Private condominium prices hold steady

The fall in completed private condominium prices was gentler last year at 3.5 per cent, compared to the 5.7 per cent from the year before. Prices are expected to hold steady this year as a dip in supply of properties in this sector bring prices to a plateau.

Jewel CDL

Photo: Jewel @ Buangkok

Demand for smaller apartments of up to 500 sq ft in size, have been weakening as their numbers, especially in the suburbs, have been on the rise in the past couple of years. Investors have found them more difficult to rent out in the dulling leasing market and those outside the central region or further from regional business hubs may find themselves competing for the same tenant pool. Tenants now prefer units with larger floor spaces with just slightly higher rents.

Sale prices of completed private properties within the central regions however have fallen more sharply as they usually come with a higher total quantum price. Compared to the many newer properties which have found a sweet spot with their total selling price, units in these central or prime districts see fewer overall transactions.

As the volume of unsold completed condominium stock diminishes and with the fewer launches expected this year due to cutbacks on land supply, resale properties could expect a happier year ahead.

Fewer launches More sales

Despite property developers rolling out fewer new property launches last year, sales of new private homes rose 2.9 per cent from 2014, to ring the tills at 7,529 transactions in 2015. The number of new homes launched last year was in fact 8.2 per cent lesser than that of 2014. Buyers may have realised that property prices are stabilising and will not decline much more, and thus are returning to the market to pick off already-better deals.

The Trilinq
Photo: The Trilinq

759 new private property units were sold in November alone last year, buoyed by the launch of The Poiz Residences. In December, there were 384 transactions recorded, 154 more in a year-on-year comparison with December 2014. Though 2013’s peak saw 14,948 new home sales, almost double that of last year’s, the signs are more positive than expected. Property investors may also be picking up real estate as the stock market remains volatile. Perhaps declining property prices have also managed to strike a chord with investors. At The Trilinq for example, which first launched at prices of $1,545 psf in 2013, have since trimmed their prices to $1,329 psf.

Market activity this year will await to be seen as the interest rates hikes and loan restrictions combined, and the reduction of land sites sold this year, may deter buyers and lower demand. Industry analysts are however remaining positive, projecting 8,500 new private home sales this year. They are expecting lower overall quantum prices to be the draw of this years’ property market.

Slower pace of private property price decline

Resale private apartment prices have been on the decline since its peak earlier in the decade, after the effects of property cooling measures kicked in and fuelled by a recent building boom. But the pace of decline has slowed down 2.1 per cent last year, in comparison with 2014. The URA property price index indicated a 3.7 per cent fall last year as compared to 2014’s 4 per cent.That may be a sign the market is finally stabilising, and sellers are no longer pressed or enticed to sell quickly.

St. Regis Residences on Orchard Road.

St. Regis Residences on Orchard Road.

The resale private property market did however report some profit losses. For example, some resale units at St. Regis Residences registered losses of $542,30 up to $4.78 million for a 4-bedroom penthouse.

2015 saw a total of 4,999 resale transactions of private properties, up 22 per cent from the year before, though still a far cry from the 10,598 in 2012. Property analysts are expecting a continued decline in prices, though at a slower rate, as buyers and sellers are still taking time to adjust to the loan restrictions and also now to cope with the new interest rate hikes. Buyers are however gradually acclimatising to the current market situation where new properties are priced affordably and resale property prices may not be drastically reduced, and thus are re-entering the market albeit with some care.

 

What do home buyers value?

Location and price. The first is a well-known fact, that the better placed the property, the higher the demand and hence also the price. But home buyers are also keeping a close eye on their budget and the total quantum price could be the make-or-break factor when it comes to sealing a deal.

NorthparkResidences2Photo: Northpark Residences

Developers have been quick to catch on to this and the launches which sold quickly and well last year were those in the vicinity of a MRT station, school or shopping mall and affordably priced. Mixed-use developments such as Northpark Residences and The Poiz Residences were especially popular. Northpark Residences has sold 486 units at the $1,374 psf average while The Poiz Residences sold 277 units at $1,440 psf. Other mixed-use developments buyers seemed out include J Gateway and DUO Residences.

Home buyers’ appetite have signalled a trend towards $1,000 psf for suburban homes, $1,500 psf for city fringe properties and $2,000 psf for homes in the central regions. They are however more willing to pay more for mixed-use residential properties or those nearer MRT stations or bus interchanges.

