Toa Payoh’s facelift

As one of the oldest mature HDB estates in Singapore and HDB’s second satellite town, Toa Payoh has a past which evolved with the growth of the nation. As more new towns such as Punngol, Sengkang and even newer ones in the future such as Bidadari come up, older estates are welcoming timely upgrades.

And it is now Toa Payoh‘s turn as the popular estate saw an overwhelming response to the BTO HDB flats launch a couple of weeks ago. With it’s central location, full-fledge sets of amenities, MRT stations, bus interchange and established schools in its midst, it’s an estate which will stand its own for a long time to come.

TreVista in Toa Payoh Made up of mostly HDB flats, there has hardly been any new private homes launched in the district for almost three years now. However, a plot of land near  the MRT station has been put aside for development, and should a private property be launched in the spot, it will be sure to bring in the buyers and fetch high prices.

In the current market, resale flats sales have dipped from 25 to 15 per quarter, but rental prices and value appreciation of private properties in Toa Payoh has remained stable. Average prices stand between $1, 121 psf to $1, 460 psf with monthly rents currently between $3,60 to $4,10 psf. The private apartments in the area now are Trellis Towers, Oleander Towers and Trevista.

The years ahead hold great promise for the estate and its continued growth seems imminent.

Property market slump continues

Resale home sales and rental prices have continued to soften as we reach the middle of Q3. July proved to be rather quiet for the resale private home market as prices reached a 21-month low, according to the Singapore Real Estate Exchange (SRX) figures.

LakevilleAs more new private properties reached their completion dates and entered the rental market, the number of units for rent increased, which caused the rental market to become more competitive. And as immigration rules tightened, the supply and demand scale tipped in favor of tenants. Rental prices were at a 38-month low last month. And the blow is felt not only in the private property market but also the HDB resale market with prices dropping to a 30-month low in July.

The areas with the largest price decline is the city center, with prices dropping 4 per cent. This is followed by the city fringe areas with a 1.1 per cent dip and the suburban districts with a 0.6 per cent drop. Property experts say that the drop in rental prices could be one of the reasons contributing to the slipping resale prices.

With property prices so closely linked to immigration policies in this small nation, how will the authorities balance the issues of housing and population?

City Fringe wins once more

From Marine Parade to Novena to Kampong Glam, areas surrounding the busy city centre and central business districts are some of the best spots for property investments and this has hardly changed over the years.

The mixed-use development DUO at Ophir road was one of the latest offerings late last year. This year, another similar residential-cum-commercial project join their ranks – the City Gate on Beach road. But before these giant developments came into play, the Concourse Skyline condominium apartments were already in place. This 360-unit property was priced at $1, 590 psf at its 2008 launch. Despite 101 of its units remaining unsold, existing units have gone for as much as $2, 075 psf in the last quarter of 2013.

CIty GateWith the large number of incoming units from City Gate, which is targeting a price range of $1,900 to $2, 000 psf, these remaining units at the Concourse Skyline may be up for some fierce competition. Developers, Hong Fok Land, may experience some pressure to lower prices in order to meet the “All sold” status.

City Gate will sit on the site of the former Keypoint and will feature 188 commercial units and 311 apartment units ranging from one- and two-bedders to the increasingly popular dual-key units. Penthouses will vary in size, from 484 sq ft one-bedders to 1, 819 sq ft four-bedders. The wide variety of units will draw buyers with different intentions in mind, but with such a prime location, the only thing that might stop consumers in their tracks is the strict loan limits.

Smaller apartments gaining popularity once again

Just a couple of years ago, there were debates about whether homes were becoming too small for comfort as the 500 sq ft studio apartments or shoebox units took the market by storm. Some shunned small units, preferring instead to go for larger ones with a lower psf price.

But now as loan limits are truly showing their might, buyers are favoring smaller apartments once again due to their lower quantum prices and the ease of rental. Though not all are flocking to shoebox units, after all, young families do need a reasonable amount of space, the average home size has dropped to 947 sq ft from June last year. And for HDB upgraders, their chances to move onto the private property market might have become slimmer, especially if size is a major consideration. The average 4-room HDB flat is around 969 sq ft.

CIty GateOne- and two-bedders have increasingly become more popular with buyers as they are usually within their budget and investors find them easier to rent out. URA figures in fact also showed that new residential properties have also featured smaller units, with the average size being 753 sq ft. But this hardly comes as a surprise as home size has been shrinking since 2009.

The other popular property  type is the dual-key apartment which provides the atmosphere of having two separate living spaces within the same home. Some of these units share the same entrance but separate facilities such as kitchens and toilets, while others share the same facilities but have separate entrances, providing privacy for bigger families and offering more rental options.

As we progress into the second half of the year and the market evolves in reaction to buyers demand and supply of land, will developers be quick to re-strategize and cater to the majority?

Queenstown has more flats to offer

One of the oldest HDB estates in the West, Queenstown looks set to have a fresh set of HDB flats. For the 3,480 flats from Tanglin Halt road to Commonwealth Drive will be torn down and rebuilt under the Selected En Bloc Redevelopment scheme.

