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2 Mar

Get your Home Loan facts straight

Straight from your bank, that is. Now all banks have to provide a home loan fact sheet to potential borrowers explaining the details of the loan, such as repayment schedule and interest rates. Do you know what questions to ask before signing on the dotted line?

Home buyers will now be in for a reality check before they sign off on their mortgage. The Monetary Authority of Singapore has mandated that from today, banks will have to provide potential borrowers with a fact sheet when discussions on the credit facility take place. The sheet will help potential customers work through the nuts and bolts of the mortgage, with information such as the loan quantum and the repayment schedule. There will be notes to inform the borrower that the bank may have the right to ask for additional payments if the property falls in value.

Is the interest rates on your home loan rising? Be aware of what the risks and fluctuations are.

Customers will have to be told that monthly repayments can increase if interest rates rise. For example, the monthly repayment on a 20-year, $1 million loan can increase by about $1,500 if the interest rate increases from 2 per cent to 5 per cent. Banks have to provide a fact sheet as and when there are changes to the key features of the proposed credit facility too. This can be in written, printed or any electronic form, with a copy retained by the bank. The bank also has to obtain a written self-declaration by the borrower that he has received such a fact sheet before the mortgage is signed.

OCBC Bank has designed an iPad application that will help its employees generate the relevant information almost instantly. Ms Phang Lah Hwa, head of its consumer secured lending unit, said: ‘Customers want to be able to quickly and easily understand how different financing terms affect their commitment. ‘We have created the iPad application, which is able to demonstrate the financing packages with just a few clicks, with graphical tools which make it easier for customers to understand.’

Mr Derrick Ang, director of mortgage sales at consultancy portal SingaporeHousingLoan.sg, noted that the new safeguards also protect the interest of the banks. ‘There were incidents in the past where the borrower claimed to have been misinformed pertaining to loan details after the loan was accepted,’ he said. DBS Bank’s head of deposits and secured lending, Ms Lui Su Kian, said it has already been informing prospective home buyers along the lines of the new requirements. Staff are also trained to assist customers in understanding the fact sheet. Ms Lui added: ‘Mortgages are a long-term commitment… and customers should be aware of how the loan type will fit into their lifestyle and how interest rates are determined, as this will have a direct impact on their monthly budget.’

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Do a quick calculation before you even head down to the banks. As a home purchase could happen quickly, it is best to already have the knowledge at hand. Check out iProperty’s home loan calculator and keep up on latest property news to ensure you are a well prepared home buyer. .

28 Feb

Increased HDB income limits have helped home buyers

With the HDB income ceiling raised to $5000 for 3-room flats in mature estates and $10,000 for four-room units and above, has this helped home buyers put a permanent roof over their heads?

The tweaks to income ceilings have benefited more than 5,000 households, which have qualified to apply for various build-to-order (BTO) flats under the new criteria. This figure was revealed yesterday for the first time by the Housing Board (HDB), which made the changes last year. Last March, it raised the monthly household income ceiling to $5,000 from $3,000 for applicants of three-room units in non-mature estates. It said then that the move would give low- to middle-income first-timer households more choices of affordable flats. Last August, it raised the monthly household income ceiling to $10,000 from $8,000 – a quantum which had stood for 17 years – for applicants of four-room or larger units, as well as three-room units in mature estates.

Singaporeans seem positive about the future of public housing.

In his National Day Rally speech last year, Prime Minister Lee Hsien Loong said this was done to ‘bring more people into the HDB net’, as income levels were rising. The HDB said the bulk of the 5,100 applications – about 3,500 – came from households earning more than $8,000, but less than $10,000, a month. Another 1,600 households earning more than $3,000, but less than $5,000, a month had applied for three-room units in non-mature estates. The success rate of these 5,100 applications is not known yet as the HDB is still determining if the applicants are eligible.

