Luxury market boosts overall real estate figures

Ironically one of the markets which first took the hit when the property cooling measures kicked in is now the one keeping the numbers looking good.

GoodwoodResidencesFor her relative political and economic stability, Singapore is considered a haven for the rich who are hoping to park their wealth somewhere safe. And real estate here are considered stable long-term assets; not so much for those in for speedy turnarounds or hoping to make a quick buck in short-term rentals, but for investors looking at long-term capital appreciation.

Recent numbers released by the Urban Redevelopment Authority (URA) has shown a 76 per cent increase in sales of luxury apartments worth above $5 million this year. Some of the best sellers in this segment were Ardmore Three, Leedon Residence, Goodwood Residence and Gramercy Park.

GramercyParkProperty prices of city fringe units also rose 0.2 per cent though prices in the suburbs fell 0.5 per cent. But property analyst are seeing the market possibly bottoming out this and next quarter as the incline of the price drops have been gradually reducing.

There were a high number of completed units entering the market in the earlier part of the year, but as developers held back on major launches for a couple of quarters, it gave the market a few chance to do some catching up in terms of sales volume. The prolonged period of low interest rates may also push consumers to pick up deals now rather than later.

More resale condominiums sold in July and August

Current Q3 property market figures are showing that while sales volume on a year-on-year basis has risen almost 60 per cent, with a 10 per cent rise in June and inching up a further 5.3 per cent in July, home prices have slipped consecutively for 2 months.

183 LonghausA total of 817 units were sold in August while 776 were sold in July. Prices of resale non-landed residential properties have however fallen by 0.8 per cent in August, following a 0.7 per cent fall in July. Most of the price decline came from suburban properties, led by those in the city fringes. The core central region private home prices have continued to rise 0.1 per cent. Overall, buyers are paying an average of $11,000 below market value last month as compared to $10,000 in July.

A few major new launches may have injected some competition into the market, fuelled by the rise in the number of completed private homes. District 20 of Ang Mo Kio, Upper Thomson and Bishan has however had a positive showing of buyers willing to pay up to a median of $18,000 above market value for properties here. The maturity of these estates, coupled with the number of schools and proximity to town may have driven prices up. Surprisingly in district 15 which consists of Katong, Marine Parade, Joo Chiat and Amber Road, buyers are shying away from the high prices properties here used to command.

Belgravia villasThe Hungry Ghost Festival in August may have dulled sales figures slightly, though property analysts expect only marginal adjustments in the months leading to the end of 2016.

Regional centres primed for growth

28 districts and 29 HDB estates strong, Singapore’s real estate market still holds space for growth, especially in the suburbs. As buyers become more investment-savvy, and the country grows, their needs and demands shift with the tides of time.

Lakeside URA MasterplanPhoto credit: URA

Buyers of today are looking for properties in a good location, not necessarily only in the central region, with the potential for value appreciation. There are now more regional centres than 2 decades ago, such as Woodlands, Tampines, Jurong and Seletar. These townships are considered second-tier commercial zones where residential, retail and industrial sectors connect and where residents can live, work and play all in the same location without having to step foot into the city centre. It helps spread the population out across the island and also create job opportunities and boosts property value and prices.

FLoravilleWith the Urban Redevelopment Authority’s (URA) Masterplan moving into action, there may be even more property hotspots coming up by the end of the decade. There are plans to develop the once sleepy Lakeside district into Singaporea’s second CBD. The Singapore-Kuala Lumpur High Speed Rail terminus will be located at Lakeside Gateway, which will be a good way of driving rental traffic in the area. The North will also see the development of the North Coast Innovation Corridor, centred around Woodlands and connected to the North South and Thomson MRT lines. And over in the North-east, the Seletar Aerospace Park is poised to bring in 10,000 new job opportunities and the early adopters of properties in the area may do well in the long term.

New Jurong launch boosts July’s private home sales

MCL Land‘s Lake Grande took the lead in July’s property sales with 42.5 per cent of the month’s sales coming from this development. 464 out of its 500 units have already been sold at the median price of $1,368 psf.

LakeGrandeAcross the board, new private home sales have hit a one-year high last month with 825 suburban new private homes sold. In the city fringes and central districts, 213 and 53 units were sold respectively. This could be partly due to the rise in number of units launched, 624 in total, in July plus investors are taking advantage of the low interest rates and lower property prices to buy up available units with long-term potential.

Though the government has not yet eased up on the property cooling measures, they have held back the release of new land plots this year, which could have in turn helped clear unsold inventory. The executive condominium (EC) market is coming out strong with 830 units snapped up in July, more than thrice the 232 units sold in June. The 2 major EC launches last month were Treasure Crest in Anchorvale Cresecent and Northwave in Woodlands.

