5 Tips on Property Investing for Non-Millionaires - 99.co

2 weeks ago · 7 min read · by Ryan Ong

A lot of people say they’ll invest in property when they get rich, which is the wrong way around. You’re supposed to invest to get rich, not get rich and then invest. Here’s how to (safely) get into property, without millions in the bank:

1. As boring as it is, you must learn how the leveraging works

As a non-millionaire, your ticket into property investing comes from the high degree of leverage you can get. For example, to buy a property that costs $1 million, you don’t need to have most of that million dollars; you’d just need around $50,000 in hard cash, and $200,000 in your CPF.

The key advantage of property is this huge amount of leverage provided by your home loan. On top of that, a home loan is one of the cheapest loans you’ll ever get in your life (around two per cent per annum).

The key advantage of property is this huge amount of leverage provided by your home loan.

But it’s important to understand how to use home loans right. There are ways to keep the costs down (e.g. refinancing or repricing at the right times, or purposely accepting lock-ins when they’re to your advantage). There are also ways to find the cheapest rates out of the hundreds of packages available, and to avoid pit-traps like obscure board rates.

To be blunt, learning about home financing is going to be one of the most boring experiences in your life. If you read the home loan terms aloud, small animals around you could keel over and die of sheer boredom. But you’re going to have to study it, if you want to be a property investor.

2. If you want to see your home as an investment, prepare for some discomfort

Is your first home just a stepping stone toward something better?

For non-millionaire investors, buying a second house to let is way out of budget; their only recourse is to treat their own house as a form of investment. That can mean dealing with certain discomforts.

Is your first home just a stepping stone toward something better?

It might, for instance entails buying in a neighbourhood with good growth prospects, but not a place you like personally. Or you might have to buy in a location so ulu, it looks like it belongs on a National Geographic cover (but development over the years will mean there’s a long-term payoff.)

You’ll also want to seize value buys, such as a house priced unusually low given its quality and location; but that might put your workplace a 90 minute bus ride away.

Which also leads us to say…

3. Make sure everyone you involve is on-board with the plan

If you’re not rich yet, you’ll probably need some help getting that first investment property. That often means roping in family. But be careful:

If you’re married, make sure you and your spouse have a shared vision on the property. If you want to use the house as a stepping stone, but your spouse sees it as a forever home, then you’re cruising into a storm. And of course, your spouse must be onboard with buying a house that’s a great investment, but far from the children’s school or a workplace.

Everyone involved in your first investment property plan must be on the same page.

If you involve other family members in your property investment, make sure there’s an investment plan that everyone understands and agrees on. Write it down. If you co-own a condo with your parents, for example, you don’t want a situation where you’ve secured a buyer, but then your parents disagree with the sale.

Always remember that property investment requires infrequent but deep decision making. You won’t need to make a lot of decisions every month (you may only need to make a decision once every few years) – but when you do make a decision, such as who to sell to, or how to rent, that decision has tremendous financial impact; there is much less room for error.

So when the time comes for that crucial decision, everyone you’ve involved must be pulling in the same direction.

4. Develop an attention to detail

If your plan is to buy a house and then “sit down and shake leg” for 15 years, you’re in for a shock. A pure home owner, or a super-rich investor, can afford to ignore small increases in home loan repayments, or maintenance fees edging upward.

(Even then, some of the richest investor we know still focus on such details).

But as a starting, small-time investor, even the small costs eat into your gains. When you always claim the flat 15 per cent on tax deductions, instead of tracking the exact costs of utilities and maintenance, you could lose money.

When you don’t refinance despite a cheaper loan package being out there, you lose money.

You need to be picky about every little detail of the house.

When you don’t crunch numbers to work out the cheapest renovation loan, don’t check on the management committee at AGMs, and don’t realise the difference between fixing an electrical issue on a Sunday versus Monday*, you could lose money.

