Private home sales – Will the decline continue?

The property market has been softening. The decline seemed inevitable, especially as completed new private homes flood the market in the upcoming year or two.

Not surprisingly, shoebox apartments saw the largest dip in sales as the number of units are somewhat saturated. Buying power is also now lower and buyers who were initially looking at these units for investment may no longer be able to get the loans they need.

 

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.

Rental issues such as the age, functionality and location of resale units now have to compete with the newer and sometimes faster property models. In the central districts, the decline in rents and sales of apartments were most evident. This could be due to the number of unsold high-end properties in these areas. Even suburban condominiums are feeling the heat as many expatriates shun them as they often do not provide the convenience and exclusivity they desire.

Whether the effect will transfer to the HDB resale market also awaits to be seen. As HDB upgraders who are moving to their completed units will have to let go of their HDB units within a specified time period, many may be in a hurry to let go of their units and possibly at lower prices than before as the market gets competitive. Pair this up with a diminishing market for smaller units as singles are now able to purchase new flats from HDB directly, as well as a smaller pool of permanent residents, the property market seems to be in for quite the turn this year.

Even as more new property launches are promised, how private home sales fare the next quarter may set the mood for the rest of the year.

Commonwealth – Properties not so common

Considered on the city fringe, just a little way off Alexandra which is an area popular with expatriates, Commonwealth may see renewed buyers’ interest as new private condominiums enter the mix.

The latest launch is Commonwealth Towers on Commonwealth Avenue. It will be officially launched on May 1 and is expected to be priced at $1, 600 to $1, 800 psf, it is relatively more expensive than similar properties in its vicinity, such as Queens condominium, Alexis, The Metropolitan, Ascentia Sky and The Anchorage private apartments. These are older residential developments and units are available on the resale market. Rental demand has been strong, though property experts are expecting competition to heat up once the newer condominiums are up and running.

The AnchorageAccording to URA figures, rental prices at the Queens averages at $4.32 psf per month. Sale prices were at $1, 350 psf. The Alexis commanded even higher prices at $6.65 psf and units sold at an average of $1, 939 psf, possibly because at 2 years old,  it is much newer than the Queens which was completed in 2002. Also, a third of the 293-unit The Alexis are shoebox apartments and are easier to rent out.

Alexis @ Alexandra CondoHowever the tightening foreign workforce rulings and immigration regulations may prove challenging for landlords looking to rent out their property especially with the rise in new units in the Redhill and Tiong Bahru area. Competition will always be present, but good location, providing attractive rental conditions and ultimately good timing may beat all that.

Rent out your property quickly

As one of the best means of passive income, property rentals are one of the first physical investment returns most beginner investors are drawn to. But as the number of homes entering the market increase, picking up speed towards 2016, it might be prudent for property owners to take steps right now to prime themselves for when the competition truly gets tough. How can landlords pull ahead in the weakening rental market?

Property analysts are predicting a two to three month average waiting time for landlords when previously it may have taken only a month or two before finding a suitable tenant. It is very much the tenant’s market now and many are taking it online in their search for home rentals.

Online property search engineOnline searches make it easier for the tenant to look at similar units within the same development and make more efficient price comparisons. This also means price points are a crucial deciding factor. Holding on to prices may mean a longer waiting period which also translates to larger income losses Though going too low may seem unsavory, easing up on prices slightly while offering longer lease terms may help you secure profits more quickly.

It might be futile comparing rental prices to what it was a couple of years back, simply because new properties are springing up all over, and the newer, swankier, though smaller unit nearby may be more attractive to tenants. Providing working, good condition fittings and appliances could also be what helps you seal the deal.

City Square Residences near Little India used to go for $1000 psf in 2009. Now it is going for as much as $2,500 psf. So perhaps the adage “Spend money to make money” may not be so far from the truth here. Sprucing up your unit with light renovation touches or simply giving your appliances an overhaul may score you a tenant sooner than later. And not forgetting, the personal touch always works. Meeting your tenants and building a good relationship makes for a better rental process for both landlord and tenant.

New private residential projects breezing into Marine Parade

With its proximity and accessibility to the city centre, and its seaside township feel, properties in Marine Parade have always been an easy breezy sell. But it has been sometime since new properties were launched hence news of upcoming projects might bring a fresh round of excitement.

A new launch to look forward to is the Marine Blue (working title) project whose building is underway across Parkway Parade Mall, developed by CapitaLand.

Coralis condominium.

Coralis condominium.

Other properties which are garnering some eager eyeballs area:

Some of these properties are older resale homes, but some new units  will soon be ready for occupation, with the Silversea possibly receiving its TOP (temporary occupation permit) by end of April. Marine Blue units are expected to sell at a promising $2, 000 psf, which may then also bring up prices at the neigbouring Silversea condominium. Most of the units have been sold at the 383-unit Silversea since its launch in 2009. Recent sales clocked at $1, 714 psf. At the Coralis, which was completed in 2013, sales stood at $1, 842 psf.

SilverseaHigh rental prices are expected to hold up and  future transport links such as the Eastern Region Line which will pass through Tanjong Rhu, Marine Parade, Siglap, Bedok South and Upper East Coast Road may only mean rising value in properties in these districts.

iProperty launches new Room-for-rent E-service

Home rental has always been a big thing in Singapore. As in most other busy, cosmopolitan cities.

