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10 May

Marina Bay’s Allure

Just at the edge of the Central Business District (CBD), right in the centre of Singapore’s newest entertainment hub and with a view to die for, it’s not wonder properties at Marina Bay are drawing the well-heeled crowd in. With the intention of cultivating this area as the new Financial district, commercial units are being built and occupied at a rapid pace. As a happy spillover, residential properties nearby are enjoying the business it brings in. Companies and individuals with cash to spend are taking the the area due to the proximity and high-end address it provides.

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.

The Marina One development expected to complete by 2017 looks set to bring in even more money, both commercial and residential. Jointly developed by Temasek Holdings and Khazanah Nasional’s M+S, it will have a 341,000 sq m gross floor are and a gross development value of $7 billion.

Surrounding developments such as The Sail @ Marina Bay and V on Shenton are also seeing positive response over time. The Sail @ Marina Bay for example launched for $980 psf in 2004 but has more than doubled to $2, 180 as of the past 15 months.

V on Shenton condominium.

V on Shenton condominium.

Marina Bay Suites sold one of the most expensive units in the area at $3, 313 psf. Median prices were at its peak in Q3 of last year at $2, 229. In the beginning of 2012 it was at $1, 926 psf.

Despite the dampened buying interest following January’s property tax hikes, tenants looking to rent homes nearby will continue to keep investment at a healthy level. Rental yields for apartments in Marina Bay are between 2 and 3 per cent. Median monthly rents range from $5.25 to $6 psf. Compared to rentals in other prime districts, it’s higher than their $3 to $5 psf median. It also helps that the proximity to the CBD and shopping and entertainment belt also helps keep selling prices high so whether its short or long term investment you’re looking for, the Marina Bay area may give you the best run for your money.

7 May

Property curbs brought in revenue

What did all the previous rounds of property cooling measures bring to the table?

$1 billion. In tax revenue.

Financing Your HomeFollowing January’s new Additional Buyer’s Stamp Duty (ABSD) hikes, in February and March $158 million were added to the taxman’s coffers. The ABSD is now up to 15 per cent. $580 million came from foreign buyers, were 3, 041 homes were sold since December 2011. Singaporeans and Permanent Residents (PRs) forked out $386 million for 7,269 homes. ABSD was introduced in 2010, and since then, home owners have paid up a total of $66.6 million of this levy.

Foreign home buyers have retreated somewhat, with a 36 per cent drop from last year. The ABSD currently stands at:

  • 15 per cent for foreign buyers
  • 5 to 10 per cent for Singaporeans and PRs
Starlight Suites condominium.

Starlight Suites condominium.

Since new home sales have continued to push on, strongly, despite the measures, the ABSD may not have entirely been a deterrent nor an aid to managing home prices. Property developers are also helping to bolster the market by providing discounts, rebates and other incentives to home buyers.

Many buyers are willing to suffer a little now and buy when they can, rather than wait for something that may or may not happen. As the population continues to grow, they are perhaps preemptive of the future where rental could be a considerable means of income and should homes become out of reach for their children.

29 Jan

Rental follow in the footsteps of Home prices

Yes, that would make sense. But not necessarily for all districts. Properties in certain areas have not fared so well, in particular, Newton and Sentosa. Rents in these two areas only yielded at  2.2 per cent, compared to the 3.7 per cent everywhere else across the island.

Trilight Condominium in Newtown.

Trilight Condominium in Newtown.

Not to be disheartened though, as private property rentals still grew, at 2.1 per cent, albeit at a lower rate when compared to the 3.8 per cent in 2011. Flying high on the charts were Woodlands, Jurong and Choa Chu Kang, with rental yields of 4.4 per cent. Tampines, Bukit Merah and Yishun followed closely on their heels.

Competition due to the completion of the many developments in the area might be the culprit. For example, Trilight, a 30-storey, 205-unit freehold condominium in Newtown, recently received its temporary-occupation-permit (TOP) last year. Another reason could be that expatriates are no longer receiving as high a housing allowance as before, thus narrowing their options to specific type of properties and within certain areas.

Northoaks, a former EC project, now available on the private property resale market.

Northoaks, a former EC project, now available on the private property resale market.

Perhaps property investors and even just your normal man-on-the-road are buying up properties when they can, in order to capitalise on the eventual situation where policies support home rentals. Future immigration and housing policy changes will also play a big part.

10 Jan

Slow ride for Property Market in 2013

With the real estate sector ending on a high note last year, will 2013 be the year things begin to stagnate?

8 Mounth Sophia

2012 seems to be the watershed year for Singapore’s property market, with residential properties doing extremely well and commercial and industrial properties not far behind. Despite cooling measures rolled out twice in the year, sales and growth remained strong.

Industry analysts are however expecting prices to reach a plateau this year. They are expecting property developers to be less active in the bidding for Government Land Sales (GLS) sites, whose number has also dropped as compared to 2011. There are still sites which may draw strong interest, such as Alexandra View, Prince Charles Crescent and Mount Sophia.

