Lakeside Wonder

Things in the West are heating up, especially with the launch of a number of private residential properties, announcements of a new Jurong Lake Gardens, a new retail and commercial hub Jurong Gateway and new transport lines. It’s a whole new township blossoming.

Prices of properties at Lakeside, a largely residential district, has been on the rise, significantly more so since 2009. Lakeholmz condominium apartments were only priced at $440psf in 2003. In 2009 and 2010 respectively, relatively properties such as The Caspian and Lakefront Residences were already costing buyers $580 psf and $1, 020psf. That is almost double in just a year’s time.

LakevilleOne of the newer launches is the Lakeville condominium and current median prices of properties in the area range at $1, 300 psf. Over the past 12 months, prices have ranged between $706psf for older establishments such as Lakepoint condominium to $1,263 psf at Lakefront Residences.

The new malls, businesses and regional offices setting up shop in the area has also brought along with it a new flow of tenants. Thus rental prospects are promising, especially for newer properties. Rental prices above $3 psf and at least 10 leases are signed at each residential property per month.

With a new land parcel up for bids in December, buyers looking to enter the market in the west side of the country could possibly have something to look forward to.

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.

Luxury apartments – Leased instead of Sold?

As the property market lull continues, developers of luxury properties are finding the going all the tougher. As the number of unsold units loom large in the horizon, some property developers have considered turning their private condominiums into serviced apartments instead.

iLiv@Grange

iLiv@Grange

The only other options are for those with deeper pockets to hold off their launches till the market turns around, or to offer steep discounts. Ardmore Residences is just one of the possible few luxury residential developments whose launch has been held off. Wealthy investors do not seem to be keen on hopping on the market for now, probably in lieu of the tightening measures placed around the housing and finance sectors. Since its completion last year, developers have chosen instead to lease out units at the Ardmore Residences for approximately $25, 000 per month. The Sculptura Ardmore condominium nearby has also not been launched.

Sculptura ArdmorePhoto credit: SC Global.

Although some marketing has been done for the iLiv @ Grange apartments in Grange road, it has not been officially launched as well. At its unveiling in 2010, developers were targeting selling prices of $3, 000 psf. But in the current market, that figure might be unrealistic. There has been talk of the developer, Heeton Holdings, possibly selling the units in bulk to a single buyer at $2, 200 to $2, 300 psf. Developers generally have a window of 2 years after completion of the project to sell off the units. Remaining units are not allowed to be rented out. Since Singapore may require more hotels and short-term accommodation, it may be a new venture should these luxury residential projects near the city centre to be converted into serviced apartments.

Property measures not hurting Malaysian property sales

And more are flocking to the local label of the new Puteri Cove Residences. This new luxury condominium is developed by local property developers, Pacific Star and DB2, with sea and harbour-view units up for offer, local investors seemed to have taken a liking to this new property.

Puteri Cove Residences. Photo by Pacific Star Singapore.

Puteri Cove Residences. Photo by Pacific Star Singapore.

450 of the 600 residential, 56 Soho and 340 serviced property units were sold within a week of its launch. Upon its targeted completion in 2017, this mixed-use development will also include a waterfront promenade housing eateries, retail stores, commercial businesses and clinics. Located strategically between the Second Link at Tuas and the Woodlands Causeway, it’s poised to have a brisk flow of traffic. Units consisted of one- to four-bedders between 600 to 4,100 sq ft. Prices ranged between RM 1, 180 (S$457) to RM 1, 580 (S$612) psf.

Most buyers were Singaporeans, followed by Malaysians and Indonesians. And with talks in the way between Singapore and Malaysia to improve transport infrastructure, such as the Kuala-Lumpur  expressway and a train system between Singapore and Johor Bahru, investors in the know are looking at long-term profitability. Will new Iskandar region properties continue to woo Singaporean investors?

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?

Reduced BTO launches will not affect resales market

2013 was a year of new BTO HDB flats. With a sales launch almost every couple of months, it may have taken the shine off resale HDB flats. Coupled with the decreasing COV prices, will this mean a a weakening resale market?

