City Fringe wins once more

From Marine Parade to Novena to Kampong Glam, areas surrounding the busy city centre and central business districts are some of the best spots for property investments and this has hardly changed over the years.

The mixed-use development DUO at Ophir road was one of the latest offerings late last year. This year, another similar residential-cum-commercial project join their ranks – the City Gate on Beach road. But before these giant developments came into play, the Concourse Skyline condominium apartments were already in place. This 360-unit property was priced at $1, 590 psf at its 2008 launch. Despite 101 of its units remaining unsold, existing units have gone for as much as $2, 075 psf in the last quarter of 2013.

CIty GateWith the large number of incoming units from City Gate, which is targeting a price range of $1,900 to $2, 000 psf, these remaining units at the Concourse Skyline may be up for some fierce competition. Developers, Hong Fok Land, may experience some pressure to lower prices in order to meet the “All sold” status.

City Gate will sit on the site of the former Keypoint and will feature 188 commercial units and 311 apartment units ranging from one- and two-bedders to the increasingly popular dual-key units. Penthouses will vary in size, from 484 sq ft one-bedders to 1, 819 sq ft four-bedders. The wide variety of units will draw buyers with different intentions in mind, but with such a prime location, the only thing that might stop consumers in their tracks is the strict loan limits.

Varied market response to declining property prices

Home prices in both the private and resale HDB markets have continued to dip in the second quarter of 2014. In the first three months of the year, the decline was 1.6 per cent. Perhaps buoyed by the increased number of launched in Q2, the rate of decline was somewhat less steep at 1.3 per cent the quarter past.

Rezi 3 TwoBuyers who have been on the lookout for opportunities such as this may be happy to find that more than a few property developments have been offering discounts. Though the overall number of sales have picked up in the second quarter, mostly due to new launches, the private homes market saw a more obvious slowdown in both the city centre and suburbs. The drop was 1.5 per cent in the city centre and 1.1 per cent in the suburbs. Properties in the city fringe fared better with a 0.6 per cent drop, an improvement considering the 3.3 per cent dive in the earlier part of the year.

But there are those who are concerned about the longevity of their investment should they purchase now. The question they may ask is, is this the lowest prices can go? If I were to buy now, will the prices continue to drop? Though property analysts are doubtful that the prices will bottom out anytime soon, they are expecting the maximum of a 5 per cent decline.

As long as the supply continues at a steady pace, prices will not vary far from the current levels. Perhaps true change will only come with a shift in policies. Considering the elections will be here in a couple of years’ time, the time leading up to that might be a period of uncertainty.

Luxury apartments – Leased instead of Sold?

As the property market lull continues, developers of luxury properties are finding the going all the tougher. As the number of unsold units loom large in the horizon, some property developers have considered turning their private condominiums into serviced apartments instead.

iLiv@Grange

iLiv@Grange

The only other options are for those with deeper pockets to hold off their launches till the market turns around, or to offer steep discounts. Ardmore Residences is just one of the possible few luxury residential developments whose launch has been held off. Wealthy investors do not seem to be keen on hopping on the market for now, probably in lieu of the tightening measures placed around the housing and finance sectors. Since its completion last year, developers have chosen instead to lease out units at the Ardmore Residences for approximately $25, 000 per month. The Sculptura Ardmore condominium nearby has also not been launched.

Sculptura ArdmorePhoto credit: SC Global.

Although some marketing has been done for the iLiv @ Grange apartments in Grange road, it has not been officially launched as well. At its unveiling in 2010, developers were targeting selling prices of $3, 000 psf. But in the current market, that figure might be unrealistic. There has been talk of the developer, Heeton Holdings, possibly selling the units in bulk to a single buyer at $2, 200 to $2, 300 psf. Developers generally have a window of 2 years after completion of the project to sell off the units. Remaining units are not allowed to be rented out. Since Singapore may require more hotels and short-term accommodation, it may be a new venture should these luxury residential projects near the city centre to be converted into serviced apartments.

HDB resale flat sales flat

Prices and sales of HDB resale flats have not gone down that drastically, though COV prices are now almost non-existent, but they have remained flat for the last quarter.

April marks a slight rise in the number of resale flats sold, 4.4 per cent up from March. This could be a sign buyers are coming back to the market after having observed the market for almost 3 quarters now and having held out in wait of market stability. As the frequency of BTO flats  launches slow down, buyers who are still in search of a flat which suits their needs, may it be price, location or size, could be more willing to purchase on the resale market now.

Resale 5-room HDB flat on King George's Avenue with asking price of more than $700,000.

How will the HDB market perform in the upcoming months? Analysts and experts are expecting prices to fall very slightly before stablising in the third quarter of this year. Overall, prices for most HDB flats fell, with the exception of executive flats of course. A 1.2 per cent rise was recorded for that sector.

With rents also coming down, mainly due to the decreasing demand as the foreign workforce diminishes, buyers of HDB flats are also more likely to think of their purchase as a long-term home occupation investment rather than to count on profiting from rentals.

The second half of 2014 and the first quarter of 2015 would be an interesting time for the HDB resale flat market, a time to find their footing and possibly find ways to turn itself around.

Kampong Bugis gets new life

With the introduction of a new 212-unit condominium project, The Kallang Riverside, the quiet township of Kampong Bugis is getting a new lease of life.

