To buy or not to buy.

That is the question. When rental prices fall and rise according to property prices, which in turn are directed by local economies of scales and indirectly impacted by global economies and general market sentiment, that is often the question home-seekers ask themselves.

In the current market, is it wiser to buy or rent? Under what circumstances should you definitely choose one option over the other? Property analysts advice against renting while speculating on market direction as the uncertainties may not always work in your favour. Instead, the main factor should be whether renting or buying best suits your needs.

KembanganSuitesSingapore may very well be one of the cities in the world where most people own their homes. In many other cosmopolitan cities, rental is a more-than-common way of life. While renting may suit those who are not willing to be tied down by fixed monthly outlays such as mortgages, taxes and condominium maintenance fees, it also means that the money that goes into your rent does not ultimately accumulate into owning the roof over your head. There is also the danger of rental rates being raised and frequent moves.

Buying a property is not a small decision, and market advisors caution against doing so when you have not yet made sound financial calculations. The price differences in purchasing a freehold versus a leasehold property could also be considerable in the long run as most freehold properties tend to appreciate over time.  This then brings you to the considerations of when to buy and sell your property. While it is true that leasehold properties tend to depreciate, factors such as location and the competitiveness of neighbouring properties could also lend weight to the depreciation process, slowing it down considerably.

New property taxes for Australian Homes

Purchasing a property in sydney? Be prepared to pay a 4 per cent duty surchage. The rule was put in place on 21 June and will apply to all home purchases in New South Wales, making the state the second in the Country to impose stamp duties on foreign buyers. On top of that,there will also be a 0.75 percent land tax surcharge from next year on.

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Increase in Foreign property purchases

The local property market is looking a little zestier as more foreign buyers picked up units in the first quarter. This affirms the continued popularity of properties in Singapore as compared to those in other major Asian cities, or global cities for that matter.

Kingsford HIllview PeakProperty prices in Singapore are still relatively affordable, and the number of purchases made by non-Singaporean residents rose by 5.4 per cent, while purchases made by permanent residents rose by 2.6 per cent in Q1. The Additional Buyers’ Stamp Duty (ABSD) initially dampened sales, but as foreign property investors find themselves having similar, it not even higher, fees levied upon them in other markets, their return is not particularly surprising. While there are other emerging markets with even lower property prices, the stability and proven track record of Singapore’s properties has done the market justice.

Most of the properties foreign buyers hunt down are priced between $1.5 to $3 million. They bought 79 units at Cairnhill Nine and 38 units at Kingsford Hillview peak. Most of the foreign buyers were Mainland Chinese or Malaysians. Property analysts are keeping positive about the market’s prospects for the rest of the year despite the number of local buyers falling 18.2 per cent, though it could be due to the Chinese New Year holidays falling in the middle of Q1.

 

 

London properties only foreign investors can afford?

Londoners are railing against the consistently rising property prices which have reached a mark where only rich foreign investors from Middle East and Asia are able to afford.

As foreign property investments become more common globally, countries are finding the need to regulate the property market and it ultimately comes down to the question of priorities. Taking notes from the US real estate bubble a decade ago, Australia and Singapore have both recently made policy adjustments to guard against excessive financial loans and foreign purchases on local properties.

London PropertiesLondon’s new mayor may also be lobbying to make moves to allow residents to purchase new properties ahead of foreign investors who have been snapping up units with fervour, with prices rapidly rising over the years. The average price of a home in London now costs approximately S$1.2 million and rental for a flat in central London can easily be S$2,700 per month. 20 per cent of home sales in Kensington and Chelsea are from foreign buyers and for new properties, the numbers can come up to as much as 75 per cent, with almost 67 per cent of them purchasing purely for investment purposes.

LondonProperty2Though some of these foreign buyers are purchasing units to rent out, some are owned by shell companies who leave the units empty on end, taking away essential numbers of available homes for London’s residents when they are already only rolling out half of the 50,000 new homes required each year.

With similar high-population versus limited land issues, Singapore’s average private home prices could easily rival that in London. While income growth lags behind other first world cities, living expenses are not necessarily remaining stagnant, will the country’s government need to revise their strategies in keeping homes affordable?

New Gem in Toa Payoh

Toa Payoh, one of Singapore’s oldest HDB estates and an integral part in the Nation’s housing history has been home to some for almost 50 years now. As part of HDB’s Estate Renewal programme in 1995, it is now an established and well-connected township in the central part of Singapore, much sought-after by property and business owners alike.