These small expenses are like cockroaches: ignore one or two, and suddenly you’re wondering why you’re up to your eyeballs in them.

As a small-time property investor, don’t be afraid to fit the Singaporean definition of ngeow: you need to be picky about every little detail of the house; right down to checking where your contractor is getting supplies, and checking the prices of those supplies yourself.

If you’re naturally laid back, or “big picture” oriented, you’d better be ready for a big shift in mindset.

*Some contractors charge more on weekends

5. Always be six months ahead on expenses

You’re not a millionaire yet, so this is important:

If you were to completely lose every income source tomorrow, your home loan(s) should stay paid for another six months. That’s the minimum standard to shoot for.

Are you six months ahead on your expenses?

In a major financial disaster, you’ll need to sell. But if you don’t have six months, your property agent – no matter how good she is – won’t have the time to market the house, conduct viewings, negotiate, and secure a good price. The faster you need to divest yourself of a property asset, the less you’ll make from it.

Or if you’re renting out the property, six months means you don’t need to rush into the first tenant you find, just to keep the rent paid. Desperation is how landlords end up with negative rental yields, or bad tenants.

Want to know more about property investing for non-millionaires? Come talk to our experts for advice.

On 25th May 2019, we’ll be conducting a talk at HDB Hub (Toa Payoh) about property investments for the average Singaporean. Come and discover the methods used, and ways to invest safely. We’ll also have a panel for you to ask all your questions.

Tickets are just $20, or as low as $10 for early birds. Get them here.

Source: 99.co (30 Apr 2019)

A Closer Look At Seasonality In Singapore’s Rental Market - PropertyGuru

What’s causing the fluctuations in leasing activity and rents of private non-landed properties in Singapore?

By David Dickinson

Last time we looked at how leasing activity and rents fluctuate from month to month each year. I plotted the monthly variations in total and per square foot (PSF) rents over the last four years. Total rents (orange bars in Figure 1) appeared to be highest in the July to September period and lowest in November and December, while rents measured on a PSF basis were on average higher in April and lowest in June and December.   

Figure 1

We now take a closer look at what might be causing these fluctuations. Figure 2 shows the average size of private non-landed properties leased out in Singapore each month from 2014 to 2018 together with a trend line. It’s obvious that the average size of apartments leased has been falling, down from about 1,200 sq ft to about 1,075 sq ft over the period. This is mostly because the stock of smaller apartments has been rising. 

Looking for a rental property in Singapore? Find an agent to take the hassle out of your home search. 

But around this trend is a fluctuation in the average size of units leased from month to month, with units being noticeably larger in July and August every year and smallest around April.    

Figure 2

In order to explore monthly leasing activity across units of different sizes, I grouped leases into three size categories; units under 1,000 sq ft, 1,000 to 2,000 sq ft and units over 2,000 sq ft. I then converted the number of leases every month to an index starting at 100 in March 2014. The index for units under 1,000 sq ft was adjusted for the increase in the relative amount of stock in this size category in order to make comparisons easier. 

Figure 3 shows the resulting index every month from March 2014. While there are consistent monthly variations across all the size groups, they are very pronounced for units over 2,000 sq ft (grey line) with extremely high July and August peaks.   

Figure 3

Leasing for smaller apartments is not as volatile month-to-month, and while there are also July and August peaks, there is another peak in April, particularly for units under 1,000 sq ft.

Are rents also higher during the peak leasing months?

Let’s firstly look at larger apartments. I selected leases in districts 9, 10 and 11 for apartments between 2,000 and 3,000 sq m in size and show average rents on a PSF basis* in Figure 4. 

Figure 4

The volume of leasing is very high in July and August and rents are also noticeably higher in these months, suggesting that there may be an advantage for landlords to market larger properties at this time when there are likely to be more tenants looking for properties. But there are other possible reasons for higher rents. For example, the most luxurious large apartments could be more likely to be leased at that time of the year when expatriates are most active. Also, a relatively large proportion of leases could be renewals and they might not fully reflect current market conditions, or perhaps corporate leases are more common at that time of year and maybe companies are more generous than tenants on private leases. Whatever the reasons, the peaks are very evident and the last six months of 2018 show a difference in average rents from a peak of $3.66 psf in August and an average of $3.25 psf from October to December.

