When will property cooling measures cool off ?

The past two years have seen the implementation, and perhaps effects, of a series of property cooling measures. From increased stamp duties to revised subsidies and the strictest of which, the TDSR (total debt servicing ratio) framework, restrictions have certainly risen the heat on the property industry.

Singapore still has some way to go before the property market achieves the sophistication it requires to reach new heights. Economist are estimating the second half of 2015 as the earliest the authorities are likely to cool off with the cooling measures. That is when most households would have managed to reduce their debt levels. However, property prices can be expected to fall by more than 10 per cent in the first half of next year, or at least show a substantial decline before curbs are removed. In fact, by 2016, property prices are expected to fall by up to 20 per cent due to the oversupply at that time.

Prices have stablised somewhat since the implementation of the property cooling measures, but the fall has only be about 3 per cent, which means the authorities could be waiting for a significant fall in figures, or a recession, before amending the rules. The fear could be the sudden upward rebound of prices which may far surpass the watershed of 2009. With the elections coming in 2016, 2015 seems like the turning point for the market and buyers and sellers alike may be watching closely to catch any opportunities  they can before things change once more.

Could 2015 be the year for home buyers? How will landlords, developers and sellers fare?

Do upgraded HDB flats bring higher resale prices?

Given an older resale HDB flat in a prime location and a recently upgraded one in a less popular HDB estate, which would you choose?

HDB recently announced that they will be speeding up the Home Improvement Programme, the Neighbourhood Renewal Programme and the Selective Lift Replacement Programme. Some sellers and property agents are putting a higher price tag on flats which have be selected for such programmes. But with caveats.

HDB MUPPhoto credit: HDB

Only HDB flats whose owners have already paid for the upgrading may have an edge in the resale market. As the upgrading is usually only billed and paid for after the work is completed, some buyers may find themselves having to foot the bill for the flat or estate’s upgrading work if the seller has not already done so. Though it may seem like a significant difference, property agents are saying that it will not affect resale prices on the whole. The most it will do is slow down the price decline.

In fact, some buyers may prefer not to purchase flats which have yet been upgraded as it may bring inconveniences such as dust and noise for a significant period of time. Only flats which have been completely upgraded can command a higher selling price. But buyers who are thinking ahead may consider these older flats for the potential they hold once upgrading has been completed. With elderly-friendly facilities, newer amenities, perhaps even more room, the future could be more promising than you think.

Private property out of reach for HDB Upgraders?

If home prices are falling, most would think that the upgrade from public housing or HDB flats to the private home market should be getting easier. But it seems the opposite is true.

Prices of HDB flats and a private condominium apartment are perhaps softening at around the same rate, or that of HDB flats possibly even quicker. This creates a widening price gap between resale HDB flats and private condominiums, and HDB sellers can no longer depend on the sales proceeds of their HDB flats to balance out the price of their new private condominium.

BellewoodsECPhoto Credit: Bellewoodsec.com

Does this also mean that more HDB flat owners will now be forced to stay put and thus decrease the number of HDB flats available in the resale market? What about those who may have already purchase a private property and have a limited time period within which to sell their HDB flats? WIll they be pushed to sell at lower prices hence suffering the growing amount they need to top up?

Property experts are expecting ECs or executive condominiums to be the bridging properties between these two markets. As a hybrid between public and private housing, buyers qualify for public housing subsidies but after a 10-year period, can sell their units as private properties.  There is also the question of home sizes, will HDB upgraders be willing to settle for lesser space and a higher psf price to make the leap from HDB to private home?

Lakeside Wonder

Things in the West are heating up, especially with the launch of a number of private residential properties, announcements of a new Jurong Lake Gardens, a new retail and commercial hub Jurong Gateway and new transport lines. It’s a whole new township blossoming.

Prices of properties at Lakeside, a largely residential district, has been on the rise, significantly more so since 2009. Lakeholmz condominium apartments were only priced at $440psf in 2003. In 2009 and 2010 respectively, relatively properties such as The Caspian and Lakefront Residences were already costing buyers $580 psf and $1, 020psf. That is almost double in just a year’s time.

LakevilleOne of the newer launches is the Lakeville condominium and current median prices of properties in the area range at $1, 300 psf. Over the past 12 months, prices have ranged between $706psf for older establishments such as Lakepoint condominium to $1,263 psf at Lakefront Residences.

The new malls, businesses and regional offices setting up shop in the area has also brought along with it a new flow of tenants. Thus rental prospects are promising, especially for newer properties. Rental prices above $3 psf and at least 10 leases are signed at each residential property per month.

With a new land parcel up for bids in December, buyers looking to enter the market in the west side of the country could possibly have something to look forward to.

New Thomson MRT Line will benefit East Coast residents

Not only will property owners in the North reap the benefits of the new stations of the up-and-coming Thomson MRT line, but those in the East Coast will also see the value of their properties rise in the long run as the new MRT stations run through Tanjong Rhu, Katong Park, Marine Terrace, Siglap, Bayshore, Bedok and Sungei Bedok.

LTA - TELPhoto credit: Land Transport Authority (LTA)

The Thomson-East Coast Line (TEL) will connect more areas in the Northern and Eastern parts of the country to the city centre and cut travel time considerably. There are a number of exclusive and boutique private residential properties in the East as it has been a popular area for expatriates, but a boost is expected when the TEL commences service in 2019. Property analysts are already expecting a 5 to 10 per cent rise in property prices, if the response to the North-east Line (NEL) stations are anything to go by. And upon completion of the MRT line, they foresee a rise of up to 12 per cent.

