Move further away for better property deals

No longer are buyers limiting their sights to properties in familiar districts or estates. They are now willing to move from one end of the island to another if the draw of a property and its potential value in appreciation is strong enough.

This could be certainly be seen from the weekend turnout at the High Park Residences launch. Situated in Sengkang, a district only a few were willing to move to a decade ago, the Fernvale Road show suite of this latest mixed-use development in Sengkang was swarmed with interested buyers from all over Singapore; a sign that buyers are now more savvy about property investment and keen on purchasing properties with long-term goals in mind.

High Park 2Previously monopolised by public housing, Sengkang is slowly rising up as a popular new town with young couples and families. Private condominiums have also entered the district with gusto and buyers are snapping up units at resale and new private apartments in the area. Some of the properties in the area include Riverbank, La Fiesta and Rivertrees Residences.

High Park Residences will boast a mix of commercial, recreational and residential units. Out of their 1,390 units, 1,100 have been sold, with all the one-plus-study, bungalow and commercial units snapped up. With the Thanggam LRT station and Seletar Mall nearby, it’s no wonder this new kid on the block was popular with buyers.

Resale private homes – Slow climb up

There was a glimmer of light in the resale property market last month as prices of homes in the city fringe rose 1.1 per cent and 0.5 per cent in the suburbs. Overall private resale home prices rose 0.4 per cent.

BlueHorizonThough property analysts are not certain if prices will maintain their current level or dip even further in the later part of the year, the numbers gave at least a little hope to private property owners and sellers. While the resale market shows that it has steadied itself with a $0 T-O-X (the median transaction over X-value or a home’s market value), in the city centre district 9 which consists of Orchard Road and River Valley, more resale properties were being sold below the computer-generated  home prices dipped to an average of $55,000 below the X-value.

In district 5 of Pasir Panjang and Clementi however, the highest media T-O-X came up to $30,000; and in the Bukit Timah, Holland Road and Tanglin areas of prime district 10, the number came up to $14,000.

As the number of new properties being launched or completed rise, the prices of resale properties may face the danger of being pushed down by competition. Though location and condition of resale units may always have an upper hand. With the General Elections planned for the year ahead, prices may fluctuate with policy or economic changes. Could this year be the watershed year for the property market?

Property auctions see more action

In light of the declining property market, more properties are finding themselves placed under the hammer at property auctions.

THeWaterlineLowered mortgage ratios, decreasing rental demand and increasing supply have all affected the property market. Most of the 180 units put up for auction in the 3 months up to 30 June have mostly been due to mortgagors defaulting on their mortgage payments. Industrial or residential properties alike have found it difficult to meet their mortgage payments if they were relying mainly on rents, especially as it has become harder to command leases at a level expected during the peak of the market.

Smaller private non-landed units such as studios or shoebox apartments were also facing some market pressure as their popularity waned. Supply of such units, or simply more private condominium apartments in general, has possibly exceeded demand and such units are now more commonplace. The next thing to budge would be rental and then sale prices.

Even as property loans become harder to secure, with the tight loan limits and hefty stamp duties implemented as part of the property cooling measures, the last hurdle that mortgagors have to cross would be the increasing interest rates.

For buyers and property investors, the proper might be a possible avenue to consider in their property search.

Seller’s Stamp Duty packs a punch

The Total Debt Servicing Ratio (TDSR) and Additional Buyer’s Stamp Duty (ABSD) have been hogging property news for some time now, but the Seller’s Stamp Duty (SSD) has packed quite a punch of its own as well.

SeascapeThe Seller’s Stamp Duty (SSD) is seldom mentioned, but ever since its implementation in 2011 to curb property speculation, it has collected up to $70 million in non-landed property transactions. February 2015 marked the record high in SSD collected. One of the biggest losses for the seller was a unit at the Seascape condominium at Sentosa Cove which sold in May with a $5.43 million loss. Another unit at Four Seasons Park incurred a $2.64 million loss as well.

