Private condominium prices hold steady

The fall in completed private condominium prices was gentler last year at 3.5 per cent, compared to the 5.7 per cent from the year before. Prices are expected to hold steady this year as a dip in supply of properties in this sector bring prices to a plateau.

Jewel CDL

Photo: Jewel @ Buangkok

Demand for smaller apartments of up to 500 sq ft in size, have been weakening as their numbers, especially in the suburbs, have been on the rise in the past couple of years. Investors have found them more difficult to rent out in the dulling leasing market and those outside the central region or further from regional business hubs may find themselves competing for the same tenant pool. Tenants now prefer units with larger floor spaces with just slightly higher rents.

Sale prices of completed private properties within the central regions however have fallen more sharply as they usually come with a higher total quantum price. Compared to the many newer properties which have found a sweet spot with their total selling price, units in these central or prime districts see fewer overall transactions.

As the volume of unsold completed condominium stock diminishes and with the fewer launches expected this year due to cutbacks on land supply, resale properties could expect a happier year ahead.

China’s property market on road to recovery

Following the recent blip in China’s economy, which has affected economies across the globe, investor confidence and expectations have dipped considerably.

Home prices have also fallen but are now on the road to recovery as the authorities have eased measures to help regions, in particular smaller cities, in danger of a supply glut. The People’s Bank of China (PBOC) has helped to keep the yuan steady after allowing it to fall rather drastically in the beginning of the year. It has reduced interest rates 6 times since November 2014 and also lowered repayment requirements to allow buyers to borrow more for their first and second homes. Home prices have risen in 37 cities over the last month. In the more touristic cities such as Hangzhou and Xiamen, home prices have grown 1.1 and 1.3 per cent respectively over November last year. In a year-on-year comparison, a growth of 5.6 and 6.4 per cent was recorded.

PikShaRoadPhoto: Pik Sha Road property in Hong Kong

China‘s government seems determined to keep the economy afloat though sharp rebounds may be unlikely. Economists are expecting the authorities to play a more supportive role this year, with one of their main tasks this year being the reduction of home inventory, thus investors and market players are expecting further easing of measures this year.

Cities which are also business hubs, such as Shenzhen and Shanghai, have seen the quickest pace of home prices recovery. New home prices in Shenzhen and Shanghai have increased by 3.2 and 1.9 per cent respectively, followed by 0.4 and 0.7 per cent in Beijing and Guangzhou. Most of the positive activity in the property market remains centred around a small market segment, and some less popular cities are still seeing a market decline.

 

Lull in private home prices

Despite a projected lull in local private home prices this year, interest in Singapore’s property market remains steady as prime residential property prices are still 165 per cent and 92 per cent lower than those in Hong Kong and London respectively.

 Photo credit: Singapore Tourism Board

So despite property analysts predicting a 5 to 10 per cent fall in prime and mass market private property prices this year, the local property market’s core remains strong. 2010’s property cooling measures may have kept property prices 17 per cent lower than what it could have been. Private home prices have fallen 4 per cent last year, following a 3.7 per cent fall in 2014. In the luxury home market, prices have fallen 20 per cent since the Additional Buyers’ Stamp Duty (ABSD) was implemented in 2011.

China’s recent growth slump, plunging oil prices, the Federal Reserve interest rate hike and a general sense of a global recession looming, might consequently affect the property markets around the world. Businesses may reconsider their expansion plans, which could mean a fall in demand for office spaces and commercial properties. This in turn may affect the number of expatriates entering the country, which may also affect rental prices.

This year could prove tough for investors and property sellers, but not without glimpses of hope. 2016 may be the year to hang-in-there, but industry experts are expecting 2017 to take a turn for the better.

Fewer launches More sales

Despite property developers rolling out fewer new property launches last year, sales of new private homes rose 2.9 per cent from 2014, to ring the tills at 7,529 transactions in 2015. The number of new homes launched last year was in fact 8.2 per cent lesser than that of 2014. Buyers may have realised that property prices are stabilising and will not decline much more, and thus are returning to the market to pick off already-better deals.

The Trilinq
Photo: The Trilinq

759 new private property units were sold in November alone last year, buoyed by the launch of The Poiz Residences. In December, there were 384 transactions recorded, 154 more in a year-on-year comparison with December 2014. Though 2013’s peak saw 14,948 new home sales, almost double that of last year’s, the signs are more positive than expected. Property investors may also be picking up real estate as the stock market remains volatile. Perhaps declining property prices have also managed to strike a chord with investors. At The Trilinq for example, which first launched at prices of $1,545 psf in 2013, have since trimmed their prices to $1,329 psf.

Market activity this year will await to be seen as the interest rates hikes and loan restrictions combined, and the reduction of land sites sold this year, may deter buyers and lower demand. Industry analysts are however remaining positive, projecting 8,500 new private home sales this year. They are expecting lower overall quantum prices to be the draw of this years’ property market.