Some of the properties which may enjoy the most out of the announced realignment of the TEL includes condominium developments in the Tanjong Rhu area such as Casuarina Cove, Tanjong Ria, Meyer Residence, The Belvedere and Water Place. Properties nearer the already existing Bedok and Tanah Merah mrt stations may not see as significant a change.

Marine BlueNearer Siglap and Bayshore are private apartments such as Lagoon View, Laguna Park, Elliot at East Coast, Bayshore Park, The Bayshore and Costa Del Sol. Cote D’Azur, The Palladium and The Seaview along Marine Parade could also see a rise in home prices in the future.

How will developers price new properties in the area which have yet to launch? Will they release units are higher prices or will they keep to the current market values? New launches coming up include the 124-unit Marine Blue and 109-unit Amber Skye.

Jurong – the second CBD?

The central business district (CBD) may always retain its title as the  financial hub of the nation. But regional hubs are gradually becoming popular with businesses who are drawn by the cheaper rents and increasing flexibility of the suburbs.

The east has Marine Parade and the seaside, then there is Punggol and its new waterways, now Jurong will have its own lake and residents will soon be able to have waterfront living, working for a multi-national company just a couple of mrt stops away, and shop on the way home at the shopping malls. Connectivity and accessibility will soon no longer be a major consideration.

LakevilleThe building and expansion of infrastructure in Jurong has been going on for over a decade now and with a new Jurong Lake Gardens, the Science centre, MRT stations and bus interchanges, shopping malls and other commercial facilities choc-a-block in the district, the outlook for the once industrial estates is set for a big change. Not forgetting, the area will also have its own Ng Teng Foong hospital next year.

Sales and rental prices of HDB flats in the area are expected to rise by up to 20 per cent once the facilities are completed. Property analysts are likening it to some of the more popular HDB estates such as Bishan, where proximity to facilities and accessibility boosted home prices over the years.

Private properties in the Lakeside district also looks set to rise in price as it becomes an almost “exclusively private residential” district. Condominiums here fetch up to $1, 000 psf for new units and at the most recent launch of the Lakeville condominium, prices went up to $1, 300 psf.

The icing on the cake – The rail terminal which will connect Singapore and Kuala Lumpur. The future looks exciting for Jurong.

Toa Payoh’s facelift

As one of the oldest mature HDB estates in Singapore and HDB’s second satellite town, Toa Payoh has a past which evolved with the growth of the nation. As more new towns such as Punngol, Sengkang and even newer ones in the future such as Bidadari come up, older estates are welcoming timely upgrades.

And it is now Toa Payoh‘s turn as the popular estate saw an overwhelming response to the BTO HDB flats launch a couple of weeks ago. With it’s central location, full-fledge sets of amenities, MRT stations, bus interchange and established schools in its midst, it’s an estate which will stand its own for a long time to come.

TreVista in Toa Payoh Made up of mostly HDB flats, there has hardly been any new private homes launched in the district for almost three years now. However, a plot of land near  the MRT station has been put aside for development, and should a private property be launched in the spot, it will be sure to bring in the buyers and fetch high prices.

In the current market, resale flats sales have dipped from 25 to 15 per quarter, but rental prices and value appreciation of private properties in Toa Payoh has remained stable. Average prices stand between $1, 121 psf to $1, 460 psf with monthly rents currently between $3,60 to $4,10 psf. The private apartments in the area now are Trellis Towers, Oleander Towers and Trevista.

The years ahead hold great promise for the estate and its continued growth seems imminent.

Pinnacle @ Duxton almost ready for resale market

50-storeys high with sky gardens and sitting at the top of an excellent location, the Pinnacle @ Duxton will soon be ready to enter the resale market as the five-year minimum occupation period (MOP) comes to an end in December this year. Will the peak of resale HDB flats prices be found in this exclusive public housing development? And how many of the flat owners will be looking to sell? In the current market lull, will more be looking to rent out their units instead?

It seems the resale market can ready themselves for some high prices. Ahead of time, one seller who has received special permission to sell the unit has had more than 50 viewings and offers of up to $830,000 for the 90 sq m four-room HDB flat.

Pinnacle @ Duxton was awarded the 2011 Urban Land Institute (ULI) Global Awards for Excellence. Image by HDB.

Pinnacle @ Duxton was awarded the 2011 Urban Land Institute (ULI) Global Awards for Excellence. Image by HDB.

With a total of 1, 848 units in the massive 7-block development, there will no doubt be competition, though most of the units being put up for sale now are four- and five-room flats. Prices nearing the million dollar mark will be expected. Even the Minister of National Development, Mr. Khaw Boon Wan, has said that when units at the Pinnacle are ready to hit the market, “there will be many millionaires there”.

Those who are ready to sell may be those who are hoping to move into the private property market as the amount they might earn from the sales could be double, if not triple the amount they originally paid for the units. When they were sold in 2004, five-room flats were priced only at $345, 100 to $439,400 while the four-bedders cost $289,000 to $380,900. Considering the prime location of it being near MRT stations, new businesses, a hip area of cafes, restaurants and pubs, the bustling Chinatown stretch and the Central Business District, it’s not surprising that public housing in the area has continually received high-priced offers. Most five-room flats in the Tanjong Pagar and Cantonment Close area have fetched above $800,000.

The only thing that might stop buyers from coming would be the mortgage limits. But as the market awaits the day the regulations are relaxed or policies changed, flat owners may continue to hold on to their asking prices, at least at this iconic building.