Resale flats still awaiting buyers

Despite the fact that resale HDB flat prices have been on the downward slide for 2 quarters now, the number of resale flat transactions have not yet picked up. One might think the lowered COV prices might bring in the buyers, but perhaps it might be time sellers reconsider their asking prices.

Resale flats in the newer towns such as Sengkang and Punggol have seen the lowest COV prices thus far, with some sellers even willing to sell under valuation, with the lowest being $5,000 below valued selling price in December last year. The highest COV was for a unit in Marine Parade, with a COV of $40,000. Popularity of the unit, plus many other environmental factors, condition of the flat, and competition from buyers all determine how much cash over valuation the seller could demand.

Queenstown-HDBThe first half of 2014 might see a delicate tango between resale HDB flat sellers and buyers as buyers hold off in wait of possibly further reduction in market prices, and sellers doing the same as they wait for lowered prices in the private property market and to see if demand picks up in the later half of the year. As 2013 was the year of announcements, with new MRT stations and bus routes being planned, new redevelopment areas and township rejuvenations, much of the hype might be past. Is 2014 the year where the dust settles and the property market solidifies pockets of positive and negative performers?

Panorama : The view up there

Up north in district 20. Up there in the price range too. That’s where units at the newest kid on the block, The Panorama condominium in Ang Mo Kio stood.

As a mature estate, Ang Mo Kio has not had a private property launch for sometime now. The last was Centro Residences, situated just next to Ang Mo Kio hub and bus interchange, and opposite the Ang Mo Kio MRT station. For all its proximity to transport and amenities, the $1, 902 psf price tag is well-deserved. But that was at its peak. In the last quarter of 2013, sales hovered around $1,550 psf. When it was first launched in 2009, prices were much lower at $1, 174 psf.

The PanoramaBut the 698-unit The Panorama is launching at $1, 400 to $1, 600 psf. Those are the launch prices. Does it have legs to take it further up the sales scale, especially with the upcoming Mayflower station on the Thomson MRT Line and North-South Expressway just a stone’s throw away? The number of schools nearby such as St. Nicholas Girls’ School, Anderson Junior College, Nanyang Polytechnic, James Cook University and Australian International School may provide sufficient demand for units either for sale or eventually for rent. The condominium is developed by Wheelock Properties and is targeted for occupation in 2019.

The prices of resale HDB flats in Ang Mo Kio may be more stable compared to those in other HDB estates, which would also translate to a larger pool of ready private property buyers. But that could also mean developers may be less likely to temper the prices of new launches here as demand may be well-matched or even supersede demand. All that remains is to await the actual numbers after its launch.

Geylang East shines brightly for property investors

Saying “Geylang” is almost the same as saying “Red light district”. But as infamous as the area is, for its various night-time activities as  as good food, properties at its fringes are also becoming the favourites of savvy investors. Its accessibility to both the Paya Lebar commercial and industrial areas and the city centre has placed Geylang East in the spotlight, but for all the right reasons.

Surrounded by small apartment blocks, shophouses and boutique hotels, the area is plump for the picking of property developers hoping to add new private homes to the district. The fresh and continuous supply of workers in the neighbouring commercial centres looking for homes to rent will provide investors with positive rental yields.

Grandview SuitesThe latest land sale of a 99-year leasehold residential plot near the Aljunied MRT station could be indicative of 215 new homes. Recent launches in the area include Grandview suites in Lorong 22, The Centren in Lorong 27, The Octet and #1 Loft. Most are smaller condominium developments with less than 60 units each. Average selling prices are between $1, 184 psf to $1,300 psf. Guillemard Suites is one of the larger establishments with 146 units and its freehold status makes it popular with investors even long after its launch a couple of years back.

Industry analysts said the median capital values for homes in Geylang have risen across the board over the past 3 years and are likely to continue its climb as Singapore’s urban and commercial landscape looks set for a major revamp and regeneration over the next 5 to 10 years.

