Lakeside’s Westside Story

Off on the west-side, Jurong and Woodlands are the main areas of business and redevelopment. But with the authorities planning to diversify commercial activity into the suburbs and redeveloping the Jurong Lake District into yet another hub for waterfront living, leisure and business, Lakeside may no longer be the town just on the side.

URA Jurong Lake District

Photo credit: Urban Redevelopment Authority (URA).

Jurong Gateway and the potential working population and medical tourist it will bring serves to bring new life to the sleepy Lakeside township. Other businesses in the mix are Big Box, Westgate, Genting Hotel, Ng Teng Fong General Hospital and Jurong Community Hospital. The previously very much industrial west-side of Singapore will see new life in many ways.

Already response at The Lakefront Residences spoke volumes, as it sold out of its 629 units during its launch in 2010. Prices then were at an average of $1, 000 to $1, 050 psf. Units were already selling this year at $1, 1199 psf. Units at The Lakeshore and Lakeholmz saw similar sales values with promising increases throughout the past few quarters. Though rentals and sales may not yet peak this year, the potential for growth is tremendous.

LakevilleThe newest kid on the block is Lakeville in Jurong West Street 41. Developer, MCL Land, is expecting buyers to mainly be HDB upgraders from the nearby, though not ruling out savvy investors who might see the rental possibilities of these units near future regional commercial hubs.

The Resale HDB flat rollercoaster ride

A year or two ago, the property market was at its peak and now, it seems to be have taken the quick dash down. With the fervent entry of new HDB flats and private properties over the last 3 years, the market is now facing a possible glut. The continuous implementation of property cooling measures also accounted for much of the decrease in activity over the last 2 quarters.

The resale market for HDB flats seem to have taken a dive due to the bumper crop of BTO flats. Photo courtesy of Singapore Tourism Board.

The resale market for HDB flats seem to have taken a dive due to the bumper crop of BTO flats. Photo courtesy of Singapore Tourism Board.

Data from the Urban Redevelopment Authority seems to signify a peak in home supply in 2016. That is when most of the properties purchased in the past 2 years will be completed and ready for occupation. That might mean many will be compelled to sell their existing homes and the resale HDB flat market may then face yet another challenge then. By 2016, 33,290 homes are expected to be completed.

In the resale HDB market, transactions have been at an all-time low since 2005. Prices fell by 0.6 per cent, and sellers may find themselves at the mercy of market demand. Median COV prices are now $10,000 and below. No longer are the days when sellers could command exorbitant cash premiums, which have to be paid upfront.

Most buyers in the resale HDB flat market now are upgraders or PRs. But the pool of buyers may have diminished as buyers may be restricted by loan limits and reduced number of foreigners granted permanent residency. PRs are now only allowed to purchase HDB flats after a 3-year period. Property analysts are expecting interest to rise again after the first half of the year, as low prices bring the buyers back.

Drop in government land supply

And this will happen come 2014. As numbers in both public and private property markets signal a soon-to-be oversupply, developers are cutting back on the number of land plots they bid for, and the authorities are getting the hint and hence cutting back on the supply of land.

A wise move perhaps to prevent a property bubble, though the first major move could be the tightening of loan limits implemented middle of the year. Only enough land for 11,600 new homes will be released in Q2 of 2014. That is 17.3 per cent lower than Q2 of 2013. The warning signal came in November from the Real Estate Developers’ Association (Redas) and it seems the Ministry of National Development (MND) has kept their ears open and made an announcement on Wednesday regarding the reduction.

THe CrestEven so, the market can expect 65,000 new residential properties to enter the market within the next 3 years. And this is expected to fulfill the housing demands of the population without sacrificing sales figures. 8 plots of land will be put up for sale in the first half of next year, and most of them will be in suburban areas such as Yishin, Sembawang, Sengkang and one at Prince Charles Crescent in Redhill next to The Crest. These plots will also yield some 2, 2000 executive condominiums (ECs).

The market will see the building of more executive condominiums, which may slow the private property market down a little, but still keep the number of new homes in the black. However, these hybrid homes will become available in the open market in 5 years’ time and this slowing down of supply in this sector may be a well-timed move.

