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24 Mar

Pros and cons of investing in a Shoebox Apartment

3 bedrooms in the space of 5 HDB carpark spaces. Believable and livable? Some say ‘No’ while others see potential profit from rental yields. The debate continues. What do you say? 

News that a developer is cramming three bedrooms into a tiny flat has put the spotlight on the regulations determining such matters, and it appears the builders have plenty of leeway. In fact, developers can put as many rooms into a flat as they like, although the Urban Redevelopment Authority (URA) does review a project’s overall design, site configuration and unit layout to ensure a good living environment. So how Natura, a joint development between Macly Group and Roxy-Pacific Holdings in Hillview, will fare with plans to build 635 sq ft three-bedroom units remains to be seen. Unsurprisingly, potential buyers told The Straits Times that their chief complaint is space constraints.

Natura condominium in Hillview - Are the units really too small to live in?

Mr Heri Setiabudi, who is in his late 30s and works in the supply chain sector, said such an apartment is ‘basically just too small’. ‘If you’re thinking of renting it out, I don’t think people, especially the foreigners, will rent such a small unit… Even if you are single but intend to start a family, (it’s too small),’ he added. A manager who wanted to be known only as Alex, 35, said the units may attract investors who ‘are thinking of… subletting (them) as three separate rooms’. But he said he would not invest in them because of a ‘lack of flexibility’. ‘I don’t think these will be very long-term tenants. I can’t imagine someone who will live there for more than 12 to 24 months.’ A 22-year-old newlywed undergraduate, who wanted to be known only as Mr Ong, said such a flat is not large enough to ‘raise a normal-sized family, which has about two kids on average’.

Real estate consultants were more neutral, with most preferring to adopt a wait-and-see attitude. Mr Tan Kok Keong, OrangeTee’s head of research and consultancy, predicts buyers at Natura will likely be HDB dwellers eager to upgrade to private homes but ‘may be a bit stretched at the moment’. He added that expatriates would likely rent them, but ‘being an untested size, I think it’s a bit challenging for people to hope to get very good rental’. HSR Property Group special adviser Donald Han noted that it was ‘creative’ of the developers to give buyers the option of pulling down a wall between two adjoining rooms to enlarge the space. ‘It could be a marketing technique for one to try selling three bedrooms at a cost-competitive, affordable rate,’ he said, adding that such a concept allowed for ‘flexibility on how you can create more rooms in the future’ and may appeal to newlyweds.

Guillemard Edge condominium by the Macly Group also has small shoebox apartments available.

Mr Colin Tan of Suntec Chesterton International said Natura’s units are comparable to small flats in Hong Kong, but noted that Singaporeans may not be accustomed to the constrained living space. ‘Hong Kong (people) are conditioned (to live in) small flats… Our basic housing is the HDB flat, which is quite big, (so) we don’t have that kind of tolerance,’ he said, adding of the 635 sq ft units: ‘It’s liveable, but you can’t buy too many things.’ OrangeTee’s Mr Tan said consultants will not know how the flats will fare until they are launched, which Macly has said is likely to be next week. ‘The market has shown itself to be very surprising to analysts like me,’ Mr Tan added.

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Though these small units may be ideal for singles or expatriates, how feasible are they in the long run if you are looking at property investment? Are they better for owner-occupiers and if so, are the prices too steep?

25 Nov

Results and thinking: which should come first?

A recent conversation I had gave me insight into how, as Singaporeans, we place too much emphasis on past results, and that our way of thinking is shaped by these results and other experiences observed.

Innovative thinking is needed to solve Singapore's housing problems. (Image courtesy of ThinkStock.)

Innovative thinking is needed to solve Singapore's housing problems. (Image courtesy of ThinkStock.)

Too much emphasis is placed on funding performance history. Yes, it is useful for us to measure current housing performances against past performances, such as keeping tabs on the house prices. But relying on old methods to solve new problems can only take Singapore so far.

Like other problems that Singapore faces, issues in the housing market are dealt with using a heavy reliance on technical analysis, like comparing past and present rates of Build-To-Order (BTO) housing over-subscription, price hikes (and drops) and so on.