What is the seasonal pattern for smaller apartments? Here I look at units under 800 sq ft in the inner districts 1, 2 and 9 as they had the highest average rents PSF for small apartments and relatively high levels of leasing activity in the segment.   

Looking at leasing volume, April is consistently the strongest month, but July to September was strong in some years, especially last year. The high levels of unit completions may have influenced leasing levels as units are put on the rental market for the first time, so we need to be careful in making conclusions as this may help explain the less apparent seasonality. 

Rents also do not seem to have the pronounced July and August peaks we can see for large apartments. In 2018, average rents were highest from January to April but fell since about May. This might also be due to completions of new units, but might be influenced by a margin of error in my rent calculations** as they are based on the mid-points of the unit size bands reported by URA for each lease.   

Figure 5

It seems that the leasing of smaller units is not as seasonal as for larger apartments and there is certainly less evidence of rents spiking higher in line with activity levels, though there is a puzzling April peak in or near the CBD. This however disappears in districts further from the CBD, such as Districts 14 and 15, which also have a lot of leases for smaller units. As new supply slows, it will be worth keeping an eye on the leasing of smaller apartments to see whether these patterns stay the same. In the meantime, I will be hunting for a more accurate way to measure PSF rents .

*The average rent per square foot is based on the mid-point of the size bands reported by the URA for each lease. For example, if the size band for a lease was 2,300 to 2,400 square feet, I adopted 2,350 square feet to derive the rent per square foot. 

**For small apartments, the margin of error in estimating the rent per square foot increases because the URA publishes fixed size bands of 100 sq ft irrespective of unit size. Therefore adopting the mid-point of 450 sq ft for a unit reported as being between 400 to 500 sq ft in size will result in a less precise rent estimate than for larger units. With large numbers of transitions, the bias may to some extent be cancelled out when calculating averages, but even so, care needs to be taken in drawing conclusions using this estimation method. 

Source: Propertyguru (25 Apr 2019)

Home Prices To Hold Steady Despite Property Cooling Measures - PropertyGuru

Fiona Ho • April 29, 2019

Darren Teo, head of research at Edmund Tie and Company, believes that residential property prices will remain firm even with the latest cooling measures in place.

Despite last year’s property cooling measures, Edmund Tie and Company expects residential property prices to remain relatively stable. 

Prior to the latest cooling measures that were rolled out in 2018, the last time similar regulations were introduced was in 2013. To moderate the private residential property market, the Total Debt Servicing Ratio (TDSR) framework was introduced that year.

Although the measures led to a drop in sales and prices in 2014, the market began picking up again in the second quarter of 2017, with the momentum carried over to 2018.

With this, Darren Teo, head of research at Edmund Tie and Company, believes that residential property prices will remain firm even with the latest cooling measures in place.

This comes as most developers launching new projects this year had paid high prices for land during the en bloc fever that commenced at around May 2017, says Teo in his commentary on Channel News Asia.

SEE ALSO: 66% Of Singaporeans Say Properties Are ‘Value For Money’

Developers will also be more willing to maintain prices and accept a lower sell-down rate rather than resort to discounting, which may devalue the overall project as well as disappoint earlier buyers who forked out higher prices, Teo opines.

Some developers may be incentivised to resort to heavy discounting to sell all remaining units within five years of being awarded the land in order to recoup the remissible portions of developer’s Additional Buyer’s Stamp Duty (ABSD), which is sizable at 25 per cent (an increase from the previous 15 per cent). However, Teo shares that the number of developments that will reach the five-year deadline from now till 2020 is relatively low, with less than 200 units in total.