Which districts will earn you big bucks, and fast?

It will not be an overstatement to say that the property industry in Singapore is booming. Recent announcements by the government may have gotten everyone into a festive mood with the promise of good things to come. But those good things, such as the Greater Southern Waterfront, may be planned this year, but may only materialise a decade or so in the future. A savvy investor would probably look at which areas will be completed first, and target those for sooner returns.

Woodlands Regional Centre URAThe Woodlands Regional Centre has been in the works for sometime now, drafted and planned by the URA under the Masterplan 2008. Being the closest to our neighbouring Johor Bahru, and served by an established transport network, which will only be further extended in future, commercial plots are already being put up for sale by the government as early as December 2013. Investors can expect development to be rapid, possibly up and running within the next five years.

In another district with a different ambience, but still as vibrant, is the Holland Village area. With bits of nostalgia and pockets of the new and modern, it’s an eclectic mix which attracts the artistic aånd creative crowd. To be extended to include 1,500 new homes and community park, it is also suitably close to the commercial hubs of Biopolis and Fusionpolis at One North. With the circle line and upcoming Thomson line, it will be even easier to connect to other parts of the island from this “urban-village” icon. Properties and businesses in this area might be set up to see a huge change.

Holland Village Extension_640.ashxIndustry analysts are expecting the other areas included in the Master Plan 2013 to be developed much further down the line. The Marina South area for example, will only be developed after the completion of the Thomson MRT Line, which means it will only  begin work 4 years later. Tanjong Pagar, Kampong Bugis and the Greater Southern Waterfront are all areas set for development under the Master Plan 2013, but properties in these areas will mostly be commercial and retail. Residential properties will command high prices, for its proximity to the city centre, thus property consultants are expecting new suburban areas to overtake in popularity and speed of progress.

Waterfront Singapore

URA Master Plan 2013As an island country, waterfront living seems like it should be a buzz word. And it certainly will be, come as early as 2023. A new blueprint, the Draft Master Plan 2013, for nation planning has been put in place, with promises of more and better homes, and a more sustainable green and ecological living environment. National Development Minister, Mr Khaw Boon Wan, has said in his blog post that “the underlying philosophy of making Singapore an endearing home and a clean, green, livable city remains unchanged”.

About half a million new homes have been planned for new housing areas. These include Bidadari, Tampines North and Punggol Matilda. Other older HDB estates will also see the injection of some new blood, in Sembawang, Yishun, Hougang and Choa Chu Kang. A strong focal point of the Master Plan is the Greater Southern Waterfront, a 1,000 hectare development along the south coastline.

Punggol Matilda HDB1And as recent property news have signaled, the Kampong Bugis and Marina South areas will be a hotbed for private residential home activity, with the possible yield of 13, 000 new homes. Out of the 13,000, 9,000 private properties are designated for the Marina South area, which will only be developed once the Thomson Line is completed in 2017 or 2018. And cyclists may have something to cheer for, with URA setting the wheels in place to make Singapore more cyclist-friendly.

As the nation becomes more congested, it now becomes less practical to travel too far from home for work, and the constant development and setting up of regional commercial centres will make the most sense. The Woodlands Regional Centre and North Coast Innovation Corridor are just two of the many scattered around the country.  There were also talks about a new commercial centre in Punggol, and new industrial sites at the Seletar Aerospace Park, and also in Defu and an area called 2 West near the Nanyang Technological University. Since properties near commercial and financial hubs usually fetch the highest prices,  could this also cause property prices to rise overall?

204, 500 properties to be completed by 2016

At 6,508 more units than the 197,566 units projected earlier this year, there will be 204,500 executive condominium and private apartment units built by 2016, according to data released by the Urban Redevelopment Authority (URA).

Completed condominium units are increasing in number as developers pour fresh new stock into the market mix. Despite having held back on some major launches as the year-end lull draws close, the number of properties available in the market continues to rise. Industry experts are however expecting developers to lower their launch prices in order to boost sales.