As Singapore undergoes a major revamp with URA’s draft masterplan 2013 to revitilize various areas island-wide,  districts which are close to bodies of water are particularly attractive to property developers and investors. As the former Kallang Airport and the land between Kallang Road and Crawford street makes way for new homes and businesses, the Kampong Bugis area will see much more activity when it is established as the waterfront residential area it is intended to be.

Kallang RiversideYet to be launched, the Kallang Riverside condominium is set to have its prices pegged at around $1, 500 to $1, 700 psf. Price comparisons may be tricky as there have been very few resale properties in its vicinity. Considering its prime city fringe location, it’s a wonder it is not a hive of real estate activity yet. But its lack of competition could mean a worthy investment as rentals are relatively stable as compared to some suburban properties. One of the few new residential projects nearby is the Southbank mixed-use development, with only 3 resale units registered last year at between $1, 639 and $1, 940psf. At the Citylights condominium apartments nearby, prices were around $1, 276 to $1, 684 psf.

As the area promises up to 4, 000 new homes, commercial businesses and even a school when it is up and running after 2016, buying now could mean positive short-term investments and possibly even better long-term ones.

Condominium units – Cheaper but also smaller

Property developers are now more attuned to the needs and wants of their customers and as buyers become more price-sensitive in light of the weakening property market, they are careful to align their new properties to fit tightening pockets.

But the lower overall prices may not necessarily translate to a lower psf price. Whilst keeping that steady, the other variable which has to change is the property size. The larger-sized units were the first to shrink, with five-bedders now measuring an average of 1,569 sq ft instead of the previous 2,035 sq ft. Surprisingly two-bedders showed a significant resize of about 11.2 per cent. Two-bedroom units are now between 698 to 864 sq ft as compared to the older units measuring 703 to 973 sq ft.

Coco PalmsSizes of three- and four-bedders remained largely the same, in fact some even increased. These mid-size units are deemed more popular with buyers. As the Total Debt Servicing Ratio (TDSR) framework has restricted many from loaning enough to upgrade to bigger units, some who were once prepared to purchase five-bedders are now settling for these bigger three- or four-bedders.

As Singapore continues to grow and land becomes scarcer, it’ll be quite the miracle to see home sizes increasing. Thus it might be impractical to wait around for the impossible to happen, and the investment-savvy move could be to purchase when the time is right. As prices continue to drop, could the time be now?

Property measures not hurting Malaysian property sales

And more are flocking to the local label of the new Puteri Cove Residences. This new luxury condominium is developed by local property developers, Pacific Star and DB2, with sea and harbour-view units up for offer, local investors seemed to have taken a liking to this new property.

Puteri Cove Residences. Photo by Pacific Star Singapore.

Puteri Cove Residences. Photo by Pacific Star Singapore.

450 of the 600 residential, 56 Soho and 340 serviced property units were sold within a week of its launch. Upon its targeted completion in 2017, this mixed-use development will also include a waterfront promenade housing eateries, retail stores, commercial businesses and clinics. Located strategically between the Second Link at Tuas and the Woodlands Causeway, it’s poised to have a brisk flow of traffic. Units consisted of one- to four-bedders between 600 to 4,100 sq ft. Prices ranged between RM 1, 180 (S$457) to RM 1, 580 (S$612) psf.

Most buyers were Singaporeans, followed by Malaysians and Indonesians. And with talks in the way between Singapore and Malaysia to improve transport infrastructure, such as the Kuala-Lumpur  expressway and a train system between Singapore and Johor Bahru, investors in the know are looking at long-term profitability. Will new Iskandar region properties continue to woo Singaporean investors?

Overseas property – New frontiers

Malaysia. Australia. London.

There are the usual hotspots for Singaporean property investors. But have you ever wondered what else is out there for the taking? Which other markets have green pastures providing long-term fodder for the profit-hungry?

Dubai, which once saw plummeting real estate prices when a bubble burst, is recovering well and once again housing prices are on the rise. To catch the property on its up cycle would be every investor’s dream. The Dubai authorities have since tightened up regulations, targeting in particular speculators. Their Real Estate Regulatory Agency, a regulatory arm of the Dubai Land Department, has rolled out a rental index which is updated every four months. As Dubai continues to expand as a commercial hub, the stream of expatriates who will be looking for rental units keep investors happy for now.

Vida Residence DubaiPhoto Credit: Emaar

Besides commercial properties, some of the most sought-after residential real estate in the Emirates are in popular communities and districts such as Downtown Dubai, Dubai Marina, Arabian Ranches and Emirates Living.  The 57-storey Vida Residence in Downtown Dubai with 320 serviced apartments are selling one-bedders for approximately S$660, 000.

Japan, which most would regard as one of the countries with the highest standard living, surprising has some good property investment opportunities. The low yen has no doubt helped. In the highly populated Tokyo for example, properties in Shinjuku and Shibuya, the 2 most popular shopping districts, are popular with investors. Since Tokyo won the right to host the 2020 Olympics, interest in properties near the proposed Olympic stadium in Harumi have also gained momentum. These include the freehold Harumi Tower with prices starting at S$900 psf. Just 800m away from the Tokyo Tower is the 13-storey Concieria Mita, a freehold property with studio apartments going at a surprisingly competitive S$436, 000.

Conciera Mita condo

Photo Credit: ECG

So it might truly be worth the time and effort to look beyond the usual suspects for investment opportunities which might be more profitable than fighting for those closer to home.