Instead of steep offering discounts, he expects developers to position their projects more competitively moving forward, especially in view of the large supply of properties in the pipeline.

Aside from early bird discounts, developers may offer higher sales commissions to agents as well as deferred payment arrangements for completed project in order to boost sales, Teo adds.

“Taken together, I expect potential downward pressure for the resale market of older, less well-located and well-amenitised estates due to stiff competition from new project launches,” he concludes.

Home buyers looking for Singapore Properties may like to visit our Listings, Project Reviews and Guides.

Fiona Ho, Digital Content Manager at PropertyGuru, edited this story. To contact her about this or other stories, email fiona@propertyguru.com.sg

Source: Propertyguru (29 Apr 2019)

HDB resale prices slip 0.3% in Q1 as volume falls 14.2% - SRX

BT PHOTO

FEWER Housing Board flats changed hands in the first three months of the year compared with the last quarter of 2018, falling 14.2 per cent to 4,835 cases.

Compared with the same period at the start of last year, however, the number of transactions was still 8.5 per cent higher.

Resale prices of HDB flats fell by 0.3 per cent on a quarterly basis, according to figures released by the Housing Board on Friday.

As for the HDB rental market, the number of approved applications to rent out HDB flats rose by 2.6 per cent, from 11,479 cases in the fourth quarter of 2018 to 11,775 cases in the first three months of 2019.

Compared with the first three months of last year, the number of approved applications was 0.5 per cent higher.

As at March 31, there were 57,764 HDB flats that had been rented out - an increase of 1.8 per cent over the fourth quarter of 2018, at 56,742 units.

Next month, the HDB will offer about 3,400 Build-To-Order flats in Kallang/Whampoa, Tengah and Woodlands. There will also be a concurrent Sale of Balance Flats exercise.

Source: SRX (26 Apr 2019)

Singapore private home prices down 0.7% in Q1 2019; rents reverse with 1% rise: URA - SRX

BT FILE PHOTO

SINGAPORE'S private residential price index declined 0.7 per cent in the first quarter this year, following a 0.1 per cent decrease in the fourth quarter according to Urban Redevelopment Authority (URA) statistics.

The Q1 fall was slightly steeper than the 0.6 per cent decrease in URA's flash estimate released earlier this month.

In the first quarter of this year, non-landed home prices fell 1.1 per cent, compared with the 0.5 per cent increase in the previous quarter.

But landed home prices rose 1.1 per cent in the quarter, after declining 2.0 per cent in the previous quarter.

Giving a breakdown by location, URA said prices of Core Central Region (CCR) non-landed properties decreased by 3.0 per cent, compared with the 1.0 per cent decline in Q4. Meanwhile, prices of non-landed properties in Rest of Central Region (RCR) slipped 0.7 per cent, compared with the 1.8 per cent increase in the previous quarter. Prices for such properties in Outside Central Region (OCR) inched up by 0.2 per cent, compared with Q4's 0.7 per cent increase.

As for private home rents, they rose 1.0 per cent in the first quarter, after falling 1.0 per cent in Q4. For landed properties, they edged up 0.2 per cent in the quarter, compared with the 2.1 per cent decrease in the previous quarter. Rents of non-landed properties increased by 1.1 per cent, compared with the 0.8 per cent decrease in the previous quarter.

The vacancy rate of completed private residential units, excluding executive condominiums (ECs), dipped to 6.3 per cent as at end-March 2019, from 6.4 per cent in the previous quarter. ECs are a public-private housing hybrid.

In Q1, developers launched 2,989 uncompleted private residential units compared with 1,657 units in the previous quarter. No ECs were launched in the quarter. 

They sold 1,838 private residential units (excluding ECs) in the first quarter, compared with the 1,836 units sold in the previous quarter.  Developers sold 10 EC units from previous launches over the period.