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Photo credit: HDB

Gem ResidencesOne of the recent launches, private residential project Gem Residences, will be a welcome addition to the area. And the public have shown their enthusiasm accordingly, as reflected in the 50% sales in the first day of sales even ahead of the public launch on Saturday. Industry experts are citing pent up demand for private condominium units in this estate as reasons for its more-than-positive sales figures.

Prices of the approximate 300 units sold were averaging at $1,426 psf. The 578-unit project offers up a arrange of units including one-bedders, two-room units and also penthouses. With the developer offering cash rebates of $7,500 to $10,000, buyers are taking the bait, fast and furious. Most of the smaller one- and two-bedders went quickly, with prices starting from $578,00 for a 452 sq ft one-bedder.

As a quick comparison, the average prices for new condominiums in Alexandra were at $1,600 psf and in Bishan, $1,500 psf. With the $1,426 psf pricing, the developers have shown that they are aware of what buyers are willing to fork out in the current market and are pricing more cautiously, sacrificing maximum profit margins for more palatable and sellable price structures.

 

Private homes sales show slow and steady improvement

Twin-Peaks3Private non-landed property prices have been rising for 2 consecutive months now, a positive sign considering the recent market lull. Though values and volume are still lacking behind that during the peak of 2012 and 2013, any slight improvement is something to cheer for.

In April, the jump in non-landed homes sold was 17.6 per cent, a considerable 28.1 per cent higher on a year-on-year comparison with 2015. A total of 689 non-landed private units were sold last month. Property analysts are happy with the recent progress as it shows that the market is not completely dismal, and buyers will still bite if the prices are right. Resale private home prices similarly rose for 2 months straight, though the percentage were more modest with a 0.1 and 0.5 per cent increase in March and April respectively.

The residential developments which showed the most positive uptick were Twin Peaks in Leonie Hill, A Treasure Trove, D’Leedon, Double Bay Residences, Parkview Apartments, Thomson 800 and Carribean at Keppel Bay. The highest rise in home prices were in the core and central regions with a 1.3 per cent increase, while resale home prices in the suburbs fell 0.2 per cent.

Double Bay Residences SimeiAs the mid-year closes in, these 2 months may set the tone for the rest of the year, though much still hinges on how both local and global economies fare. Buying abilities and sentiments may follow suit.

Property mortgage sales even include uncompleted units

A weakening rental market and the growing supply of new homes have pushed even more units into the realm of mortgage sales.

Silversea1Even uncompleted units are now going under the hammer. While only 3 properties were auctioned last year, the number have more than quadrupled to 13 in the same period this year. More mortgagees are defaulting on their loans, which could be largely due to the diminishing loans they are now able to secure based on the debt servicing limits, increasing competition in the rental market and an overall property price drop.

Investors who have been dipping their toes into too many properties may be finding themselves unable to service the multitude of loans taken on multiple properties, in particular smaller one-bedders or studio apartments which are only reaching completion in the recent couple of years. Some units at The Greenwich in Seletar and euHabitat for example, in particular smaller one-bedroom apartments priced at $1 million or below, are being put up for auction as their owners are overstretched financially and find it difficult to secure rents sufficient enough to cover their mortgages. Larger penthouses with irregular layouts above 1,500 sq ft and priced above $2million are also finding it difficult to find buyers or tenants as they exceed the budget of many investors but may not yet fulfil the requirements of affluent or high-networth buyers.

The GreenwichSome of the units put up for auction this year include a one-bedroom penthouse in Guillemard Edge, a three-bedder in Bartley Residences and a four-bedder in Silversea condominium in Marine Parade. The latter was sold at $1,529 psf or a total of $3.9million.

 

Property market showing signs of awakening

Sturdee-ResidenceAlthough property prices have been falling, the show of interest from the buying public has never really waned, instead they are now simply more aware of their options and have become more selective in their investments.

Signs that the market lull might be broken soon have come from the positive take-up of units in 2 recent launches at The Visionaire Executive Condominium (EC) and The Sturdee Residences. 158 units were sold the 632-unit The Visionaire EC at a median price of $811 psf while prices averaged at $1,550 psf at the 305-unit The Sturdee Residences. Buyers at the private residential project have gone mainly for the smaller one- and two-bedders though 3 of its 8 penthouses have already found new owners. Two of the 1,830 sq ft penthouse units were sold at $3.2 million each.

Gem REsidencesThe Parc Life EC and private residential project Gem Residences will launch this weekend. Private condominium Stars of Kovan is expected to launch next month. The latter is a mixed-use development consisting of 390 residential units, 5 strata terraces and 46 shops. Prices are expected to range between $1,550 to $1,600 psf. E-applications for Parc Life have already exceeded the 660 units available and there is hope that uptake will be on the uptick at both these projects.