Rising competition in the Rental market

If you were looking to buy a condominium unit to call home, competition from the rising number of new homes might be good news for you. But if you were looking to invest in a unit to reap rental profits, it might be wise to consider your options carefully.

Jupiter18 CondoThe rental market for suburban condominiums has been falling, especially as more new properties enter the market. Private condominium rentals have fallen 0.6 per cent last month and is 6 per cent lower than last May on a year-on-year comparison. More new condominiums will receive their TOP (temporary occupation permits) in the next few months, which may suppress the rental market even more. Property analysts are expecting a fall of up to 7 per cent for the private property rental market this year.

The effects may also trickle down to the HDB rental market as competition heats up across the board. The price gap may be narrowing between HDB and private apartment rents, thus giving tenants a much wider pool of options. A five-bedroom HDB flat now usually rents for up to $2,400 per month while a 2-bedder private condo unit rents at just under $3,000.

Location is still king and units in mature estates or near MRT stations will still command slightly higher rents.

Encouraging response from recent property launches

Over the weekend, show flats at two new condominium launches were packed to the rafters with eager buyers and those shopping for a good deal. Affordability and proximity to transport seemed to be the biggest crowd pleasers at these two developments.

Northpark Residences saw more than 70% of their 430 units sold with most of their buyers being Singapore citizens. Prices averaged at $1,300 psf. A 431 sq ft studio apartment for example, went for $612,000 while five-bedders with an average floor area of 1,432 sq ft sold at approximately $1.89 million.

Botanique @ Bartley2At the Botanique at Bartley, most of their units, about 70%, were all priced below $1 million. Definitely wallet-friendly for the middle-upper class household in Singapore and also more plausible for those who need a home loan. And they boasted the options of turning two- and three-bedders into dual-key apartments. Situated in the midst of quite a few schools such as the Paya Lebar Methodist Girls’ School (PLMGS), Maris Stella High School and the Australian International School, the property was quite the hot target for local and foreign buyers alike. Although only 300 units were put up for sale over the weekend, almost half have been sold. The most popular units were the one- and two-bedroom apartments starting at $598,000 for one-bedders and $798,000 for two-bedders.

If the weekend response and sales were anything to go by, the next few months may not be such dull ones. Is it time the property market picked itself off the floor, dust off and hit the road running? Will the positive effect rub off on older properties in close proximity to these new launches?

 

Affordable units below $1 million at Botanique @ Bartley

Over the weekend, the 797-unit Botanique @ Bartley condominium opened for viewing at pocket-friendly prices. Situated on Upper Paya Lebar road, near Bartley MRT station, the Paya Lebar Methodist Girls’ School (Secondary), Maris Stella High School and The Australian International School, this new property seems like it has all the ingredients for an expensive price tag.

But instead, more than 70% of its units were pricedbelow $1 million, making it one of the more affordable new properties around town. With prices starting at $598,000 for a one-bedder, up to $1.68 million for three-bedders. While most of the units here are smaller, with one-bedroom apartments ranging between 495 to 689 sq ft and 926 to 1, 356 sq ft for three-bedders, the total quantum prices are more palatable with upgraders. A floor area comparision will however reveal that at $1, 300 psf, it is actually priced higher than the nearby Bartley Ridge which went for a median of $1, 296 psf.

Botanique@BartleyDeveloped by the UOL Group, the Botanique @ Bartley will feature “flexi” units, referring to the two- and three-bedders which can be converted into dual-key apartments. Some of UOL’s other properties include the popoular Thomson Three which only has eight units left unsold, Seventy St Patrick’s and Riverbank@Fernvale.

The rest of the year might not be hectic on the new private property front, with more attention possibly given to executive condominiums, thus supply might not necessarily overtake demand. How will that impact both the private and public housing markets?

Rental market ended weaker in 2014

Compared to a year ago, the private residential rental market was on a slight downwards slope since last February, with the luxury property market taking the biggest hit with a drop of 1.2 per cent last month.

Parc Rosewood in Woodlands.

Parc Rosewood in Woodlands.

As most expatriates now have a reduced housing budget, properties which are asking for more than $10,000 in monthly rents may struggle to secure tenants quickly. And as the rental prices of properties in the city centre dips and closes in on the rental prices of city fringe homes, the latter may also be facing some fierce competition.

While suburban homes holding up better with their comparatively less expensive rents, the surge of 25,000 new homes entering the market by end 2015 may change the tune of things to come. Private residential condominiums which may be ripe for the rental pickings soon include Parc Rosewood in Woodlands and Eight Courtyards in Yishun.

When many units within the same property enter the market at the same time, property experts are expecting a price war which may benefit the tenants but not necessarily the landlords. As the private property market prepares itself for the upcoming increase in supply, one begins to wonder if the HDB market will benefit from this or will the rental prices there be similarly affected?

New properties lower overall rent

Though the government has reduced land sales in the second half of the year, a fresh new crop of properties reaching their point of maturity in the next year may have some effect on the rental prices of private properties across the board. In 2013 alone, 16,000 new non-landed properties entered the market and 25,000 more are expected to flood the market by 2016.

Shore Residences on Amber Road

Shore Residences on Amber Road

Tenants will have more rental options ranging from units in brand-new condominium to those at older private apartments as a large supply of condominiums enter the market next year. And as most tenants in a new development receive keys to their units at the same time, they may face competition from one another as they put up their units for rent at the same time. Older neighbouring properties as well as HDB flats may also face the same competition as tenants opt for newer choices. Rental prices may waver and some landlords may find themselves having to lower the rent to secure a suitable tenant.

Landlords may find themselves competing for the same and somewhat decreasing tenant pool, especially with concurrent restrictions placed on the foreign workforce. Diminishing expatriate housing allowances may also mean tenants may be looking out of the city centre for rental options. And though most of the new properties are situated out of the central region, the sheer supply may overshadow the demand.

Take the Katong, Joo Chiat and Amber road district for example. In that small area, there is The Shore Residences, Silversea, The Meyerise amongst other older properties. And in the up-and-coming Punggol and Sengkang regions, there is a good mix of ECs and private condominiums such as A Treasure Trove, The Luxurie and the latest launch of Bellewaters. It could very well be the battle between the new and newer in time to come as many new homes are erected in already-new clusters of private homes.

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.