WIsteria YishunPhoto credit: thewisteria.net

There will be a number of new launches such as 183 LongHaus in Upper Thomson and The Wisteria in Yishun coming up within this first quarter of the year, and it will be a time to watch as it will set the tone for the rest of 2016.

 

 

Suburban private home prices waver


Parc EleganceNovember saw a 0.6% fall in private home prices, pulled down mainly by falling figures in the shoebox apartments segment. These units sized below 506 sq ft fared 1.2 per cent better in October than in November.

Property analysts are expecting some selling action in the months ahead, particularly in the non-central suburban private home segment as the surge of completed units and increased interest rates may force the hand of investors who have overstretched themselves. However, the number of sellers may outweigh the number of buyers as competition toughens up.

Properties in the central regions or prime districts of 1 to 4 and 9 to 11 could have fared better as well, with a 4.5 per cent fall in prices in a year-on-year comparison. That is a drop of 13.1 per cent from the peak in May 2013. Industry players have reasoned that properties in the central regions are generally larger in size, which means they also have a higher total quantum price, which makes them harder to find buyers for. Foreign buyers are also expected to pay a 15 per cent ABSD (Additional Buyers’ Stamp Duty), which may have turned some investors off the Singapore property market.

The Boutiq Killiney

Photo: The Boutiq Killiney

As the target audience for the central and non-central regions are quite different, sellers and buyers alike may need to alter their expectations of the market in 2016. In the central regions, some sellers may be ready to let go of their properties as the economy slows, but prices are not expected to fall drastically as the owners usually have the holding power to hang on to their properties till the price is right. In the non-central regions however, where owners and buyers are usually salaried workers, pricing may be more dependent on external forces such as the overall rate of economic growth, employment and mortgage rates, rental potential and debt ratios.

Singapore Real Estate – Of Buying and Renting

It is not easy sussing out a good landlord, tenant, seller or buyer. It takes time, a great deal of good timing and some amount of luck.

But whether you’re looking to rent a property or buy one, there are some common things to look out for.

Adana CondoPhoto: Adana Thomson

1. Reputation – If you are looking to buy a new property, the developer’s track record is one of the key factors. This even applies to resale properties for that matter. It is a reassurance of the current and future value of the property. They are familiar with the ins and outs of the industry and have quality control checks in place; plus they are often very transparent with the selling process. For tenants and landlords alike, background research and interviews are important. Employment track record, understanding each other’s background and culture are crucial and laying things out clearly on the table before anyone signs on the dotted line will help smoothen the tenancy out. In some cases, landlords may even request to check with a tenant’s previous landlords for references.

2. Price – There is no need to price below market price purely to secure a deal, landlords and home sellers should be realistic but also fair to themselves. They need to weigh the time and effort they are willing to sacrifice against the amount they are able to profit in the long run. Pricing too high may simply keep buyers and tenants at arms’ lengths and a vacant property will still require maintenance and utilities. It will always help to find out what similar properties in the vicinity are going for.

3. Finances – Before going on the hunt for a property, it’s always wise to first sort out your finances. Check with banks to see how much you are able to loan, how deep your pocket actually is, and what sort of financial liquidity you need and the sustainability of your current financial situation. Taking steps before committing to an often life-long commitment of buying a property will keep debt away. And remember not to be lead by opinions of others. They will not be paying your mortgage. Decide on what works best for you.

And after all that, if all else fails, a recommendation of a good real estate agent will often make all that property-hutning headache go away.

Property market looking positive

Buyers, it seems, are slowly realising that property prices are not likely to fall any further, and are making their way back into the market once more. Both in the private property and HDB resale flat sectors, sales are picking up and the year might just close on a happy note.

Trilive KovanPhoto: Trilive condominium 

Resale private properties in particular are faring well, as they one up on newer launches in terms of price per unit of floor area. They are usually larger in size and while may not be cheaper in terms of the total quantum price, buyers consider them better value for money in the long run especially as more buyers of resale units are now owner-occupiers rather than investors. The latter often prefer smaller units in newer launches as they come at a lower overall selling price, though rental competition may prove tough in the market ahead.

More buyers now hunt for residential units near their workplace or schools and are less adverse to living in the suburbs, especially around a strong regional centre such as Jurong, Tampines or Woodlands.

TheTerraceECPhoto: The Terrace Executive Condominium

In the resale HDB flat front, transaction numbers are up 10 per cent from last year. Property analysts are expecting up to 19,000 transactions of HDB flats this year alone. Prices of resale flats are unlikely to fall any further in 2016, and may even pick up a little as demand returns.

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.