Dennis Wee Realty spokesman Lee Sze Teck said the numbers showed that many preferred new HDB units over other options. ‘In particular, there are many people who want to enjoy the cheaper HDB flats, but because of their higher income, are forced into the resale market, or even private property,’ he said. He said the larger BTO flats cost from $250 per sq ft (psf) to $350 psf, versus executive condominiums’ $700 psf to $750 psf. Resale flats’ psf range is $380 to $550, said Mr Nicholas Mak, head of research and consultancy at SLP International. ‘This shows that the raising of the income ceiling was a move long overdue as the low ceiling meant people would look to the resale market. Given the increasing income levels of many Singaporeans, the ceiling should perhaps be reviewed every two years or so,’ he said.

Waterway Sunbeam BTO flats in Punggol were part of January's launch. There will be another BTO launch in March this year. Photo by HDB.

However, he added that it was unlikely the revised income limits would lead to a big spike in demand for BTO flats. He said: ‘In the past year, many of those who would have opted for public housing would have already applied, while the rest are probably waiting for property prices to come down before going in.’ Indeed, demand seems to be going down, even as the HDB ramps up its supply of BTO flats. It rolled out a record 28,000 units last year, and will put out another 25,000 this year.

At the start of the year, National Development Minister Khaw Boon Wan said the application rates for first-timers seemed to be stabilising, and promised more help for second-timers. One couple benefiting from the income amendments is accounts assistant Suah Wei Ling and her boyfriend. They had initially applied for a four-room unit in Bukit Panjang in February last year, but changed their minds when news of the rule change for three-room flats in non-mature estates broke a month later. Said Ms Suah, 24: ‘We were very lucky to have applied at the right time and qualified for a smaller unit as we did not need such a big flat anyway.’

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Though income ceilings have been raised, has this made owning a flat any easier? What about the continued rise of prices for resale HDB flats?

8 Feb

Residential property market up for price correction soon?

2012. A year of recession? No one is absolutely certain, but the signs of price correction in the residential market seems to be showing. What will this mean for Singapore’s economy, property investors and home owners?

What do the recent residential property prices and sales figure indicate?

The odds seem stacked against residential property prices in Singapore, historical data compiled by Credo Real Estate shows. Notably, negative residential price corrections were reflected in the years 2008, 2000 and 1983 following several quarters of price moderation to levels close to zero – a pattern which became apparent in the final quarter of 2011. Slowing to a meagre 0.2 per cent from 1.3 per cent in the previous quarter, the residential property price index for the fourth quarter of 2011 seemed supportive of the view that current values are nearing their apex.

More worryingly, the fall in prices tended to coincide with periods of negative GDP (gross domestic product) growth or deteriorating economic conditions, which in most cases evolved into recessions. Said Credo Real Estate’s executive director and head of research and consultancy, Ong Teck Hui: ‘If a recession occurs this year, it will certainly lead to a correction in the residential market. Even if a recession does not occur this year but economic conditions deteriorate ultimately leading to a recession, the market is also likely to correct.’

Property prices seem rather unstable at the moment and some are expecting it to fall. Image courtesy of ThinkStock.

The debate over when the correction will take place has been going on for a while, with many analysts arguing that property prices would weaken this year as a result of economic uncertainty, mounting supply and cooling measures by the government.

However, the situation could look a lot brighter if Singapore manages to escape with a mild slowdown. ‘If economic conditions turn out to be better than expected, we are likely to see a fairly stable market, albeit with uneven performance amongst different market segments and with price adjustments within a narrow range,’ said Mr Ong. In particular, the suburban primary mass market could stay ‘relatively healthy’ due to firm underlying demand should a recession be averted, though the secondary market, which is  experiencing weaker volume, could face a wave of price moderations. Slower activity in the prime residential segment is also expected as foreign buyers take time to come to terms with the additional buyer’s stamp duty (ABSD).

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Suburban homes are stealing the show for the moment, with new property launches and positive sale figures. How long more will this boom last and is the bubble growing bigger?

