Property prices soften last quarter

Property market prices seemed to have fallen once again as Q3’s numbers show. Weaker market sentiments as well as a weakening rental market seem to have taken a toll on property prices and sales volume. Resale HDB flat prices were down 0.3 per cent and private property prices down 0.9 percent in Q3. In a year-on-year comparison, HDB resale prices have fallen 9.8 per cent and private property prices 8 percent since 2013. Property analysts have expected a drop in prices this year of between 4 to 6 per cent.

Queens Condo Stirling RoadWhile many private property owners may not yet be feeling the impact of the price decline, those who truly want to sell their property may be faced with the dilemma of dropping their asking price in order to close the deal. With more readily available industry information, buyers are now more aware of market prices and making more informed offers, which places the ball in their court.

The HDB resale flat market seems to be stabilising. Last month’s price decline is the smallest thus far, with the previous month seeing a 0.4 per cent drop. As most HDB flat buyers are able to service their loans using their property using Central Provident Funds (CPF), they may be less affected by a weakening economy and rising interest rates.

How the market fares moving ahead, will be largely dependent on the economy. The 1998 Asian financial crisis is a good reminder of how policies, jobs and industries are closely tied.


From New York to Sydney – Investing in Foreign properties

While the number of new properties coming up in Singapore may tilt the scale towards supply and give buyers an upper hand, in other major cities around the world, a decline in supply has moved property prices up the charts.

MelbourneProperty_CollinsStreetIn New York, the number of available properties, especially those in popular districts, have been on the decline. There has reportedly been a 20 per cent fall in the number of available listings, now standing at 5,654 which is much lower than the 10-year average of 7,047. This has placed the median selling price for a Manhattan apartment to just below the record-setting US$1 million (S$1.4 million) mark. Though that may not seem much, considering Singapore condominium apartments are selling at similar prices, the amount of space you get is much lesser. If it’s space you’re looking at, buyers may have to look outside of New York and into the suburbs. Needless to say, the lack of available properties below the US$1 million mark has made competition all the more heated, and buyers now find themselves having to stretch their budget to get the apartment they want. Landlords and sellers now have the upper hand.


At the opposite end of the globe in Sydney, Australia, property prices have been climbing steadily for the past quarters and now stand at an average of A$785,000. But prices in Sydney may have reached its peak as prices only grew 0.1 % last month. Over in Melbourne, the average prices stand at A$580,000 and prices have rise 2.4 %.

Are there opportunities in both cities for investment and is the time now?

Luxury apartment market remains quiet

While luxury property buyers find similar properties in Singapore cheaper and more affordable than those in Hong Kong, the market for high-end apartments above 2,000 sq ft remains quiet. In the third quarter of 2014, 162 luxury condominium units were sold and this year, only 112. Most of the properties sold were in the prime districts of 9 to 11.

Palms Sixth Avenue 1Property analysts say the Additional Buyer’s Stamp Duty (ABSD) is one of the main factors affecting the change as it increases the total quantum price considerably. And as most luxury property owners are the highly affluent with sufficient holding power, they are unlikely to succumb to asking prices which are not suited to their liking. Buyers however are now looking for better deals as they see the property market as weakening. The buyer-seller tussle may continue while everyone keeps an eye on interest rates and global economic changes.

However, the landed home market in the prime districts are still doing well. 30 houses have been sold in the third quarter thus far, with the total sales numbers coming up to $266.3 million. And Malaysian and Indian buyers still have the strongest showing in the local market. Some of the projects which did well in 2015 include Leedon Residence, D’Leedon and Palms @ Sixth Avenue. Resale properties which fared similarly include Goodwood Residences, Urban Resort Condominium and St Regis Residences. Recently, a townhouse at Bishopgate Residence also sold at $21 million and Chinese buyers are coming back into the fold.


Has private property market reached stability point?

Has the private property market possibly reached a point of stabilisation? Figures of late seem to show that while there are slight fluctuations either ways of the scale, the market seems to have somewhat levelled.

Prices of completed private properties seem to have stopped declining and August showed a only a 0.6 per cent fall according to the Singapore Residential Price Index (SRPI). Property analysts have put the slight decline mostly to the increase in completed units in the central regions, the possibility of buyers waiting for post-election policy changes, and the lull in property transactions in the Hungry Ghost month.

Stevesn SuitesSmaller apartment units seem to have fared well though, with prices rising 0.5 per cent in July. Vacancy rates of rental units have risen while rental rates dipped island wide. As long as foreigner labour and immigration policies remain tight, the leasing market may remain weak, especially as the number of completed units are rising in the next couple of years. Resale properties in districts 1 to 4 and 9 to 11 have suffered a hit with a 23 per cent fall in transactions in August.

The next 2 years might be a time to watch for small apartments under 506 sq ft which were purchases for investment purposes. While sellers may not yet be pressured to sell as interest rates now remain low, as the number of these units rise upon completion of many developments launched last and this year, and interest rates fluctuate, the situation may be different come 2017.



Quality of life in quality homes

The number of private residential properties out there have blossomed, and with the options so far and wide, how do you narrow down your choices?

