Private non-landed resale property prices continue to rise in June

After a couple of quarters of positive performances, resale private home sales have continued on an upward path last month.

6DerbyshireJune’s resale condominium prices rose by 0.9%, the highest in the last 3 years. In comparison with the same month last year, it has risen by 2.2% and the resale index reached 171, comparable to that in May 2017. Though it may not be the sharp rebound industry players are hoping for, it is nevertheless a positive sign pointing towards possible market recovery.

1,065 private resale condominium units were sold last month, up 51.1% from the 705 units sold in June 2016, but down 12.5% from the 1,217 units sold in May this year. Part of the decline could be due to the June school holidays, as many families and buyers could be out of the country or occupied with other activities. Property experts are expecting the momentum which picked up at the beginning of the year to continue well into the second half of 2017.

ReflectionsKeppelBayThe core central region saw a 1.3% rise in resale values, followed by a 1.1% in the suburbs. Prices of resale units in the city fringes remained unchanged but properties in Newton and Novena received the most attention, with buyers paying up to an average of $40,000 above market value for units here. Resale condominiums in district 4 did not fare as well, with buyers paying an average of $120,000 below the median price.

The weakening rental market however continues to weigh heavily on the minds of buyers and investors as competition for tenants in the outside-central-region remains high due to the increased volume of completed properties in these districts.

2 months of declining new private home sales nothing to fret about

The roller coaster ride of the real estate market has hit a gentle slope with regards to the new private home sector as sales volume fell for the 2nd month in a row since April, mainly due to the lack of new launches in recent months.

MartinModernWith 1, 024 homes sold directly by developers in May, the number of new private homes sold registered a 34 per cent drop from the 1,558 units sold in April. This follows a 12.5 per cent fall from March. The year-on-year figure also showed fewer homes were sold last month than in May 2016. To be fair, only 339 new units were launched in May compared, about 5 times less than the 1,616 units launched in April and no new executive condominium (EC) units were launched last month.

The 2 months of declining sales are nothing to fret too much about as the number of new private homes sold in the first 5 months of the year has surpassed that in the same period last year. 5,723 units were sold from January to May this year. Property analysts expect the buying momentum which began in the earlier part of the year to carry on through the rest of H2 as buyers are beginning to realise that the market has probably reached or is nearing the bottom after 3 years of declining prices.

HundredPalmsPhoto credit: hundredpalmsresidences.com

June however could be a challenging month for the market since it is the school holidays. But H2 looks to be promising with the expected launch of a number of new projects including the executive condominium development Hundred Palms Residences, Martin Modern and Le Quest.

New suburban homes continue to lead sector sales

New non-landed homes are still hot on the list of home seekers and property investors, local and international, as April’s figures have shown. Sales have remained above the 1,000-unit mark for the second consecutive month and the 1,500 units sold in April alone was double that of the same period last year.

ArtraRedhillOne of the factors contributing to the continuing demand could be the changes in property cooling measures which took place in March this year. Consumer’s confidence have risen considerably thus leading to higher home sales including a larger appetite for units even in older launches. The number of units sold in previously-launched developments remained fairly steady across March and April, with 1,079 and 1,001 sold in the 2 months respectively. Some of the more popular projects included Parc Riviera and Commonwealth Towers.

Suburban properties fared particularly well, with 966 transactions closed in April. 558 units were sold in the city fringes and 30 in the core central region. New launches which were well-received included Seaside Residences in Siglap and Artra in Redhill. The former sold 419 units at an average price of $1,736 psf and the latter, 126 units at a median of $1,646 psf.

SeasideResidencesThere had been previous concerns about the large volume of unsold inventory  and with more new units entering, a supply glut might disturb the market slightly. As the supply and rate of new homes diminishes however, there might be a possibility for new homes to be priced higher in the near future. How will this market sector fare as we move on into the mid-year? Will the positive sentiments continue well into the second half of the year?

Resale condominium prices slide in February

The latest private resale condominium sales figures seem to slightly challenge industry experts’ expectations of the market bottoming out this year.

Marina One ResidencesFebruary’s resale condominium prices fell 0.3 per cent following a 0.1 per cent in January from December last year, indicating further decline in the private non-landed resale property sector. While the numbers could mean the market has yet to bottom out, the slower rate of decline does point towards a state of stabilisation.

The biggest impact was felt in the central region (made up of districts 1 to 4, 9 and 10, the financial district and Sentosa Cove) where a 1 per cent fall was registered following a hopeful 0.5 per cent rise in January. Even in the small-apartments (units 506 sq ft and below) segment, prices fell 0.6 per cent. Resale units outside of the central region however fared better, coming back up top with a 0.3 per cent rise following a 0.6 per cent fall from December.

Oceanfront Sentosa Cove CondoThough market sentiment has been picking up, the overall economic outlook and rising interest rates may not be enough to completely turn the market on its head. Recent tweaks in the property cooling measures may give the industry a little push towards to the direction of recovery, but property analysts are still expecting a 3 to 4 per cent price-decline by end of 2017.