To effectively resolve our housing needs, our thinking and funding should not be entirely based on performance history and past results. Rather, creative thinking and efficient execution of policies should directly lead to positive results.

I believe this is partly the reason Singapore’s government housing policies have been stuck in a virtual limbo. Back when Singapore was struggling towards independence and naysayers doubted the country’s ability, it was then Prime Minister and current Minister Mentor Lee Kuan Yew’s vision to model Singapore after successful countries that made the country what it is today in just three decades.

Today, however, things are much different. Singapore is now one of the most successful Southeast Asian nations. The problem of rising housing costs we face now is a completely different set of problems that requires new approaches to solve. We cannot afford to be rehashing the same solutions in a situation that calls for innovative thinking.

National Development Minister Khaw Boon Wan’s solution of releasing a bumper supply of BTO flats is one way of quickly dissipating demand; but in the future, when there is no more land to release, even more creative thinking will be needed to fulfil housing demands. Policy makers have already begun exploring the construction of homes skywards and seawards, so what about doing so downwards for instance?

If Singaporeans and their government are looking to make a change, why not take a leaf from companies with exceptional visions? One such company is Apple, which did not start out in the mobile phone industry. While it took established mobile phone giants like Nokia and Motorola 10 years and hundreds of models and features to get to where they currently are, Apple accomplished similar achievements in half the time and with only one phone model.

If we encourage a culture of innovative thinking to solve not just Singapore’s housing problems, but other issues in transport and healthcare as well, we will certainly get positive results.

19 Oct

Is profit from property ownership a confirmed shoo-in?

Almost everyone here aims to own a property, be it a HDB flat, EC, mass market suburban condominium, luxury apartment or a piece of valuable landed property. But how sure is your profit even if you do decide to buy into the market? Is it all about timing and location? Is there a best time to buy?

An old friend in the real estate business once estimated that only one in four investors here made any money out of investing in property. Although he had a pulse on the market for the past four decades, I thought that his estimate was absurdly low. Owning a home of our own is in our blood, and it would be insane for anyone to want to grab a piece of the highly prized real estate on our crowded island if it had been a money-losing proposition. In fact, until the Government stepped in with a host of anti-speculation measures, there were numerous stories of investors who flipped their purchases for a quick profit by selling the property they had just bought to another buyer.

Costa Del Sol condominium.

Still, looking at the many ups and downs of the private residential market over the years, I wonder if there is some truth to the observation made by my friend, far-fetched though it may seem. Like the stock market, the property market moves in cycles, and if you are caught at the wrong end of the cycle, it may take years before you get to see the price you paid for that dream home again.

At a recent reunion with a group of old friends, all in their late 40s and early 50s, I observed that several of them had sold their properties in the past few months as the red-hot market was on a roll. Surprisingly, they then chose to downgrade to a smaller apartment or HDB flat, or kept the cash proceeds. As middle-aged investors, they are certainly more conservative in their investment outlook, but the roller coaster ride experienced by the local property market in the past 20 years also had a bearing on their decisions.

Scotts Square soho property. Photo by Wheelock Properties.

Making money from the property market is not as easy as it seems. One friend said he had invested in a swanky Orchard Road condominium unit four years ago, only to see its price plummet soon after that with the onset of the global financial crisis. He was glad to get out, even though he had only broken even on his investment. Another friend remarked that on paper, it would appear that he had made a hefty gain on a condo unit he had bought for investment 15 years ago. But after deducting the interest paid on the mortgage and the sums spent over the years on repairs and maintenance, the returns worked out to a paltry 3 per cent a year.

In hindsight, it is simply not a risk worth taking, considering the large outlay involved, he said. We argued that his returns would not have been so low if he had included the rentals he had collected in his calculations. And there lies another twist to his story: He said that unlike the current tight rental market, where landlords can pick and choose their tenants, there was a period between 2002 and 2005 when condo rentals plunged so badly that it was uneconomical for owners like himself to let out the unit. It is a cautionary tale about some of the potential hazards in the property market that a fresh investor may want to take note of.

