More condo developments offering deferred payment plans

As the number of completed private home units in the market rise without the same exponential reaction from buyers, developers are finding it increasingly difficult to move remaining units.

peak-cairnhillMore developers have been seen to offer incentives such as a deferred payment scheme in order to entice buyers. One of the latest to hop on the bandwagon is TG Development‘s The Peak @ Cairnhill II. Following good response to their previously-launched deferred payment scheme, CapitaLand has added Sky Habitat to their other 2 properties, d’Leedon and The Interlace, offering the same incentive. Their stay-then-pay option allows Singaporean buyers to make a 10 per cent down payment (15 per cent for foreign buyers) within 8 weeks to exercise the option to purchase and the other 90 per cent within a year from that even while living in the unit.

Some other properties such as One Balmoral are offering sweeteners such as direct discounts. The freehold 91-unit condominium in prime district 10 has offered a 13 per cent discount on all their units with prices averaging at $2,150 to $2,200 psf. Over at the waterfront-style Corals at Keppel Bay, the developer is offering $50,000 off selected units with average prices working out to be around $1,850 psf.

threebalmoral the increasing number of unsold units in the market, industry experts are not yet concerned about new launches coming up this year. New blood will likely inject active browsing and buying sentiments into a stabilising market, and with prices holding steady buyers are likely to take the bait, and the effect may very well trickle down to the secondary and other sectors.

Will current property bright spots continue to shine in 2017?

Private home prices have continued to fall in 2016, and while that may have coloured the market atmosphere somewhat grey, bright spots are beginning to shine through the gloom, with 3 sectors performing particularly well this year.

Miro condo on Lincoln Road, just off Novena at the City Fringe districts.

Miro condo on Lincoln Road, just off Novena in the city fringe.

The luxury residential property, commercial office and collective sales segments have all shone this year. And industry players are no doubt hoping that the positive streak will continue in 2017. In this year alone, 3 en bloc sales were closed. Only 1 such transaction was recorded for 2015 and none in 2014. Even for the private home market, sales volume has risen 9.8 per cent this year despite 10.8 and 10.7 per cent fall respectively in sale prices and rents in 12 consecutive quarters.

Some property analysts however consider the fall in property prices a good thing, as this has enticed more buyers back into the market. Buyers who may have previously stayed away from the market due to the increased stamp duties and fees implemented by the authorities in the past few years to attempt to cool the market, have now returned and are now swiftly closing transactions.

2 RVG condo apartment in River Valley

2 RVG condo apartment in River Valley

In the prime districts of 9, 10 and 11, private home transactions were already 42.6 per cent higher than the total in 2015. 2,601 deals were sealed in the Orchard, River Valley, Bukit Timah and Novena areas as of mid-December. With more land allocated under the Government Land Sales (GLS) scheme and developers on the lookout for smaller prime location sites, the market may see a lot more activity quite soon.

New private home sales figures on track for H4

Though there was a 31.4% fall from October’s record sales of 1,253 units, the year is nevertheless set to end on a cheerful note, as spirits in the new private home market are buoyed by a 13.3% year-on-year spike last month with developers selling 860 units in November alone (excluding the 250 new executive condominium units sold). The fourth quarter has clocked a 2,500-unit sales figure thus far and property analysts say the projected market figures are are on track as the year-end is usually a quieter time for the property sector.

parcriviera2Even before numbers for December are consolidated, the number of new homes sold this year have already crossed 7,769, which is already more than the total of 7,440 homes sold last year. The lowered private property prices have attracted a considerable market audience, with most going for units with lower quantum prices. Most buyers are hoping to score a good deal before prices bounce back up, and have shown interest in smaller one- and two-bedders. The demand for larger units are slightly lacking in comparison.

queenspeak2Units at the newly launched Queens Peak condominium development in Queenstown and Parc Riviera in West Coast Vale were the month’s best sellers. Most of the units sold were priced under $1 million with 185 such units sold at Queens Peak and 110 of the sme at Parc Riviera. A positive outlook on the private home market next year seems likely with a projected 8,000 number of new homes sold by end of 2016.

Resale private condo prices up by 0.3%

Resale private non-landed property prices have inched up slightly in November with a 0.3 per cent increase following a 0.7 per cent fall in October.

teresavilleHowever on a year-on-year comparison, prices were 1 per cent lower than November 2015. As more new units enter the market and demand wanes, more sellers have put their properties up for sale below estimated market values. In districts 22 and 27 of Boon Lay, Jurong, Tuas, Sembawang and Yishun, private condominium units have been sold at around $20,000 below the market norm.

But in district 4 which includes Mount Faber, Telok Blangah and Habourfront, condominium prices have been consistent with some buyers even paying up to $25,000 above market value. On a positive note, the margin between the market value and the average selling prices of resale condominiums have been narrowing, as more buyers get used to the stamp duty requirements and additional fees involved and are rather actively seeking good deals.

pebblebaySales volume of resale condo units has also improved 21.3 per cent from last November with the 581 transactions recorded for the month. In the prime districts, prices rose by 2.3 per cent while those in the city fringe dipped 1.5 per cent. Suburban resale private condos fared least well with a 2.6 per cent fall in prices. Analysts are watching the market closely for signs of how it will fare in 2017, and have raised concerns about prices possibly lowering further as more unsold homes seep into the market.

