2015 – A year of the property buyer

Following the footsteps of 2014, this year seems like it will continue to be a buyer’s market. Some property hotspots have sprung up over the course of last year, as new MRT stations and areas of redevelopment were announced.

Twin Fountains Executive Condominium in Woodlands.

Twin Fountains Executive Condominium in Woodlands.

For buyers looking for a good deal, there will be sellers out there who are willing to let go of their property as not all are able to have the holding power to last out the year. Many HDB upgraders who are moving to private properties may have to sell their HDB flats, and due to a mortgage restriction, some private residential property investors may also be looking to move units in exchange of a healthier bank balance.

For buyers looking for immediate to medium term property returns, areas near upcoming MRT stations may be their ticket. These include those along the North-East Line (NEL) and Eastern Region Line. Other further flung districts which are experiencing an influx of amenities and new properties such as the Jurong Lake district, Woodlands Central, Buona Vista and Paya Lebar, may also pique the interest of investors. And for those who are not in a hurry to reap the benefits from their property purchase, property analysts are expecting districts which have not been included in previous upgrading and redevelopment plans, to get a major face lift within the next decade or so. Woodlands could be the next area to watch.

Thomson MRT Line's alignment. Are you already area-spotting for the best property investment?

Thomson MRT Line’s alignment. Are you already area-spotting for the best property investment?

Starting from the second quarter of the year, sales are expected to pick up, and industry experts’ advice for buyers are to keep a clear idea of what they are looking for, search for sellers who are sincere about selling, and hit the iron while it’s hot.

Re-zoning Geylang – Fewer residential properties

At first instance, this proposal may not sound promising, but it may actually bring good news for owners of existing condominiums in Geylang. The Urban Redevelopment Authority (URA) has recently announced a re-zoning of residential areas in Geylang for commercial use.

Rezi3TwoWhile this means that there may not be as many private residential properties in the area, the value of those which have already been built may appreciate as offices and businesses eventually move into the area. This proposal by the URA could be seen as mainly to facilitate the balancing of residential and commercial activities in the district. The over-building of residential properties in the red-light district could have a reverse effect and introducing more commercial properties and maintaining a suitable amount of residential properties in the area may in turn increase the rental yields and value of properties in its proximity.

With Geylang’s prime location putting it close to the city centre, Aljunied MRT station and the Singapore Sports Hub, rental yields here are already 1.5 per cent higher than those in other districts. With the area mostly made up of smaller land parcels, the likely tenants would be boutique developers and small businesses, with the possibilities of niche eateries and shops.

Some residents have however raised concerns over this re-zoning move as more commercial spaces here may mean an increase in the illegal and disruptive activities normally associated with this infamous district. What are the pros and cons of purchasing property in Geylang and does one outweigh the other?

New Thomson MRT Line will benefit East Coast residents

Not only will property owners in the North reap the benefits of the new stations of the up-and-coming Thomson MRT line, but those in the East Coast will also see the value of their properties rise in the long run as the new MRT stations run through Tanjong Rhu, Katong Park, Marine Terrace, Siglap, Bayshore, Bedok and Sungei Bedok.

LTA - TELPhoto credit: Land Transport Authority (LTA)

The Thomson-East Coast Line (TEL) will connect more areas in the Northern and Eastern parts of the country to the city centre and cut travel time considerably. There are a number of exclusive and boutique private residential properties in the East as it has been a popular area for expatriates, but a boost is expected when the TEL commences service in 2019. Property analysts are already expecting a 5 to 10 per cent rise in property prices, if the response to the North-east Line (NEL) stations are anything to go by. And upon completion of the MRT line, they foresee a rise of up to 12 per cent.

Some of the properties which may enjoy the most out of the announced realignment of the TEL includes condominium developments in the Tanjong Rhu area such as Casuarina Cove, Tanjong Ria, Meyer Residence, The Belvedere and Water Place. Properties nearer the already existing Bedok and Tanah Merah mrt stations may not see as significant a change.

Marine BlueNearer Siglap and Bayshore are private apartments such as Lagoon View, Laguna Park, Elliot at East Coast, Bayshore Park, The Bayshore and Costa Del Sol. Cote D’Azur, The Palladium and The Seaview along Marine Parade could also see a rise in home prices in the future.

How will developers price new properties in the area which have yet to launch? Will they release units are higher prices or will they keep to the current market values? New launches coming up include the 124-unit Marine Blue and 109-unit Amber Skye.

Pinnacle @ Duxton almost ready for resale market

50-storeys high with sky gardens and sitting at the top of an excellent location, the Pinnacle @ Duxton will soon be ready to enter the resale market as the five-year minimum occupation period (MOP) comes to an end in December this year. Will the peak of resale HDB flats prices be found in this exclusive public housing development? And how many of the flat owners will be looking to sell? In the current market lull, will more be looking to rent out their units instead?

It seems the resale market can ready themselves for some high prices. Ahead of time, one seller who has received special permission to sell the unit has had more than 50 viewings and offers of up to $830,000 for the 90 sq m four-room HDB flat.

Pinnacle @ Duxton was awarded the 2011 Urban Land Institute (ULI) Global Awards for Excellence. Image by HDB.