Queenstown-HDBThis will be a promising move for the mature estate as these two to four-room flats make way for newer, bigger blocks. Most of the residents were offered replacement flats and compensation based on current market value of their units. Most three-room HDB flats in the Queenstown area are priced between $305,000 to $390,000 according to current HDB transaction values.

Residents can look forward to new sky gardens and terraces, panoramic views of the city and new shops, eateries, supermarkets and hawker centres. Considering these flats will have a new 99-lease of life, future residents will be stoked that their new flats will possibly fetch even higher prices in the future.

Commonwealth TowersOne of the more prominent private property offerings in the area is Commonwealth Towers, which is particularly attractive to buyers due to its proximity to the Queenstown MRT station. In nearby Alexandra and Tiong Bahru, there are other popular apartments such as Highline Residences, Ascentia Sky and Alexis. Will surrounding properties also benefit from this redevelopment process?

HDB rental market stable

The rental demand for HDB flats has remained stable for most of the year. Though there was a slight rise in February and March, the take-up rate has sbeen sliding since August last year. But since April, demand has remained stable for the next three months.

Yishun HDB FlatRent prices for whole HDB flats now hover around $2, 300 per month. And since most tenants are fresh graduates or foreign students, they are likely to want to sublet to make rent. How then has the subletting quota affected tenants who wish to rent out part of their rented HDB flats? In January, rules were set to restrict the “formation of foreigner enclaves in HDB estates”. But figures have shown that hardly any HDB block has gone over the quota. With the exception of those nearer MRT stations and town centres. Tenants can search online for the quota of the specific HDB block they are interested in renting a unit in.

With more new flats being rolled up quarterly, what worries the industry more is the oversupply of flats for rent. Though prices of private properties are flat-lining, home loans are proving equally, if not more, difficult to secure. This means HDB upgraders may now re-think their plans to sell, instead, keeping their flats and renting out rooms to pick up profits which may go towards funding their targeted private property purchase.

As the year edges past the halfway mark, the balance between seller and buyer remains delicate. Which way will the scales tip?

CBD Living on the rise

Despite restrictions in the property market and decreasing sales in the private property sector, more buyers are looking to purchase apartments in the CBD (Central Business District).

Tanjong Pagar CentreLiving just a walk away from the office has its positives. But recent interest has dawned from the promise of change. New mixed-use developments such as GuocoLand’s Tanjong Pagar Centre, will bring live into the sleepy after-hours districts of Shenton way, Raffles Place and Tanjong Pagar and change the fact that CBD living often comes with its fair share of inconveniences such as not having schools, supermarkets or shopping centres which open beyond the normal office hours in the vicinity.

Tanjong Pagar Centre will feature Grade A office spaces, luxury serviced apartments – Clermont Residences and other commercial businesses. It will be linked to the Clermont Singapore Hotel. Just a little way off are other residential options – the Marina One residences. This project will go on sale later this year, and prices are expected to start at $2, 800 psf. There are other new private apartment developments in the pipeline, giving this city-nation a new meaning to city-living. Skysuites @ Anson, 76 Shenton and Altez, just to name a few of the many which have come up in the last 10 years.

76 ShentonWith news of the Southern Waterfront development under URA’s draft masterplan 2013, the area looks set to be booming with activity within the next decade. Considering the fact that rental yields now are already at 4 to 4.5 per cent, higher than the island-wide average of 3.8 per cent, it will be no wonder what the future will bring.

More looking to rent private property

Immigration rules have shrunk the pool of foreign workers here in Singapore, and that also meant a lower demand for home rentals. Closely linked to this are the prices and sales of private homes,  which have been on the decline for sometime now.

But the market is starting to look up as the previous quarter saw a increase in demand for private rental homes. The growth is expected to continue into the second half of the year. Though figures are somewhat positive, the number of vacant rental units available in the market also means tenants will have more to choose from and competition will be fierce.

Shore-Residences-Amber-Road.jpgTenants seemed to favour the city fringe areas, as rental budgets have been largely reduced, and price-conscious expatriates are now more stringent with their spending. The Rest of Central Region districts received the most loving from rental home seekers, including areas such as Bishan, Toa Payoh, Little India, Queenstown and Geylang. New private condominium developments in these areas have accounted for renewed interest. Slightly further west, Ascentia Sky, Waterbank at Dakota and The Interlace all in the Alexandra, Depot road region meant up to 2,500 new units, some of which no doubt will join the rental pool. In the East, Waterview in Tampines, Vacanza@East and The Shore Residences will be completed in the first quarter of 2015.

The Loft at Nathan, situated in River Valley on the city fringe.

The Loft at Nathan, situated in River Valley on the city fringe.

Landlords of high-end apartments may continue to see a lack of movement in the rental front. And units are already expected to add to the mix, with the completion of Suites @ Orchard and Loft@Nathan next year.