New private homes – Sales lacklustre

The hungry ghost month and the lack of new property launches during that time have affected new home sales in August. Sales were down 15% and only 432 units were sold although 351 units in previously-launched developments were put up for sale.

The PanoramaMost of the sales came from suburban properties, especially from newer launches such as The Panorama in Ang Mo Kio and Coco Palms in Pasir Ris. Median selling prices at the former was $1,249 psf and $1,046 psf at the latter. Whilst Eight Riversuites launched around the same time as Coco Palms in May 2012, the Whampoa East property fared better with average prices at $1, 345 psf. Positive sales at these few developments could be due to the lower prices at its re-launch. The Panorama for example saw sales picking up once median prices were lowered during its relaunch in May. It was official launched in January this year.

But in the upcoming months, home sales may see a rebound as new launches in the pipeline bring a surge of buying interest. New launches include Marina One Residences, Highline Residences, Seventy St Patrick’s., and a few executive condominium developments such as Bellewoods and Bellewaters EC.

Property analysts are however cautious about the amount of increase in home sales, and the overall sales figures for 2014. The TDSR (total debt servicing ratio) framework and other property cooling measures such as stamp duties for additional properties, may keep the numbers suppressed. Some developers could also be holding their launches for next year in wait of any policy or market shifts.

Marina One Residences breathes new life into Marina Bay

Activity at the Marina Bay district may see a boost as new units at the Marina One Residences were launched over the weekend. With its exclusive CBD address, the 1,024-unit residential development may see a more positive uptake as property cooling measures could have kept prices at a reasonably affordable range for investors.

Those with strong holding power and are looking for properties with a high growth potential may consider the Marina One development quite seriously. With one- to four-bedder apartments available in the mixed-use development, residents will be in close proximity not only the entertainment areas, the Central Business District but also the Marina One offices and the 65,000 sq ft retail podium, The Heart. Prices are set to hover around $2, 600 psf. Over the past year, prices averaged between $1, 945 to $2,694 psf.

Marina One residential project with 1,042 new condominium units. Photo by marina-one.org.

Marina One residential project with 1,042 new condominium units. Photo by marina-one.org.

Buyers of units in the Marina Bay area, such as those at Marina Bay Residences, Marina Bay Suites and The Sail @ Marina Bay, have seen profits ranging from $60,000 to close to $1 million. Other properties in the area include V on Shenton.

With the Marina One Residences being one of the rare freehold apartments in the area, property experts are expecting its value to hold steady or increase over the years. Despite resale prices falling up to 8 per cent, and with expatriates now moving into less central areas such as the suburbs due to their housing allowance curbs, smaller units are still expected to do well as the mid- to senior-level foreign workforce may still favor the convenience and proximity of units in the CBD.

For this sector of the market, the main change which came about from the implementation of the TDSR (total debt servicing ratio) framework by the MAS (Monetary Authority of Singapore) is that buyers may now dictate how owners and developers price their units.

Shoebox apartments falling out of favor?

These tiny but self-sufficient apartments have been doing exceedingly well for the last five years, and many investments favored these smaller units as their total quantum is more affordable than the larger ones and are easier to find tenants for. But as developers caught on and began building more of the same units, the number of shoebox apartments, or units below 500 sq ft, rose in number. By 2015, 53,900 new private condominium units will hit the market, and most of them will be shoebox apartments.

Alexis @ Alexandra CondoAccording to URA figures, there are currently 2,400 such units in the market. By end of 2015, there will be 11,000. That is almost five times the numnber. Will this dilute the market of potentla buyers? No doubt. But landlords with units in highly accessible locations may find themselves having the upper hand. Others who own units further away from transport nodes, town centers may find it harder to secure rental rates which they had hoped for.

However current rental yields for shoebox apartments remain 1 to 2 per cent higher than other types of units, which are 2 to 3 per cent. Private properties with such units include Alexis in Alexandra road, Parc Imperial in Pasir Panjang and Suites@Guillemard.

Property analysts still see some brightness in this market as singles, young couples and expatriates with smaller housing allowances continue to lean towards these smaller, more affordable units.

Lakeside Wonder

Things in the West are heating up, especially with the launch of a number of private residential properties, announcements of a new Jurong Lake Gardens, a new retail and commercial hub Jurong Gateway and new transport lines. It’s a whole new township blossoming.

Prices of properties at Lakeside, a largely residential district, has been on the rise, significantly more so since 2009. Lakeholmz condominium apartments were only priced at $440psf in 2003. In 2009 and 2010 respectively, relatively properties such as The Caspian and Lakefront Residences were already costing buyers $580 psf and $1, 020psf. That is almost double in just a year’s time.

LakevilleOne of the newer launches is the Lakeville condominium and current median prices of properties in the area range at $1, 300 psf. Over the past 12 months, prices have ranged between $706psf for older establishments such as Lakepoint condominium to $1,263 psf at Lakefront Residences.

The new malls, businesses and regional offices setting up shop in the area has also brought along with it a new flow of tenants. Thus rental prospects are promising, especially for newer properties. Rental prices above $3 psf and at least 10 leases are signed at each residential property per month.

With a new land parcel up for bids in December, buyers looking to enter the market in the west side of the country could possibly have something to look forward to.

Prices remain low for private properties

With a drop of 0.3%, private home prices have slipped down the slope a little further in July. Property experts are taking this dip, 2 months in a row, to mean that prices could be stablising.