NorthwaveECPhoto credit: MCC Land

August may be a slower month as fewer deals are likely to be closed during the Hungry Ghost month, but as long as interest rates remain low, buyers will continue to scour the market for good deals. Property analysts are expecting the positive sentiments and increased interest to carry on to the end of the year.

Property market on the road to recovery

2016 has proven to be a fairly good year for the property market. Despite slight price fluctuations, prices and sales volume have been stabilising for a few quarters now, giving analysts hope that it’s on a timely road to recovery.

GramercyParkThough the government has yet to indicate an easing of property cooling measures, the market as managed to right itself within the past year or so. Signs of the luxury property market picking up point towards the property market possibly bottoming out soon, which would also mean the market’s on the road to recovery. In Q2, the fall in private residential price index was a mere 0.4 per cent, the smallest thus far. The market has also been correcting itself for 11 consecutive quarters now.

Since the 2013 peak, property prices have fallen 9.4 per cent. With the interest rates currently low and looking like it will remain so for a longer period of time as opposed to extreme fluctuations, borrowing is kept at a healthy level sans the danger of over-borrowing or a property bubble looming. Investors may be refocus their attention on other sectors, keeping the property sector speculation-free.

Leedon Residence on Holland Road.

Leedon Residence on Holland Road.

Global situations such as Brexit or global terrorism may indirectly affect the investment environment and sentiment in the country and region, but Singapore’s real estate market is considered one of the safest and investors are increasingly looking at longer-term capital appreciation.

 

Signs of property market bottoming out?  

Though the vacancy rates of private residential properties are currently 1.4 percent higher in Q2 and at a 16-year record high, and property prices 9.4 percent lower than the 2013 peak, property analysts remain positive about the outlook as these could be signs that the property market is reaching the bottom of its cycle.

7478d455d05b4f2aa26fd1e5a8ce7bd2There were 30,310 vacant private homes in the second quarter, that is 5,391 units more than in Q1. As the number of completed properties rise, with almost 11,400 new units entering the market in the first half of 2016, the rates are seemingly modest. Property prices have also been stabilizing, and as long as interest rates remain at their current level, most households will be likely to be able to hold on to their properties over the down season.

More property buyers are now making home purchases for their own use instead of pure investment purposes and many are taking the opportunity to seal deals during this quieter time. In a year-on-year comparison, sales volume has risen 11 per cent and the luxury property market in particular is enjoying a spike in buying interest as prices have fallen sufficiently, luring buyers back into the high-end property market.

 

 

 

Property cooling measure not going away

Yet. For now, as long as global circumstances continue to destabilise, growth slows and home prices remain high, the local government is unlikely to loosen the noose on the property market and the property cooling measures look set to stay.

Thomson Impressions2Property analysts say only a drastic and sudden market plunge will move the authorities into action as they focus their energy into repositioning Singapore as research and development investment-worthy. Though a complete reversal of the sudden market boom between 2008 and 2013 seems unlikely, the property cooling measures rolled out by the government over the past few years have effected a slow and gradual decline in property prices.

More households are saving up for their first home or to invest in a second, and putting away less for research, education, entrepreneurship and development. And as high home prices also mean higher wage expectations and thus higher labour costs, the high property prices here may be detrimental to Singapore’s overall growth over the next few years. In the near future, it seems unlikely that the property cooling measures will be lifted, until such time when a balance between national growth, competitiveness and housing needs is struck. Or till a sudden fall in property prices. Would a prolonged period of suppressed property market be any less damaging to the local economy?

Bukit Batok – Growing fame

The birth of a new town often means going through some growing pains, the largest factor being time. A township takes time to grow, to iron out uncertainties and for residents to grow familiar with their surroundings and to make the place home. But ultimately, more often that not, townships come into their own and begin to grow and mature into attractive and popular entities.

RegentHeightsBukit Batok is once such estate. Sharing district 23 with Choa Chu Kang, Diary Farm, Hillview and Bukit Panjang, there are areas of unfounded quiet, and yet with the bustle not far off with pockets of businesses just a short distance away. Catching such a growing township at the right time could mean more value for money in terms of property sizes and prices, with the light of promise not too far away as the township matures and more amenities, transport convenience and commercial opportunities arrive.

Some private condominiums already in her midst include Hillview Regency, Guilin View, Parkview apartments, Regent Heights and The Jade. Not to mention the abundance of HDB flats, some older resale units with considerable floor areas going for much less in comparison to similar units in older, more mature estates.

BukitBatokHDBAnd now with the Downtown MRT line in force, the Hill View, Dairy Farm and Bukit Panjang estates are just a quick 5 to 10 minute ride away, not to mention a much shorter travel time to the city centre. Are Bukit Batok properties ripe for picking?