5 Dec

The NSE Expressway – What does it really mean for properties nearby?

The NSE Expressway will take approximately 5 years to complete. Throughout this entire construction process, what will it mean for properties in the vicinity? Will rental prices fluctuate? Will prices rise because of increased accessibility or will it go the other way? Which are the main affected areas?

It will be nearly a decade later before the North-South Expressway (NSE), which will run from the north of Singapore to the city, is ready. When it is built, it will bring a lot of convenience to those who drive, cutting up to one-third of peak-hour travel time. But the convenience will come at a price to some property owners, particularly those who own units directly facing the expressway, long before it can be used.

The full alignment of the North-South Expressway has been determined by the authorities. This is but one area the NSE will pass through.

The Land Transport Authority (LTA) recently announced the alignment details of the southern section of the NSE, after it had announced details of the northern section at the start of the year. Nearly half of the 21.5km NSE will be underground, with the 5.6km southern stretch being fully subterranean and running from Toa Payoh Rise to East Coast Parkway. To make way for the latter, the Government will acquire Rochor Centre, a clan building, and part of 21 plots used for schools, condominiums and commercial property.

Major construction works will start in 2015 and last for at least five years. New research by property consultancy DTZ shows properties located very close to the NSE will likely see a small drop in their values while rents may be slightly hit. Another group that may be temporarily hit are retailers near the NSE, it said. Its check on prices shows that as of October, there is no evidence of underperformance compared with the general market trend in the transacted prices of residential properties along the northern part of the NSE since January.

Jones Lang LaSalle’s head of research, Dr Chua Yang Liang, said the current heavy traffic along the route is possibly depressing the values of projects around the area. The highway, which should ease congestion and thus improve the overall quality of the environment especially along the route, should thus enhance property prices around the area. Typically, the public will react only closer to the start of construction when they can feel the inconvenience and disamenities, said DTZ head of Asia-Pacific research, Ms Chua Chor Hoon.

 

Woodlands - one of the areas where the NSE construction work will take place.

During construction

The LTA said it will adopt the cut-and-cover method of excavation as the expressway is too big for it to use the less disruptive and often safer boring method. Residents of properties along the NSE will have to put up with road diversions, inconvenience due to movement of construction vehicles, and noise and dust from construction works. This means investors who own these properties may not be able to push up rents substantially. ‘Tenants won’t pay you good rentals because of the inconvenience,’ said a veteran consultant. They have other housing choices and some will just choose to live elsewhere since a tenancy agreement binds them for two years. Residential rents could therefore underperform by up to 5 per cent during the construction period, projects Ms Chua.

Where prices are concerned, she found that while property prices along the NSE are not expected to underperform the market in general, there are exceptions. These are the ‘severely affected’ properties, which include those located close to the construction works, she said. The facing and distance of the residential blocks to the NSE will determine how their prices will be hit, experts said. ‘Those that will face the viaduct after completion of the NSE will see some impact on prices generally in the range of 3 per cent to 10 per cent, depending on the facing and distance of the units to the viaduct,’ said Ms Chua.

Find out the exact spots in Yishun where the NSE will start and end.

Properties located near the in-and-out ramps and the semi-tunnel will also be affected by the increased noise level and higher volume of traffic, and may thus see prices fall slightly, perhaps by 0.5 per cent, she said. When the market is bad, buyers will likely use the inconvenience as an excuse to push down prices, experts said.

The NSE will have 16 in-ramps and 17 out-ramps connecting towns such as Woodlands, Sembawang and Yishun with the city. ‘While the entire construction process is expected to take five years, the construction period in any specific area along the route is likely to be shorter, say, two to three years,’ said Ms Chua, explaining that generally, prices along the NSE should not underperform the market. Besides, with many parts of Singapore undergoing road construction works at one point or another, there is high tolerance towards road works. ‘Owners will look beyond the construction period,’ she said.

