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3 Apr

Fringe growth for City fringe homes

In terms of speed, the property cooling measures have certainly put the brakes on the growth of city fringe private apartments. Investors are not coming to the buffet table of apartments in areas such as Balestier, Thomson, Outram and Rochor, despite the substantial number of choice units for the picking.

Echelon condominium.

Echelon condominium.

The Urban Redevelopment Authority data indicated zero growth in the non-landed home prices for city fringe areas. City centre apartments on the other hand has increased by a slight 0.4 per cent. The higher stamp duty and tighter home loan limits have detracted many a property investor. In fact, growth in this sector in particular has be flattening since April 2012.

Spottiswoode SuitesSLP International’s head of research, Mr Nicholas Mak, thinks that part of the reason for the flat-lining sales could be that recent launches have been targeted at investors. These include Echelon near Redhill MRT station, Seasuites in Pasir Panjang and Spottiswoode Suites near Outram Park MRT station. Projects such as these has a significant number of one and two-bedders, which have been the hot favourites of real estate investors for sometime.

Have residential home prices in this area reached a saturation point and what will it take to get the buyers back into the market? Will there be spillover interest from the suburban private home market which is doing exceedingly well for the moment?

17 Dec

Property Price Rise in 2013

The dawn of a new year may bring great joy for property sellers as property experts expect a continual rise in property prices. Rising land costs may be the leading cause of the rise. And low interest rates will keep the buyers coming. Non-landed mass market homes are again expected to be the first in the race, running far ahead with a 10 to 15 per cent rise. The luxury property sector is also expected to rise, but at the lower margin of 3 to 5 per cent.

Singapore property condo

Neck in neck with the suburban mass market private homes are Executive Condominiums (ECs). This particular property type has been enjoying spectacular success with home buyers this year, and especially this quarter. By the end of 2012, the target sales of EC units will hit 4000. That’s still more than the number of units sold in 2010 and 2011 combined.

Despite the government’s efforts to cool the market, it seems to have a life of its own and the growth is too strong to be suppressed. What were the government’s motivation behind the cooling measures, and is it enough that those aspects are controlled, leaving those who can afford to push up overall prices? Or should the authorities be doing more to ensure that the little people and the middle class is still able to afford what they can.

Demand and supply. The balance awaits scrutiny. And the guessing game continues.

23 Nov

Investors flocking to housing clusters

Those in the city fringes and eastern suburbs that is. And it’s no surprise either. These areas have been growing in popularity these past months and the numbers have shown. $1,500 psf used to be considered the pricing for expensive city-centre housing but now, it’s considered the norm even for suburban housing in the east, namely Marine Parade and Bedok. Other areas which registered a high percentage of transactions which crossed this $1,500 psf mark were Geylang and Bukit Timah.

The Sound private condominium in Bedok.

Property developers are lauding the ‘lifestyle’ concept of new private residential developments in a bid to attract the affluent. Many of the recent new property launches are also clustered in the east due the release of land through the government land sales programme. The Seawind and The Sound condominium projects had a median selling price of $1, 520 psf and $1, 650 psf respectively. There are, however, quite a number of new properties coming up in newer residential areas such as Punggol, Kovan and Sengkang and with competition heating up, gain in home prices in the East might slow in the months to come. Hillview might be another hotspot  for investors to keep a keen eye on, especially with the new Downtown Line 2 bringing property hotspots closer and closer together.

In the city fringes, the chart-topping districts were Kallang/Whampoa, Bukit Merah, Bishan and Bukit  Batok. And with commercial hubs being completed quickly in Buona Vista and Jurong Gateway, housing in these estates are expected to rise in due time. Are investments opportunities the only reason buyers look at when purchasing a home? Are there possibly other reasons and how can property developers better harness the momentum from this other home-buying group?

16 Nov

The Promised Land

At least this may be how landed properties are viewed in Singapore.

Thomson HouseMost buyers and investors would see owning their own land and building their own home a dream come true. Thus it is no wonder landed properties around Singapore are commanding rising prices. Suburban landed homes have recently seen a rise in prices and sales.

The districts which saw the most fervent activity were District 20, 16 and 23. Strangely, district 11 (Novena, Watten Estate) saw a dip in prices this past year. Ang Mo Kio saw a rise of 23.2 per cent in average psf price in 2012, topping the charts with an average psf of $1, 266. Notably, the Serangoon landed homes are selling exceedingly well, with the higest number of sales in the third quarter, with a rise of 33 per cent of sales in a quarter-on-quarter comparison. At these prices, could this be a sign that property investors are becoming more savvy and cost-conscious, and shunning more expensive city-centre homes for suburban properties in the city-fringe?

Industry insiders are predicting that the additional buyer’s stamp duty (ABSD) could have turned investors away from homes in central prime districts. In the long term, they also expect demand for landed housing to remain positive and prices to continue to trend upwards.

14 Nov

Property prices heading skywards

Cooling measures have met their match as the property market here heats up. Healthy sales from recent new property launches such as eCo in Bedok South and Sky Green off Upper Paya Lebar Road are indicating a rebound in property sales following a slight dip after announcements of the most recent property cooling curbs which were more to safeguard the banking system from excessive lending rather than deter investors or buyers from snapping up properties.

Skyline ResidencesAs long as investors still have sufficient funds to afford the cash upfront payments for properties, and have holding power to support their purchases, the buying may continue well into the next year or two. Instead of a complete stop, they could simply be turning their attention to smaller, more affordable units. Will shoebox apartments benefit from this change of direction?

Areas which showed the most positive sales were homes in the city-fringe and suburban areas. They held a average rise of 4.5 per cent and 4.2 per cent in October. Industry players cite rising construction and land costs as one of the reasons for this continued price hike. Corresponding rise in prices of resale HDB flats may have also provided a boost in the suburban homes market.  The narrowing price gaps between city-centre and suburban homes might be the next trend to watch, as that could very well be the sign of the next property bubble. Whether it will burst and when is a path to be lightly treaded.