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16 Apr

New private homes sales may match 2012′s high

D'nest condominium.

D’nest condominium.

If anything, worries about the property cooling measures affecting the property market in a big way should be allayed, for now, by the way Q1′s new homes sales figures go. March’s sales gave it a big boost, as buyers returned after the Chinese New year  lull in February. Many buyers were first-timers, and out of the 5,564 units launched in Q1, almost all (5,533  units) were sold.

Property developers had kept launches out of the market in February, and the release of numerous new properties near MRT stations in March could have made up for the pent up demand from buyers who flooded the showflats and new property launches in March, snapping up units in new suburban condominiums such as D’Nest, Urban Vista, Bartley Ridge and Sennett Residence.

According to the Urban Redevelopment Authority’s (URA) data of new home sales, March alone saw 2,793 units sold, breaking the previous record of 2,772 in July 2009. It goes to show that despite the cooling measures, demand is well ahead in the race to balance property prices and inflation at large.

Shoebox apartments were top sellers for HDB upgraders. Seen here is the Bartley Ridge condominium.

Shoebox apartments were top sellers for HDB upgraders. Seen here is the Bartley Ridge condominium.

Property analysts are however not expecting similar sales numbers this month, since March’s bumper crop of new units would have satisfied the pent up demand from previous months. D’Nest emerged the clear winner with 699 units of its 912 units sold. Once again, location and proximity to transport were cited as top reasons for great sales.

5 Mar

Will Singapore homes ever be truly ‘affordable”?

Not for some time yet, according to Finance Minister and Deputy Prime Minister Tharman Shanmugaratnam.

Waterfront living in Sentosa. Is this the area for expansion in SIngapore's future?

Waterfront living in Sentosa. Is this the area for expansion in SIngapore’s future?

Stuck in the part of the property cycle where home prices run high, all are in wait to see if they run even higher. The Government is doing all they can to cool the market. The previous seven round of property cooling measures since 2009 will attest to that. But Singapore’s real estate market still stands for some price correction before it could get moving and complete the cycle it is apparently in.

It will not amaze most Singaporeans to know that housing prices have risen sharply in the past four years. 30 per cent is a huge leap. In the time where the global economy struggles to right itself from its humpty-dumpty fall, Singapore’s economic growth, lower interest rates and strong capital flow has kept the property market buoyant.

Is the private property market quietening? Image courtesy of Singapore Tourism Board

When will homes truly be affordable for the average Singaporean? Image courtesy of Singapore Tourism Board

Even though the cooling measures may have slowed the rate of increase of home prices, the pricing rise is still significant. We return once again to the question of whether the Government should be responsible for keeping market prices low or simply stall the rise in prices, which is inevitable and should be left to market forces to dictate.

Mr Thaman said as ‘Singapore’s highly open economy lives by being global and regional, the Government’s key priority is to raise productivity to a new level”, since raising incomes for the average person and for the median household is at the top of their to-do list for now.

2 Jan

Property makeover for 8 private estates

Under the Estate Upgrading Programme (EUP), 8 private estates will be getting a whole new look by the end of 2014. Although it may not extensively change the property prices, it may nevertheless provide an added incentive to potential buyers and thus benefit the sellers.

Mount Rosei GardenWhich estates are these?

What they will be getting are landscaped environments, fitness equipment, park furniture and wider footpaths, according to the Ministry of National Development. Selection was based on the age, physical condition and scope of improvement. As the areas have begun to look dated and some plagued with drainage and parking issues, the revamp will cost about $29 million.

Marine Parade GRC MP Fatimah Lateef and Potong Pasir MP Sitoh Yih Pin are looking forward to improvements for their wards. In all, there has been a high demand for these government-funded upgrading schemes and Senior Parliamentary Seretary for National development, Dr. Maliki, has reflected strong spport for such programmes as it is aimed at improving community bonding.

All in time for the next election perhaps? Either ways, about 7,000 households will benefit from these estate upgrades, but how much more these new amenities and facilities will bring to the properties in these districts still awaits further analysis.

19 Dec

Prices of HUDC Flats – Not a medium median

Well, unless you think $1 million should be the normal selling price for HUDC flats. The prices of these rare public housing units are only going upwards as more buyers focus on their potential value after privatisation. For the first time in HUDC history, the median resale price of HUDC apartments have risen to above the $1 million mark according to the Singapore Real Estate Exchange (SRX) data. And though the Q4 numbers are not out yet, they are almost certain it is still inching upwards.

Bishan Shunfu HDB

Last month, a HUDC unit in Shunfu Road was sold at $1.33 million. The median resale price for HUDC units is now $1.04 million. Perhaps the buyers were simply able to afford the selling price, and location plus apartment size were ideal for their current situation, but property analysts have warned buyers against over-extending themselves in hope of future profits.

However if you are indeed looking for a HUDC apartment in its pre-privatised state, HDB estates to look out for are:
Bishan (Shunfu)
Serangoon North
Hougang North N3
Hougang North N7
Potong Pasir

HUDC were introduced in the 1970s to provide options for families who needed bigger flats but were unable to afford private properties. But once private property prices fell in 1987, the authorities stopped releasing these units. There are a total of 18 HUDC projects in Singapore, which yielded 7, 731 units.