Interestingly, Ms Chua found that retailers may be a group that will be indirectly affected by the NSE. ‘Due to road diversions around the construction area, the public may avoid traffic-congested areas, which will then affect shopper traffic in retail properties such as those in Thomson Road and Rochor Canal Road/Rochor Road,’ she said.

 

The Rochor and Bugis area, where residents and businesses were asked to relocate.

After construction

Things will go back to normal for properties in the southern stretch where the NSE is underground, but not for properties next to the viaduct in the north and near the ramps. These will be adversely affected by the loss of privacy and increased traffic noise. Residents of properties in the north with easy access to the NSE but not necessarily along the NSE route will benefit more than those in the southern stretch from travel-time savings. ‘However, any price outperformance will not be solely due to the NSE, but also from new MRT lines (Thomson line, Downtown line) that will improve the accessibility of the north,’ said Ms Chua.

The overall impact of infrastructure on property prices is like a ‘double-edged sword’, said Jones Lang LaSalle’s Dr Chua. ‘While it generally benefits the larger population/residents living around the nodes where the project is located through enhanced accessibility, the costs of the accessibility – noise and nuisance – will be borne by the community immediately adjacent to the road.’

To sum it up, the veteran consultant said: ‘You want access to the expressway but you don’t want your property to face it.’

So which areas are most affected?

 

Will Sembawang be even more accessible when the NSE is completed?

WOODLANDS/SEMBAWANG/ YISHUN

The North-South Expressway (NSE) along this stretch will be in the form of a viaduct. There are army camps, factories, HDB flats and vacant state-owned land in these areas. Private residential properties along the route include: Northoaks, Seletaris, Sembawang Cottage, Goodlink Park (landed), Sembawang Park condominium and Euphony Gardens.

Residential units in close proximity of and with full frontage to the viaduct are expected to see some impact in terms of rents and prices. Occupiers of industrial properties may incur higher operating costs in transportation due to the road diversions. But this will not cause a fall in occupancy as the inconvenience is temporary and it would be too costly to relocate the plants and machinery, says property consultancy DTZ.

 

Nuovo executive condominium in Yio Chu Kang/Ang Mo Kio.

YIO CHU KANG/ANG MO KIO/ MARYMOUNT

The NSE along this stretch will be in semi-tunnel form. Developments along this route are mainly HDB and private housing with some institutional uses. Private residential properties include Bullion Park, Lentor Residences, landed homes on Countryside Road, Castle Green and Nuovo executive condominium. The semi-tunnel section will not have the same intrusive effect as the viaduct and is unlikely to affect housing prices.

THOMSON ROAD

The NSE from here will be in tunnel form. This stretch is heavily built-up with private housing and some commercial developments. Properties that will have part of their land acquired include:

  • Cube 8 (89.6 sq m)
  • Tan Tong Meng Tower (554.9 sq m)
  • 368 Thomson (239.1 sq m)
  • SLF Building (256.6 sq m)
  • Celebrities Resort Club (174.1 sq m)
  • Singapore Polo Club (333.4 sq m)
  • Goldhill Shopping Centre (720.4 sq m)
  • Novena Garden (466.1 sq m) and
  • Novena Ville (29.9 sq m)

Novena Ville along Thomson Road includes residential units and retail units.

Prices of such properties will likely not be adversely affected in the long term as the acquisition will affect only the common green and/or carpark spaces, according to DTZ. In the short term, as the completion date of some new residential projects is around 2014, subsale prices may see some pressure in the light of the impending construction, especially if the market is not buoyant, DTZ says. As traffic conditions are expected to worsen along the already congested road, drivers will try to avoid the area which may cause lower visitorship, especially those with access only from Thomson Road.

Retail malls, like United Square and Novena Square, which have alternative access and are destination malls, may see a slight fall in traffic but not enough to warrant a fall in rents. The upside to retail shopper traffic after the completion of NSE is limited because there is no out-ramp in the vicinity to the Thomson Road stretch.