Talk to any seasoned property investor and he will tell you that the key to making money is ‘location, location, location’. But like the equities market, investing in the property market is also about getting the timing right. My friend’s returns on his investment were so low because he bought the condo in 1996, when prices were at a record high. It took 10 years before property prices regained those lofty levels – and another five before they rose to a level where he could comfortably get out without incurring a loss.

Pebble Bay condominium in Tanjong Rhu.

Would my two friends have done better if they had waited? Their answer is no, given the recent turmoil that has rocked financial markets. At the back of their minds was a fear that the roaring bull property market might be too good to last, given the bad memories they nursed of previous market crashes. Some bullish property investors argue that this time, it is really different. They note that the 1996 rally was powered primarily by local purchases, following a relaxation in the rules on the use of one’s Central Provident Fund savings to buy private properties and resale HDB flats.

Now, however, foreigners account for a sizeable chunk of the buying interest. As such, even if local demand flags, there will be foreigners to prop up the market. As US investment bank Goldman Sachs noted in a recent report, foreign buying made up 31 per cent of all private residential properties in the third quarter. It also observed that Chinese buyers dominated the purchases, accounting for 28.3 per cent of the foreign buying. Yet, even the Goldman report found little to be exuberant about.

While sales of new private properties stayed firm in the mass-market condo segment, it observed that the resale market was subdued, with only 2,507 caveats lodged for the July-to-August period. Also taking a cautionary stance was Malaysian investment bank CIMB, which noted that the unsold inventory of private properties had started to creep upwards in the past few quarters, even though it was still lower than that in 2009. It expressed concerns that the selling pressure might build up in the next 12 to 18 months if fears of a recession escalate.

And with foreigners forming a significant portion of the buyers, the regional housing trend becomes important. For example, a slowdown in the red-hot Chinese property market may also have an impact here. For property sellers, the big relief is that the concerns raised by analysts will not be relevant any more. Their big worry is how to get a decent return on their sales proceeds in order to stay ahead of inflation.

Besides luxury properties such as The Sail @ Marina Bay, foreigners are also buying up suburban mass market condominiums.

However, those aiming to buy a condo unit as an investment should realise that it is not a sure road to riches. Getting into property investment is far easier than getting out of it – especially when the global economic climate turns chillier, like now

~ Goh Eng Yeow

Source: The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
With the economic situation always changing and no one really sure about how it will turn, is it all about how big a gamble you are willing to take? What should be your priority when deciding whether or not to buy a property?

26 Sep

Deadline extension for Property agents’ industry exam

The Council of Estate Agencies have extended the deadline for property agents to pass the mandatory industry exam by six months. The new deadline is now 30 June 2012.

Property agents who have yet to pass a mandatory industry exam by the year’s end will have six more months to do so. The Council for Estate Agencies’ (CEA) new deadline of June 30 next year will spell respite for 2,753 provisionally licensed agents who, as of Aug 31, make up 8 per cent of some 33,000 registered property agents here.

With the deadline extension, property now have at least 6 more months to prepare for the mandatory industry exam. Image from the Council of Estate Agencies (CEA).

Earlier this year, the CEA said agents who brokered at least three transactions over the last two years have up to Dec 31 to pass the Real Estate Salesperson Examination. They were given provisional licences in the meantime. CEA’s director of licensing and investigation, Ms Purnima Shantilal, said the extension stems from the council’s acknowledgement that agents need more time. ‘The extension will thus help them to better prepare for the exam. The CEA will work with the estate agents closely to ensure that their salesmen take the exam by the deadline,’ she said.

If you want to be a property agent, there are proper channels and examinations to pass.

The new deadline also applies to those sitting the Real Estate Agency Examination, which is for partners, directors and key executive officers of property agencies. The CEA, a statutory board under the Ministry of National Development, made it mandatory for all agents and those running agencies to take proficiency exams to raise the professionalism of the industry, which was largely unregulated before the council was set up in October last year.

But property agencies said they received feedback from some agents who had problems passing the exams set in English mainly because they were not proficient in the language. The CEA said it has arranged with the Institute of Estate Agents to come up with Mandarin courses to teach agents how to pass the Real Estate Salesperson exam. The exam is a mix of multiple-choice and short-answer questions testing issues such as an agent’s knowledge of property law and regulations.

