Rise in HDB Resale flat sales

As HDB resale flat prices continue to decline for the eighth month in September, buyers are taking the opportunity to suss out the best deals. The number of sales transactions for HDB resale flats rose to the highest since April this year. A total of 1, 469 flats were sold in September, up 10.7 per cent from August and almost 20 per cent from the same month last year.

St George Towers

Photo credit: HDB

It comes as no surprise that the larger flats saw the largest fall in prices. Five-room HDB flat prices fell 1.6 per cent, followed by three- and four-room flats dipping 0.2 per cent and ECs (executive condominiums) 0.1 per cent. The recent numbers also revealed the fact that buyers are willing to accept a smaller price difference between the selling price and the average market value when previously, they had expected larger margins before committing to a deal.

Some of the factors contributing to the drop in HDB flat prices could be:

The first and last two factors in the list may have more lasting effects that expected. And it may change the value and purpose of HDB flats. But would the change be all that bad? Or will it help refocus investments into the private property market?

When will property cooling measures cool off ?

The past two years have seen the implementation, and perhaps effects, of a series of property cooling measures. From increased stamp duties to revised subsidies and the strictest of which, the TDSR (total debt servicing ratio) framework, restrictions have certainly risen the heat on the property industry.

Singapore still has some way to go before the property market achieves the sophistication it requires to reach new heights. Economist are estimating the second half of 2015 as the earliest the authorities are likely to cool off with the cooling measures. That is when most households would have managed to reduce their debt levels. However, property prices can be expected to fall by more than 10 per cent in the first half of next year, or at least show a substantial decline before curbs are removed. In fact, by 2016, property prices are expected to fall by up to 20 per cent due to the oversupply at that time.

Prices have stablised somewhat since the implementation of the property cooling measures, but the fall has only be about 3 per cent, which means the authorities could be waiting for a significant fall in figures, or a recession, before amending the rules. The fear could be the sudden upward rebound of prices which may far surpass the watershed of 2009. With the elections coming in 2016, 2015 seems like the turning point for the market and buyers and sellers alike may be watching closely to catch any opportunities  they can before things change once more.

Could 2015 be the year for home buyers? How will landlords, developers and sellers fare?

Lakeside Wonder

Things in the West are heating up, especially with the launch of a number of private residential properties, announcements of a new Jurong Lake Gardens, a new retail and commercial hub Jurong Gateway and new transport lines. It’s a whole new township blossoming.

Prices of properties at Lakeside, a largely residential district, has been on the rise, significantly more so since 2009. Lakeholmz condominium apartments were only priced at $440psf in 2003. In 2009 and 2010 respectively, relatively properties such as The Caspian and Lakefront Residences were already costing buyers $580 psf and $1, 020psf. That is almost double in just a year’s time.

LakevilleOne of the newer launches is the Lakeville condominium and current median prices of properties in the area range at $1, 300 psf. Over the past 12 months, prices have ranged between $706psf for older establishments such as Lakepoint condominium to $1,263 psf at Lakefront Residences.

The new malls, businesses and regional offices setting up shop in the area has also brought along with it a new flow of tenants. Thus rental prospects are promising, especially for newer properties. Rental prices above $3 psf and at least 10 leases are signed at each residential property per month.

With a new land parcel up for bids in December, buyers looking to enter the market in the west side of the country could possibly have something to look forward to.

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.

3 Reasons to invest in a Booming Brisbane

Brisbane_May_2013_edited

Australia has been the investors’ hotspot for property investment. Having avoided the technical recession in the financial crisis it is rated by Dun & Bradstreet’s Global Risk Indicator as the safest country to invest. This is expected to continue given the stable economy, political and legal environment. According to The Australian Bureau of Statistics (ABS) it is expected that residential property prices in Australia will continue to rise for the remainder of 2014. Brisbane as one of the capital cities is an investor heaven, set to ride this wave of rising property prices.

Why Brisbane?

1) Positive landscape

Brisbane is set to be the ‘New World City’ of Australia, attracting international events like G20 summit, and multi-million dollars worth of major infrastructure projects that improve domestic and international accessibility to the city. With all the hype and strong infrastructure development plans, Brisbane is becoming a natural magnet to draw in businesses, increase employment and grow its population.

In recent years Brisbane has recorded a high population growth, on average of 2.2% annually. The Queensland Government has also forecasted population to reach close to 3 million by 2031.  With lower unemployment than other capital cities like Melbourne and Sydney, APM chief executive, Andrew Wilson predicts that this will help to boost Brisbane’s economic growth and lend potential for higher yield and capital growth to investors.

These factors suggest that there will be strong future demand for residential properties.

2) Competitive property pricing

Sydney and Melbourne reached close to the peak of the property cycle in 2013/2014 and have little room left for further capital gain in the short term. according to a number of experts including Shannon Davis, of Metropole Property Strategists in Brisbane and Ben Skilbeck, Managing Director of Rismark Brisbane has the opportunity for capital growth as property prices are still below the 2010 peak. The Australian Property Monitors (APM) report reveals that Brisbane’s housing market is also recovering with median house prices that have increased by 2.1% over December 2013 quarter. House prices increased by 5% in 2013, just 2.2% below the 2010 peak while unit prices were up by 0.4%.