Echelon

And as new properties which entered the market last year compete for buyers, affordability may remain strong. Vacancy rates for rental properties may stay low, and the possibility of new property cooling measures being implemented this year may also contribute to a less vibrant market.

The prime districts are expected to do less well, as supply overshadows the weak rental demand due to companies cutting back on housing allowances and lowered employment rates. Mass market private homes are however given the thumbs up, resilient sales buoyed by affordable prices and favoured by investors and upgraders.

14 Dec

The property rent vent

Landlords are finding themselves at the mercy of tenants, some having to slash prices to find one. The diminishing pool of high-flying tenants is the main cause. More so for owners of prime district high-end luxury condominiums though. The expatriate working force have smarten up and many are now opting for mass market homes further away from the city centre and at lower prices. And especially with the sudden boom of new condominiums all around the island, things do not seem to be getting any easier for these city centre private condominiums.


According to URA’s data, private housing rents were up 17.9 pre cent in 2010 but only a paltry 3.8 per cent last year. And for this year, experts are expecting it to maintain last year’s increase at best. The only sprout seems to be Geylang, which has come up as one of the more popular areas for rentals of cheap shoebox units. The link to the changes in the immigration policies here as well as the exit of some major multi-national companies, is stronger than we think.

With the government reining in home mortgage spending and possibly rolling other cooling measures one can only guess at, careful consideration and calculation may prevent you from getting into a property investment situation you are unable to get out of. So if you’re thinking of investing in a private home in the current situation, do note that tenants now favour mass market suburban homes. Will this eventually affect private home prices, and then resale HDB flat prices?

7 Dec

Waterfront Living in Pasir Panjang

Singapore is an island. A small one. So most of it would be waterfront living, wouldn’t it? At least along the circumference of this tiny red dot. So which areas besides the East and Sentosa would offer the latest lifestyle up to home buyers eager to buy into this slice of life?

Luxe Ville  condominium in Pasir Panjang.

 

Pasir Panjang of course. Not the likeliest of possibilities. But here is why.

Just these 5 reasons alone are enough to start you thinking about how home prices in this area fare. Industry experts expect that the scarcity of new launches in the area indicates a stable high price of residential properties here. Recent property launches here include Horizon Residences, Ria Apartments, Luxe Ville and Viva Vista. All are expected to be ready for occupation by 2014.

Compared to their sister district, Telok Blangah, Pasir Panjang is relatively unfound territory, thus real estate here still currently cheaper. With the influx of workers from the Science Parks, business hubs and universities, property rental could also see a rise. Currently rental prices are at $3, 100 to $3, 300 psf for a shoebox unit of 420 sq ft at Parc Imperial.

3 Dec

Something old, Something borrowed

In the West, this is a common phrase used in preparation for a wedding. But for Singaporean newly weds, are their something borrowed a chunky home loan from the banks? Recent reports show that Singaporean households and businesses are borrowing to purchase properties and household wealth has risen 7.3 per cent. Could this be a sign of a property bubble? Is the nation taking after the times just before the economic recession in America? What could the government do to prevent that from happening?

The cooling measures may have curbed home buyers’ borrowing but does it have any effect on home prices?

 

MAS’ Fnancial Stability Review reported robust home loan quality with no loans exceeding the property’s value. A good sign considering the low loan rates could have caused a rush to purchase properties in hope of reaping rental and resale profits. Most mortgages were for home-occupiers and there was a 0.2 per cent drop in the number of loans taken which were more than 80 per cent of the property value.

In that sense, one of the cooling measures could have taken effect rather quickly. What then is the cause of rising home prices of both resale and new apartments? Rising construction and labour costs? How does this impact the resale HDB Flat market?

7 Nov

Private flat rentals unpredictable

One would think the central business districts apartments fetch the highest rents in town, but apparently not. Recent Singapore Real Estate Exchange (SRX) numbers show that flats in district 2, the Anson and Tanjong Pagar areas, were one of the worst performers in terms of private residential apartment rental.

Domain 21 condoThe areas that did well were District 14 – Geylang, Eunos, Paya Lebar and Kembangan, District 3 – Queenstown and Tiong bahru, and district 12 – Balestier, Toa Payoh and Serangoon. Private apartments in district 20 – Bishan and Ang Mo Kio, also did well with at least a 10 per cent increase.  Areas where rental prices slide include district 13 – Macpherson, Braddell and Potong Pasir, and district 11 – Watten Estate, Novena and Thomson.

Construction taking place in many places may have affected rental, for the moment, as the noise and dust may have caused the temporary drop in prices. The tenant pool may also be changing as more share units to save on the high rental prices, and there may also be a decreasing pool as the revised immigration policy kicks in. Industry experts are however expecting changes in June 2013, where more small apartments enter the market.

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