. Besides residences, Funtasy Island’ will also include a tourist park featuring the 328-hectare island’s eco-attractions such as nature hikes, fishing and snorkelling. There will also be a 24-hour in-house security on the island.

Forest Bungalow on Funtasy Island.

Forest Bungalow on Funtasy Island.

So if you fancy living the modern kampung life for less than half the price of what you might get on mainland Singapore, it might be fun to make fantasy, well, funtasy.

22 Apr

Bought landed property. What did you really land?

With the rise of high-rise properties in Singapore, landed homes are becoming very much the rarity it is. But surprisingly, you can still buy a landed home for as little as $2 million, which is in the same range as a condominium unit in the suburbs. In Geylang and MacPherson, there are a number of landed properties tagged with that price.

Freehold or Leasehold? What other criteria would affect the price of landed property? Belgravia Villas in Ang Mo Kio.

Freehold or Leasehold? What other criteria would affect the price of landed property? Belgravia Villas in Ang Mo Kio.

According to URA’s real estate data, at least 10 freehold landed properties were sold for under $2 million last year. The cheapest was a 1, 841 sq ft property in Geylang which went for $792,000. That is $392 psf for you, less than half of some suburban condominiums. But these finds are few and far in between. Usually the plot size of these landed homes are smaller, such as a 893 sq ft terrace house in MacPherson which sold for $1,133,000. One of the rarest sales last year was a landed home in the prime district 10 on King’s road. The terrace was sold at $800,000.

But since sale of landed properties are limited to Singaporeans (foreigners are usually not allowed to buy landed homes), prices and demand are surprisingly lower than you think. Landed properties are valued mostly for the land alone. Thus size definitely matters.The condition, age and location of the property all come into play as well of course.

Jansen cluster terrace homes in District 19.

Jansen 8 cluster terrace homes in District 19.

Landed home prices rose 7.3 per cent in 2012; as compared to resale freehold condominium prices which rose 2.3 per cent. Leasehold suburban condominiums rose 3.4 per cent in the same period. Property agents and industry players have been seeing a rise in the number of landed home buyers within 35 and 40 years old. Previously most buyers are above 40 years old.

So if you find a good landed property deal, could it be too good to be true? Perhaps.

There are a number of hidden costs to punch into the calculator before you sign on the dotted line.

  • Land size
  • Age of the property
  • Condition of the property
  • Location
  • Parking spaces
  • Quality of the neighbourhood
  • Restoration and renovation costs

One should also take note of the number of years remaining on leasehold properties. Since demand in the resale market for properties with limited number of years left on the lease might lower the selling price quite substantially.

9 Apr

100% condo sales few and far in between

Rare are the new condominium launches which see a “Fully sold” sign plastered on their boards within a few months of launch. Though most may eventually reach a 100% sale status, they are taking longer to do so. This depends on the location of the property and the number of units available for sale, of course, but so far, the top scorer has been Seasuites in Pasir Panjang Road, at 85 per cent of its 52 units, with an average psf price of $1,650.

Seasuites condominium in Pasir Panjang.

Seasuites condominium in Pasir Panjang.

A strong runner-up in the race is Urban Vista in Tanah Merah. Considering it just launched mid-March, this 582 unit condominium project is selling exceedingly well with 77 per cent already sold. Average prices are $1,350 psf. March’s other big launch, D’Nest in Pasir Ris also sold a cool 76 per cent of its 912 units at $920 psf.

Private condominiums are still selling well, with new trumping resale. But there are 9 more months left of the year, and what will keep or halt the sale momentum? Chances are new properties which check the right boxes will win the race:

1. Good location
2. Competitive pricing
3. Comparison of other residential projects nearby

In 2012, most of the properties which reached a fully sold status were launched in the early part of the year, and most of them were one or two-bedders or studio apartments. Will 2013 see a reprise of last year? Or will the cooling measures change it up?

19 Feb

Yishun climbing in ranks

As one of the sleepier HDB estates with perhaps an older, lower-income resident profile, Yishun could be seeing a turn of tide this year. Although as large, if not more, in size than neighbouring Ang Mo Kio and Woodlands, Yishun has been relatively quiet in terms of property investments and new property launches.

Miltonia Residences in Sembawang.

Miltonia Residences in Sembawang.

But a possible revival could be in its books. With recent launches such as Miltonia Residences and Skies Miltonia, and also a rise in industrial activity at A’Posh Bizhub, Northpoint Bizhub and North Spring Bizhub, there has been a rise in the number of residential transactions in the area. Over the past year, 1, 189 properties have been sold.

In January this year, 26 home sales were recorded, as compared to the 7 in January 2012. But with the lack of other new launches, home prices here could have lost some shine. So far, the average price of $874psf have pretty much stayed the same from a year ago. The only high which was recorded was in October last year when Skies Miltonia was launched.

NorthSpringBizhub

With one of the lowest percentage of young residents below 15 years of age, and 11 per cent earning below $1, 999 per month, perhaps an estate makeover could be in the pipeline. Keeping in mind that a new highway, the Eastern Dispersal Link, will shorten travelling time between the Causeway and the Iskandar development region in Malaysia, a new rush of temporary (and possibly permanent) residents might be headed Yishun’s way. Will this increase rental yields in that area?

According to Savills‘ head of research Alan Cheong, increasing the number and rate of new properties, both public and private, in Yishun may help to bring new, and younger, blood into the population. Will this be one of the next mature HDB estates to have new BTO flats?

