Private resale property market to cruise on status quo

2016 proved to be a roller coaster year for the private home market, as prices fluctuated throughout the year but never quite settled into an upward swing. Price increases lasted hardly a quarter before turning the opposite direction and movements differed between regions as well.

SeletarParkResidencesAcross the board, resale private home prices rose 0.1 per cent. Most of the increase were for properties in the prime districts. Prices here rose 1.8 per cent while falling 0.9 per cent and 0.4 per cent in the city fringe and suburban districts respectively. Location continues to rule buyers’ decision-making process and prime district home prices remained stable despite the year-end lack of market activity.

As the rental market continues to wane and competition from completed properties put further pressure on rental prices, more private condominium unit owners may be pushed to sell this year as they come to the end of their 4-year holding period, after which they will have to foot their sellers’ stamp-duty bill. Buyers of resale units could have the upper hand when it comes to negotiations in these cases.

NathanResidencesThe number of private apartment units sold have been falling as well, with 484 units sold as compared to the 618 sold in November. Though the numbers are higher than the 453 units sold in December 2015, it is still a far cry from the 2,050 in April 2010 – a 76.3 per cent fall in fact. Property analysts are expecting prices and sales volume to maintain their current levels, though 2017 could be more a year of keeping the status quo than quick recovery.

West Coast Vale and Serangoon Road sites to yield more new homes

The Urban Redevelopment Authority (URA) has just released a West Coast Vale residential site with a tender closing date of Feb 9 next year, on the back of positive response from 14 developers for a Margaret Drive site.

parcriviera2While property analysts are more prudent with their predictions of response from developers for this site, they are nevertheless expecting 5 to 10 bids. It’s location is perhaps not as ideal as the previously released  Margaret Drive and Martin Place sites, but this 99-year leasehold, 16,378 sq m site is situated near the Jurong Lake District and its many amenities such as office and commercial spaces and also shopping malls such as Westgate and Jem.

A recently launched project nearby is the 752-unit Parc Riviera condominium. Sales for this development has been muted thus far with 130 units sold at around $1,175 psf, but analysts are still expecting a winning bid of between $222.1 million to $246.8 million for this new West Coast Vale site. There are speculations that EL Development might go for the bid in order to manage pricing of new homes in the area.

sennett-residencesOn the private front, the Serangoon Road site on which the National Aerated Water Company sits has also been sold to Malaysia-listed developer Selangor Dredging for $47 million. Unknown to some, the National Aerated Water Company used to distribute popular nostalgic soda pops such as Sinalco and Kickapoo Joy Juice and this site used to house its bottling factory up to the 1990s when operations ceased. As the new owner is planning to convert this industrial site into a residential one which could potentially yield 117 apartment units, there is an additional fee of $22.66 million involved in the transaction. This could very well be a worthy investment as the site is close to the Potong Pasir MRT station and upcoming Bidadari HDB estate, in the increasingly popular city-fringe district 12.

New launches versus Completed private homes

As home supply inches towards a new high this year, the public’s attention may now be shifted to the competition between completed new homes and new developer launches.

Property investment was almost a sure thing not long ago, but now 3 to 5 years down the road from the peak of the market, when property prices were high but so were buying sentiment and potential investment yields, units which were launched then are now made available in the physical, adding pressure to the already-gluggy property market.

Private apartment prices in the core central region (CCR) have taken a turn for the better with a 0.4 per cent rise in the first quarter of 2016, following a 0.3 per cent fall in the last quarter of 2015. Luxury properties in the prime districts may once again be welcoming affluent buyers and investors as average unit prices have risen from $2,215 psf to $2,243 psf by the end of last year.

In the city fringes however, private property prices have continued to ebb, falling 0.4 per cent for 2 consecutive quarters now. Out of the central regions (OCR) and in the suburbs, prices fell 0.9 per cent. For the rest of the year, property experts are expecting private apartment prices to stabilise in the central regions while landed and suburban non-landed homes continue to struggle.

Downtown Line 2 – 12 stations bring buzz to prime districts

The Downtown line is having an open house this coming weekend on December 5, and with 12 new DTL2 (Downtown Line 2) stations commencing operations from December 27, travel across the island will now take half the time it used to. Spanning Bukit Panjang and Rochor, with stations such as Cashew, Hillview, Beauty World, King Albert Park, Tan Kah Kee, Sixth Avenue, Botanic Gardens, Stevens, Newton and Little India in between, the new stations and train service may just bring some year-end cheer to home and business owners in their vicinity.

GoodwoodResidences

Photo: Goodwood Residences

Not only do they potentially bring a buzz to businesses nearby, residential properties may also find an appreciation in sale and lease value. DTL2 runs through most of Hillview, Upper Bukit Timah and Bukit Timah, where the prime district of 10 stands. Properties along this stretch may see a rise on the already-high prices as the only public transport plying this route used to be the buses. Traffic jams are more than a dime a dozen, especially during peak hours and also when during the afternoons when schools are let out.

Downtown Line RochorPhoto credit: Land Transport Authority (LTA). Rochor Downtown Line Station.

Private properties along these 2 very long stretch include Hillbrooks, Springs Grove, Robin Residences, Stevens Suites and the newer Goodwood Residences, Three Balmoral, Hills TwoOne. Further up near the Cashew station are residential projects such as Cashew Villas and Cashew Crescent Terraces.