As at the end of the first quarter, there was a total supply of 53,284 uncompleted private residential units (excluding ECs) in the pipeline with planning approvals, compared with the 51,498 units in Q4. Of this, 36,839 units remained unsold as at the end of the first quarter, up from 34,824 units in the previous quarter.

There is also a pipeline supply of 3,519 EC units with planning approvals. Out of this, 1,871 remain unsold. This means that in total, including ECs, there were 56,803 units in the pipeline with planning approvals. Out of this, 38,710 remained unsold, up from 35,649 units in the previous quarter.

In addition, there is also is a potential supply of 5,200 units (including ECs) from Government Land Sales (GLS) sites and awarded en-bloc sale sites that have not been granted planning approval yet.

Source: SRX (26 Apr 2019)

Real estate among top gainers YTD but further rally unlikely - SRX

ST FILE

THE real estate sector has been among the best-performing in the Singapore market this year, but analysts see limited upside from hereon, following the sector's rally this year.

Going by Singapore Exchange (SGX) data as at Wednesday, the share prices of the top five real estate developers have, since the start of the year, risen 24 per cent.

DBS Equity Research analyst Rachel Tan told The Business Times that developers were trading at attractive valuation levels relative to other sectors at the start of the year and have rallied with the Singapore market.

In March, the sector was the third best-performing on the SGX, with a total return of +2.7 per cent.

Analysts concurred that the US Federal Reserve's dovish interest outlook, which benefits developers and home buyers, was a contributing factor to the sector's peformance last month.

Ms Tan said: "While the Fed's dovish stance on interest rates may potentially drive some property sales volume as mortgage rates could remain flattish in the near-term, the S-Reits are the bigger beneficiaries of the prospects of a prolonged Fed pause."

Both she and KGI Securities' head of research Joel Ng believe that the Urban Redevelopment Authority's draft master plan 2019 might have also triggered gains for developers.

Mr Ng said: "The draft master plan 2019 included items like higher plot ratios in the central business district (CBD), together with plans to change the CBD from being purely commercial to one with mixed developments, which could include residences."

Developers like City Development (CDL) and CapitaLand, with a number of properties in the CBD, could gain, he added.

RHB analyst Vijay Natarajan suggested that recent property launches such as Treasure at Tampines and Boulevard 88 may also have had a hand in piquing interest. The launches garnered a "reasonably good response, which shows that demand still exists, as long as the pricing and product attributes are right".

Despite this, however, analysts are muted on the outlook.

DBS' Ms Tan said: "We remain cautious on the Singapore residential market and believe real estate developers will likely be range-bound as sentiment remains subdued."

Property market volumes should remain firm and will face re-rating if sales volumes or take-up rates pick up, she added.

RHB's Mr Natarajan said the flattish price outlook in the Singapore residential market is likely to have more of an impact on Singapore-centric developers in the near term.

"Developers with diversified geographical presence and high recurring income should be less impacted."

KGI's Mr Ng said that valuations of developers had forged ahead of fundamentals during this year's market rally.

"Valuations for many of the property developers are now near their five-year historical price-to-book average and are neither too cheap nor too expensive. We thus believe that there is limited upside in the next year, and investors who wish to invest now may have to take a two- to three-year investment horizon."

He expects a pullback in the second quarter, which may be a time for investors to enter at a more attractive level.

Mr Natarajan's pick as a favoured real estate play is not a developer but an agent, APAC Realty. He said that, with developers incentivising agents with higher commissions to boost property sales, agencies are most likely to gain.

DBS' picks in the real estate space are CapitaLand and Frasers Property, due to the developers' limited exposure to the Singapore residential market and their strong profiles as commercial landlords.

Ms Tan said: "We believe there are still positive upsides from the potential merger between CapitaLand and Ascendas-Singbridge, while Frasers Property offers a 5 per cent yield and has opportunities to monetise/recycle its mature assets into its Reits."

