Waterfront living in Penang

Mixed-use properties have always been popular with property investors, and when you throw waterfront living and resort charm into the mix, the popularity index may just shoot up the charts.

The Light Waterfront Penang

Photo credit: IJM Land

Waterfront properties are not only increasing in numbers locally, but also across the border in Malaysia. In Penang, a new waterfront mixed-use development is being planned for about 5 kilometres away from George Town, spanning more than 750 metres. With a shopping mall, residential blocks, hotels, convention centre and an office tower, it looks set to be a self-contained township on its own. The residential property linked to this development is named The Light Waterfront Penang and will boast 1, 177 private condominium units and villas. Most of these units have already been completed and sold.

Despite recent news about a possible supply glut in the Iskandar development, specific areas still hold their worth in terms of property investment. Foreigners who are hoping to invest in properties in Malaysia are governed by certain rules but with sufficient knowledge at hand and experienced agents or agencies by your side, it is possible to find something worth your time and money.

Phuket Inside Out

dCondo

Known for its sandy beaches and vibrant nightlife to tourists, Phuket is fast becoming another property hotspot for property investors around the world. With an influx of tourists in the area, especially driven by the power of the Chinese Yuen, Phuket properties are now well regarded as a strong investment with high potential returns.

With a staggering range of property for sale in Phuket from the aftereffects of the nationwide property boom, developments in the idyllic island paradise can include anything from basic studio apartments to luxury villas with breathtaking beach views.

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Phuket is generally warm all year round with the wettest season during the months of September to October. Tourists, however, love to visit this area during the cool monsoon season, from December through March, with cool breezy winds that keeps things comfortable.

With the economy driven up by a large influx of Mainland Chinese tourists who are attracted by the weather and the beautiful, scenic views of the city, investors all over the globe have come to recognize Phuket properties as one of their must-buy as part of their property investment portfolio.

There’s no better time to find out about Phuket than from Sansiri, one of Thailand’s largest and listed property developer. From finding out exactly which part of Phuket you should invest in for maximum rental yield and potential capital gain to the latest updates on upcoming infrastructure projects that point the best areas for you to focus your investment in, now’s the time to hear directly from the local experts and not just from what’s on the web.

Within 30 minutes, you will also find out about how to maximise rental income by adopting different leasing strategies and the transaction costs and taxes involved when you invest in Phuket properties as a foreigner. In addition, find out about one of the best kept gem in the dCondo Mine project, the fully furnished and designed freehold condominium priced from only SGD100,000.

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In addition, special incentives that lie in wait for you at the special event include 50% developer financing, 7% p.a. rental guarantee and 14-day from Sansiri.

With limited seats available, do RSVP early and grab your ticket to the “Phuket Inside-Out in 30 Minutes” session happening this weekend 25-26 April 2015.

RSVP here for the event right now

This advertorial is brought to you by Asia Bankers Club.

 

Resale HDB flats in prime locations command high prices

Even though the resale HDB flat market seems to be following the general downhill trend of the property market over the last year or so, bigger and newer units in the town’s hottest locations are still bringing in big bucks.

Of the 20 five-room HDB flats which sold at over $900,000 this year, as compared to just one in the same period last year, 14 were from the lauded Pinnacle @ Duxton. The other sales came from units in Bukit Merah and Queenstown.

View from PInnacleAs units at the Pinncale@Duxton were only recently released into the market, after their statutory five-year MOP (minimum occupation period), part of the increase in sales could be accounted for by these units. At their time of launch in 2004, five-room units were only priced between $345, 100 to $439, 400. Prices have since more than doubled. With their astounding views (for a public housing facility) and close proximity to the CBD (Central Business District), chinatown and city centre, the reasons for their expensive price tags could hardly be disputed.

Most of the other flats which sold in Strathmore Avenue and Holland Drive, were also newer ones which came under the Selective En Bloc Redevelopment Scheme (SERS). These flats were newly built in order to house owners of older flats nearby which were scheduled to be demolished. Many of these owners were luckily enough to secure a new flat at almost no additional cost, and now are able to sell at a profit.

Other areas with a higher ratio of newer resale flats include the less mature estates such as Punggol and Sengkang. Here, the units may not command as high a price due to their far flung location and higher number of sellers. But that said, it could be early days yet and in years to come, another tune may be sung.

Offers galore in blossoming EC market

Executive condominium launches in the recent months haev proved attractive to the buying crowd, especially after years of quiet on the ground.

But with 7 more launches planned for the later part of the year, will the market be poised for a saturation point? Or will buyers welcome the competition and options? Most of the new launches will be near existing EC sites in the North and North-east regions, which could mean stiffer competition for the developers.

Westwood ResidencesOne project which may however prove promising is the Westwood Residences in Boon Lay. Together with Lake Life EC, they could the only 2 executive condominiums in Jurong since 2010. The rarity, coupled with the pent-up demand could means buyers may be willing to pay slightly higher than average prices for units here as compared to ECs elsewhere. Property experts are expecting the median prices for ECs launched later this year to hover between $750 to $770 psf.