National Development Minister, Mr Khaw Boon Wan recently announced that starting 2014, HDB’s “massive construction programme” will slow as the pent-up demand for public housing units have been largely elevated by the continuous supply of BTO flats over the past 3 years. Industry analysts are not expecting the resale market to be overly affected by this announcement, especially since the pool of buyers usually have different motivating factors. Most BTO flat applicants are young families and first-time buyers. Now that application rates have fallen from 5.3 to 2 in 2 years’ time, there seems reason enough for the authorities to put the brakes on the building programme.

East Lawn Canberra HDB FlatIn comparison, the resale market has suffered slightly, with stricter loan limits, competition from the private property market, and recent COV prices have come to show for it. With the median at an all-time low, many are wondering if the cease of supply of new HDB flats will once again bring resale flat prices up. But this may be unlikely, at least for the next half year or so. As long as the loan limits and private residential options remain and especially since demand has been largely fulfilled,

It will be an interesting year for Singapore’s real estate sector. Which way will the wind blow?

Paint the town red

Marina Downtown to be specific. The plans to invigorate the upcoming Marina Downtown district are in the pipelines, and it sounds exciting indeed. The aim is to shape the area in a such a way it compliments the nearby Central Business District. Akin to the infamous Canary Wharf in London, this new area will have its own transport line, and a good mix of residential homes, commercial offices, entertainment, retail and recreational facilities.

Marina DowntownAmassing 70 hectares, it will extend all the way to Harbour Front, connecting from Marina Bay, to form a new CBD area and as an extension to the existing financial districts in the city centre. With the government’s recent announcement about the Marina Coastal Expressway, properties along this stretch looks set to command higher prices, starting possibly from now. And when everything is complete, one can only wonder how much these properties will appreciate in value.

Mixed developments in this new district could be what investors are looking at eagerly. Marina One and Asia Square Towers are just two of the possibly many integrated residential and commercial projects which may also mean more skyscrapers joining the ranks of those in the city. Despite the existence (and possibly more in the future) of residential private properties in the area, industry consultants are expecting the area to be mainly dominated by commercial buildings. Existing properties have already taken up much of the market slice of residential homes in the area. Properties such as The Sail, Marina Bay Residences and Marina Bay Suites. Thus one of the main challenges the authorities will have could how best to inject vibrancy and life into the area during the weekend.

The Sail MarinaYet unclear how long the development process may be, its a delicate balance between supply and demand. And demand could be dependent on global situations. Will there be more office space than required? Or is it the government’s plan to bring in more businesses and thus tipping the scale in favour of property investors?

A little cloudy on the top

At the top of the property market, where the luxury apartments reside, sales and profits are a little hazy at the moment.

The high-end property market has been a little quiet for sometime now. But there are still undercurrents under the still surface, as some buyers have been able to reap considerable profits. Despite some properties having been bought at a time where prices are are a record high, seven units at The Reflections at Keppel Bay were resold with a profit of between 6.5 and 23.8 per cent.

Reflections at Keppel Bay boasts waterfront living with a marina and a good many luxury amenities as well.

Reflections at Keppel Bay boasts waterfront living with a marina and a good many luxury amenities as well.

Orchard Residences was another development with positive sales, where 11 units were sold at a 20.6 per cent profit in 2011 and one for 13.4 per cent recently. Most buyers in the luxury market have the financial ability to hold onto their properties are are unlikely to sell lower than their buying price. Those who have been overambitious would have already left the market, either at a loss or without much padding in the pocket.

Some luxury residential developments have not however been able to keep up with the high selling prices. Demand is lower and it is also harder to secure rents. Orchrard Boulevard and The Marq on Paterson Hill took a slight hit on some units. The Marq previously sold units at $6, 850 psf shortly after launching, but a recent unit sold at a 6.1 per cent loss. A unit at the Orchard Residences bought in 2007 also went at a 2.6 per cent loss.

Orchard Residences condo

Orchard Residences condo

Although these losses are less than 10 per cent, at the prices they were purchased for, the loss is considerable. Could these losses indicate a loss of interest from investors, both foreign and local? How long will this lull last and when will the undercurrents stir up enough interest and create some big waves?