Source: SRX (12 Apr 2019)

Singapore is second priciest city for private property: CBRE - SRX

PHOTO: ST FILE

SINGAPORE remains the world's second most expensive housing market after Hong Kong, according to an annual CBRE report which compares private residential property markets across 35 cities. But average price growth was significantly slower, at just 1.1 per cent.

Hong Kong kept its top position with an average residential property costing US$1.235 million or US$2,091 per square foot (psf). Singapore came a distant second at US$874,372 or US$1,063 psf, with Shanghai third at US$872,555 or US$714 psf.

CBRE noted that these top three cities have all introduced cooling measures to keep prices under control.

Asian cities took half of the spots in the top 10, with Shenzhen coming in fifth and Beijing, ninth. The other cities in the list were Vancouver (4th), Los Angeles (6th), New York (7th), London (8th) and Paris (10th).

For prime property prices, however, Singapore ranked lower, coming in ninth with an average prime property price of about US$1.24 million. Hong Kong was far and away the leader at US$6.87 million, with Shanghai second at US$2.43 million.

The report's property data for Singapore comes from the Urban Redevelopment Authority's Realis database, which covers only private property transactions.

CBRE head of research for South-east Asia Desmond Sim said Singapore's property costs have been influenced by its status as a financial hub "known for its skilled talent, ease of doing business, top-notch infrastructure, as well as economic and political stability", and the fact that it is an attractive location for multinational companies to establish their regional headquarters.

But he noted that after property curbs were introduced last year, price growth declined for the second straight quarter in Q1 2019, after five consecutive quarters of strong growth since Q3 2017.

"Coupled with increasing supply and weaker sentiments, prices are likely to moderate or remain flat from this year going forward," he added.

In contrast to its high ranking for house prices, Singapore ranked 27th for house price growth. The island's average private property price growth of 1.1 per cent in 2017 was far outpaced by Hong Kong's and Shanghai's growth rates of 5.5 per cent and 11.2 per cent respectively.

And unlike the property price top 10 where Asian cities dominated, six of the top 10 cities for property price growth were in Europe.

As for private rental markets, Singapore ranked 10th for rental prices, with an average monthly rental price of US$1,935.

But it was only 25th for rental growth, with rents having fallen 1.9 per cent in 2017.

The CBRE report highlighted "considerable rental growth" in many European cities, with six European cities among the top 10 for rental growth, including Lisbon, Madrid, Dublin and Barcelona.

Source: SRX (12 Apr 2019)

Highest HDB Resale Volume Jumps 26% In March 2019. Prices Also Rise, With SRX SPI For HDB Resale At Its Highest Level Since August 2018 - SRX

1. HDB resale prices increase by 0.2% in March 2019 over February 2019. HDB 3 Rooms and Executives prices rise by 0.8% and 0.4% respectively, while the prices of 4 Rooms and 5 Rooms both dropped by 0.2%. Those located in Mature Estates decreased by 0.1%, however, those in Non-Mature Estates increased by 0.5% as compared to February 2019.

According to the SRX Property Price Index for HDB Resale:

•  Year-on-year, prices in March 2019 decreased by 1.0%
•  Prices in March 2019 were down by 13.7% from the peak in April 2013.
•  Mature Estates and Non-Mature Estates both recorded a year-on-year price decrease of 2.2% and 0.1% respectively from March 2018.

 

2. 1,657 HDB resale flats were transacted in March 2019, representing a 26.1% increase from the 1,314 units sold in February 2019. Year-on-year, resale volume in March 2019 was 12.7% lower than 1,897 units transacted in the previous year.

3. Overall median transaction Over X-Value (T-O-X) was ZERO in March 2019. This represents an increase of $1,000 as compared to February 2019. The median T-O-X for HDB measures whether people are overpaying (POSITIVE T-O-X) or underpaying (NEGATIVE T-O-X) relative to the SRX Property X-Value estimated market value. HDB 4 Rooms, 5 Rooms, and Executive flats witnessed POSITIVE Median T-O-X $1,000, $3,000 and $4,900 respectively in March 2019. Only HDB 3 Rooms recorded a NEGATIVE $3,000 Median T-O-X.