The CreekFrom the looks of the recent Inflora condominium launch, selling prices, of new properties at least, may indeed be on the slippery slope. But that perhaps might be good news for those looking to invest. Properties in the prime city centre spots are dropping by as much as 0.5 per cent whereas city fringe and suburban areas enjoy continued growth, however slight.

Over the next 3 years, 4, 884 more private homes will be built as National Development Minister, Mr. Khaw Boon Wan considers it “making good progress in our ramp-up of the home-building programme”. The number of HDB flats to be built will remain the same as projected. 1, 355 executive condominiums will be ready within the same time frame. What does this heightened supply mean for Singapore’s housing market and will the population growth be a reflection of a cause of this increased property growth?

New high for Executive Condominiums

A new record for selling prices of executive condominiums may be struck this week, with the launch of the latest offering in this property market – Sea Horizon near Pasir Ris beach.

Sea Horizon ECAt $ 800 psf, it is the highest so far for ECs, according to industry players.  The 495-unit development is a hybrid between public and private housing and will be situated at the junction of Pasir Ris Drive 3 and Pasir Ris  Rise. Rare to most public properties, this one will have most units enjoying an unobstructed sea view. This could be part of the reason for the high prices.

Sea Horizon will have a range of 71 sqm two-bedders to 160 sqm five-bedders and penthouses from 129 to 160 sqm. A closer look at recent executive condo launches will reveal that prices have been on the high side of late. Several launches have come close to $800 psf. Punggol’s Ecopolitan EC was tagged with selling prices of around $799 psf.

EcopolitanWill EC prices stop short at $800 psf? Probably not. Especially with a recent EC plot tender securing a bid which will put selling prices of units at $900 psf. Both property developers and home buyers are targeting this particular property segment as they are considered the best-selling and most stable in terms of long-term investment. With the private property market  taking a hit due to recent cooling measures, interest is expected to increase. Another EC, SkyPark Residences on Sembawang Drive is expected to launch in September. Are executive condominiums truly fulfilling its purposes as a stepping stone for Singaporeans to enter the private property market? Or could it merely be a calculated option which would eventually compete with private properties ?

Residential property market may go either way

Differing data from the Urban Redevelopment Authority (URA) and the Singapore Real Estate Exchange (SRX) has put investors and industry on tetherhooks about the outlook for the rest of the year.

Jewel @ Buangkok

Jewel @ Buangkok

While URA data reflected 1, 806 new private homes sold in May, at a 23.8 per cent hike from May, SRX data showed that only 605 resale properties were sold at a 21 per cent drop from May. When both sets of data are at opposite ends of the spectrum, it makes one wonder if the cooling measures had indeed made a difference.

Much of the sudden spike in rise in home sales could be due to the recent launch of new condominium developments such as J Gateway and Jewel@Buangkok. Most activity are however in the new home sector. For resale homes, a year-on-year comparison shows a 30 per cent drop from 5,675 in 2012 to 3, 965 this year. For most part, it may be indicative of the effectiveness of the government’s cooling measures in 2013. Thus far, the curbs this year have put a damper on resale home sales with the rise in additional buyer’s stamp duty to 7 per cent for Singaporeans buying a second home and 10 per cent for a third or subsequent property, and a tighter rein on home loans.

LUsh Acres

There are those in the industry who think buyers will continue to purchase properties simply because they can. They have the money to do so, and they will. Mr Colin Tan, research head of property consultancy Chesterton Suntec International believes that “Investors borrow to the hilt because it is silly not to do so. Likewise, they use their children’s names because it is silly not to do so”. But as many of the properties sold are yet built, a truer reflection of this boost in sales could be shown only later in the decade. Currently there are 290,000 completed private homes and executive condominiums, and 100,000 more will be built within the next four years. There might be a one-third increase in private residential units then, and buyers who had counted on raking in rental yields may find themselves in a position to sell when demand weakens.

Whether these moves have driven potential investors overseas is yet to be proven, as new properties are still bringing in the cash. But there is still half a year left. And time may be the best mirror of the true market status.