PropNex chief executive Mohamed Ismail said agents need to take the exam more seriously, now the CEA has given them more time to do so, as well as try to overcome the language barrier. This is because the CEA expects agents to understand English, which is used in documents in property transactions. ‘They should not expect the CEA to keep extending the deadline. The reason the CEA has announced this extension is really because it recognises that this job is a ‘rice bowl’ for many people, so agents now have to play their part,’ he said.

The news comes as a relief to Mr Colin Zhang, 30, a property agent with real estate firm Cushman & Wakefield. ‘I’ve not really had the time to sit down and study for the exam, which deals a lot with property law,’ he said. ‘If not for the extension, I would have had a real headache by the year’s end. Now I have more time to study, the exam shouldn’t be a problem.’

As a property agent, have you made plans to renew your licence? Don't miss the year-end deadline.

The CEA will also conduct its first licensing and registration renewal exercise – for those who have passed the mandatory exam and whose registration expires on Dec 31 – from Oct 1 to Nov 15 and update the list of property agents registered for next year. They are also urged to undergo six hours of continuing professional development (CPD) before March 31 next year. CPD is a scheme to update agents and property companies on the latest government policies and real estate procedures.

The courses, which are recognised by the CEA, are conducted by vendors from the public and private sectors.

Source: The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
The real estate industry seems to be receiving a good shake-up and re-structuring it needs. Moving forward, will this increase the trust consumers have for property agents and agencies?

12 Sep

Majority of Luxury apartment sales from Foreigners

Singaporeans seem to be shrinking away from high-end luxury homes as bulk of the buys come from foreigners and permanent residents. The Chinese and Indonesians top the list.

Foreigners are snapping up posh apartments and contributing to much of the activity in the high-end market that has been languishing since the heady days of 2007. Foreigners, including permanent residents, have bought 162 non-landed units with a price tag of more than $5 million in the first half of this year.

That is about 60 per cent of the transactions at the top-end market, according to an analysis by Cushman and Wakefield of caveats lodged with the Urban Redevelopment Authority. These include both primary and secondary sales. On that same basis, foreign buyers accounted for 46 per cent of the high-end market last year and only 24 per cent in 2005.

A foreign buyer took top spot of the priciest transaction for a unit thus far, paying $19 million for a unit in The Marq on Paterson Hill.

Chinese and Indonesians have dominated the upmarket segment this year, making up almost half of all high-priced purchases. They were followed by Malaysians, British and Indians. Singaporeans have retreated, accounting for just 20 per cent of purchases of more than $5 million in the six months to June 30. Last year, they had 34 per cent of the market and 25 per cent in 2007. Companies make up the rest of the transactions.

The Orchard Residences - a combination of quality location and facilities is also reflected in the property's prices

Experts say the increased interest from foreigners is not entirely surprising, due in part to the buzz created by the two integrated resorts and the country’s growing strength as a financial hub. Dennis Wee Group director Chris Koh said many see Singapore as the most stable country in the region, with a strong government, developed infrastructure and quality medical and educational services.

Mr Colin Tan, Chesterton Suntec International’s research head, noted that the foreigner share has increased mainly due to the reduced interest from locals. ‘In 2007, many of the locals bought into the high-end segment in a big way. Some might not have seen their prices recover yet and so demand is lower now,’ he added.

SLP International research head Nicholas Mak said high-end homes have always depended significantly on foreign buyers. Demand from Singaporeans could have fallen as those with bigger budgets might have decided to go into the landed home segment instead, which has recorded robust price growth of 31 per cent last year. ‘Since 2007, the landed homes market has seen stronger interest, with Sentosa Cove prices influencing those on the mainland. Singaporeans see it as a lifestyle and investment choice and are starting to see more value in such homes,’ added Mr Mak.

Sentosa Cove properties are one of the only areas accessible to foreign property buyers in Singapore.