Some folks have extra space to spare, some are hoping to rake in their investments, others need a place to stay. Just a little cosy corner to call your own. If you’re not looking to rent a whole house, condo apartment or HDB flat, but only a room, iProperty now offers an efficient way of searching room rental listings throughout Singapore in just a few easy clicks.

iProperty room rentalRegistration is free and 4 easy steps later you’re able to post your rental ad. Powered by iProperty, the rental portal resides at sg-house.com. Attract as many as 52,000 views on your post and find a suitable tenant quickly and at the comfort of your desk. It’s an easy way for landlords to reach potential tenants and vice versa.

Short-term accommodation options are also available. Great for companies hunting down term rentals for their overseas employees. Filter down your search through keywords and find what you need pronto.

Besides this new feature, iProperty’s recently revamped website also has organised links and a site chock full of other property related resources such as a search function for properties near MRT stations or schools, directory of condominiums in Singapore and property trends.

Private condo units – Buy 15 in a go

As the property cycle could be heading towards its low point, property developers are eager to find ways to let go of remaining units in order to recoup losses or earn whatever profits are left.

Some have taken to offering discounts or freebies, whilst others have are even offering bulk sales of units at lower prices. Buyers are now more cautious about their purchases and with lending limits being restricted, many are now unable to afford additional property purchases. Most of these would be the middle to upper-middle classes who eye small private apartment units as potential for rental revenues. But as rental demand dips, they may think twice.

Newton Imperial21 units of the 36-unit condominium, Newton Imperial has been put up for bulk sale recently for possibly between $65 to $72 million. Only 15 units of the Great Newton Properties owned condominium development has been sold since its completion in 2011, most of which are to foreigners. The Newton and Novena area is known to be popular with expatriates and was once in hot demand as its city fringe location made its properties highly valuable. Most of the apartments in Newton Imperial are three-bedroom units.

Though bulk sales are a risky investment, there might still be a chance of profits, especially if the units are designed to suit specific tastes and are in the right location. Rental of private apartment units in Newton are at an average of $8, 000 psf. Units at the Newton Imperial were previously sold at approximately $1, 880 psf. Nearby, other private establishments such as L’Viv and 26 Newton are selling units at $2, 100 to $2,600 psf.

What lies in the future of private properties? Is the market headed towards a downward spiral and at what speed?

Home prices down all around

Landed. Non-landed. Private. Public. Across the board, prices of all residential properties seem to have taken a hit in the last quarter.

Prices have dipped, some sectors more than the others, but signs are pointing to a possible slowdown in the market due to governmental curbs and the increased number of new property launches over the last 2 years. With the last price decline registered in 2005, resale HDB flat prices have been on the downhill slope for 2 quarters now. Private property prices have also suffered albeit to a lesser degree, with the lowest prices since 2009.

Mon JervoisMight it truly be the buyers’ market this year? Will this prompt more buyers to jump on the opportunity or are there other factors which might keep them away from the cash register? The tighter loan restrictions such as shorter loan periods, lower debt-to-income limits, and higher stamp duties may still be an obstacle to some buyers, thus sellers eager to cash in on their properties may find themselves having to wait a little longer for a good deal to come by.

Location usually still trumps all, though considerations such as space, amenities and living environment all have a part to play in the final selling price. With more new private condominium launches and new HDB flats pushing their way into the market this year, competition on the rental front is proving tough as well. Buyers now have more options for comparison and may be tempted to wait for prices to drop even further or wait it out for the best deal.

Even prices of suburban private homes, which have been the main stalwart of the property market last half of the year, have slipped 0.6 per cent. And as resale HDB flat prices drop, so have the number of HDB upgraders who may require the cash from the sale of their flats to purchase private homes. In turn, demand for mass-market suburban homes may fall.

Will it be a sombre year for Singapore’s residential property market?

What’s the situation with the rental market?

The sheer number and speed of new homes entering the market is bound to have some effect on the rental market. And indeed the cracks are beginning to show. Even in areas where resale properties have been commanding considerable rents, there have been signs of price compression. In the River Valley stretch, a four-bedder at Aspen Heights used to go for $5,700 just two years ago, but now $5,000 is the norm. With new properties such as RV Edge coming into play, comparison may make for stiffer competition in the rental front.

RV Edge in the River Valley area, just off the Orchard road belt and the Central Business District.

RV Edge in the River Valley area, just off the Orchard road belt and the Central Business District.

For the next couple of years, the rental market is expected to suffer, whether in terms of lower rental prices or longer periods of vacancy. This year alone, there are 17, 458 vacant units for rent by the end of Q3. Some home owners had bought resale units at the peak, and now may find themselves having to come down on the prices or risk a longer wait before finding a tenant. Next year, 19,302 new private home units will be ready for occupation. Combine that with 19, 727 in 2015, and stricter immigration and labour policies, the rental market may be facing some tough challenges moving ahead.

Shoebox apartments and smaller condominium units were popular for the past year. But now, it seems supply has larger overshadowed demand. The dip in rental prices were most obvious here, with a 10 per cent decrease. A two-bedroom apartment at Cote d’Azur in Marine Parade for example, which would have been rented out at $3,000 per month last year is only going for $2,700 in the current market. New homes at Silversea and The Shore Residences which will be ready soon, may only lower the prices even further. And landlords who are eager to recoup their capital may have to lower prices in order to secure a tenant in order to make their mortgage payments.

Shore Residences on Amber Road

Shore Residences on Amber Road

As supply of HDB flats reaches a saturation point, and lower sale prices mean more HDB owners are upgrading to private properties and renting out their HDB flat, the options for tenants have opened up tremendously. That also means they are more likely to compare or wait for the best deal, putting landlords at a disadvantage. The prediction is a 5 to 10 per cent drop come 2014. Will governmental policies be likely to change to the benefit of home owners anytime soon?