More for less – Smaller condo apartments

With the rising prices of land plots sold under the Government Land Sales programme and with developers taking into consideration how the property cooling measures have affected buyers’ purchasing power, private apartment sizes have been diminishing since 2010.

LakevillePhoto: Lakeville at Jurong West

More apparent in units in the city fringes, average sizes have shrunk from 1,051 to 810 sq ft. And in the suburbs, apartment sizes went from 878 sq ft to 811 sq ft; though the average sizes from new projects actually dropped from 1, 113 sq ft in 2006 to 667 sq ft in 2011 but rose again to 928 sq ft in 2014.

In 2012, the Urban Redevelopment Authority (URA) put in place guidelines for the maximum number of units for condominium developments outside of the central area. Developers have since noticed that buyers are more sensitive to the total quantum price of a unit rather than per unit prices, especially since the implementation of loan curbs such as the Additional Buyers’ Stamp Duty (ABSD) and Total Debt Servicing Ratio (TDSR), hence maximising the land area and total number of units would be the best way to go.

Symphony SUitesPhoto: Symphony Suites

There are some residential projects which chose to follow their own path however, including Lakeville and Symphony Suites. But as the population continues to grow, it seems that unit sizes will only continue to diminish. Resale units may then have an edge over the smaller-sized newer units, provided pricing is equally competitive when time comes.

Resale HDB flat prices hold steady

At this point of the property market cycle, prices holding steady could be a positive sign, indicating effectiveness on part of the cooling measures which did not crash the market but rather, merely realigned the prices gently. The change evolved over a long period of time, which is more palatable for sellers and the lowering prices may have also increased sales volume by enticing buyers.

BidadariPhoto credit: HDB

A 0.3 per cent fall in HDB resale flat prices indicate a slowly stabilising market. Although prices have been falling for 9 quarters straight, the last quarter showed the lowest rate of decline. In 2014, overall resale HDB flat prices fell 6 per cent. Industry analysts are expecting a smaller dip this year of 2 to 2.5 per cent. Some buyers may have been holding back on buying in the open resale market, in wait of November’s major launch of new Build-to-order (BTO) flats which includes prime units in Bidadari and Punggol Northshore.

Suburban resale private property prices are falling at a steeper rate of 1.3 per cent and if the prices fall even further and at a quicker rate than HDB resale flat prices, the gap between the 2 market segments will narrow. This could then draw a substantial pool of buyers from the resale flat market into the private property market, which could then give sales volume a boost and slow down the price decline in the private property sector.

Sims Urban Oasis

Photo: Sims Urban Oasis

Property developers are keeping a close eye on whether cooling measures will be adjusted, and pricing their units accordingly. We could also expect a more staggered schedule of new launches as developers become more careful about not cannibalising on one another’s market share. More so than before, it may be a matter of timing and opportunity.

Sentosa Cove units fetch high prices once more

There was a time when luxury properties on Sentosa fetched luxurious prices. That time was more than 2 years ago. The property cooling measures have hit home since their implementation over the past couple of years however, and sales number sand prices have dropped with the imposed additional stamp duties and loan restrictions.

TheOceanfrontBut there may be light yet in the horizon. Recent sales of 2 units at The Oceanfront condominium apartments in Sentosa Cove luxury enclave have soared above the $2, 000 psf range despite their lack of a waterfront view and their low-floor  Previous sales, which were few and far in between, have gone as low as $1, 190 psf. That was a $463 psf loss on a $1, 653 psf second-storey apartment at The Coast. Considering the fact that most mass-market homes on the mainland are already going at the $1,000 psf range, prices have declined substantially since its peak in 2008.

Will investors with deep pockets continue to pick up deals on the island, especially as prices dip? And will those who have already purchase units on this exclusive waterfront-living enclave continue to hold off on selling in wait of prices rising in the future? How much more will prices be able to rise and will the competition with units on the mainland only become fiercer?

Private resale home prices stabilising

With minimal fall in prices over the previous couple of quarters, could this be a sign that resale private property prices are stabilising? Could buyers be getting used to the current home prices and are coming back to pick up deals before a possible rise? Will the predictions of a 4 to 8 per cent drop in property prices this year continue on its track or will buyers buck the trend?

Botanique@BartleyThe NUS Singapore Residential Price Index (SRPI) has indicated a 2.2 per cent fall in resale condominium prices over the last 12 months. But since the first quarter of 2015, the fall has been more gradual and marginal, considering the expected 5 per cent year-on-year fall in prices per month in the last quarter of 2014. The next couple of months could be the watershed for the property market. A slow and small drop in prices could indicate a possible bottoming out of the market.

Part of the reason for last month’s 0.1 per cent fall in April could also be due to the high transaction volume. The recent new property launches of Botanique at Bartley and Northpark Residences may also have had a trickle-down effect on the resale market, in particular properties in the proximity of these 2 launches. Another promising bit of news is the 0.4 per cent rise in the prices of small apartment units up to 506 sq ft. A much untested market, particularly in the suburbs, as more commercial businesses move out of the central region and into the heartlands, the demand for these units may change in the next few years.