The luxury market – defined here as an elite club of projects that have achieved both unit prices of $3,000 per sq ft (psf) and total quantums edging past $5 million – has flatlined since last year. There were 79 such homes sold in the first eight months this year while 73 were picked up in the same period last year. But go back to the boom of 2007, and 237 posh apartments found buyers in the same period.

Prices are also languishing about 6 to 8 per cent below their 2008 peak, despite the property boom that has seen all other segments surpass their historical highs. Only around two dozen upscale projects made the elite club list of $3,000 psf and $5 million-plus pricing, including Nassim Park Residences, Tomlinson Heights and The Orchard Residences.

Nassim Park Residences has an exclusive dining area for residents to host that special dinner party.

It was a foreign buyer who smashed the unit price record this year, picking up a 3,003 sq ft unit at The Marq on Paterson Hill for just under $6,400 psf – or about $19 million. City Developments executive chairman Kwek Leng Beng said now is not the best time for luxury projects because sophisticated investors are waiting for the market to be more certain. Transactions are few and demand is not as good as before, acknowledged Mr Kwek, who was speaking on the sidelines of a Real Estate Developers’ Association of Singapore event on Friday.

Source: The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Landed properties in Sentosa Cove are also garnering positive interest, amongst many other centrally located condominiums in Singapore’s prime districts. Will the sales volume rise as Singapore prepares herself to welcome an increasing migrant population?

8 Sep

EC seems the way to go

The income ceiling for HDB flats and executive condominiums have been raised. And the crowd is turning out in the numbers for the latest EC offerings, one of which is Arc at Tampines. Will sales of exec condos overshadow the private property market?

There is some talk in recent months that Singapore’s red-hot property market is finally cooling somewhat, dampened by global economic uncertainty and fears of a property bubble. But one segment of the market still sizzles: executive condominiums (ECs), which have Housing Board-style ownership restrictions but all the facilities of private condominiums.

One of the latest Executive Condominium offerings by HDB - Arc at Tampines

Hundreds of people turned up at the launch of the latest EC project, Arc at Tampines, last week to view the showflat before balloting for buyers starts tomorrow for the Hoi Hup Realty-led project. In July, buyers snapped up 568 EC units – mostly at Blossom Residences in Bukit Panjang and RiverParc Residence in Punggol. The number boosted sales of new private homes, which climbed 40 per cent to 1,954 units, from 1,394 units in June.

The numbers are a stunning turnaround for a type of housing which only a few years ago had so few takers that the Government stopped supplying land for ECs altogether. ECs were introduced in 1996 to provide a new housing option for the ‘sandwich class’ of middle-income buyers who aspired to private condo-style living but were unable to afford the prices. ECs boast facilities of private estates such as swimming pools and a gated community, but are subject to such HDB rules as an income ceiling for buyers and minimum occupation period before they can be sold. They are considered a hybrid of public and private housing on purchase, but are converted into private housing after 10 years, when units can be sold freely, including to foreigners.

From the introduction of the scheme till 2005, 23 ECs were launched, the last at La Casa in Woodlands. Then, in 2005, as the property market dipped, there was a supply glut. Property prices fell across the board. Hopes of massive capital gains for those who bought ECs earlier vaporised. New buyers could also afford private condos, and did not need ECs. This category of housing became unattractive and the Government stopped releasing land to build ECs.

La Casa in Woodlands - one of 23 EC projects over the past 8 years.

The HDB was also just launching its Design, Build and Sell Scheme (DBSS) to let private developers build and sell public housing, promising home-buyers more innovative designs. Analysts even said then that the Government may scrap ECs if DBSS proved successful since both types of housing target the same group – young families from the middle-income group. How things have changed in five years. Today, it is ECs that are popular and the DBSS scheme that has become unattractive.

The HDB is reviewing the DBSS programme. National Development Minister Khaw Boon Wan has suspended all future land sales for DBSS projects, even while 11 sites have been sold as EC projects since last March. Why the reversal of fortunes?

Compare the EC, Arc at Tampines, with private condo, Waterfront Gold condo at Bedok Reservoir

First, the perception now is that ECs offer much better value for money. Private property prices have climbed to record highs and put homes out of the reach of many aspiring HDB owners, but some ECs remain affordable. The Arc at Tampines may have set new records for EC prices at slightly above $700 psf. But it is still much cheaper than similar mass-market condos in the area such as Waterfront Gold, launched at just below $1,000 psf earlier this year.

