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.

2013 closed with weak demand for resale homes

Although a 0.1% rise was registered, the last quarter of last year saw a resale private home market which was relatively quiet, and where demand was low. But industry experts were none too ecstatic about the rise, with most recognizing that this might be a mere “technical rebound” which will not be sustained.

The Montana1Homes in the central region which sold above the median market prices could have accounted for this rise in numbers. A few units at The Montana in Jalan Mutiara for example, sold at $1, 832 to $2, 130 psf. The market prices were at an average of $1, 600 to $1, 800 psf. Another high-floor unit at The Orchard Residences also went at $4, 312 psf, above the $3,600 psf market price, possibly due to the rarity of the unit.

The largest dip came from the shoebox apartments sector. For these small apartments of less than 500 sq ft, which were the best sellers of earlier in the year, a 0.6 per cent drop could signify a saturation of the market with these types of units, and where rental demand may not yet make up for the sheer number in existence. As new non-landed residential developments flaunt their remaining units, resale units in the suburbs may be forced to lower seller expectations. Will 2013 purely be a buyers’ market?

Retirement village or investment opportunity?

Singapore’s first retirement residential development will go up for sale next month as 2014 dawns upon the nation where an aging population is one of the top issues for the government.

Named The Hillford, it will be situated in the Jalan Jurong Kechil area, just off of Bukit Timah road, near the Bukit Batok and Bukit Timah nature reserves. Its proximity to nature, and with conveniences such as supermarkets, shopping malls, medical services and bus and train services, this 60-year leasehold property may attract not just senior citizens. Although marketed as a retirement project, there are no age restrictions placed on buyers, and some of the younger crowd may well consider this a possible investment or a second home to purchase while renting out another on the side.

Hillford Retirement HomePrices at The Hillford are estimated to be at $400,000 for a 398 to 431 sq ft one-bedder; $500,000 for a 506 to 560 sq ft two-bedder and $700,000 for a 657 sq ft dual-key two-bedder apartment. Considering the lease period is only 60 years, as compared to the usual 99-years or freehold residential projects out there, it is expensive. But for those looking to downgrade or have a comfortable sum for their leisurely senior years, these units may be their ticket to their golden years.

Also owing to the fact that property prices in the Jalan Jurong Kechil area being more stable than other suburbs, property prices here are lower, with a 1 per cent rise in median prices for new properties, and a 12 per cent increase for median resale prices. The latest launch in the area is The Creek @ Bukit, where selling prices avereage at $1, 620 psf. Signature Park saw the most number of sales, with 124 units changing hands.

The Creek in Bukit Timah.

The Creek @ Bukit.

As the downtown line irons out some kinks, the future for properties in this area looks bright, and it is not too early to think about the future, and retirement.

Hardly any Condominiums below $1000 psf

In recent times, you’ll be hard pressed to find private condo units priced below $1, 000 psf. And as we move ahead, it looks even more unlikely. How has the market truly changed since the first implementations of the property cooling measures and are they truly meant to reduce property prices or merely to gently put on the brakes at timed pauses along the path of increasing home prices?

Centro Residences in District 20 - Ang Mo Kio.

Centro Residences in District 20 – Ang Mo Kio.

Recent numbers showed that 60% of the private property transactions completed in Q2 were priced at $1, 000 psf and above. In the same time in 2011, the percentage was only at 25.5 per cent. As some industry experts predicted, home buyers may not necessarily be deterred by the rising home prices as long as prices remain seemingly affordable. A $1.2 million suburban non-landed private property is more the norm than the exception, especially for the last couple of years.

What’s more, the proportion of properties priced above $1, 500 psf have also be increasing from 0.5 per cent in Q2 of 2011 to 14.2 per cent in Q2 of 2013. Some of the recent launches which were priced in this range are J Gateway in Jurong East, the Tembusu in Kovan and Centro Residences in Ang Mo Kio. Units at J Gateway went for as much as $1, 774 psf for a 484 sq ft shoebox apartment, while a unit of similar size went for $1, 687 psf at the Tembusu. At Centro Residences, prices soared as high as $1, 920 psf.

J GatewayCurrent property market prices almost dictates an acceptable first home to be priced between $950, 000 to $1.1 million. Market analysts are however expecting higher resistance from buyers beyond the $1.2 million mark. But a continued rise in property prices is probable, though possibly a subtle one, due to the most recent loan restrictions.

A+ sales for Ardmore Park

Marina Bay and Sentosa Cove are some of the well-known areas for luxury properties. But don’t forget Ardmore Park. This district 10 prime spot is one of the most prestigious locations on mainland Singapore and has managed to hold on to its highly priced calling card in the midst of a luxury property market slump.