Waterfront Singapore

URA Master Plan 2013As an island country, waterfront living seems like it should be a buzz word. And it certainly will be, come as early as 2023. A new blueprint, the Draft Master Plan 2013, for nation planning has been put in place, with promises of more and better homes, and a more sustainable green and ecological living environment. National Development Minister, Mr Khaw Boon Wan, has said in his blog post that “the underlying philosophy of making Singapore an endearing home and a clean, green, livable city remains unchanged”.

About half a million new homes have been planned for new housing areas. These include Bidadari, Tampines North and Punggol Matilda. Other older HDB estates will also see the injection of some new blood, in Sembawang, Yishun, Hougang and Choa Chu Kang. A strong focal point of the Master Plan is the Greater Southern Waterfront, a 1,000 hectare development along the south coastline.


Punggol Matilda HDB1And as recent property news have signaled, the Kampong Bugis and Marina South areas will be a hotbed for private residential home activity, with the possible yield of 13, 000 new homes. Out of the 13,000, 9,000 private properties are designated for the Marina South area, which will only be developed once the Thomson Line is completed in 2017 or 2018. And cyclists may have something to cheer for, with URA setting the wheels in place to make Singapore more cyclist-friendly.

As the nation becomes more congested, it now becomes less practical to travel too far from home for work, and the constant development and setting up of regional commercial centres will make the most sense. The Woodlands Regional Centre and North Coast Innovation Corridor are just two of the many scattered around the country.  There were also talks about a new commercial centre in Punggol, and new industrial sites at the Seletar Aerospace Park, and also in Defu and an area called 2 West near the Nanyang Technological University. Since properties near commercial and financial hubs usually fetch the highest prices,  could this also cause property prices to rise overall?

New but discounted

Some new properties are already slashing selling prices as the weakening property market is sending developers into somewhat of a frenzy. In bids to move more units before the festive season, various properties across the island are offering discounts. Will these recent moves be enough to woo buyers back?

Changing the landscape of the Bugis-Rochor district is this immense mixed-use development. Photo by www.theDuoResidences.com.

Changing the landscape of the Bugis-Rochor district is this immense mixed-use development. Photo by www.theDuoResidences.com.

Alex Residences near Redhill MRT station was one of the latest private residential developments to make such such a move. Only to be launched next weekend, the 429-unit condominium is set to launch at $1, 600 psf, lower than the Echelon next door, which sold for an average of $1, 745 psf at its launch around the same time last year. All units at the Echelon have been sold. The Alex Residences might be aiming for the same fully-sold status, and hoping the lowered prices will make it more palatable for investors.

One of the hardest-hitting reasons behind the recent lull in activity is the newly introduced debt-to-income cap. Home buyers are now no longer able to take loans of larger amounts since their income essentially is their own limiting factor. With starting prices of $760, 000 for a small 476-sq ft one-bedroom apartment to just around $2 million for a 1, 044 sq ft three-bedder, they might just hit the target market. Targeted for occupancy by February 2019, Alex Residences could be banking on the fact that resale units along the Alexandra Road and River Valley stretch have reportedly rose by 9 per cent for the last two years. Rental prices have also gone up by 4 to 6 per cent.

Sky Vue2Other properties which may have their price tag lowered at Sky Vue in Bishan and Duo Residences in Bugis. Is this an opportune time to enter the property market and which properties are worth the wait and risk?

No mixed feelings about Mixed-use properties

In comparison with suburban and city fringe homes, properties in the downtown area has been languid for awhile. But that looks set to change as the growing popularity of mixed-use developments return with a vengeance. There are a total of 4 mixed-used properties currently in the planning stage and that includes one which might claim the title of the new tallest building in Singapore.

Marina One residential project with 1,042 new condominium units. Photo by marina-one.org.

Marina One residential project with 1,042 new condominium units. Photo by marina-one.org.