4. Pasir Ris posts the highest median T-O-X at POSITIVE $7,500 in March 2019, followed by Bukit Panjang at POSITIVE $7,000 (for HDB towns having more than 10 resale transactions).

5. Queenstown posts the lowest median T-O-X at NEGATIVE $11,100, followed by Jurong East at NEGATIVE $10,600 (for HDB towns having more than 10 resale transactions with T-O-X).

Source: SRX (04-Apr-2019)

Prime areas lead slide in private home prices in Q1 - SRX

PHOTO: ST FILE

APARTMENTS and condos in the prime areas or Core Central Region (CCR) led declines in private home prices in the first quarter of this year.

Compared with the other submarkets, CCR has been the hardest hit by last July's hike in additional buyer's stamp duty (ABSD) rates, which impacts investors and foreigners more severely, points out JLL senior director of research and consultancy Ong Teck Hui.

Based on the Urban Redevelopment Authority's flash estimate data for the first quarter of 2019, the price index for non-landed homes in the CCR fell 2.9 per cent quarter-on- quarter - the sharpest quarterly drop since the 5.2 per cent slide in Q2 2009 in the aftermath of the global financial crisis, notes Colliers International's Singapore research head Tricia Song.

The latest decline in the index, combined with the 1 per cent fall in the preceding quarter, takes the total decline to 3.9 per cent from the recent peak in Q3 2018.

URA's overall private home price index too contracted for the second consecutive quarter. The 0.6 per cent (flash estimate) decline in Q1 2019 was a bigger drop than the 0.1 per cent q-o-q dip in the preceding quarter.

The price drop for non-landed homes in the CCR in Q1 2019 came amid the launch of four prime projects in the region - Fourth Avenue Residences, RV Altitude, Fyve Derbyshire and Boulevard 88.

JLL estimates that more than 300 private homes were launched in Q1 2019 in CCR, significantly higher than the 182 launched in Q4 2018. Unsold units from projects launched last year have also increased the cumulative unsold stock, exacerbating the supply and demand imbalance in the CCR primary market.

Furthermore, the secondary market in CCR also softened in Q1 2019, as reflected by a 3.8 per cent decline in median prices of non-landed homes in this segment during the quarter.

"According to URA Realis data as at Q4 2018, CCR's proportion of the total unsold (completed and uncompleted) private homes is 22.5 per cent, while units sold in CCR in 2018 made up only 5.9 per cent of the take-up for the whole of last year, reflecting the significant mismatch between supply and demand in this sub-market," said Mr Ong.

 

Ms Song of Colliers said a closer look at the transactions in Q1 2019 suggests that the q-o-q decline in median prices for certain projects in the CCR could have contributed to the price drop as developers sought to clear inventory in ongoing launches. These included: Marina One Residences, New Futura and TwentyOne Angullia Park.

"The lower prices transacted may also be due to bigger or less choice units, which command lower per square foot rates, as the projects get sold down," said Ms Song.

URA's price index for non-landed homes in the city fringe or Rest of Central Region (RCR) dipped 0.2 per cent in Q1 2019 after posting an increase of 1.8 per cent in the previous quarter. In the suburbs or outside central region (OCR), non-landed private home prices were unchanged, following the 0.7 per cent increase in the previous quarter.

Market watchers note that demand in these two segments is better supported by a higher proportion of buyers who are owner occupiers as well as relatively more affordable price points. Moreover, sentiment boost from the Cross Island Line announcement helped developers to hold onto prices of projects near future stations.

ZACD Group executive director Nicholas Mak said: "Although the current cooling measures would continue exerting downward pressure on private home prices in general, stabilising HDB resale prices could provide some support to buying demand in the OCR segment.