The private home gentle wave

It’s an up and down ride for the private non-landed property market for more than a year now. Across the board, non-landed resale home prices dropped 6.2 per cent last year. Prices of homes in the central districts dipped an average of 7 per cent last year, though there were good months when some segments managed to bounce back slightly before falling again. That could mean that things were mainly level though there are outliers.

Duchess ResidencesResale private apartment prices fell 0.2 per cent last month, with a 3.9 per cent fall compared to the same month last year. But some city fringe properties bounced back with an average price rise of 0.4 per cent. Part of the yoyo-ing in prices could be due to the Chinese New Year period in February and buyers were just coming back into the fray in March.

The second quarter of this year would be a crucial point in almost determining how the rest of the year will flow, at least up to just before the Hungry Ghost month. Though the ride has been more a gentle wave of price fluctuations rather than a roller coaster ride, property experts are however not expecting a drastic change in prices unless there are major policy changes or a major interest rates hike.

The year could be a relatively quiet one with bright sparks and dull moments along the way, but the basics of good location and lowered total quantum prices will still move units.

Private properties – Not all in the slumps

Recent figures showed that the property cooling measures have only really affected the luxury market, which has slipped into the red.

Even then, there are properties within the private property market which have not been as drastically affected by the measures and market slump. At Cote d’Azur in Marine Parade for example, prices rose by 4.3 per cent. Prices of resale units at Costal del Sol also rose 4.5 per cent. And for the new property market, in Chestnut Avenue, selling prices of units at Eco Sanctuary showed a promising increase of 4.1 per cent.

Eco SanctuaryAlthough this could be caused by developers choosing to release juicier units later in their launch schedule, enticing buyers to purchase at their latest launches, this nevertheless gives hope to the market. Buyers are still wiling to fork out the cash to get the units they want. And there is no lack of these savvy folks.

Naturally as with all market movements, effects are never seldom felt the same way across the board, there will be units with more potential than others. It takes a keen eye and a close followup of market trends to make a killing at the right time.

While this is good news for property developers and sellers, it raises the question of whether the property cooling measures have really been effective in making property purchasing affordable for the majority, or only instead stymied the inflow of foreign cash earnings in the high-end property market?


Competitive pricing will help Property developer move units quicker

Home mortgage interest rates look set to rise sometime this year, and while new properties continue to come into the market, buyers will be spoiled for choice with executive condominiums, resale private apartments and new condominium units all competing for their attention.

Trilive KovanPricing might then be the differentiating factor in the current property market which is still finding its footing. In January, Symphony Suites in Yishun proved to be one of the best sellers in the non-landed private property market. Prices averaged at $1,010 psf, which was not considered to be on the higher end of the price spectrum. Most suburban properties fared better, making up 62 per cent of the total sales numbers last month. City fringe properties followed behind with 28 per cent and city centre homes took up only 10 per cent.

The TDSR (total debt servicing ratio) continues to be the main obstacle for buyers as the loan amounts they are now able to receive have been largely reduced. However, developers are unlikely to make drastic price reductions as land prices have been high for the past two years.

Contrary to concerns that new properties may outshine previous older launches and resale properties, some older developments have fared well in the last month. Trilive in Kovan sold 22 units at a $1,562 psf median price while 20 units in Jurong West’s Lakeville also exchanged hands at the average selling price of $1, 378 psf.

While the influx of new units and restrictive loan limits may be the way things go for the year ahead, the demand for residential properties may not necessarily have disappeared altogether. It may simply be a matter of buyers taking longer to weigh their options.

Resale DBSS flats in demand

With four-room resale DBSS HDB flats at The Premiere @ Tampines going for $570,000 to $590,000, a marked rise from its original $278,000 to $410,000 price tags, interest in newer DBSS launches may continue as resale units just became available last year. Units at The Premiere were the first to come on the market.

The Premiere at Tampines

The Premiere at Tampines

The Design Build and Sell Scheme (DBSS) was suspended in 2011 due to the high prices of flats at The Centrale 8 in Tampines. But since its suspension, majority of units at the existing DBSS projects have been successfully sold. At Pasir Ris One, only 53 units are left, with 88 per cent sold, and owners will be receiving their keys in about a months’ time. Trivelis in Clementi only has 28 units left and is ready for occupation. Lake Vista in Jurong West and Parkland Residences in Upper Serangoon have been fully sold.

Property experts are however aware that the earlier of these DBSS developments were launched when property prices were considerably lower, thus allowing for a higher profit margin. Newer projects may have been launched at higher prices. Coupled with the MSR (Mortgage servicing ratio) cap, this may mean a lower yield for future DBSS resale unit sales. With executive condominiums (ECs) and BTO flats covering the needs of most families, the role of the DBSS may not be as relevant today as before.

But demand seems to be quite positive as there will still be buyers who do not mind paying a bit more for units at a good location and with all the interior fittings and finishings done at no extra costs.