Nouvel Ardmore 1Although the number of sales may have dipped over the past two years, prices have been consistent. Part of the reason could be the holding power of the property owners in the area. In light of the rising property prices all around, home owners or investors may be choosing to hold on to their Ardmore properties simply because it may be difficult getting similar properties within the same size and price range in the current market. Median selling prices psf is currently at $3, 311.

Unique to the Ardmore Park location is its commitment to luxury. Unlike other luxury property areas such as Marina Bay and Sentosa Cove where there are a mix of smaller and average-sized apartments, Ardmore Park only has large-sized, spacious units. At the freehold Ardmore Park condominium, each unit averages 2, 885 sq ft.

What will the architectural landscape of Ardmore Park look like?

What will the architectural landscape of Ardmore Park look like?

Other condominium developments in the area include the 118-unit Ardmore II which was ready for occupation in 2010; the Sculptura Ardmore, Le Nouvel Ardmore and Ardmore 3 which are all being constructed. Units at Ardmore 3 have been sold between $3, 160 and $3,485 psf. But with rental reaching $18, 118 a month, home owners may not be in any of a hurry to divest of their investment. With an eye on the global macroeconomic situation, any movement upwards may mean increased activity in the luxury property market. When will the market see a revival?

Local home sales and prices expected to take a hit

Will property prices finally come down following the rounds and rounds of cooling measures meted out by the authorities? It seems they might very well be, as property industry experts predict a possible slowdown of home sales volumes and prices due to the recent curbs on property loans.

What is in store for Singapore's real estate market in H2? And this might be directly tied to rental prices and demand in the market. Currently the vacancy rate for private residential properties is at 5 percent. Should it rise to 8 per cent, prices may see a corresponding drop by 5 to 10 per cent, according to UOB Kay Hian research analyst, Vikrant Pandey.

One possible reason could be that the restrictions on loans might detract from potential investors from over-stretching themselves thus diminishing the number of home sales. While there is no expectation of a sudden drop in interest or home prices, industry analysts are considering the fact that Singaporeans are generally still rather prudent and as up to 10 per cent of borrowers are currently overstretched, the market may see a slight move southwards for the latter half of the year.

Corals at Keppel Bay.

Corals at Keppel Bay.

And with the slew of new properties these last couple of years, most of which will be completed within the next year or two,  a fall in property prices of up to 10 per cent could be imminent particularly in the mass market home sector. Though buyers in the high-end luxury property market may not be flocking in by numbers, they are usually more financially secure and have the means to hold on to their properties or the willingness to absorb the  extras brought on by stamp duties.

Homes across the Causeway may now cost more

As the property game evolves globally, each country is picking up on the unique quirks and preferences of buyers and investors, both local and foreign. And Governments are catching on quickly now, with implementations of new rulings and taxation systems occurring more regularly, which changes the landscape of real estates all across the globe.

UDA Heights in Johor Bahru.

UDA Heights in Johor Bahru.

Singaporeans have always been fond of investing in homes in the neighbouring Malaysian state, Johor Bahru, and for some time, the sharp contrast in prices have drawn numerous buyers across the border. But now, a new taxation scheme will see future foreign property investors paying more in taxes. Johor state is planning to put higher tax rates on 130,000 foreign home owners starting end of 2013. Perhaps this is a means for the Johor government to rein in skyrocketing property prices spurred by foreign home buyers, 90 per cent of which are Singaporeans, but while time will tell whether this will deter buyers in the long run, the short term gains for the state through higher property returns may be substantial.

This property tax however does not apply for lower-priced properties, but with the restrictions already put in place, most foreign buyers may have to fork out an increased amount of property tax. Current tax for Johor properties are at 0.14 per cent of the property value. For example, a RM500,000 home will cost the owners RM700 a year in property tax. Foreign buyers are only allowed to purchase properties of a minimum of RM500,000, up from RM250, 000 a couple of years ago. Early up-takers may have benefited, but prices now will have more than doubled.

There is an additional charge of RM10,000 for government consent and if you choose to let go of your property, you will be charged a Real Property Gains Tax (RPGT) set by the Federal Government. RPGT Is set at 15 per cent of the net profit from sales of the property, is the property is held for less than 2 years. For properties held between 2 and 5 years, a 10 per cent RPGT is charged. And if the property is held above 5 years, no RPGT is charged. In general, owners of Malaysian properties are charged 2 types of property taxes:

  • Assessment tax – This is based on the renal value of the property
  • Quit Rent – This is based on the land size of the property
Condominium for sale at Penang's Batu Ferringhi.

Condominium for sale at Penang’s Batu Ferringhi.

In Penang, another state where foreign buyers popularly choose to invest in, the price limits for foreign buyers stand at RM1 million. Property taxes vary from one municipality to another, thus if you are looking to invest in properties in Malaysia, it would be wise to engage the expertise of a property agent or agency.