BUKIT TIMAH ROAD/ ROCHOR/NICOLL HIGHWAY

This stretch of the NSE will be in tunnel form. Many properties along the route are already affected by the construction of the Downtown MRT Line which is expected to be completed by 2015, before construction of the expressway starts. The MRT line could bring shoppers to the area and mitigate further decreases in business activity in the area. Thus, there should not be any downside to property prices and rents, says DTZ.

At Rochor Centre, where occupiers have to move out by September 2016, many retailers are mum-and-pop shops and can afford only low rents. Hence, most are likely to relocate to affordable HDB premises and there should not be a rise in rents in the vicinity of Rochor Centre as a result of the displaced retailers, says DTZ.

Source: DTZ and The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Retail seems to be taking the hardest hit. But what about quality of life for tenants in affected properties? Will they welcome the increased accessibility and possible long-term benefits?

29 Nov

No significant rise in Resale Private Home prices

Although there is a slight rise of 0.9% on prices of resale private homes last month, the small blip in the radar hardly has the industry jumping for joy. What can be expected in the last quarter of 2011 and what lies ahead in the new year?

Resale prices of private homes rose a touch last month, reversing a slight dip in September, but the overall trend suggests a period of flat values. The new Singapore Residential Price Index (SRPI) flash figures out yesterday showed that prices rose 0.9 per cent last month, rallying from a 0.1 per cent dip in September. The overall SRPI – which tracks a basket of completed non-landed projects – points to a cautious market, with monthly price movements mostly fluctuating within a range of just one per cent or less this year.

RV Edge in the River Valley area, just off the Orchard road belt and the Central Business District.

Prices of centrally located homes, excluding small apartments of less than 500 sq ft, posted a gain of 1 per cent last month compared with the 0.4 per cent dip in September. Non-central area values rose 0.8 per cent, building on September’s 0.1 per cent increase. Prices for small apartments inched back 0.9 per cent after a 3.5 per cent drop in September. Experts offered various reasons for the trends seen in the SRPI index, which is compiled by the National University of Singapore.

DTZ’s head of Asia-Pacific research Chua Chor Hoon noted that the index’s ups and downs could be due to its nature as a monthly snapshot, and there were fewer caveats lodged in October. Chesterton Suntec International research head Colin Tan said the fluctuation could be due to prices reaching a turning point. ‘The underlying trend is still up ever so slightly. This is to be expected as there is still positive economic growth,’ he added. He suggested that there could be a to and fro between the HDB resale and private resale mass market segments, which could have led to the varying impact on prices.

How have prices of new properties in the River Valley area affected resale private home prices in the vicinity? Seen here is Aspen Heights condominium.

Savills’ research and consultancy associate director Alan Cheong also highlighted the high correlation between new and resale prices. ‘Developers who command some sort of pricing power when they launch new projects will invariably bootstrap prices in the neighbourhood,’ he said. ‘What this means is that if prices of new units increase too much, it will divert demand to the resale market, which then reacts by increasing prices.’

Source: The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Do you know which new properties are coming up in your area? Have they already reflected a corresponding rise in the resale prices of HDB flats and private homes in the surrounding areas? How long will this pegging of property prices last?

23 Nov

Bedok Residences – Are the serious buyers turning up?

Is Singapore a city where long queues are the norm? It certainly seems so at the Bedok Residences launch over the weekend. However it was revealed that many were actually queuing in place of agents or buyers. Is demand as high as it seems, especially with the high prices of units at $1,3000 psf? Is there a reason property agents are standing in line?

Hundreds of people braved the rain and scorching heat yesterday to queue for the upcoming Bedok Residences project, but many claimed they were either acting for agents or being paid to stand in line by genuine buyers. The line started forming on Sunday night and numbered a few hundred by 7pm yesterday. The CapitaLand project will be launched tomorrow. Plastic bags and rubbish were strewn across the entrance of the showroom as the crowd settled in for the long wait at the show-flat near Bedok MRT station. A CapitaLand spokesman said each person in the line is assigned a number that entitles him to pick a unit.

