China’s top-tier cities post continued growth

2016 has been quite the year for China’s property sector. With property booms in top-tier cities such as Beijing, Shanghai and Shenzhen, overall investment in the country’s real estate rose by 6.9% last year.

chinaSince the property sector is one of China’s main sources of economic growth, and her economy did grow by 6.7% last year, fuelling 40 other main business sectors in the country, economists, the China government would no doubt hope for continued success this year. But there have been concerns that the pressure on the property bubble is building up and might be reaching bursting point.

Despite the government’s attempts to cool the market with rapid and frequent policy changes over the past couple of years, property investment growth has hit a 11.1 per cent high last December, up from the 5.7 per cent in the month before. Though home prices in some cities have began to fall slightly, analysts are seeing that market sentiments are hardly sensitive to policy shifts. Should the policies stick, any significant changes will only come with time. As most investors consider property-ownership the most feasible and desirable means of adding to their income, demand in top-tier cities remain high despite soft price growth.

GuosonCentreRecent shifts on the international front however may mean continued growth in the real estate market within China as more investors look inward, what with the Trump administration turning things on its head with his trade agreements changes. It may be in the government’s interest to acquire land revenue while keeping an eye on a burgeoning real estate sector which on the plus side will boost economic growth but may cause bigger issues later on if allowed to continue on its upward trajectory.

A stable year for Singapore’s property market?

Resale HDB flat prices have fallen only 1.5 per cent last year, as compared to 6 per cent the year before. Industry experts are not expecting prices to fall much more this year and in fact last quarter saw a 0.2 per cent rise in HDB resale flat price index. But that may not mean a sudden rebound of HDB flat prices as the options available to home buyers have now increased, especially as private home prices have fallen and more are now eligible to purchase new BTO flats directly from HDB.
Poiz Residences2Photo: Poiz Residences

HDB has announced that they will be rolling out up to 18,000 new flats this year, 3,000 more that last year. Private properties are now more affordable as developers have caught on to buyers’ affinity to total quantum selling prices. Last year, private property prices dropped 3.7 per cent overall, and a 0.5 per cent fall was registered last quarter of 2015.

The number of new property launches in the 4th quarter propped up new property prices with launches such as Principal Garden, The Poiz Residences and Thomson Impressions. Prices of new units in the city fringes fared well with no price changes. Landed property prices however fell 10.4 per cent over the last 2 and a half years, with prices falling 4.4 per cent last year alone.

Property analysts are watching the market closely as they are expecting the interest rate hikes to put a strain on those servicing home loans, especially as the property cooling measures concurrently remain.

Rebound in resale private non-landed property market?

If sales volume are anything to go by, signs of the resale private property market rebounding could be imminent.

Since the fall of prices of resale units to equivalent of or lower than new private non-landed properties, the number of transactions have increased significantly. Within the first 4 months of 2015, transaction volume has seen a 20.7 per cent increase. Resale properties are often ready for immediate occupancy and rental, thus buyers tend to favour these units to new ones in order to skip the wait of building and construction. The rental opportunities to be had within the few years it takes to build a new residential property could be quite substantial. And oftentimes, resale units tend to have a bigger floor area.

PebbleBayCondoThough the number of transactions, 1,411 from January to April this year, is still lower than the 2,203 in a year-on-year comparison with the peak in 2013, property analysts are upbeat about the market as the year moves on. It could show that buyers are finally getting used to the cooling measures, in particular the TDSR (total debt servicing ratio) framework, and realising that the market could be reaching a plateau. Sentiments could be that this is the time to buy, before prices and interest rates start climbing again.

The promising signs could be seen across the island, though more markedly in Districts 5, 10, 15 and 23. Some of it could be due to the fall in prices over the past year, and some the potential of having the future Downtown MRT line in close proximity. Even the Central region’s luxury properties have seen a recent boost in sales numbers of 24.2 per cent, most evident in Districts 9 and 10.

 

Tanjong Pagar shaping up for the future

The Greater Southern Waterfront, part of URA’s Draft Masterplan 2013, looks set to change the shape, and size, of Singapore’s Central Business District. In the plans are for a extended waterfront starting from Harbour Front to Marina Bay. And all this is after the Pasir Panjang and City Terminals are shifted to Tuas, making space for 1,000 hectares of development both residential and commercial.