Pinnacle @ Duxton was awarded the 2011 Urban Land Institute (ULI) Global Awards for Excellence. Image by HDB.

With a total of 1, 848 units in the massive 7-block development, there will no doubt be competition, though most of the units being put up for sale now are four- and five-room flats. Prices nearing the million dollar mark will be expected. Even the Minister of National Development, Mr. Khaw Boon Wan, has said that when units at the Pinnacle are ready to hit the market, “there will be many millionaires there”.

Those who are ready to sell may be those who are hoping to move into the private property market as the amount they might earn from the sales could be double, if not triple the amount they originally paid for the units. When they were sold in 2004, five-room flats were priced only at $345, 100 to $439,400 while the four-bedders cost $289,000 to $380,900. Considering the prime location of it being near MRT stations, new businesses, a hip area of cafes, restaurants and pubs, the bustling Chinatown stretch and the Central Business District, it’s not surprising that public housing in the area has continually received high-priced offers. Most five-room flats in the Tanjong Pagar and Cantonment Close area have fetched above $800,000.

The only thing that might stop buyers from coming would be the mortgage limits. But as the market awaits the day the regulations are relaxed or policies changed, flat owners may continue to hold on to their asking prices, at least at this iconic building.

Property market outlook positive

New condominium launches are once again welcoming eager crowds. Drawn mainly by the affordable prices and viable unit options, buyers are flocking new weekend property launches in search of investment-worthy buys.

Coco Palms2Both East and West ends of the island were covered last weekend, as sales started out briskly at Coco Palms near Pasir Ris MRT station and Waterfront@Faber on West Coast Road. Although buyers are now more selective, Coco Palms still sold a whooping 82 per cent of its 600 units released last Sunday. Not surprisingly, all of its one-bedders were sold out within the day. With price tags of $498, 000 for a 493 sq ft one-bedder, these units are highly affordable and practical. They are within the range of most young couples of singletons, and also make for easy rentals, especially with t’s proximity to the MRT station and international schools such as the United World College of South East Asia.

Waterfront@FaberAt the 210-unit Waterfront@Faber, 80 units were sold as 7pm on Sunday. Prices ranged between $1,100 psf and $1,350 psf. It’s distance, about a 20-minute walk, from Clementi MRT station could be a slight drawback for investors, but those who were looking for a quiet place of their own will still consider it a good buy. But considering the recent growth of commercial and regional hubs in the west, such as in the Woodlands, Buona Vista and Jurong areas, thinking far ahead may be a wise move.

New private homes still receiving buyers’ love

As expected, even in the real estate downturn, property buyers still know what’s value for their money and properties near MRT stations are always the first to draw the crowds.

The 845-unit Commonwealth Towers near Queenstown MRT station sold 175 homes in the first day of its launch alone last weekend. Most of the units sold were one- and two-bedders, which may signify a change in the buying trends amongst property investors. As buying power decreases due largely to the restrictions in loan limits, buyers are favouring smaller units going for a lower quantum price.

Waterfront@FaberPrices ranged from $721, 000 for a one-bedder to $2.2 million for a four-bedroom apartment. With its prime location, it goes without saying that most investors would be looking at renting out their units. And with its considerable proximity to schools, universities, hospitals and other amenities, this is a good spot to grab.

Waterfront@Faber over in Clementi won over some buyers with its more exclusive 210-units. Prices ranged between $1, 100 to $1, 250 psf. The minimum size for apartments here are 721 sq ft two-bedders. The largest are 2, 292 sq ft four-bedders. There are 11 strata-landed homes in the development, with the remaining 199 being apartment units.

Going by the loving buyers have shown these 2 recent launches, will upcoming launches such as the Coco Palms condominium in Pasir Ris, The Crest at Prince Charles Crescent and Amber Skye at Amber Road receive the same or heightened attention?

City fringe districts going strong

In the current softening property market, where private home sales and prices are on the downhill slide, it takes a good location to help a new launch stand its pricing ground.

The Thomson and Bishan area saw 3 such promising launches – Thomson Three, Three 11 and Sky Vue. Throw their proximity to current and future mrt stations, good schools, heartland shopping malls and other eateries into the mix, and it’s a recipe for success.

Thomson ThreeAll 65 units at Three 11 along Upper Thomson Road has been sold, whilst Thomson Three on Bright Hill Drive has already seen a 87 per cent take-up rate of its 445 units. Prices at the former were around $1,368 psf and $1, 308 psf at the latter.

Closer to Bishan, prices were even more positive, with units at the Sky Vue going at a median of $1, 465 psf. Prices have however dipped slightly. At its launch last September, prices were higher at $1, 500 psf. Closer to the Bishan MRT station, the massive 505-unit development, Sky Habitat, relaunched with encouraging sales figures last week. Prices were quite a bit lower than its launch price of $1, 700 psf. Discounts of 10 to 15 per cent were not rare, with units going at $1, 279 to $1, 590 psf. Perhaps these prices were more realistic and are sitting well with buyers still looking for a potential investment buy.

Sky Vue2In short, private home sales has been affected across the island, but there are still buyers out there looking for property worth their buck. And if the price is right, they might just bite.

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?