Resale condominium market in gradual recovery

Could a slice of sunshine be sliding its way back into the local private property market? Resale condominium prices have risen 1.1% in January and it’s a bigger increase than the 0.5% in the last 2 months of 2016.

RivervaleCrestAnd as expected, non-landed private residential properties located in prime districts lead the way, with a 1.9% month-on-month increase. Central region properties also gained 1.5% in terms of prices while that of suburban properties rose by 0.4%. In a year-on-year comparison, resale prices were 0.3% higher than in the same period of 2016.

In some districts, resale properties exchanged hands at lower-than-market value, though the price difference at minus $4,000 is lesser that the $5,000 in December. District 23 posted more than 10 resale transactions in January alone and selling prices went as high as $2,000 above market value.

GrandeurParkResidencesThough the year is still young, it could be a budding sign of the things to come for the rest of the year. Property analysts are not expecting sharp rebounds anytime soon, though the stabilisation of prices and an increase in sales volume would already be sufficient to signify market recovery, albeit a gradual one. What could also be seen from the market data was that sellers were beginning to moderate their asking prices, possibly with pressure coming in from new property launches and completed new units entering the weak rental market.

 

Resale condominiums make a comeback

Do not underestimate the power of the trickle-down effect as older resale condominiums leverage on new launches to bring in activity and renewed interest.

LakeGrande

December’s resale private home sales figures were case in point, in particular The Santorini in Tampines. The new launch of The Alps Residences resulted in a spillover of buyers’ interest in surrounding condominiums and though the 597-unit The Santorini was launched more than 3 years back in 2014, it sold 106 units in 2016 alone, compared to only 32 units in 2015.

The overall sentiment is one of hope as buyers, now more driven to purchase and increasingly swayed by lower quantum prices, have been seen to be re-entering the market in the past months. Upcoming new townships such as Bidadari and the Jurong Lake district have been showing up more often on buyers’ radars and interest in the latter is particularly telling especially as the area is flagged in the Government’s development plan as the next central business district.

thealps

The 710-unit Lake Grande development in the Jurong Lake district has already sold 553 units and nearby, Sim Lian’s Wandervale and Treasure Crest executive condominium (EC) projects have also sold 1,003 units. With the government holding back on the release of land sales, the resale condominium market may hopefully continue with its winning streak this year. Most of the sales developers received last year were from older developments launched before 2016, Commonwealth Towers, Coco Palms, Bellewoods and Bellewaters, just to name a few.

Fierce bids for Perumal Road land site

A mixed-use land site on Perumal road which could potentially yield 200 private homes and an entire floor of commercial spaces have attracted bullish bids from property developers since its release in November last year.

Sturdee-Residence11 bids have been placed, the highest at 4.4 per cent more than the next in line came from Low Keng Huat at $174.08 million. The second highest bid came from China Construction (South Pacific) development. The keen activity in the land sales sector could translate into a competitive primary and thereafter secondary market which will in turn mean a ready pool of buyers who are ready to spend after the prolonged market lull over the past few years.

Average selling prices at this site is expected to hover around $1,700 psf due to the high land cost and also its proximity to the Farrer Park MRT station and other amenities such as City Square Mall and Mustafa Centre. The neighbouring plot where Sturdee Residences stands only lodged at $787 psf.

The lack of land sites available for sale in the earlier part of 2016 could have resulted in pent up demand from developers who are looking to replenish their lank banks in preparation for 2018 and beyond when market recovery is expected to happen. Property analysts are already seeing signs of market stabilisation and developers who prepare ahead of the recovery could just catch buyers at an opportune time.

 

Continued decline of private resale condo prices expected

2017 has arrived and the question on every property owner, seeker and investor’s mind may be how the year will fare for them. Will interest rates rise and how will that affect their financial sustainability? Will vacancy rate fall and will there be an increase in resale units hence affecting price competitiveness?

casabellaThe last couple of months of 2016 has shown a continued decrease in resale condo prices. In November, overall resale condominium prices have fallen 0.7 per cent, following a 0.2 per cent in October from September. While central region private non-landed residential properties have regained some favour with foreign buyers, prices have dipped despite a rise in sales volume. Property analysts are expecting a market stagnation at best for 2017 as a quick rebound seems unlikely due to the continued slow economic growth and global political uncertainty.

The increase in sales volume is however a sign of hope for the property sector, as the rate of price decline may cease after a period of increased activity. Most sellers who are listing their units under the current market conditions are more likely than not serious sellers as most investors will try to hold on to their units and tide over the market lull. Thus buyers are increasingly aware of this change in tide and are negotiating for lower prices.

seletar-springsThe segment most affected could be the small suburban condominium apartments as the number of resale units are on the rise and also facing competition from HDB flats. While official figures are yet to be computed, analysts are expecting private property prices to have fallen by approximately 3.5 per cent last year.