One reason for the lower prices is that under HDB rules, only families who are citizens can buy ECs. There is an income ceiling, which was recently raised from $10,000 to $12,000 a month. First-time buyers also qualify for various housing grants. In contrast, DBSS flats have been priced at a big premium over new subsidised HDB flats, which are their competitors. The Centrale 8 project in Tampines was priced in the $600 psf to $700 psf range – almost double that of comparable build-to-order (BTO) HDB flats. Secondly, resale conditions favour buyers of ECs.

The DBSS project, Centrale 8 at Tampines, which has been the centre of recent debates about Singapore's housing & property market.

After five years, DBSS flats become HDB resale flats, which are subject to HDB ownership restrictions which change from time to time. The latest rules prohibit foreigners and private property owners from buying HDB resale flats. In contrast, ECs eventually become private property, which can be sold to any Singaporean after five years, and to foreigners after 10.

An EC buyer thus competes with fewer people when buying a unit; but can sell the unit after five years to a much wider pool. This explains their capital gains after the property market rebounded. Many EC projects were launched in the $360 to $460 psf range. They fetched an average of $683 psf from June to date on the open market when sold, according to Credo Real Estate’s head of research Ong Teck Hui.

Westmere in Jurong was once a spanking new executive condominium, but is now available on the resale market.

For example, Westmere, an EC in Jurong, was launched in 1996 at $400 psf. This year, its resale transactions averaged $707 psf – a price appreciation of 77 per cent. In its vicinity, the average price of private condominium Parc Oasis rose from $666 psf in 1996 to $760 psf this year – a 14 per cent increase. This has reinforced buyers’ perception that, barring a crash in the market, ECs are a ‘sure win’ proposition. The factors underpinning the rise of ECs and the decline of DBSS – and the clear preference of buyers today – raise the question of whether the Government should just let the DBSS scheme lie fallow and release more land for ECs.

Former executive condominium, Westmere in Jurong appreciated by 77 per cent wherease private condo Parc Oasis rised in price by 14 per cent.

In the past, the DBSS scheme was conceived as an experiment to outsource development of public housing to the private sector, leaving the HDB to eventually assume a more ‘regulatory role’. But this policy objective is less relevant today, as Singaporeans want affordable public housing provided by the state, not pricey private developers.

The right mix of public and private housing for Singapore may well be a simple one: new subsidised HDB flats on one end of the spectrum; private property on the other; and executive condominiums as the in-between class, catering to the aspirations of middle-class HDB upgraders.

Source: The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Are ECs really the in-between options for the middle class? As the middle-income earners continue to become the meat of the sandwich class, will prices of ECs rise and become comparable to private property. And if they are converted from public to private property in 5 years, will more opt to wait it out? What will this mean for the private residential property market? Compare EC and private condo prices, and find out.

31 Aug

Singapore Architects measure up

Not long ago there was news that the international award-winning architect, Moshe Safdie, was commissioned to design a condo project in Bishan. What about works by local Singaporean architects? They are certainly holding their own, as various residential projects all around town show.

In the last decade, Singapore’s real estate developers have been unveiling almost-Gatsbyesque apartments designed by top-notch local and foreign designers. With the standards already so high – what’s next?

Private developer Pontiac Land – no stranger to the luxury market – and two architects about their new projects and perspectives of the luxury residential market in Singapore are coming back in strength from a long hiatus in the mainland luxury sector – with the launch of freehold Ardmore Residence, situated at the old Pin Tjoe Court in Ardmore Park, and 99-year leasehold Hana, at the corner of Tomlinson and Cuscaden roads.

Le Nouvel Ardmore in the exclusive Ardmore Park area. Image by Wing Tai Holdings Limited.