Condominium rents up, HDB rents down

A brieft respite in the rental market presented itself in January and February as increases in condominium rental rates were recorded for 2 consecutive months. HDB rents however slipped slightly.

Draycott8Condominium rents rose 1.1 per cent in February as demand from expatriates is usually high in the first few months of the year. Private residential properties in the prime districts were particularly in demand with a rise of 1.2 per cent in rental rates, while the city fringe and suburban sectors saw a 0.8 and 1.2 per cent rise respectively.

Property analysts are seeing an increase in leasing demand not only due to the influx of a foreign workforce in the beginning of the year, but also because rents are now at a affordable levels and more tenants may be willing to take on larger properties or properties in a more expensive location. Though rents are still 18.1 per cent lower than the peak in 2013, sales volume has increase by 12.6 per cent in comparison to the same period last year.

JurongWestCentralHDBFLatThe number of HDB flats being leased has also increased by 1.2 per cent with 1,477 units rented in February. HDB flat rents have however slipped by 0.8 per cent overall, falling 1.3 per cent in mature estates and 0.3 per cent in non-mature estates. Industry experts are expecting further decline in rents this year, while harbouring hope that 2017 will stabilise the market and bring about a recovery early next year.

Resale private home prices up for 4th consecutive month

3 months into the new year and things seem to be looking up for the resale non-landed private home sector. Prices have been on the rise for the fourth consecutive month with a 0.9 per cent climb last month, following a 0.6, 0.3 and 1 per cent rise respectively in the months counting up from December last year.

ParkInfiniaRecent industry figures have shown a slight recovery in both prices and sales volume in the resale market, mostly due to an overall more upbeat atmosphere boosted by a series of successful new launches within the first 3 months of the year. Approximately 694 private non-landed residential units were resold in February albeit it being the shortest month of the year. That is 31.2 per cent higher than the 529 units which exchanged hands in January though that could have been because of the Chinese New Year holidays.

Comparing year-on-year, resale prices in February this year clocked at 1.8 per cent higher that the last and resale volume was 77.9 per cent higher than the 390 units sold the same month last year. Compared to the price peak in 2014, resale private non-landed home prices is still lagging by 6 per cent, but considering the lull which took over the real estate sector for the past 2 to 3 years, price increases across the island in this segment is a step in the right direction. Prices in the prime districts rose 1 per cent while inching up 0.8 per cent in the city fringes and 0.9 per cent in the outside central regions.

 

New home sales yet to show significant change following SSD tweaks

Perhaps the recent changes in Sellers’ Stamp Duty (SSD) regulations may have no effect on the property market, or it might have a considerable effect. Whichever direction things might go, it is still too early to tell. Sales of new properties following the March 11 announcement has yet to show significant signs of change in terms of concrete figures, but the tweak has however boosted interest in new launches as shown in the response from the public at recent show flats such as that of Marine Blue and Park Place Residences.

MarineBlueCondoWhile earlier launches of The Clement Canopy and Grandeur Park Residences generated positive sales during their launch weekends, things have slowed down in the time following. That is however the general real estate market trend and is no cause for alarm. Most property analysts are glad for the change as it will bring about positive sentiments in the buying market, which could mean more energy, move net and direction in the months ahead. They are not certain this relaxation of the property cooling curbs will have a big impact on the market but are nevertheless happy the government has taken this step in moving forward. The next most likely impact would be the push for those caught in a dither of to-buy-or-not-to-buy.

On the other side, the Federal Reserve has raised their interest rates to 1 per cent and that could affect home loan rates, in turn diminishing demand from property investors.

 

Next major condo launch to watch – Park Place Residences

Following the successful launches of The Clement Canopy and Grandeur Park Residences, The Park Place Residences at the Paya Lebar Quarter (PLQ) previewed on 11 March and developer, Lendlease is more than hopeful about the response.

Paya Lebar Quarter_Lendlease

Photo credit: Lendlease

With a prime location in the developing Paya Lebar regional hub, the 429-unit property will provide fodder for the current pent-up demand in the market. The 99-year leasehold development released 40 per cent or 171 apartment units at its first release a couple of weekends ago. Most of they units made available for selection were 2- and 3-bedders. The Park Place Residences is part of the $3.2 billion Paya Lebar Quarter (PLQ) development which will consist of 3 office towers, 3 residential blocks and a mall. It is jointly developed by Lendlease and Abu Dhabi Investment Authority.

The developers are already planning for a second wave of release, where the pricing will be higher and based on the response from the first wave. As interest in smaller, affordably-priced units have been on the rise, buyers will be interested to know that Park Place Residences will have 117 one-bedroom units sized between 480 and 580 sq ft with prices starting at $780,000. The project features mainly two-bedroom units sized between 650 and 900 sq ft starting at $1 million – there are 234 of these units in the project. The remaining 78 units are 3-bedders of between 1,080 and 1,350 sq ft priced at around $1.6 million.

ParkPlaceResidencesThe average selling price is between $1,560 to $1,610 psf. While this is higher than the $1,400 psf median prices of units at The Clement Canopy and Grandeur Park Residences, the location and potential for growth of The Park Place Residences more than make up for it. It will be launched for sale on March 25.