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So which district in Singapore provides the best rental returns?

- August 31, 2015 No Comments

According to data compiled by property research portal Square Foot Research based on transactions over the past 6 months, district 18 in the east - meaning areas around Pasir Ris, Tampines and Simei - have the largest number of private non-landed homes in Singapore with high rental returns.  

The rental returns of developments such as Tampines Trillant, Tampines Court, Simei Green, The Eden, Melville Park, Savannah, Eastpoint Green and Changi Rise is more than 4%.

Research also indicates that many condos in the western part of Singapore (district 5) such as Pasir Panjang and Clementi can also command rental returns that exceed 4%. These include West Bay Condominium, Faber Crest, Vista Park, Park West, Dover Parkview and Heritage View.

Next up is district 3, which are areas around Queenstown/Tiong Bahru (Mera Prime, Emerald Park, Domain 21, River Place and Queens) and district 19, which comprise of Serangoon Gardens, Hougang and Punggol (Compass Heights, Rivervale Crest, The Florida, Sunglade and Regentville). 

On the other hand, condos in the prime districts 9, 10, 15 and 21are attracting far lower rental returns. Developments that are popular with investors such as Marina Bay Suites currently command rental returns of just 2.2%, while the returns at Ardmore Park and St Regis Residences are 2.3% and 2.6% respectively.




Private home resale prices stayed flat in July: SRPI

- August 29, 2015 No Comments

Resale prices of completed non-landed private homes were unchanged in July from the previous month, the Singapore Residential Price Index (SRPI) flash estimates released on Aug 28 showed, with gains in the central region offsetting the declines in the non-central areas.

The SRPI, compiled by the National University of Singapore’s Institute of Real Estate Studies, showed overall prices stabilised last month after the revised 0.1% drop in the previous month.

Prices of completed private apartments have fallen about 1.7% in the first six months of this year. The decline follows falls of 3.7% and 1.3% in the first and second halves of 2014 respectively.

Prices of homes in the central region, excluding small units, rose 0.2% to extend June’s 0.6% rise. Prices for these units have fallen the furthest so far at 4.2% from a year back and down an estimated 12.3% from their peak in May 2013.

Home prices in the non-central region eased a further 0.2% following the 0.7% decline previously. They are down 1.9% year on year and have fallen an estimated 8.6% from their peak in April 2013.

Prices of small units — those with a floor area of 506sqft and below — rose 0.3%, reversing from the 0.9% decline a month earlier, the data showed. They are down 2.9% year on year and have fallen about 9.5% from an August 2013 peak.

Even as cooling measures and loan curbs continue to weigh across the entire housing market, the resale sector is facing more competition for the buyer’s dollar as developers are making their new launches more affordable.

Sales of new private homes last month jumped to the highest level since the Total Debt Servicing Ratio came into effect two years ago, largely due to the launch of High Park Residences in Sengkang, where 1,169 of the 1,186 units offered were snapped up. The median launch price of $989psf – below the $1,000psf psychological threshold – was a key factor in its strong sales, analysts said.

In all, developers sold 1,594 private residential units last month, more than four times the 375 units sold in June and thrice the 511 units offloaded in July last year, Urban Redevelopment Authority data showed.

Analysts are expecting resale private property prices to decline by 3 to 4% for the full year, given looming new supply.

A total of 21,563 private homes are scheduled to be completed this year, up from 19,941 last year. A further 21,043 are expected to be completed next year.

About 96% of the supply this year and the next are non-landed homes.
Source: TODAY, ST




UK annual house price growth lowest since June 2013

- August 28, 2015 No Comments
UK house prices rose by 3.2% year-on-year in August, according to the latest survey from mortgage provider Nationwide.

That is the weakest annual pace since June 2013, and marks a slight slowdown from July.

Month on month, prices rose by 0.3% in August, compared with 0.4% the month before.

The average house value in August was £195,279, according to the Nationwide house price index.

One reason why house price inflation has apparently weakened is a rapid growth in prices at this time last year, the Nationwide said.

"This month's data provides further evidence that annual house price growth may be stabilising close to the pace of earnings growth, which has historically been around 4%," said Robert Gardner, Nationwide's chief economist.

"Clearly house price trends are determined by a wide range of factors, but labour market developments are amongst the most important," he added.
With demand for homes rising, new home construction needs to increase to keep houses affordable, he said.

The figures from the Nationwide are in marked contrast to those from its rival, Halifax.

Earlier this month the Halifax reported that house prices across the UK were rising at 7.9% a year, and it expected strong growth to continue.