Skysuites@Anson

Skysuites@Anson

This move would mean Tanjong Pagar will be twice the size of Marina Bay. And that could mean business, literally, for property investors. By 2015, 4,500 new homes will be ready, and 18, 000 more will join its ranks starting 2027. Though the road to be travelled is still long and arduous, it can never be too early to plan.

Already the potential of the area is drawing in buyers for the increasing number of residential properties in the area. Skysuites@Anson, officially launched last week, despite 200 of its 360 units already sold since its marketing began a year ago. One bedroom apartments are selling at $2, 650 psf and two-bedrooms units start from $2, 200 psf, and three-bedders from $2, 500 psf.

Clermont ResidencesThe 181-unit Clermont Residences is making a tall point in the district, with the launch of this 290m apartment block 2 weeks ago. When built in 2016, it might possibly be the tallest residential project, and boasting a $30 million super penthouse, it will certainly be well-poised to see far into the future. Onze @ Tanjong Pagar is the other option should you be looking at a smaller, cosier establishment. With only 56 units in total, 15 have already been sold at a median of $2, 515 psf.

With developments mostly still in the planning stage, investing in Tanjong Pagar properties will likely be a long-term affair. But with the potential so great, the stronger competition in the future might be what turns the wheels of luck.

Rise in property prices at Iskandar Malaysia

As planning, building and construction continue at the Iskandar Malaysia project development site, property investors are catching on quickly and lapping the residential properties all up. The recent hike in property prices definitely seem to say it all. Property agents from both sides of the causeway have reported an astounding and sudden spike in foreign interest and sale prices of property in the area.

Taken at the iProperty.com Expo: International Collection, Marina Bay Sands Expo Centre, Oct 2010

Taken at the iProperty.com Expo: International Collection, Marina Bay Sands Expo Centre, Oct 2010

Is it mere hype or can this activity be sustained and for how long? Will there be a time where investors find themselves holding on to lesser than they had hoped for?

Property agents have been busy showing potential investors the show houses and apartments in the territory and even in Singapore,  Malaysian property launches and expos have been garnering renewed interest. The fervent buying could also be due to various countries in Asia tightening their foreign property investor policies, countries such as Hong Kong, China and Singapore. This could be driving investors to look elsewhere in Asia and even in Europe and the States.
Puteri Harbour

The Puteri Harbour scheme, featuring luxury waterfront villas, apartments, serviced residences, hotels and commercial developments, have been one of the top picks so far. The promise of good international schools such as Malborough College in the vicinity has also helped rakes in some interest from expatriates. Waterfront properties in Danga Bay and Permas Jaya have done equally well.

A faint indication of how  the prices have changed since 2006 when Iskandar was first launched can be seen in the prices of bungalows in Ledang Heights:

  • In 2006 – RM25 to RM30 psf
  • In June 2012 – RM60 to RM80 psf
  • In 2013 – RM100 to RM120 psf

Prices have risen more than five times the initial launch. Pure speculation or true reflection of what future the Iskandar development holds? Will you be looking to invest in Malaysian properties and do you know where to begin? Don’t forget to keep a lookout for useful tips and learn how to plan your finances for long term investment from industry analysts and experts at property events, seminars and launches.

New Pasir Panjang Freehold Low-rise Apartments

SeaSuites, launched over the weekend, has collected 100 cheques even before its official launch. As a freehold property, the units range from 517 to 1, 410 sq ft, mostly made up of one and two-bedders. Prices hover around $1, 650 sq ft. With the fashion-based business group, Link (THM) behind this project, this small-scale landed development may be projected at buyers with an eye for design. The group’s other residential properties include a landed housing site in Holland Road, which when completed are expected to fetch a grand $10.5 to $11 million per home.

SeaSuites 1

With only 52 units available, who out of the 100 cheques collected will successfully secure a home at this new residential development by the end of Sunday? The exclusivity and rarity of low-rise apartments are perhaps the calling card for this new property. The previous lack of private condominiums may also be a contributing factor. Many buyers or investors may look at the area as a future property goldmine, at least for the potential it holds. And as more MRT stations are being built, areas such as these which are yet relatively underdeveloped may see much more activity and early buyers could benefit from a wider profit margin.

Other private properties in this area include Village @ Pasir Panjang, Parc Imperial, The Foliage and West Shore Residences.