Property prices in Brisbane are also more affordable than the other capital cities as indicated in Table 1. This suggests that there is a better chance for higher returns for Brisbane property when the market picks up.

Capital Cities Median House Prices Median Unit Prices
Brisbane $470,000 $383,000
Sydney $775,000 $557,000
Melbourne $625,000 $481,000
Perth $ 537,250 $439,000
Canberra $ 570,000 $432,000

 

Table 1: Affordability of house and unit prices in various capital cities

Source: Michael Yardney, Director of Metropole Property Strategists, who extracted from RPData and SQM Research.

Furthermore, the rental yield of Brisbane is among the top performers in Australia (Figure 1), outperforming both Melbourne and Sydney.

grossrentalyields - brisbane

Figure 1: 2014 Q1 Rental Yield across capital cities

Source: RPData

3) Favourable investment climate

The sound legal system, implies that transactions are transparent, making investment more secure and convenient. While the Singapore market experiences strong curbs and loan restrictions on property ownership, the Australian market welcomes foreign investment and there is no Additional Buyer Stamp Duty charged on property purchases.

At present, there is a favourable exchange rate, with AUD 1 equivalent to SGD 1.16, making Australian property more attractive.

The Australian government has also announced in its Federal Budget that interest rates would remain low in the medium to long term, thereby promoting construction to boost up the supply of housing, making properties in Brisbane even more affordable.

In all, Brisbane holds great potential and opportunities for higher returns on investments as well as a chance to diversify an investors’ portfolio with a lower risk asset – residential property, as compared to commercial developments.

For more information about investment opportunities in Brisbane, please visit http://www.australasian.sg for more details.

 

Pasir Panjang’s star set to rise

Part of the Urban Redevelopment Authority’s (URA) Draft Master Plan is the major redevelopment in Pasir Panjang, shaping the Greater Southern Waterfront district which will seem a boom in commercial, retail and residential upgrades. When the ports are moved to Tuas in 2027, the space will see a major growth spurt.

Village Pasir PanjangThough not as conveniently located as its neighbouring Clementi or Buona Vista, it undoubtedly has the potential for property appreciation within the next two decades. This also means there are low-rise freehold private apartments to be had at lower prices, for now. It is not difficult finding tenants as well, with the Science Parks and National University of Singapore nearby.

Some of the selections here include Village @ Pasir Panjang with average selling prices of $1, 404 psf. Others include older establishments such as The Spectrum, Pasir Panjang Court, Palm Green and Villa de West.  At Pasir Panjang Court, a freehold 28-unit project just across from Village @ Pasir Panjang, a 1,335 sq ft unit was sold at $1.24 million, at a rather affordable $928 psf. Most new suburban properties are already commanding $1, 300 psf, easy.

The window of opportunity may not be open for long, as more pick up on its potential and demand drives up prices.

Shadows cast on property market

New properties are revving up their engines once more. As the market prepares themselves for these launches, what could the consumer expect?

Resale private properties situated near the sites of new properties to be launched this year may be slightly affected by the prices set by these new kids on the block. And as resale HDB flat prices dip, HDB upgraders may also not have as much as before to spend.   As developers find it harder to attract buyers since some have since redrawn from the investment pool as their finances are restricted by loan limits and mortgage curbs, prices of these new properties may be lower than expected. Properties nearby may then be forced to do the same with their resale units.

Tanglin ViewIn areas with potential for redevelopment and growth, such as Alexandra and Tanglin, competition may be fiercer. For example at Tanglin View condominium, the going rate used to be $1,600 psf a year ago, but now the average selling price stands at $1,400 psf. Similarly for Ascentia Sky apartments, prices have dropped from $1,900 psf to the current $1,500 psf.

But there are still profits to be made for private property sellers. Even though prices may not be as high as a couple of years ago, properties which were purchased 10 to 20 years ago may still find suitable buyers. Property prices today are definitely still much higher than a decade ago. Those who were hoping to rake in a quick profit with properties bought less than five years ago may find themselves having to hold on to their properties for slightly longer to wait out this year’s lull.

For the serious home buyer, it could be the prime time to buy.

iProperty launches new Room-for-rent E-service

Home rental has always been a big thing in Singapore. As in most other busy, cosmopolitan cities.

Some folks have extra space to spare, some are hoping to rake in their investments, others need a place to stay. Just a little cosy corner to call your own. If you’re not looking to rent a whole house, condo apartment or HDB flat, but only a room, iProperty now offers an efficient way of searching room rental listings throughout Singapore in just a few easy clicks.

iProperty room rentalRegistration is free and 4 easy steps later you’re able to post your rental ad. Powered by iProperty, the rental portal resides at sg-house.com. Attract as many as 52,000 views on your post and find a suitable tenant quickly and at the comfort of your desk. It’s an easy way for landlords to reach potential tenants and vice versa.

Short-term accommodation options are also available. Great for companies hunting down term rentals for their overseas employees. Filter down your search through keywords and find what you need pronto.

Besides this new feature, iProperty’s recently revamped website also has organised links and a site chock full of other property related resources such as a search function for properties near MRT stations or schools, directory of condominiums in Singapore and property trends.