Resale private condo prices up by 0.3%

Resale private non-landed property prices have inched up slightly in November with a 0.3 per cent increase following a 0.7 per cent fall in October.

teresavilleHowever on a year-on-year comparison, prices were 1 per cent lower than November 2015. As more new units enter the market and demand wanes, more sellers have put their properties up for sale below estimated market values. In districts 22 and 27 of Boon Lay, Jurong, Tuas, Sembawang and Yishun, private condominium units have been sold at around $20,000 below the market norm.

But in district 4 which includes Mount Faber, Telok Blangah and Habourfront, condominium prices have been consistent with some buyers even paying up to $25,000 above market value. On a positive note, the margin between the market value and the average selling prices of resale condominiums have been narrowing, as more buyers get used to the stamp duty requirements and additional fees involved and are rather actively seeking good deals.

pebblebaySales volume of resale condo units has also improved 21.3 per cent from last November with the 581 transactions recorded for the month. In the prime districts, prices rose by 2.3 per cent while those in the city fringe dipped 1.5 per cent. Suburban resale private condos fared least well with a 2.6 per cent fall in prices. Analysts are watching the market closely for signs of how it will fare in 2017, and have raised concerns about prices possibly lowering further as more unsold homes seep into the market.

Resale private property prices slip further in October

Following the dip in resale prices in September, last month saw a further slip of 0.7%. Resale prices of private non-landed properties were apparently at a 50-month low.sycamoretreeSales volume of resale private properties also fell 15.2 per cent with 586 transactions clocked in October, in comparison to the 691 in September. In the peak of April 2010, 2050 units were sold, 71.4 per cent higher than the current numbers. September’s numbers may have been slightly more positive due to the pent up demand from the lack of major launches in the second quarter and the Hungry Ghost month in August.

Some districts fared better, with more than 10 resale transactions recorded – namely district 10 where the median selling price was $10,000 more than the computer-generated market value. But in most regions, sellers have found themselves having to offer prices up to $10,000 below the market value in order to close deals and attract buyers. In district 21 in fact, selling prices went as low as $23,000 below the market value.

HighlineResidences2Property prices in the city fringe, normally where selling and buying is the most active, have fallen 2 per cent. In the suburbs, prices also fell 3.3 per cent. Prime district properties however enjoyed a 4.9 per cent price increase, though it might only be sufficient to consider it a rebound from previous lull months.

2016’s demand for properties level with last year’s

Though it may seem like the property market took a turn for the worse this year, figures have shown that the level of demand has remained similar to last year’s.

peak-cairnhillProperty prices have fallen 10.8 per cent since the 2013 peak and perhaps it is precisely this decline of home prices that have kept buyers coming to the table, more so this year than the previous few which have been dull partly due to the property cooling measures implemented since 2013. Some property agents have in fact reported up to a 50 per cent increase in sealed deals this year, indicative of increased buyer’s interest and number of project launches.

The market inertia in terms of the property cooling measures and interest rates may also have been push factors in enticing buyers back into the market. Resale property sales have been strong with 5,587 transactions closed in the first 3 quarters of this year, up 18 per cent from 2015. Developers have also been pricing new units more competitively this year, giving the resale market a run for their money.

the-crestCity fringe and central region resale properties were particularly popular with buyers though some may still be waiting for better deals.  And as property analysts predict a further 3 to 3.5 per cent drop in prices for the rest of the year, the market seems primed for owner-occupiers though those considering investing in properties should wait a little more to get the most out of their buck.

 

More resale condominiums sold in July and August

Current Q3 property market figures are showing that while sales volume on a year-on-year basis has risen almost 60 per cent, with a 10 per cent rise in June and inching up a further 5.3 per cent in July, home prices have slipped consecutively for 2 months.

183 LonghausA total of 817 units were sold in August while 776 were sold in July. Prices of resale non-landed residential properties have however fallen by 0.8 per cent in August, following a 0.7 per cent fall in July. Most of the price decline came from suburban properties, led by those in the city fringes. The core central region private home prices have continued to rise 0.1 per cent. Overall, buyers are paying an average of $11,000 below market value last month as compared to $10,000 in July.

A few major new launches may have injected some competition into the market, fuelled by the rise in the number of completed private homes. District 20 of Ang Mo Kio, Upper Thomson and Bishan has however had a positive showing of buyers willing to pay up to a median of $18,000 above market value for properties here. The maturity of these estates, coupled with the number of schools and proximity to town may have driven prices up. Surprisingly in district 15 which consists of Katong, Marine Parade, Joo Chiat and Amber Road, buyers are shying away from the high prices properties here used to command.

Belgravia villasThe Hungry Ghost Festival in August may have dulled sales figures slightly, though property analysts expect only marginal adjustments in the months leading to the end of 2016.