Ardmore Residence, designed by Amsterdam- based UNStudio, will be a development of 58 units averaging some 3,300 square feet each. Hana will be a smaller development, with 29 units, each of about 3,500 sq ft occupying the entire floor plate. It will be designed by Singapore and Australia-based Kerry Hill Architects, ‘whom we have been working with for 10 years on this project’, says Wei-lin Kwee, vice-president of Pontiac Land Group. ‘For us, a major factor in our decision of choosing architects and designers is the chemistry between us and them, we give a lot of feedback and its important to have architects who will invest time and energy to work with us.

The Colonnade, designed by Paul Rudolph. Image by Pontiac Land.

‘An example of the special working relationship is with Paul Rudolph, who designed the Colonnade. He worked closely with my uncles who even brought him out to eat chilli crab!’

Both Hana and Ardmore Residence have been entrusted to Shimizu Contractors. According to Ms Kwee, it was necessary to do so as the curvy designs by UNStudio required a builder of good reputation and quality. ‘It’s very important when purchasing an apartment to find out who the contractor is.’

Ardmore Residence will have double volume balcony space while Hana boasts a cantilevered pool on each floor. As for the fittings, ‘we will always look for items that are both aesthetically pleasing and functionally designed’, she says.

‘We have chosen Dornbracht for the bathrooms and Vizug, Liebher and Poggenpohl fittings for the kitchen area. Ultimately, we seek to offer space, privacy and exclusivity, all of which are luxuries in land-scarce Singapore.’

The use of foreign architects does not end with Pontiac Land. Jumping onto the bandwagon is SC Global, which BT understands is working with New York-based Carlos Zapata Studio for its 35-unit Ardmore Project.

8 Napier, a residential project designed by Aedas architecture firm. Image by Napier Propeties Ltd and Aedas.

Despite the increasing presence of foreign architects, local architects are still getting their fair share of the luxury residential market – one of whom is Chioh-hui Goh, principal of boutique architecture firm Studiogoto and former director of SCDA Architects. He is working on a luxury 17-storey, 32-unit residential project in Robin Road. ‘The idea is based on interlocking of any two units with benefits of both a double storey loft ceiling and a very sizeable outdoor terrace,’ Mr Goh says. ‘It discards the idea that high-rise apartments should be all compartmentalised and boxy, due to structural constraints.

‘This project allows us to explore a more volumetric spatial expression both externally and internally. For Robin, we are exploring concepts that re-interpret high-rise buildings.’ Mr Goh wants to translate the free flow of space normally experienced in low-rise buildings to the high-rise.

The Robin Road development will consist of mid-sized units that range from 1,400 sq ft two bedroom units to about 1,900 sq ft three bedroom units. The intention is to reduce the number of bedrooms to increase the size of each one. BT understands that most of the units will also be offered for lease.

Orchard View condominium. Image by Wheelock Properties

However, luxury apartments are not exclusive to smaller niche developments. Currently designing a 180-unit project at mixed development South Beach (alongside Norman Foster) and other high-end properties such as 8 Napier and Orchard View is Tony Ang, managing director of Aedas.

For 8 Napier – situated at 8 Napier Road – it was all about ‘the bespoke architecture that responds to the formal buildings along the embassy row’, Mr Ang explains. There was also extensive use of clear glass to take in the generous views of the greenery surrounding the site.

‘There is an integration of art and landscape into the architectural design of the project.

8 Napier is designed to complement and take in the generous lush green surroundings. Image by Napier Properties Ltd and Aedas architecture firm.

Mr Ang also notes that the new things that a potential buyer of these luxury apartments look for are integrated fixtures: lighting, sound, security systems of high specifications besides the usual wardrobe, sanitary and kitchen fittings. However, it does not stop there. Mr Ang says that Aedas is looking into new materials, such as a new form of translucent ETFE that can be used for large canopies and that complies with the fire code.

Source: The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Watch out for locally driven projects in the property market. Singapore’s very own architecture talents are not lacking in international exposure and the finer points of design.

14 Aug

Property buyers: Will patience yield profits?

With the stockmarket acting up these past few weeks, many are fearing a rehash of the situation of the 2008 recession. What are many property buyers doing to hedge their assets and maximize profit opportunities?