Halifax and Nationwide use different "mix adjustments" in their methodology.


This involves a different emphasis on property sizes, to account for the fact that more small or large properties may be sold in any one month.

Source: BBC


And speaking of UK properties, the wife and I made a boo-boo by not exchanging for Pounds back in May ahead of the completion of our UK property in September. This has become a rather expensive lesson when the £ went from S$2.02 to the current S$2.18 in just 3 months! So for those who are dabbling in foreign property investments, do be real mindful of exchange rate fluctuations!







Adana @Thomson (Review)

- August 26, 2015 No Comments

The wife and I have decided to check out Adana @Thomson (Adana) last weekend, since one of our readers had asked about it.

Adana is a low-rise, freehold project developed by Fortune Properties Pte Ltd - a boutique developer whose previous projects had included RV Suites, RV Edge and Estrivillas. The actual site of Adana is along Upper Thomson Road, but the sales gallery/showflat is located at the junction of Ang Mo Kio Avenue 1 and Avenue 2, besides the Ang Mo Kio Telephone Exchange.

First off, let's talk about awards. Nature-lovers will be pleased to know that Adana is one of three developments that have been recognised under National Parks Board’s (NParks) Landscape Excellence Assessment Framework (LEAF) as an "Outstanding Project" for their efforts in providing greenery and ecologically friendly landscapes. What this essentially means is that the project features 100% usage of native species of shrubs, trees and creepers for its landscaping and a green gardenscape will cover the entire rooftop of the development, which is interweaved with walkways, jogging tracks, community gardening and recreational spaces for residents. The entire development will also serve as an extension of Central Catchment Nature Reserve and a green corridor to the Thomson area and Bishan-Ang Mo Kio Park. 

Adana consists of just 74 units that is housed over 3 blocks of 5-storey each. It sits on a small rectangular plot of land of about 41,000sqft, which currently houses the showroom of Star Furniture. Entry into the development will be via Old Upper Thomson Road, which is the same stretch of road that one will use when visiting the Lower Pierce Reservoir Park. 

In terms of unit offerings, Adana has apartment types ranging from 2- to 4-bedrooms. And you get one standard size per apartment type, which makes for easier selection.
 
            2-bedroom (25 units):                         560sqft
            3-bedroom Compact (20 units):          721sqft
            3-bedroom (20 units):                         872sqft
            4-bedroom (4 units):                        1,152sqft

The development is currently scheduled for TOP in 2019.

Facility wise, these are located on the ground and roof-top levels. Offerings are fairly limited as can be expected with small developments but you still get your share of swimming pools (though the main lap-pool looks to be rather narrow despite its 30m length), gym (both indoor and outdoor), BBQ areas and even a children playground. And a side-gate will allow residents to access Upper Thomson Road by foot directly from the development. 

You also get underground parking but your visitors may have to find their own parking outside of the estate. Consolation is that there is a public parking area for about 20 cars (currently catering to those who visit Lower Pierce Reservoir Park) just across from the development. 
There is only one showflat available for viewing in the sales gallery. This is the 3-bedroom (Type B2).

As you enter the main door, the kitchen is directly ahead of you while the living/dining area is to your right.

The kitchen is a small rectangular strip that may pose a bit of a challenge even for two people working alongside. It comes equipped with hood/hob, oven, fridge and washing machine by Electrolux and the huge window located at the back will ensue proper ventilation and an outlet for the cooking smell that is likely to overwhelm the tiny kitchen. And since this unit type do not come with a yard/laundry area, you will have to get creative if you are one who prefers to "air-dry" your clothing.

The living/dining area is again a longish strip of real estate. The dining area is particularly narrow - do not be misled by the photo as the line on the floor actually demarcate where the walls will be. So other than the need for a small rectangular dinning table, those who sit on the outer side will probably have to stand up every time someone wants to pass from the living area to the kitchen/main door.  Alternatively, you can take your dining al fresco, i.e. at the balcony, which is definitely sizable enough to house a dining table for four but will probably need to double up as the laundry drying area as well.

The living area has sufficient wall for a three-seater sofa. And you need not worry about splashing on that 80" flat-screen given the narrow space. But what the wife and I liked about the living/dining area is the large-slab compressed marble flooring and the 5.5m (no typo here) ceiling height, which creates an extra dimension of space... or makes it seems so anyway.

..