31 Dec

The $2 million EC which came and went in 2 hours

CityLife EC TampinesThat’s the story of the week. The penthouse at CityLife@Tampines was sold for $2.05 million to a 56-year-old businessman who was purchasing it in proxy for his son because “My son can’t afford it, he’s only a salaried employee.”

Executive Condominiums (ECs) have been at the crux of heated debates recently as property developers raise the stakes of recent launches by adding luxury pluses such as penthouses, sky suites and private jacuzzis. CityLife@Tampines had 16 penthouses and 6 sky suites. And all were sold by noon on last Saturday, with 65 per cent of the entire development sold by that time. The $2 million penthouse was as big as four five-room HDB flats and went for $744 psf. Given its proximity to the MRT station, bus interchange, malls and the upcoming business hub, it’s perhaps a small price to pay, considering the potential value in say, 10 years.

Many may ask, if the buyers can afford penthouses at these prices, and since the potential added value of these public-private hybrid properties are almost a guarantee, should they still receive HDB housing grant?

Yew Mei Green

Before we get into that, perhaps a look at how previous ECs have fared since their launch:

  • Touted as the most expensive EC thus far, Bishan Loft units have gone from $379 – $491 psf to $1,109 psf.
  • Whitewater in Pasir Ris were $313 to $423 psf at launch and now goes for an average of $825 psf.
  • Yew Mei Green in Choa Chu Kang however did not see a substantial rise, going from $313 – $844 psf at launch to a current average of $717 psf.

Up or down the prices go, is besides the point. Buyers are quick to see the potential rise in property value of ECs as they can be bought as public housing but sold as private properties. Simple as that. And if that were the purpose of the government building executive condominiums, then they have done well. If there were other reasons, perhaps some tweaking needs to be done in the near future, and quickly.

11 Dec

The Topriary penthouses sold out

At one of Sengkang’s up-and-coming executive condominiums, The Topriary, there were once 16 penthouses.  But they are now none. All were sold out within the first two hours and at prices of between $1.3 and $1.5 million at sizes of between 1, 970 sq ft to 2, 476 sq ft.

Buyers were attracted by The Topriary’s amenities and investment potential. Situated near the soon-to-be completed Seletar Mall and existing Greenwich V Mall, home  buyers snapped up 600 units of the 700 units within the first five days. Applications have since closed last Tuesday. Other units included two-, three- and four-bedders as well as dual-key apartments.

The response is a strong indication of the market interest in ECs. HDB upgraders and those not willing to fork out the money for limited space in private properties count amongst many of those applying for the recent EC launches. CityLife@Tampines was another EC with a 4, 349 penthouse which was more than three times oversubscribed. If you’re looking out for another EC launch, then Forestville in Woodlands might be just your thing.

With property developers offering more luxury fittings and options in the latest EC launches, it makes one wonder how much further will this particular property sector have to go before it becomes entirely comparable to private condominiums and possibly closer to laying its own path to demise.

6 Dec

Executive Condominium prices = Private Condominium prices?

And it might be that way for a while more as new executive condominiums present luxe features, giving private mass market homes a run for their money. The current price gap is 17.2 per cent this year, down from 32.2 per cent in 2007′s property high. Executive condominiums are hot ticket property buys in the local real estate market.

Some of the pros of buying an executive condominium include:

1. The income ceiling for ECs has increased to $12, 000 per household, thus if you earn less than that, you are still eligible for a housing grant from HDB.

2. After the minimum occupation period (MOP) of 5 years, the EC unit can be sold to Singaporeans and Permanent Residents in the open private property market.

3. After 10 year, the EC unit can then be sold to foreigners.

Property buyers see a great deal of rising value in this particular property type. And it is usually the areas where EC units are limited that see the most active sales. Districts with the greatest number of resale ECs are usually those with the narrowest price gaps.  Areas such as Bishan and Ang Mo Kio, and Pasir Ris, Simei and Tampines, saw the narrowest price gap of 10 per cent whereas in Sengkang, Punggol and Hougang, the price gap was 22.4 per cent. Average psf of units at Bishan Loft and Nuovo in Ang Mo Kio is only $100,000 below the average price psf of private condominiums in the same district.

The recent EC launches, CityLife in Tampines for example, has pushed this market up a notch into the private property arena with its  luxury penthouse, infinity pool and sky terraces.

Is this narrowing of the price gap between public and private housing a true reflection of the housing situation in Singapore?  If the rise in prices continue, would the Executive Condominium market eventually suffer the same fate as the Design Build and Sell Scheme (DBSS)? In the end, the only question we are truly left with is, should it be that way?

3 Dec

Something old, Something borrowed

In the West, this is a common phrase used in preparation for a wedding. But for Singaporean newly weds, are their something borrowed a chunky home loan from the banks? Recent reports show that Singaporean households and businesses are borrowing to purchase properties and household wealth has risen 7.3 per cent. Could this be a sign of a property bubble? Is the nation taking after the times just before the economic recession in America? What could the government do to prevent that from happening?

The cooling measures may have curbed home buyers’ borrowing but does it have any effect on home prices?

 

MAS’ Fnancial Stability Review reported robust home loan quality with no loans exceeding the property’s value. A good sign considering the low loan rates could have caused a rush to purchase properties in hope of reaping rental and resale profits. Most mortgages were for home-occupiers and there was a 0.2 per cent drop in the number of loans taken which were more than 80 per cent of the property value.

In that sense, one of the cooling measures could have taken effect rather quickly. What then is the cause of rising home prices of both resale and new apartments? Rising construction and labour costs? How does this impact the resale HDB Flat market?

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