Location is often one of the first considerations for time-conscious buyers, but there should also be some leeway, depending on a balance of affordability and other factors such as age of the property, to consider quality of life and the lifestyle you’re in search of.

There are now a good many more properties offering waterfront living, or high-rise units with scenic views of the city of greenery than before. Take the 147-unit Riverbay apartments for example. Though not a massive development, its smaller size provides an exclusivity and quiet, especially with its view overlooking the Kallang River. Located at the fringe of the city, it also offers lush greenery and is close by the Kallang Park Connector. Other pros include the provision of a number of schools nearby including St. Andrew’s Junior and Secondary schools and Junior College, and the Stamford American Internationl School.

Suites@OrchardAnd if it’s stylish interiors and city-centre-living you’re looking for, then set your sight on properties in district 9 – Orchard and River Valley. Properties in this areas are pricier, but they do come with many pluses such as quality interiors, fittings and finishes; and are just a quick walk away from the Orchard shopping belt and MRT stations. Near the Dhoby Ghaut MRT station, in fact just next to the Plaza Singapura shopping mall, is Suites at Orchard – a 10-storey project with a range of units ranging from one-bedders to penthouses.

But if it’s resort-style living you are after, then looking East would not be such a bad idea. Take Palm Isles in Flora Drive for instance. It is situated close to Changi beach, though they already have resort living down pat right on their doorstep with dip pools, spa pools, lounge pools and lap pools all in its midst. The development also offers one of the few landed houses within a private property compound – 28 three-storey homes featuring 3,757 sq ft Garden Homes and 3,014 sq ft Garden Terraces.

Though choices are aplenty, and it is wise to shop around till you find a unit you like, narrowing down on the kind of lifestyle you want will help you be a step closer to your dream home.

A possible supply glut in Australia property market

Economists are beginning to see possible cracks in the Australia property market as an onslaught of new homes threaten to cause a supply glut by 2017. The property market has been booming for awhile now, with most homes overvalued at 20 per cent. Partly boosted by the central bank’s series of 10 interest rate cuts since 2011, buyers have been snapping up units in one of the world’s most expensive property markets.

GreenSquareProperty prices in Sydney alone have risen 46 per cent in 3 years, with a 24 per cent average rise in the whole of Australia. The latest property offering is Green Square in Sydney, which will yield 10,000 new apartments, adding to the 213, 000 new homes which will be made available across the country. Perhaps some of the reasons for the possible glut could also be the lack of a corresponding rise in income and population growth. Confidence and capital spending have thus reflected this. Tighter lending rules have also effected a 13.1 per cent drop in investor loan growth.

Though buying will not cease or fall immediately, analysts are advising buyers to proceed with caution and to consider their mortgage options for the long term as banking rates will fluctuate and holding power will no doubt be what differentiates the wise investors from those in for a quick buck.

When will the property cooling measures ease?

Some of the first property cooling measures were implemented more than 4 years ago, and they have stayed till today. More were added along the way and the market seems to be finally responding to the restrictions, with prices and sales volume falling slightly since the 2009 peak.

Considering it took almost 5 years for a slight decline in property prices, the authorities seem determined to stick to their guns and have the property cooling measures in place at least for a little while more. But analysts are expecting a much steeper drop in residential prices of up to 15 per cent before the Singapore government is likely to ease up on the measures. They are likely to also be waiting for mortgage interest rates to rise above the 3.5 per cent average from before.

Especially as the elections have just ended, a sudden change in policies is unlikely as increasing housing prices could affect public sentiment. Although there has been pushback from citizens about immigration policies, and the increasing supply of new properties in then next couple of years may further keep rental and housing prices suppressed unless there is a drastic shift there. In the HDB market, they are expecting a further 5 to 10 per cent drop in prices before any change might be effected.

Will there however be a gradual easing of cooling measures by removing restrictions one at a time?



More launches ahead in the North-West

August proved to be a slow month for the private property market as the lack of new launches and the Hungry Ghost month made a tiny bump numbers-wise.

The number of homes sold were similar in a year-on-year comparison with 2014, and while it is comforting to know that the numbers are level, the overall primary sales figure of 7,400 units sold last year is below the ideal 10,000 to 12,000 units per year primary sales volume. The resale private property market is largely dependent on the primary sales market thus home sellers as well as developers are all hoping for more vibrant sales of new properties.

PrincipalGardenThe last quarter of the year may be more promising as there are a number of new launches coming up. This includes Principal Garden in Prince Charles Cresent, and a slew of executive condominiums (ECs) in the North and North-west, namely: Signature @ Yishun , Wandervale in Choa Chu Kang, The Criterion in Yishun and Parc Life in Sembawang.

The most recent EC launch was Sol Acres in Choa Chu Kang. So far, 259  units have been sold at approximately $787 psf. Despite the recently-announced increase in income ceiling for EC applicants from $12,000 to $14,000, the uptake for EC units seemed to have stalled somewhat, with an increasing number of units unsold.

Property analysts are chalking this up to a lull month, the location of the properties, tightening loan limits and the developers’ track records. But will the upcoming EC launches fare better?