Bijou1Despite four new launches of private apartments Bijou, City Gate, Robin Residences and Citron Residences, which also meant a spill-over effect on surrounding resale properties, the market remained soft. Shoebox apartment units saw the largest difference, with a 0.8 per cent drop, with the non-central regions showing the most promise. Prices in the central region fell 0.7 per cent.

The biggest factor suppressing prices is the TDSR (total debt servicing ratio) framework. Since the authorities have expressed the fact that this cooling measure will not be reduced or removed anytime soon, the property market may see more slipping and sliding for now. The new year may bring a breathe of fresh air with new launches and some new properties reaching completion, though that could also mean a further dampening of the market with a larger supply and a diminishing demand.

Resale homes are expected to receive a larger blow as they often have older designs in comparison to the newer units and property buyers could be drawn by the discounts offered by developers.

More vacant EC units left in the market

Executive Condominiums (ECs) used to be the cream of the public housing crop. But now, one in eight EC units are left unoccupied in the market. What are the reasons behind this change?

Belysa Executive Condominium in Pasir Ris is not yet available on the resale market for foriegn purchase. But it will be in 10 years' time.

Belysa Executive Condominium in Pasir Ris.

One of the main factors could be the increasing number of completed units whose owners have yet to renovate or move into. Some of these EC developments include Esparina Residences in Sengkang, Belysa in Pasir Ris and Riverparc Residence in Punggol. ECs are particularly attractive to young families as they are poised to help them move in the private property market eventually. A hybrid between public and private housing, buyers of executive condominiums are able to utilize the public housing grants for the initial purchase, and after 10 years, the property becomes privatized and owners can then reap the profits from selling the units in the private property market.

There are also a number of home owners who have purchase units to make use of the public housing grants they are eligible for, but do not yet need to live in them. They may opt instead to rent out their units after the 5-year minimum occupation period (MOP).

As the overall property market weakens and the HDB resale market remains flat, HDB upgraders who may have planned for a move are finding themselves unable to find a buyer for their existing flat, thus have yet to move into their new ECs.

Is the EC market softening? And will it continue to do so? Currently vacancy rates are at 6 per cent according the URA figures and thus far 739 units have been left vacant. What does this signify for 2014 as the year makes its way into the last quarter?

New Thomson MRT Line will benefit East Coast residents

Not only will property owners in the North reap the benefits of the new stations of the up-and-coming Thomson MRT line, but those in the East Coast will also see the value of their properties rise in the long run as the new MRT stations run through Tanjong Rhu, Katong Park, Marine Terrace, Siglap, Bayshore, Bedok and Sungei Bedok.

LTA - TELPhoto credit: Land Transport Authority (LTA)

The Thomson-East Coast Line (TEL) will connect more areas in the Northern and Eastern parts of the country to the city centre and cut travel time considerably. There are a number of exclusive and boutique private residential properties in the East as it has been a popular area for expatriates, but a boost is expected when the TEL commences service in 2019. Property analysts are already expecting a 5 to 10 per cent rise in property prices, if the response to the North-east Line (NEL) stations are anything to go by. And upon completion of the MRT line, they foresee a rise of up to 12 per cent.

Some of the properties which may enjoy the most out of the announced realignment of the TEL includes condominium developments in the Tanjong Rhu area such as Casuarina Cove, Tanjong Ria, Meyer Residence, The Belvedere and Water Place. Properties nearer the already existing Bedok and Tanah Merah mrt stations may not see as significant a change.

Marine BlueNearer Siglap and Bayshore are private apartments such as Lagoon View, Laguna Park, Elliot at East Coast, Bayshore Park, The Bayshore and Costa Del Sol. Cote D’Azur, The Palladium and The Seaview along Marine Parade could also see a rise in home prices in the future.

How will developers price new properties in the area which have yet to launch? Will they release units are higher prices or will they keep to the current market values? New launches coming up include the 124-unit Marine Blue and 109-unit Amber Skye.

Jurong – the second CBD?

The central business district (CBD) may always retain its title as the  financial hub of the nation. But regional hubs are gradually becoming popular with businesses who are drawn by the cheaper rents and increasing flexibility of the suburbs.

The east has Marine Parade and the seaside, then there is Punggol and its new waterways, now Jurong will have its own lake and residents will soon be able to have waterfront living, working for a multi-national company just a couple of mrt stops away, and shop on the way home at the shopping malls. Connectivity and accessibility will soon no longer be a major consideration.

LakevilleThe building and expansion of infrastructure in Jurong has been going on for over a decade now and with a new Jurong Lake Gardens, the Science centre, MRT stations and bus interchanges, shopping malls and other commercial facilities choc-a-block in the district, the outlook for the once industrial estates is set for a big change. Not forgetting, the area will also have its own Ng Teng Foong hospital next year.

Sales and rental prices of HDB flats in the area are expected to rise by up to 20 per cent once the facilities are completed. Property analysts are likening it to some of the more popular HDB estates such as Bishan, where proximity to facilities and accessibility boosted home prices over the years.

Private properties in the Lakeside district also looks set to rise in price as it becomes an almost “exclusively private residential” district. Condominiums here fetch up to $1, 000 psf for new units and at the most recent launch of the Lakeville condominium, prices went up to $1, 300 psf.

The icing on the cake – The rail terminal which will connect Singapore and Kuala Lumpur. The future looks exciting for Jurong.