Post-brexit: Singaporeans still believe in value of London homes

Brexit may have rocked London’s real estate sector, but it does not seem to have rocked Singaporeans’ confidence in the market. In fact, their appetite for properties in London has continued to be rather voracious.

televisioncentrelondonPhoto credit: televisioncentre.com

More first-time buyers are reportedly entering the overseas investment market, and for many, the United Kingdom is one of the first non-Asian market they are dipping their toes into. The Brexit seems to have opened doors for these first-time investors who see the recent turn of events cultivating the prime time to enter the market. The weaker pound is one of the reasons Singaporeans are making their foray into the London property sector. In fact, property analysts and UK-based developers have reported seeing Singaporeans picking up London homes priced between £300,000 and £500,000. And most interestingly, majority of these buyers are HDB flat dwellers who see foreign property investments as more worthy than local properties.

lincolnsquarePhoto credit: The Lodha Group

Take for example Television Centre, a new mixed-use project in West London developed by Stanhope, which will yield 950 new homes amidst massive office, lifestyle and retail spaces and a hotel and even TV studios . Its first marketing effort outside of the UK had a sales target of 40 units. But thus far, it has already sold 45 units and a third of the buyers were from Singapore. Another property, Lincoln Square, marketed by Lodha UK, has also seen their sales doubling. Most buyers either have business links in London or have children who are studying in colleges nearby such as the London School of Economics and King’s College London.

Though property prices in London have been falling for half a year now, these new Singaporean investors are more keen on long-term gains, and see the current timing as optimal and to be taken advantage of.

Resale private property prices slip further in October

Following the dip in resale prices in September, last month saw a further slip of 0.7%. Resale prices of private non-landed properties were apparently at a 50-month low.sycamoretreeSales volume of resale private properties also fell 15.2 per cent with 586 transactions clocked in October, in comparison to the 691 in September. In the peak of April 2010, 2050 units were sold, 71.4 per cent higher than the current numbers. September’s numbers may have been slightly more positive due to the pent up demand from the lack of major launches in the second quarter and the Hungry Ghost month in August.

Some districts fared better, with more than 10 resale transactions recorded – namely district 10 where the median selling price was $10,000 more than the computer-generated market value. But in most regions, sellers have found themselves having to offer prices up to $10,000 below the market value in order to close deals and attract buyers. In district 21 in fact, selling prices went as low as $23,000 below the market value.

HighlineResidences2Property prices in the city fringe, normally where selling and buying is the most active, have fallen 2 per cent. In the suburbs, prices also fell 3.3 per cent. Prime district properties however enjoyed a 4.9 per cent price increase, though it might only be sufficient to consider it a rebound from previous lull months.

Property market in the doldrums in Q3

The local property market seems to have taken a harder hit in the third quarter as both sales and rental figures fell. While the decline was not drastic or sudden, it nevertheless points to possibly tougher times ahead.

alexresidencesOverall property selling prices fell 1.5 per cent while rental prices dropped by 1.2 per cent. The general global economic gloom, fears of inflation and growing unemployment rates have given way to a sense of impending recession. Buyers are likely to be more careful with their finances and though property is a good way to hedge excess funds, investors are likely to weigh yield potential even more seriously should the negative sentiments persist.

The private residential market seems to be the most affected as vacancy rates rose. Property analysts report more positive sales in the resale rather than the new homes segment, possibly because there were fewer new residential project launches in Q3. Resale property sales clocked a 15.7 per cent increase while new homes sales fell by 12 per cent.

tampineshdbIn the resale HDB property market, prices continued to stabilise, with no significant rise nor fall. However, the number of transactions recorded fell by 5.5 per cent. Currently, overall private home prices have fallen 2.6 per cent.  With only 2 months left to the year, property experts expect a slight fall in prices and transactions in the private property market, which largely dependent on market sentiments may result in a final 3 to 4 per cent decrease for 2016.

Property cooling measures likely to remain

The economic slowdown and diminishing growth rates are causes for concern not only for the Singapore government, but also for consumers and businesses.

National Development Minister Lawrence Wong has recently spoken about the property cooling measures which were implemented in succession over the past three years. He has mentioned that they are likely to remain at this time of uncertainty as a response to “global context and environment”.

Kingsford HIllview PeakProperty prices have fallen 10.8 per cent since Q3 of 2013 and prices fell 1.5 per cent in the third quarter of this year, bringing it to the 12th consecutive quarter of price decline. The real estate industry currently faces stagnation and though interest rates are low, many are looking for higher yields. He has warned against creating an environment rife with property speculation and has said that capital inflow might create a volatile and highly-speculative atmosphere which will result in property market fluctuations.

With the high number of completed units entering the market this year, and with unsold inventory rising, the property cooling measures may be helpful in keeping the delicate market balance. As of Q2 this year, there were 21,500 unsold and uncompleted private homes, the lowest ever recorded, indicating a possible shift of influence from the seller to the buyer. The government has also held back on the launch of land sites earlier this year.

Meyerise2Property analysts are not surprised by the government’s move to keep the property curbs in place, though sudden pace changes and steeper declines might prompt the government to reconsider relaxing the rules sooner.