Fears that interest rates will rise and stifle the local housing market have all but disappeared amid the unfolding global stock market turbulence. In a bid to stabilise markets, the United States Federal Reserve this week vowed to keep US interest rates at historic lows for at least two more years.

Singapore's property seems to have taken a punch by the recent bearish stockmarket situation.

But property buyers are taking a cautious attitude nevertheless, and are expected to wait to see how the stock market chaos plays out. Experts say the volatility has presented a double-edged sword that could fall either way. The low US rates are set to keep local rates at rock-bottom levels and bolster the housing market, but the recent wild stock market swings are likely to spook some property buyers, experts say.

Further blurring the picture – and analysts’ expectations – is a possible fresh financial stimulus in the form of a third round of US ‘quantitative easing’, which amounts to printing more money. This could send more cash flowing into the region, including Singapore and its property sector. The prospect of low rates for at least two more years was timely. Before that, fears had emerged that the end of the second round of US quantitative easing in June could have meant higher interest rates – belting the housing market.

With that fear seemingly on hold for two years, and on the back of a strengthening Singdollar, key local money market rates have responded by heading down. The three-month swap offer rate, for example, plunged into negative territory to -0.0119 per cent for the first time on Wednesday. With some mortgages pegged to this benchmark, experts say affected home loan rates might fall between zero and 0.6 per cent.

Financial considerations are key for property buyers.

Brokerage Kim Eng said yesterday low interest rates could keep demand for homes fairly strong, with owner-occupiers likely to be the key driver. ‘And with global stock markets heading into bear territory, it may prompt more investments in property in this part of the world as investors also seek to hedge against inflation,’ it added. ‘On a normalised basis, we still expect an average of 1,000 new private residential units being sold per month.’ But interest rates are only part of the housing equation. There have been several warnings of an impending glut while stock market volatility and the global economic storm could dent confidence.

In 2008 when stock markets dived at the start of the global financial crisis, home sales plummeted almost 70 per cent to just 118 units sold that October. Experts say, however, it is too early to tell how the current crisis will play out. It could be just a short-term blip or a longer-term correction that will chill the property market.

Boathouse residences in Serangoon. Image by Far East Organization, Frasers Centrepoint Homes and Sekisui House.

But buyers are likely to keep their heads down for the next few weeks. Still, 100 units have been sold at 493-unit Boathouse Residences in Serangoon at an average $880 per sq ft in the past week since a soft launch.

Mr Elson Poo, assistant general manager (sales and marketing) of its developer Frasers Centrepoint Homes, said: ‘The more popular (unit types at Boathouse) are the bigger ones which appeal to owner-occupiers. Investors, on the other hand, are on the sidelines, watching to see how the global economic development pans out before making a decision.’

There are many types of units to choose from at the Boathouse residences. Image by Far East Organization, Frasers Centrepoint Homes and Sekisui House.

Global Property Strategic Alliance chief executive Jeffrey Hong said demand, even for suburban homes, might be ‘stagnant’ for a while as buyers await clearer signs of the market’s direction. Mr Hong noted that the suburban segment – where many buyers are owner-occupiers or HDB upgraders – is likely to be less affected than high-end homes, which often attract investors.

Which direction will Singapore's property market go next?

UOL president Liam Wee Sin said concerns remain over the faltering US and European economies but added it was too early to tell how stock market volatility might affect property sentiment. He noted that low interest rates, ample funds and a strengthening Singdollar all boded well for the market although he expects sales and prices to moderate.

‘There are different segments of buyers. Foreigner purchases, for example, may continue unabated as the strengthening Singdollar might make residential properties here a relatively safer asset to invest in compared to the volatile stock market,’ added Mr Liam.

Property investor Sameer Aswani, a 35-year-old businessman, said the Singapore market is still fundamentally sound despite the shaky global economy. ‘Interest rates are at an all-time low so if a good opportunity arises, I will still go ahead with a home purchase,’ he added. ‘At most, I see the market correcting slightly but of course in the light of the uncertainty now I’ll be more cautious.’

Source: The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
The direction seems a little wobbly for now, but as we wait for the stockmarket to correct itself, residential and commercial properties are still exchanging hands with certain fervour, especially in the suburban areas.

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