How will units at the Bedok Residences do?

It was not clear why the potential buyers, having obtained a queue number, had to remain behind instead of being allowed to return on the day of the launch. Some market watchers reckoned this to be a marketing ploy, as the sight of a big turnout might help drum up interest among buyers at a time of flagging interest in the residential market due to the global uncertainty.

While the project is centrally sited near the Bedok bus interchange, the pricing is unlikely to be a top draw. Although no firm details have been released, prices are expected to hover around $1,300 per sq ft (psf), valuing a 517 sq ft one-bedroom unit at $723,000. In contrast, several new projects – including A Treasure Trove in Punggol – have sold well in recent months, with analysts pointing to their average price of about $870 psf as a key attraction.

Options are wide and many at Bedok Residences. Will there be units for everyone?

Bedok Residences comprises 583 units of one-, study plus one-, two-, three- and four-bedroom units, and penthouses. The 15-storey project will be built above a retail development and is due for completion in 2015. It is unclear how many in the queue are really buyers looking to secure a flat in the 99-year leasehold project. Since the last cooling measures were implemented in January, no major project has been an instant sell-out.

And Bedok Residences is unlikely to buck the trend, analysts noted. Many people in the queue The Straits Times spoke to were property agents, or students and retirees who said they were being paid by agents to stay in line. Asked if they were there to buy, a group of women shook their heads and pointed to a property agent’s name card.

Bedok Residences is situated in a prime location, near public transport, shopping malls and other amenities.

A potential buyer, Mr Lim K.T., said he was interested in the place as his in-laws lived nearby, but added that some of his friends who had come with him had decided against buying when they saw how disorganised the situation was. There was no clear instruction on where to queue and many people pushed in. Some analysts were taken aback at the turnout, given the unstable economic outlook. Guessing at a reason for the crowd, Mr Colin Tan, head of research at Chesterton Suntec International, said the resale market has been slow, so agents may be focusing on developer sales.

Analysts said that the indicative selling price of $1,150 to $1,400 per square foot (psf) at CapitaLand’s newest condominium, Bedok Residences, is higher than expected – but they still expect a strong launch performance. OCBC Investment Research analyst Eli Lee, who visited the showflat on Monday afternoon, checked with three agents and found that they will only hire a replacement to wait in line if his team committed to buy and submitted cheques.  ’From these data-points, we judge that there is robust demand for the launch and expect a strong sales performance in terms of both units sold and average selling prices later this week,’ Mr Lee said.

Take a peek into the showflats of units at Bedok Residences.

Kim Eng Research also noted that the lack of condominium supply in Bedok Town Centre probably allows the project to set a higher price. The 99-year-leasehold, 583-unit Bedok Residences is part of an integrated development comprising homes, a shopping mall and a transportation hub linked to Bedok MRT station. ‘Demand for such integrated projects is expected to be strong as they provide convenient access to key transport nodes and retail outlets, not to mention their limited quantity. After all, there are only so many MRT stations in Singapore,’ said Kim Eng’s analysts in a fresh note.

Take-up could also be boosted by foreign purchasers, said Ku Swee Yong, chief executive of International Property Advisor. ‘There is likely to be a fair amount of foreign interest in this project, and around 20-30 per cent of the units could be bought by non-Singaporeans,’ he said. CapitaLand decided to forgo the traditional balloting system (which is largely based on chance) and instead opt for the queue system for Bedok Residences, so that selection and purchases can be done on ‘fairer, first-come first-serve basis’, said ERA.