Home prices along Downtown Line go to town

As expected, the newly completed Downtown MRT stations have brought much cheer not only the commuters but also to owners of properties in their vicinities.

The SkywoodsPhoto credit: Skywoods.com.sg

Since the Downtown Line began operating some of its stations last December, prices of properties near these stations have already seen an increase in interest, units sold and also rental prices. Private apartment prices have risen from $1,523 psf to $1,592 in the last quarter, up 4.5 per cent from the previous quarter. Out of the 18 stations now operating include long-awaited ones along Bukit Timah and Upper Bukit Timah such as Tan Kah Kee, King Albert Park, Sixth Avenue, Beauty World, Cashew, Hillview and also Bugis, Little India and Rochor stations along Rochor Canal and Sungei Road.

The price increase can be observed at private apartment projects such as Eco Sanctuary, where 9 per cent more units were sold by December. The development is now 91 per cent sold. Kingsford Hillview Peak condominium also saw a 3 per cent increase in sales and The Skywoods almost doubled their in the number of units sold.

With the effect MRT stations have on property prices, it would not be surprising to find prices of homes along upcoming Downtown and latest Thomson-East Coast line appreciate in the near future.

Slower pace of private property price decline

Resale private apartment prices have been on the decline since its peak earlier in the decade, after the effects of property cooling measures kicked in and fuelled by a recent building boom. But the pace of decline has slowed down 2.1 per cent last year, in comparison with 2014. The URA property price index indicated a 3.7 per cent fall last year as compared to 2014’s 4 per cent.That may be a sign the market is finally stabilising, and sellers are no longer pressed or enticed to sell quickly.

St. Regis Residences on Orchard Road.

St. Regis Residences on Orchard Road.

The resale private property market did however report some profit losses. For example, some resale units at St. Regis Residences registered losses of $542,30 up to $4.78 million for a 4-bedroom penthouse.

2015 saw a total of 4,999 resale transactions of private properties, up 22 per cent from the year before, though still a far cry from the 10,598 in 2012. Property analysts are expecting a continued decline in prices, though at a slower rate, as buyers and sellers are still taking time to adjust to the loan restrictions and also now to cope with the new interest rate hikes. Buyers are however gradually acclimatising to the current market situation where new properties are priced affordably and resale property prices may not be drastically reduced, and thus are re-entering the market albeit with some care.

 

$1.5 million sweet spot for private resale buyers

Singapore’s property market will be expecting some adjustments in the private resale non-landed sector as more completed units continue to enter the market next year. But prices have stabilised somewhat in the past couple of months after 5 months of consecutive decline.

Loft @ Nathan, one of the new property launches available to buyers.

Loft @ Nathan, one of the new property launches available to buyers.

Property analysts have realised that buyers remain highly sensitive to the total quantum price and they seem to have reached a sweet spot of $1.5 million. Smaller units are more susceptible to price changes as their numbers are on the rise, causing rental competition to be rather fierce. In October, a 0.1% value increase for private completed non-landed properties was registered by the NUS Singapore Residential Price Index. More buyers have been setting their sights on resale properties as developers largely cut back on the number of new launches in the second half of the year.

There were 247 more transactions registered this year as compared to the last and with a $750,000 increase in sales figures. There has also been a shift this year in the market’s focus, from new developer properties to resale properties. More buyers are own-occupiers who are looking for immediate housing needs, thus are more willing to pay for resale units.

Industry experts are expecting 2016 to bring more fluctuations as the market copes with new homes reaching completion, private homes and HDB flats included.

Poiz Residences – Poised for Potential

Come this weekend, another mixed-use development will enter the market and perhaps just in time to add some excitement to the year-end festivities.

With half of its units launching this Saturday, November 28, is the 731-unit condominium Poiz Residences developed by MCC Land. It is part of a mixed-use development that includes the retail and lifestyle-centric Poiz Centre. The project is situated in Myeappa Chettiar, just right next to the Potong Pasir MRT station.

poiz-img-001Photo credit: MCC Land

With the new Bidadari HDB estate coming up not far away, and schools such as St. Andrew’s primary, secondary and junior colleges nearby, the new private condominium may provide buyers with a tantalising option. Tentative completion date for the property is in 2019, which will comfortably coincide with that of the HDB flats in Bidadari.

Pricing of units at Poiz Residences are expected to be around the average of $1,380 psf with a good mix of 4 penthouses, 202 three-bedroom units, 52 four-bedders, and the rest made up of the highly palatable one- and two-bedders. With buyers now more akin to units with lower quantum prices, the latter might sell quickly.

MCC Land is hoping to position the mixed-use project as a mainstay of the Potong Pasir area, building it up as a central destination in the region.