How does the SSD work? For properties purchased after 14 January 2011, should the property be sold within the first year, the SSD comes up to a whooping 16%, then lowered to 12%, 8 % and 4% after the second, third and fourth year. Should you sell after the fourth year, the SSD will no longer apply and you will be saved from having to pay any additional seller’s stamp duties.

Though tough, industry analysts consider the SSD an effective tool in curbing property “flipping” and consider it mild when compared to the ABSD which is levied on foreign home buyers and Singaporeans purchasing second and subsequent properties. These do not have a time limit, and unless the regulations are amended in future, will continue to take a fair bite out of profits.

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 property prospects for the next 2 years?

The Singapore General Election may be coming up in the next year and a half, and that leaves most wondering about possible policy shifts and how that would affect the country’s economy. Since the last election, immigration and loan policies have changed rather substantially, both of which have impacted the property industry in a number of ways.

Melrose VilleOn the financial front, the TDSR (total debt servicing ratio) framework has been effective in slowing down property demand. With the likelihood of interest rates here rising in tandem with US rates, it seems unlikely that this policy will be removed or relaxed anytime soon as it aims to help households and borrowers build a clearer structure around their long-term financial stability.

A decrease in immigration numbers have also affected the property rental industry, with vacancy rates possibly hitting 10 per cent at the end of 2015. Coupled with a growing number of completed new units made available within these 2 years, the supply could majorly outweigh the demand. Property experts suggest that the only way to slow down the property prices and demand decline is to reduce the speed and quantity of new properties, and an adjustment of the TDSR. There is no sign of change for the moment, but would next year bring about a fresh wave of changes?

Fewer new private property launches

Despite lower sales of new private home last month, the percentage of sales based on the number of units launched, was positive.

The lower sales figure was mainly due to the lack of new property launches. But the take-up rate of the 499 units launched was at a happy 128 per cent in May. The take-up rate was only 84 per cent in May this year, compared to 82 per cent in April 2014. Considering the 21 per cent fall in sales in the first 5 months of this year, the leap last month is a promising sign.

HighparkResidencesLeading the sales were suburban launches at Botanique at Bartley, Northpark Residences in Yishun and The Panorama in Ang Mo Kio. Median selling prices were $1,232 psf at The Panorama, $1,292 psf at Botanique at Bartley and $1,397 psf at Northpark Residences. Competitive pricing may have lowered prices on some newer launches and this could have attracted buyers back into the market. There were even reports of private funds or group of investors who have picked up 16 units at 111 Emerald Hill.

In the months ahead, the number of new property launches will remain low, which may in turn affect figures. But instead of looking at across-the-board figures, sussing out potential deals in previous launches which are re-launchning new units could be the way to get ahead of the pack. Upcoming launches to look forward to are Gramercy Park in Grange Road and High Park Residences in Fernvale.

Resale private apartment prices remain level

Last month’s resale private non-landed property prices remained flat, which could be a sign that the market is bottoming out.

The back-and-forth quick-step between sellers and buyers is a dance familiar to market players, but they are expecting further falls in prices of 3 to 6 per cent, especially in the suburban resale property market. In the Central regions and prime districts, prices have fallen considerably since its peak in 2013, and thus it’s not surprising to find a rise in resale volume of late. Investors who have been on the lookout for prospective buys will be quick to jump on these units.

SimsUrbanOasisIn the suburbs, it is another picture altogether as prices have held relatively steady despite the property cooling measures. But the sheer number of new units entering the market, combined with the weakening leasing market, may bring an about-change soon. In addition, the per sq foot prices of newer condominium units have increased, due to their smaller sizes. What this could mean for the market is an expected further fall in prices as resale units will have to compete with the newer developments and the total quantum prices become more important for buyers.

But the industry could well expect and enjoy an increasingly positive resale volume as up to 6,000 resale units are projected to change hands this year.