The rest of the Downtown Line, 16 stations of DTL3, are expected to be up and running by 2017.

Private property prices remain level

The NUS Singapore Residentail PRIce Index (SRPI) showed a 0.1 per cent rise in private non-landed home prices in September. But property experts say it could simply have been a post-election response, when buyers might have held back to see if the property cooling measures would be removed. Now that the authorities have indicated the cooling measures are here to stay, at least for now, some buyers may have taken advantage of the already-lowered prices and closed some transactions.

The Scala condo Serangoon

Photo: The Scala condominium in Serangoon

The resale private home market in particular has benefited from the lack of new property launches in September. Non-central units rose 0.3 per cent while smaller units gained a 0.4 per cent footing. But as 2016 brings an onslaught of completed new properties, the resale market may have to brace itself for a bigger hit. Industry players are expecting home prices in the non-central regions to continue on a downward trend as the number of completed units there rise. Leasing may also prove difficult as there will be a huge leap in supply while immigration policies are now tighter, which implies a lower demand.

While recent figures point to tenants looking towards to the central regions for leasing prospects, high-end properties may be hitting a wall in both sales and leases as competition has lowered rental prices in the suburbs and more tenants are seeking options there. The property market seems to be reaching a standstill as the year draws close and the festivities take over, the real time to watch the market might be the first quarter of 2016, which will set the tone for the year ahead.

Penchant for Penthouses

Although the luxury property market seems to be falling behind as property cooling measures take bite, penthouses which are few and far in between are attracting the right customers.

At the exclusive Ardmore Park district, the one-and-only penthouse at Le Nouvel Ardmore recently sold at $51 million, apparently the highest recorded since the global financial crisis. Measuring at 13, 875 sq feet, that translated to about $5,000 psf. Considering news of a recent high-end property resale at a loss of $15.8 million just broke not too long ago, industry players are understandably happy about the recent progress.

Le Nouvel Ardmore in the exclusive Ardmore Park area. Image by Wing Tai Holdings Limited.

Le Nouvel Ardmore in the exclusive Ardmore Park area. Image by Wing Tai Holdings Limited.

Prime district condominiums are all in the millionaire range and penthouses are even higher on the price charts, mostly because of the floor area. One of the largest sale of penthouses in recent years was one at TwentyOne Angullia Park which sold for $42.9 million in 2013. Other high-end apartments include The Marq on Paterson Hill, The Orchard Residences and the Ardmore Park condominium. At The Marq, four-bedders start at $20.5 million ($6, 850 psf) which makes for a higher per square foot price than the $51 million penthouse at Le Nouvel Ardmore, but with a more palatable quantum price.

Are the buyers coming back into the market, slowly but surely? What will entice them back quicker and what are they looking for in a property? Property experts expect properties which are already completed will be a much higher draw for this high-end luxury property customer base as they often prefer to invest in the tangible.

Best performing districts for Private Home sales

13 is not such an unlucky number after all. Private homes in district 13 were the best performers this year, rising a huge 25 per cent in home prices. District 13 consists of MacPherson, Potong Pasir and Braddell. Sennett Estate near Potong Pasir registered highest sales with the current average of $1,270 psf.

Signature Park

Other districts which also did well were 21 – Upper Bukit Timah, Clementi Park and Ulu Pandan; and district 14 – Geylang and Eunos. Areas which showed a lag were the city fringe and city centre sectors. The Rochor and Bugis area saw the largest drop of 4 per cent, and Telok Blangah, Sentosa, HarbourFront, Bukit Timah, Holland Road and Tanglin areas all saw a slight dip. But overall, prices of private homes are still rising.

Property experts attribute the price gains to rejuvenation projects and upcoming amenities in these districts. Transport and location are often key. District 13 homes are selling well mainly because of their central location. The MRT Downtown Line which is being built, is also expected to bring more positive sales to District 21. The Hillier, The Cascadia and Signature Park are all condominium projects which are doing well. They are also expecting resale value of homes around these new launches to rise accordingly. Will more new residential launches next year bring good cheer all around before Chinese New Year?

Private flat rentals unpredictable

One would think the central business districts apartments fetch the highest rents in town, but apparently not. Recent Singapore Real Estate Exchange (SRX) numbers show that flats in district 2, the Anson and Tanjong Pagar areas, were one of the worst performers in terms of private residential apartment rental.

Domain 21 condoThe areas that did well were District 14 – Geylang, Eunos, Paya Lebar and KembanganDistrict 3 – Queenstown and Tiong bahru, and district 12 – Balestier, Toa Payoh and Serangoon. Private apartments in district 20 – Bishan and Ang Mo Kio, also did well with at least a 10 per cent increase.  Areas where rental prices slide include district 13 – Macpherson, Braddell and Potong Pasir, and district 11 – Watten Estate, Novena and Thomson.

Construction taking place in many places may have affected rental, for the moment, as the noise and dust may have caused the temporary drop in prices. The tenant pool may also be changing as more share units to save on the high rental prices, and there may also be a decreasing pool as the revised immigration policy kicks in. Industry experts are however expecting changes in June 2013, where more small apartments enter the market.