These properties are:

Although these projects sound more like shopping malls and offices, which they will have, they will also include hotels and residential units. Their prime location will command high prices for these apartments, and developers are expecting most buyers to be foreigners or those looking for a worthy piece of investment property. But rental yields might also be considerable as these projects are close to the city centre and central business district (CBD) and also provides the prestige of a downtown address.

Tanjong Pagar CentreResidential units at the DUO, which is situated between Rochor and Ophir road, will be put up for sale before the end of the year. The 49-storey residential block will hold 660 studio apartments and one- to four-bedders and penthouses. Just below is the Bugis MRT station of the new Downtown Line.  Marina One is touted to be one of the only developments in the Marina Bay district to have 65,000 sq ft of greenery. Rare in a built-up city like Singapore, and especially in the city centre. It is also twice the size of DUO.

Tanjong Pagar centre might be the tallest feature in Singapore when it’s built. At 290m, its residential units, Clermont Residences, will be up for sale also end 2013. At South Beach, only 190 residential units will be available.

Will the launch of these mixed-use developments inject some fervor into the year-end property market?

V sign for Thomson Three

V for Victory?

Perhaps so for the 99-year leasehold Thomson Three property development by UOL Group. Up to 160 of the 200 units were sold in the preview launch last Friday alone. The expected number of sales was originally 80 to 120 units for the first day. That’s more than 200 per cent more than the initial prediction.

Thomson ThreeWith a mixture of property types, 435 apartment units and 10 strata semi-detached houses, Thomson Three at Bright Hill Drive is situated in the sweet spot between Bishan and Upper Thomson. Units were sold at an average of $1, 350 psf and three- and four-bedders were the fastest movers. 2 of the 10 semi-detached houses were also sold at $3.3 and $3.4 million.

Some buyers were targeting the project for investment sake, especially due to its proximity to the upcoming Upper Thomson MRT station. As the Upper Thomson area has yet to have many high-rise apartments, buyers consider this to be a safe bet. Another upcoming property nearby is the Thomson Grand.

Thomson Grand condo project along Upper Thomson Road.

Thomson Grand condo project along Upper Thomson Road.

Just a little further off, home buyers looking for a suitable spot in Bishan can look forward to Sky Vue‘s launch on 28 September. Is district 10 the next hot spot in the North? Can we expect more property launches in this area especially nearing completion of the Thomson Line?

Shoebox rental units stepping up

Demand and prices of small shoebox apartments had dipped in recent months. But the silver lining is showing on that tiny dark cloud, shining through. Rental prices of apartment units in suburban regions have risen in the second quarter of 2013.

Shoebox units had been, and perhaps will continue to be, all the rage the last couple of years, as property investors saw the potential of these units largely due to the low total cost but higher percentage in rental yields in these 540 sq ft (50 sq m)  or smaller homes. R66 apartments near Farrer Park MRT station fared especially well, with a 5.8 per cent rise.

R66 ApartmentsRecent home loan curbs and restructuring of PRs’ benefits in the HDB market may push more towards the private property market, which may in turn mean more PRs have to consider more seriously the possibility of first renting a small apartment whilst waiting out their 3-year period before they qualify for public housing. And as the population in Singapore grows, it may not be entirely possible that the waiting period is amended in future. And by then, these compact living quarters may see a surge, or drop, in demand.

For now, industry experts are expecting rental prices to sustain it’s high even while more such property types surge into the market. They are also looking at a higher ratio of tenants to apartments playing to the favour of property owners. Location, however, remains the determining factor. A wisely selected property may help the buyer rake in substantial profits and it shows in the sales of apartments priced below $1 million. The number of units sold almost doubled in Q2, with 738 sold as compared to Q1′s 310 units. Could the rate at which prices are rising and falling, and at which new rulings are rolled out  show that the cycle is becoming shorter and market fluctuations are more unpredictable?