Currently, the average selling prices for ECs are at around $800 psf. But buyers have not been particularly responsive to this pricing level and with the introduction of thousands of new units over this and next year could bring the competition higher and prices lower. The dip in resale HDB and private condominium prices since the high in 2013, would also mean that ECs have to priced realistically in order to entice HDB upgraders and buyers.

As the market segments react to one another, the EC being hybrid between private and public properties, may also find themselves having to price themselves appropriately between these two market segments.

 

Cluster landed homes – The next goldmine?

Landed homes have always been known to be one of the most expensive properties in land-scarce Singapore and understandably so. And most would think that properties with individual land titles will always be a step ahead of leasehold properties. But apparently strata landed properties, or more commonly known as cluster landed homes, have seen the fastest price rise over recent years.

The four types of landed properties in Singapore are:

  • Leasehold non-strata landed homes
  • Freehold non-strata landed homes
  • Leasehold strata landed homes
  • Freehold strata landed homes

Casa FidelioAnd the last one on the list above have seen speedy rise in value of 77.3 per cent from 2004 to 2008. And the third on the list have been even more popular since 2009, with the fastest rise in capital value of 20.1 per cent a year. This could be due to the fact that most of these cluster homes have been built in the last decade or so, and have better floor planning and a larger floor area due to the fact that they are often built up to at least two storeys. Some older freehold landed properties may come with a land deed, but often extensive renovation have to be done, which raises the cost for the buyer.

Hillcrest-VillaPhoto credit: MCL Land

Examples of the price rise in freehold cluster housing properties can be seen at the Casa Fidelio in Siglap. In 2004, a terraced house cost only $760,000 and by 2008, it was sold for $1.18 million. In 2007, the launch of the Hillcrest Villa in Bukit Timah also pushed prices of cluster landed homes up by almost $1.5 million. Though landed properties are one of the highest profit-earning tickets out there, the cost of such properties in today’s market will require a healthy bank balance and deep pockets. What options are there out there for buyers who wish to invest in such properties? 

 

New properties on a fresh new ride

And hopefully it will be an upwards ride.

May 2014 was a good month for the new private home market. Mostly due to the large number of properties launched, 1,487 units were sold. But after that huge spike, sales have held steady at around 300 to 400 units sold per month, with December’s showing a little lower due to the festive season.

KingsfordWaterbayThe numbers have however increased significantly in March this year, from 390 units sold in February to 613 last month. The results are promising, but there has been a few recent launches of new units at previously launched developments and also a release of pent-up demand after the Chinese New Year festivities, which could account for some of the positive vibes.  Most of the sales came from Kingsford Waterbay with 155 units sold and Sims Urban Oasis with 107 units sold. New launches are pulling out all the stops to get buyers’ attention. Competition will be high as more launches are planned for the year, thus getting first dibs with the buyers’ pool is crucial for developers.

Suburban properties are often priced below city fringe and central district properties; at 22 per cent lower than city fringe and 43 per cent lower than central region homes. Lower quantum prices seems to be the factor helping to close deals, as the property cooling measures do not work in favour of most middle-income buyers. The Skywoods and Symphony Suites projects seemed to stacked up better, but sales at Northpark Residences and Botanique @ Bartley may very well give them a run for their money soon, looking at the response from the public.

The outlook for the market this year seems spotted, with possible glimmers of hope but also tough restrictions which may put a damper on sales volume and prices.

 

Lions, Alligators, Elephants & Locusts – Investment lessons from the wild

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Here is my take on the Asia Pacific real estate market and why Malaysia is still the place to invest.

Before I go into the details of the market, I want to identify the segment of the market which I believe holds the key to any major real estate boom; the middle and upper middle class. For this article. I will specifically look at the middle classes of Asia Pacific.

According to a report by Ernst and Young released on 25 April 2013 in London

“By 2030, two-thirds of the global middle class will be residents of the Asia-Pacific region, while Europe’s share of this population will have dropped by 14%” – Ernst & Young

From studying the different markets of the world that went from sleepy to scintillating and boring to boom, we can see a certain pattern emerging. It always starts with strong government initiatives for economic transformation and growth that motivate and trigger an influx of savvy investors both big and small to develop various fundamental industries like construction, transportation, utilities, education, health care, corporate services, logistics, recreation etc. which are crucial to building a successful city or region.

Real estate will also have to be developed to anticipate the population growth created by such transformation. As such It baffles me to hear people saying constantly that supply is greater than demand during the transformation period. Doesn’t it make sense to build homes and offices first and than fill them up as you go along? Any government worth its salt will ensure there are homes first before bringing the people in! That means there will always be more homes and offices than people during this phase and the disparity is greatest at the beginning.  Imagine doing the opposite? Where would the people live or the businessmen do their businesses? I can imagine these people would leave as soon as they come to such cities as there are not enough housing or places to run their businesses effectively. My point is if a country is going to grow successfully, there must always be more homes and offices first. Yet In some strange ways, you will hear people saying that there is an oversupply or saying that the place is a ghost town and there are still nothing there and no one is living there! Excuse me, but it is still a construction zone and there are no bars and restaurants and anything else at the moment and supply will always exceed demand at this stage.