With the knowledge of the motivation behind HUDC Units, should it really be about whether it is a public housing unit or a 99-year leasehold private property when perhaps the only difference is whether it is in an enclosed compound with perhaps some facilities (though they do come with maintenance fees). Should floor area and location be the ultimate determinant between property prices? How does one begin to differentiate between public and private housing if prices of the latter is moving constantly up the charts. Is this a product purely of inflation or are there other reasons and factors which need to be first tackled?

17 Dec

Property Price Rise in 2013

The dawn of a new year may bring great joy for property sellers as property experts expect a continual rise in property prices. Rising land costs may be the leading cause of the rise. And low interest rates will keep the buyers coming. Non-landed mass market homes are again expected to be the first in the race, running far ahead with a 10 to 15 per cent rise. The luxury property sector is also expected to rise, but at the lower margin of 3 to 5 per cent.

Singapore property condo

Neck in neck with the suburban mass market private homes are Executive Condominiums (ECs). This particular property type has been enjoying spectacular success with home buyers this year, and especially this quarter. By the end of 2012, the target sales of EC units will hit 4000. That’s still more than the number of units sold in 2010 and 2011 combined.

Despite the government’s efforts to cool the market, it seems to have a life of its own and the growth is too strong to be suppressed. What were the government’s motivation behind the cooling measures, and is it enough that those aspects are controlled, leaving those who can afford to push up overall prices? Or should the authorities be doing more to ensure that the little people and the middle class is still able to afford what they can.

Demand and supply. The balance awaits scrutiny. And the guessing game continues.

6 Dec

Executive Condominium prices = Private Condominium prices?

And it might be that way for a while more as new executive condominiums present luxe features, giving private mass market homes a run for their money. The current price gap is 17.2 per cent this year, down from 32.2 per cent in 2007′s property high. Executive condominiums are hot ticket property buys in the local real estate market.

Some of the pros of buying an executive condominium include:

1. The income ceiling for ECs has increased to $12, 000 per household, thus if you earn less than that, you are still eligible for a housing grant from HDB.

2. After the minimum occupation period (MOP) of 5 years, the EC unit can be sold to Singaporeans and Permanent Residents in the open private property market.

3. After 10 year, the EC unit can then be sold to foreigners.

Property buyers see a great deal of rising value in this particular property type. And it is usually the areas where EC units are limited that see the most active sales. Districts with the greatest number of resale ECs are usually those with the narrowest price gaps.  Areas such as Bishan and Ang Mo Kio, and Pasir Ris, Simei and Tampines, saw the narrowest price gap of 10 per cent whereas in Sengkang, Punggol and Hougang, the price gap was 22.4 per cent. Average psf of units at Bishan Loft and Nuovo in Ang Mo Kio is only $100,000 below the average price psf of private condominiums in the same district.

The recent EC launches, CityLife in Tampines for example, has pushed this market up a notch into the private property arena with its  luxury penthouse, infinity pool and sky terraces.

Is this narrowing of the price gap between public and private housing a true reflection of the housing situation in Singapore?  If the rise in prices continue, would the Executive Condominium market eventually suffer the same fate as the Design Build and Sell Scheme (DBSS)? In the end, the only question we are truly left with is, should it be that way?

16 Nov

The Promised Land

At least this may be how landed properties are viewed in Singapore.

Thomson HouseMost buyers and investors would see owning their own land and building their own home a dream come true. Thus it is no wonder landed properties around Singapore are commanding rising prices. Suburban landed homes have recently seen a rise in prices and sales.

The districts which saw the most fervent activity were District 20, 16 and 23. Strangely, district 11 (Novena, Watten Estate) saw a dip in prices this past year. Ang Mo Kio saw a rise of 23.2 per cent in average psf price in 2012, topping the charts with an average psf of $1, 266. Notably, the Serangoon landed homes are selling exceedingly well, with the higest number of sales in the third quarter, with a rise of 33 per cent of sales in a quarter-on-quarter comparison. At these prices, could this be a sign that property investors are becoming more savvy and cost-conscious, and shunning more expensive city-centre homes for suburban properties in the city-fringe?

Industry insiders are predicting that the additional buyer’s stamp duty (ABSD) could have turned investors away from homes in central prime districts. In the long term, they also expect demand for landed housing to remain positive and prices to continue to trend upwards.

5 Nov

Property appreciation versus Home ownership

Understandably, most Singaporeans are concerned about the value of property. But as our population ages and property prices surge ahead of income rise, will there be a point when most Singaporeans find themselves unable to afford a home?

Jurong West HDB

One opposition party, the Singapore Democratic Party (SDP) has come up with a research paper that proposes that the authorities put aside a category of “non-open market’ (NOM) HDB flats for those with special circumstances.

Written by four SDP volunteers, including a phD student, doctors and a property consultant , the housing policy paper suggests that the cycle of rising property prices and increasing government subsidies will remaing untamed if the current system continues. They link the current situation in Singapore to that in Japan in the 1990s.

They propose that these NOM flats could be priced from $70,000 for a 2-room unit to $240, 000 for a 5-room unit, and can only be sold back to the HDB, without being affected by the property market. Not simply to be radical, they are also suggesting that the scheme could be introduced gradually to prevent the current market from crashing, and giving home owners options which include CPF and cash reimbursements for converting their HDB flats to a NOM flat.

Though just a proposal, how feasible is this scheme and will a compromise be possible in the near future?

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