"In the absence of major shocks to the market, the price index for non-landed homes in the OCR could outperform the price indices of the other market segments this year."

URA's price index for landed homes rose 1.1 per cent quarter on quarter based on the flash estimate for the first quarter, reversing the 2 per cent drop in the preceding quarter.

Observers say that the landed price index may be more volatile due to the lower transaction volumes for these relatively big-ticket items and the fact that prices of landed homes may vary widely depending on their specific characteristics.

URA's benchmark overall private home price index is now 0.7 per cent below its most recent peak in Q3 2018 and 3.8 per cent below the all-time high in Q3 2013.

According to JLL's analysis of URA Realis data, there were 3,215 transactions of private homes in Q1 2019, a sharp 40 per cent year-on-year drop.

Said Cushman & Wakefield head of Singapore research, Christine Li: "Multiple doses of cooling measures coupled with stronger headwinds in the macroeconomic condition have started to weigh down buying demand, although the interest-rate hike is likely to be put on hold due to the pause in the Fed's rate hike.

"Weaker sentiment in the residential market is likely to persist in the near-term and may discourage buyers from committing early for fear that prices could erode further in the coming quarters.

"It also does not help when there is a steady stream of new launches in the pipeline due to the five-year (sales) deadline for developers - which means buyers are also spoilt for choice."

Moving forward, the less-than-ideal take-up rates at some recent launches are likely to nudge developers to price projects more sensitively in the coming months if they want to move units and better manage sales inventory, she added.

Mr Mak of ZACD predicts that the URA overall private home price index could post anything from a 3 per cent drop to 1 per cent growth for the whole of this year compared to last year.

Ms Song of Colliers is more sanguine, maintaining her forecast of 3 per cent growth in the benchmark index in 2019, for which, among other factors, she cites a halt in interest rate hikes, continued benign economic growth and those who sold their homes through collective sales buying replacement homes.

Source: SRX (02 Apr 2019)

Total auction sales in Q1 down 42% y-o-y - EdgeProp

By

Timothy Tay

/ EdgeProp

|

March 29, 2019 6:33 PM SGT

Tags:

property auction

ET&Co

1Q2019

grange residences

Haig Court

The property auction market saw a total sales value of $11.57 million in the first three months of this year. This translates into a 42.1% decline y-o-y from $53.84 million in 1Q2018, says Edmund Tie & Company (ET&Co).

The decline could be due to the after-effects of last year’s property cooling measures, which softened the whole residential property market since 3Q2018, says ET&Co. Other factors include the New Year and Lunar New Year festive periods in January and February, as well as the March school holidays.

Units sold via auction in Q1 2019, excluding private treaty sales and units transacted before or after the auction. (

“Many buyers appear to adopt a wait-and-see attitude, especially with many upcoming new launches, giving buyers a wide variety of choices,” ET&Co says.

The most expensive unit sold at auction in the first quarter this year was the mortgagee sale of a 2,852 sq ft, three-bedroom-plus-study unit at Grange Residences. The unit fetched $7.15 million ($2,507 psf) when it went under the hammer and successfully found a buyer at ET&Co’s auction on March 27. It was the first time the 17th-floor unit was offered at auction. It was bought for $6.8 million ($2,384 psf) on Oct 5 last year, based on URA Realis.

“The successfully auction price of $7.15 million is very attractive, given that another 17th-floor unit in Grange Residences was sold at $8 million ($2,805 psf) in January 2018. Prices in Districts 9 and 10 are also surpassing $3,000 psf in today’s market, with nearby new launches transacting at approximately $3,500 psf,” says Joy Tan, head of auction and sales at ET&Co.

Other top auction sales include the owners’ sale of a 1,399 sq ft, three-bedroom unit at Haig Court which changed hands for $1.85 million ($1,322 psf) on Feb 28; and the mortgagee sale of a commercial unit at Sim Lim Square at $1.7 million.

Source: EdgeProp.sg (03 Apr 2019)