It is good to note that most of the savvy investors and institutional investors would have gone in early. They are the lions and alligators and elephants but like lions, alligators and elephants, the big players’ who have gone in will not cause a frenzy. The lions, alligators, and elephants eat and have their fill and will then sleep. No impact on the forest or jungle (real estate market). Eventually,  the market will go into a little slumber. This slumber will persists until visible signs of change appear and more stories of people making money surfaces. This is where the middle class, the locusts (who are, at the moment, still grasshoppers) will come in and devour all in its sight.

China, Hong Kong, Singapore is not palatable for most middle and upper middle class as prices are too high and/or restrictions aplenty.

India is for Indians or NRI and has its restrictions and may not be

Emerging markets like Myanmar, Cambodia, Philipines, Thailand, Vietnam, Jakarta are emerging markets and are not for bulk of the middle & upper middle classes as they are more risk adversed and these markets do not have a mature secondary (resale) market.

Australia & New Zealand, Taiwan are slower markets and may not generate the right rate of returns for those who wants faster returns

One country, Malaysia, where many people speak English, Chinese, Indian etc and where food from India, Hong Kong, China, Singapore, Korea, Japan etc can me found. Where it’s relatively cosmopolitan and many MNC’s are moving to. Where Price WaterhouseCoopers and Ernst and Young report to be the place to set up businesses to penetrate the lucrative South East Asia market. One major reason, Profitability.

Where there are quality workforce, adequate facilities and has all the logistic support equivalent to developed cities but much lower operating costs. PWC and E&Y

The World bank reported it to have better investor protection than Australia, UK and the U.S.

It is strategically located right in the middle of Asia Pacific and a short distance to all the countries mentioned above

Yet prices of its properties are still one of the cheapest in the region.

Fact is the middle & upper middle class will finally realize that there is only a place that suits their profile. Just that they will only move when all the Economic Transformation Program are in place, the people and industries are in place and then the middle class who waited will see all these happening and then it will boom.

It is like Singapore in 2005 period where we were in the transformation transition. The middle class stayed away from District 1,2 and 4 in Singapore and avoided properties like The Sail & Icon until they finally saw the Marina Bay Area truly transformed with the Casino, MBS, Flyer, Esplanade, F1 happening and heard people started making money. By then, the properties which could have turned many middle class into multi-millionaires became out of reach of them. Pity.

In Malaysia, All the Savvy investor and institutional investors have gone in. They are the lions and tigers and elephants but like them, the big players’ who have gone in will not cause a frenzy. The lions, tigers, and elephants eat and have their fill and will then sleep. No impact on the forest or jungle (real estate market). It is the middle class, the locusts (who are now still grasshoppers) that will come in and devour all in its sight.

In short, the middle class will consider these:

  • Proximity
  • Culture
  • Investor protection
  • Resale
  • Increase in population thru transformation
  • A mature local real estate market
  • Lower price and entry level

Singapore had all of these but the one country most similar to Singapore in Culture, language, and social and economic make up. Which country in Asia Pacific is most similar to Singapore in these aspects?

Remember, Singapore boomed and attracted the expatriates and grew our population because of adding one element to work and live, play. Which country is working on the same industries and ingredients that transformed Singapore in the last 20 years?

Your guess is as good as mine. We are just waiting for the grasshoppers from China, Korea, India, Hong Kong, Indonesia, Singapore and even Malaysians themselves to become locusts.

 

By Colin TanColinTan Training & Consultancy

ColinTan Training & Consultancy

The private home gentle wave

It’s an up and down ride for the private non-landed property market for more than a year now. Across the board, non-landed resale home prices dropped 6.2 per cent last year. Prices of homes in the central districts dipped an average of 7 per cent last year, though there were good months when some segments managed to bounce back slightly before falling again. That could mean that things were mainly level though there are outliers.

Duchess ResidencesResale private apartment prices fell 0.2 per cent last month, with a 3.9 per cent fall compared to the same month last year. But some city fringe properties bounced back with an average price rise of 0.4 per cent. Part of the yoyo-ing in prices could be due to the Chinese New Year period in February and buyers were just coming back into the fray in March.

The second quarter of this year would be a crucial point in almost determining how the rest of the year will flow, at least up to just before the Hungry Ghost month. Though the ride has been more a gentle wave of price fluctuations rather than a roller coaster ride, property experts are however not expecting a drastic change in prices unless there are major policy changes or a major interest rates hike.

The year could be a relatively quiet one with bright sparks and dull moments along the way, but the basics of good location and lowered total quantum prices will still move units.