The property firm added that many people in the queue outside the project’s showflat are paid to stand in line by agents who represent potential buyers with keen interest in the property. ‘We expect most of the queuers to be students and retirees as most of the interested buyers are working adults holding full-time employment and therefore are unable to take leave from work to be in the physical queue themselves,’ ERA said. ‘Similarly, the agents themselves are unable to join in the physical queue as they will have appointments, such as HDB appointments and viewings to attend to.’ Some of the agents also have more than one customer keen to purchase a unit, in the project, ERA added.

Source: The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Are property buyers giving a final year-end push to sales volume or are they still waiting for more options to fall on their plate?

22 Nov

Tiong Bahru – Old is Gold

As preserving memories of old Singapore become an uphill task, properties in older historic areas such as Tiong Bahru are seeing a substantial price hike. Are there any other areas of Singapore where properties are more resilient to recession because of the nostalgia they hold?

The nostalgia of one of the first uniquely designed HDB flats in Tiong Bahru. Now available for sale or rent.

The days of bargain buys in Tiong Bahru are long gone – the 1,000 sq ft pre-war flat that cost about $680,000 three years ago would set buyers back about $1 million now. The astonishing price hikes are being driven by the transformation of the once-sleepy neighbourhood into a popular enclave with the kind of amenities younger buyers seek. While the area contains a mix of private and public housing, there are 27 blocks of private pre-war homes with conservation status that are especially popular.

Unlike the neighbouring public flats built by the Singapore Improvement Trust, owners of these pre-war conservation apartments are not subject to HDB eligibility rules. The appeal is not immediately obvious, despite the proximity to the Central Business District and a well-established network of amenities. Most of the pre-war homes have less than 60 years left on their 99-year leases and are contained in low-lying blocks that range between two and five storeys high. There are no lifts or modern facilities like rubbish chutes, and like other older developments, these blocks do not come with facilities like pools, gyms or security guards.

A bit of retro beauty in the style and surroundings of these simple walk-up apartments in Tiong Bahru attract a good many looking to purchase or rent a unit.

But this has not deterred prospective owners and tenants. Ms Tan Kar Woei, a procurement engineer who has been living in a four-bedroom apartment in Guan Chuan Street since 2009, told The Straits Times: ‘My husband and I have lived here for a long time and we’re familiar with the Tiong Bahru estate. ‘Other than being near our families, it reminds us of a different place and time when housing estates in Singapore weren’t so built up.’

Young professionals and expatriates who have also seen the appeal now make up a size- able portion of the neighbourhood’s demographic and the area has seen an infusion of businesses, with bookstores, art galleries and coffee joints sprouting up over the past year. Anecdotal accounts suggest that despite the shorter leases, some owners are able to secure longer-term financing for these pre-war flats, a sign of the area becoming more established.

Not to mention, Tiong Bahru is just a stone's throw from the Central Business District.

The buzz has also proved irresistible to investors. ‘Around 90 per cent of the calls I get about properties in the area are from investors. But two to three years ago, it was a 50-50 split between investors and buyers looking to live there,’ said Mr Alvin Yeo, a property agent who deals primarily in Tiong Bahru homes. Accurate figures on prices and rents of the pre-war apartments are difficult to piece together, but agents say they have seen an increase in sales activity and listings.

The Regency condominium in Tiong Bahru.

Between 2005 and 2007, there were no more than three transactions a month, but now there can be up to 10. Recent transactions have shown the staggering jump in prices. Urban Redevelopment Authority (URA) data shows a 1,141 sq ft flat in Yong Siak Street sold for $668,000 last September, which translates to $585 per sq ft (psf). It is unclear if the apartment was then renovated but it changed hands again in September this year for $1.27 million or $1,113 psf, almost double the initial sale price.

Rents for a typical 1,000 sq ft unit can hit $3,500, or $3.50 psf per month (psf pm), Mr Yeo said, up from the average $3 psf pm from three years ago while shop spaces are going for more than $7 psf pm, up from around $4 psf a year ago. Prices of newer private homes nearby have benefited a great deal from the demand for the pre-war homes. URA figures indicate that the median price of flats at The Regency at Tiong Bahru, a condominium in Chay Yan Street, was $997 psf in the second quarter of 2008. Fast forward to the second quarter of this year and it was $1,486 psf.

