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.

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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.

Grand opening launch for Grandeur Park Residences

The latest property development in Tanah Merah has sold more than half of its units over a weekend. Grandeur Park Residences reported strong sales with at least 58 per cent of its 720 units sold during its launch.

GrandeurParkResidencesSmaller apartments seem to be popular once again as the project sold most of the 96 one-bedroom units made available during the launch. Selling prices averaged $1,350 psf. The location, in close proximity to the Tanah Merah MRT station, could be one of the main factors pushing buyers to seriously consider the long-term and rental potential of the property. The condominium project which is also close to the Changi Business Park also has two- to five-bedders with prices starting from $550,000 for a one-bedder and $700,000 for a two-bedroom unit. Though the rental market is weak at the moment, buyers are counting on the property market rebounding by the time the project is ready for occupancy.

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Following the first private condominium launch this year of The Clement Canopy, response at the Grandeur Park Residences launch may be an expression of pent-up demand which could release keen albeit selective buyers back into the fold. However, the eagerness to snap up smaller units mean a lower overall quantum which may keep market figures low or at best level.

January’s private home sales plateau

After a slight rise of 0.1 per cent in December, January’s completed private home prices remained flat. There were some rise and fall in the different districts but overall, non-landed residential property prices evened out on a plateau.

CreekBukitTimahThat may not necessary be a negative as signs of stabilisation are generally expected of the year. Property analysts say that some of the zero per cent month-on-month change could also be due to the availability of smaller units with a higher psf pricing schedule. Besides shoebox apartments, studios and one-bedders, family-size units in new developments are also now smaller in size than before.

Small apartments aside, prices of completed condominium units in the central region did rise 0.7 per cent after a 0.3 per cent dip in December. In the non-central regions however, prices went the other direction with a 0.6 fall following a 0.5 per cent increase the month before.

26NewtonThe private real estate market could however be looking at more resale properties entering the pen soon as most buyers who have purchased investment properties in 2013 will have completed their 4-year holding period this year. This means they are no longer tied down by the cooling measure which requires them to pay a seller’s stamp duty should they sell their property within 4 years following the purchase. Whether the sector is ready for this influx of properties while pulling themselves sluggishly out of the lull remains to be seen.

Consumer confidence in property market improving

Though gradual, the property market seems to be coming out of a long hibernation and there are some bright sparks to make 2017 a warm one.

VIIOThe supply and inventory stock is gradually diminishing, by 8.4 per cent at the end of last year, aided by the restriction in land supply by the government last year, the key word being gradual. Fortunately, the decline in home and rental prices have also been gradual, with no sudden collapse. Last year’s rate of decline of overall private home prices was at a 3-year low, at 3.1 per cent. The 2 years before saw a 3.7 and 4 per cent decline, counting backwards.

QuinterraBy now, consumers and investors are used to the price decline, which has been a regular occurrence since 2013 when the property cooling measures began to kick in. In the current market, any news of slower price declines will be good news, and of stabilisation, even better news. Private home prices have finally landed on a level where an increasing number of buyers find affordable and investment-worthy, which explains the boost in new home sales from 7,440 in 2015 to 7,972 last year.

Properties in the core-central region fared the best in the second half of 2016, while non-landed homes in the city fringe and suburbs registered 2 and 0.6 per cent drops respectively. Landed properties fared unexpectedly well with a 0.8 per cent price increase in Q4. Property analysts are expecting property prices to bottom out this year, which could the year when the property market bottoms out. The authorities do not yet seem to show any signs of easing the property cooling measures, at least not in the first half of the year.

Resale HDB flat market’s continued stabilisation

For 2 consecutive years now, the sales volume of resale HDB flats have been on the rise. Since 2014, the number of transactions recorded for resale HDB flats have been increasing, from 17,318 in 2014 to 19,306 in 2015 and then 20,813 last year.

ToaPayohHDBflatResale flat prices are showing signs of stabilisation, with only a 0.1 per cent fall in 2016 from the year before. Though last quarter’s transaction figures fell 9.1 per cent, it could be due to the usual year-end lull as most were away for the school holidays. Akin to buyers’ sentiments and reactions in the private property market, HDB flat buyers have also been increasingly keen on closing deals as prices have been falling steadily since 2013. Most consider the market currently nearing or at the bottom of the property cycle and are thus more confident or willing to make the purchase at what they consider lowest-possible prices.

Despite the government ramping up supply of new BTO (build-to-order) flats for young couples and families, even including singles in their bigger scheme of things by providing them the option to purchase 2-room units directly from HDB instead of previously restricting them to only units in the resale market, there are still those who will require a unit sooner rather than later or do not quite qualify for new flats. These buyers will be the ones who prop up the market, though with the current cooling measures still in place, prices are unlikely to rebound anytime soon.

ClementiHDBflatProperty analysts are however hopeful that the number of resale flats transacted this year will be closer to the 21,000 to 23,000 mark. Resale prices have fallen to a level at which young couple and families find attractive or affordable enough to commit. A large number of HDB flats and suburban condominiums will also reach completion this year, which could mean more HDB upgraders will be looking to sell their existing flat in the resale market. And as rents are expected to fall as well, for the same reasons, the most optimistic outlook could be a 1 to 2 per cent price increase by end 2017.

Rise in new private home sales volume

The number of new private homes sold last year have risen on the back of declining prices in the primary private home sales market. Fighting against predictions of a languishing private residential sector, new private home sales have held up in 2016 with 8,136 new units sold, 9.4 per cent higher than 2015’s 7,440.

SantoriniBuyers have been picking up units directly from developers, aided by a couple of pushes from low interest rates an and lower selling prices. Though 2016 was a slow year for Singapore’s real estate industry in terms of home prices, the number of transactions clocked have surprisingly went against all odds. While private home prices have fallen over the past 3 years, market sentiments have begun to pick up last year and increased interest and availability of one- and two-bedroom units whose total quantum prices were more palatable for the general buying public and investors alike.

In Q4 of 2016, 2,480 new units were sold, the highest number in a quarter for the year. Despite the year end’s usual market lull and only 90 new units launched in the last quarter, December’s sales were positive with suburban projects leading the way with 231 sales, followed by 112 in the city fringes and 24 in the core central region. Last month’s best seller was The Santorini in Tampines which sold 26 units at an average price of $1,046 psf.

More condo developments offering deferred payment plans

As the number of completed private home units in the market rise without the same exponential reaction from buyers, developers are finding it increasingly difficult to move remaining units.

peak-cairnhillMore developers have been seen to offer incentives such as a deferred payment scheme in order to entice buyers. One of the latest to hop on the bandwagon is TG Development‘s The Peak @ Cairnhill II. Following good response to their previously-launched deferred payment scheme, CapitaLand has added Sky Habitat to their other 2 properties, d’Leedon and The Interlace, offering the same incentive. Their stay-then-pay option allows Singaporean buyers to make a 10 per cent down payment (15 per cent for foreign buyers) within 8 weeks to exercise the option to purchase and the other 90 per cent within a year from that even while living in the unit.

Some other properties such as One Balmoral are offering sweeteners such as direct discounts. The freehold 91-unit condominium in prime district 10 has offered a 13 per cent discount on all their units with prices averaging at $2,150 to $2,200 psf. Over at the waterfront-style Corals at Keppel Bay, the developer is offering $50,000 off selected units with average prices working out to be around $1,850 psf.

threebalmoral the increasing number of unsold units in the market, industry experts are not yet concerned about new launches coming up this year. New blood will likely inject active browsing and buying sentiments into a stabilising market, and with prices holding steady buyers are likely to take the bait, and the effect may very well trickle down to the secondary and other sectors.