While some real estate agents have described homes in this area as slightly more resilient to recession, property experts beg to differ, saying that like the rest of the market, the growth trend is dependent on how Singapore’s economy fares within the next year.

Source: The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Pre-war shophouses, older private condominiums, black and white colonial homes, these are but a few of the properties which call their own shots either in terms of rent or sale price. Will they be worth even more in years to come? Will the land ever be reclaimed by the housing authorities? Is it merely a matter of time?

14 Oct

New Bedok DBSS to cost less?

And the answer is – the new DBSS will cost less than the whooping price tag which developers put on Centrale 8 in Tampines earlier this year. Units in Belvia will be priced between $500,000 for a 3-room to just under $700,000 for a 5-room one. Is this affordable for you? 

HDB flats under the Design, Build and Sell Scheme (DBSS) being offered for sale this month are all but certain to cost less, as developers try to avoid a repeat of the negative reaction to a previous launch in June. Two of the three developers behind the newest projects say the prices will be pegged to market sentiment, following a public outcry over record-breaking asking prices for flats in Centrale 8 in Tampines. DBSS flats are designed and sold by private developers and typically come with fittings and better designs than standard build-to-order (BTO) HDB flats. Their prices reflect that premium.

Centrale 8 in Tampines under the DBSS scheme. Image by Sim Lian Group Limited.

Developer Sim Lian’s Centrale 8 made the news in June when its asking price for a DBSS flat rivalled that of executive condominiums (ECs). It eventually backed down on its prices to varying degrees, slashing $100,000 off its priciest $880,000 units. CEL Development, which will launch Belvia in Bedok Reservoir tomorrow, said the asking price for a three-room unit with an area of 721 sq ft will be under $500,000, while a four-room unit of 925 sq ft will cost less than $600,000. A majority of five-room units of 1,162 sq ft each will go for under $700,000. Those with a better view of the reservoir will cost slightly more.

Trivelis DBSS flats in Clementi.

EL Development’s Trivelis, a Clementi project to be launched on Oct 26, said the price ranges for its units are: from $300,000 to $400,000 for a 645 sq ft three-room unit; between $500,000 and $600,000 for an 882 sq ft four-room unit, and from $600,000 to $700,000 for a 1,130 sq ft five-room unit.

Hoi Hup Sunway, which developed Lake Vista @ Yuan Ching off Jurong Lake, will release information on its prices today. The development will be launched next Tuesday. CEL Development chief executive officer Raymond Chia said his company is well aware of the fact that DBSS flats are still public housing, and the price range will reflect that. ‘We know pricing is a sensitive issue. At the end of the day, before we price it, we also want to look at public sentiment,’ he said.

In July, National Development Minister Khaw Boon Wan said the DBSS scheme will be put on hold as the Government reviews the policy. PropNex chief executive Mohamed Ismail said the DBSS flats are still pricey. Belvia’s flats cost at least $600 psf. Centrale 8 was priced in the $600 to $700 psf range.

Adora Green DBSS flats at Yishun. Photo by Guthrie SK Land Pte Ltd.

Its predecessor, Adora Green, went for between $450 and $500 psf. ‘A BTO price is about $350 psf, and a DBSS flat in Bedok, which is a mature estate, should be $550 psf maximum. The prices are still rather high,’ he said. ‘It might be more worthwhile to buy an EC or go for a resale flat instead.’

Mr Nicholas Mak, research head of property consultancy SLP International, said pricing is a tricky issue that developers must take heed of. ‘DBSS prices occupy a narrow range between that of BTO flats and ECs, but buyers must remember that they are still buying an HDB flat, and they should not have to pay too much money for it,’ he said.

Source: The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
EC, resale, BTO or DBSS? Which public housing option makes more sense in terms of pricing and longevity?

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