The two common bedrooms are "petite" (aka small) but the saving grace is again the 5.5m high ceiling, which means you have the option of putting in a double-deck bed or raise the bed and leave the floor-space for alternative use (a study table, for example). The wife and I were told that one of the common bedroom will be pre-approved for building of a loft of no larger than 3sqm, which will allow you to add more space to that room. 

The common bathroom looks fairly plain-vanilla. That said, it comes with high-quality floor and wall tiles and sanity fittings from Laufen, Geberit and Hansgrohe. 

 ....
The master bedroom will not leave you with much space after putting in a Queen bed. You also get another balcony area which the small apartment can ill-afford. 

The master bathroom is almost an exact replica of the common bathroom. But the wife and I were rather stunned (but not quite like a vegetable yet) by how tiny the shower cubicle is. The wife and I reckon that an average-sized individual will need to be quite restrained while bathing to prevent knocking himself/herself against the glass partitions. Even with the rain-shower, the cubicle will offer little cheer to the overall shower experience.


Pricing wise, a second-floor unit in Stack #15 (which we opine to be the best stack) will cost you $1,372,600, which translates to $1,574psf. 

Adana was officially launched about 2 weeks ago (after an extended period of "preview" as per current practice) and as of last weekend, about 40% of the project has been sold. The wife and I also understand that all but one the 4-bedders have already found buyers.


What we like:

1. The project's freehold status, which for new developments these days are more the exception than the norm and will be increasingly so moving forward.

2. The quality furnishing and fittings provided, which adds that bit more class to the apartment.

3. The tall ceiling at 5.5m not only make the apartment feels more spacious than its square-feet will suggest, but may also allow you to carve out additional functional spaces through some creative ID.

4. Amenities such as F&B establishments, supermarkets and even a Singapore Pools outlet are about a 5-minute walk away across the road at Jalan Leban, where Sembawang Hill Food Centre is also located.

5. There is almost a zero chance that your car will run flat on petrol as there are 3 petrol kiosks lining side-by-side next to Adana  and another 2 more within close proximity across the road.

What we do not quite like:

1. At just a tad over 800sqft, the 3-bedroom unit in Adana is way too small for our liking, regardless of the high ceiling.

2. Call us pampered but we cannot quite get use to not having a proper yard to do our laundry, iron our clothes etc. And hanging them out in the balcony to air-dry is an eye sore.

3. Adana is located right along Upper Thomson Road, which is serviced by quite a number of public buses (to places like Clementi, Orchard and even CBD, according to the wife). It should also allow you to flag a cab rather easily. However, the nearest (upcoming) MRT station, which we understand to be Bright Hill station, is quite some distance away and probably a bit laborious to get to on foot. And being right next to a busy road will mean that apartments closer to the main road may bear the full brunt of traffic noises.

4. One of the major marketing point for Adana is its proximity to nature and the lower pierce reservoir park. However, given the orientation of the development due to the plot size, none of the units actually faces the reservoir directly. One row of apartments actually face the petrol kiosks, which is not exactly appealing. However, we were told that the leases for these will be up in a few years and that they are unlikely to be renewed. But nobody knows for certain what's gonna happen at current time, so you may still end up watching vehicles taking petrol or getting a car wash while breathing in petrol and exhaust fumes all day long.

5. Being in sync with nature is good. Having to deal with roving gangs of monkeys, not so. The wife and I are all too aware about the monkey infestation problem especially around the forested parts of Upper Thomson. When we asked about this, we were told that monkeys should not be a major problem. But our visual inspection of the area around the Adana site may suggest otherwise.

6. Primary school wise, we can only identify one -  CHIJ St. Nicholas Girls' School - that is within 1km of Adana. This may be a concern for some parents, especially those with boys.


Our Parting Shot 

While we are generally happy with what we see in terms of quality, the wife and I are not too hot over the small apartment sizes and location/orientation of Adana. And despite all the hype about this being a freehold project, we still feel that at almost $1,600psf, it is probably a tad over-priced.
  




Speaking of bells and whistles...

- August 22, 2015 No Comments

The wife and I have read on CNA today that property developers are getting "creative" in terms of the amenities being offered in their new projects these days, in an attempt to win back buyers after home sales - weakened by multiple rounds of cooling measures - dropped to a six-year low last year.
Long gone are the days of impressing homebuyers solely with location, view, resort-style living or the usual trappings of 50m swimming pools, Jacuzzis, tennis courts and air-conditioned gyms. Instead, developers today are going all out to design and develop dwellings that provide a new way of living for buyers with a more assured sense of value and quality and very specific tastes. This is evident in some of the recent launches:
  • High Park Residences, a  condominium at Fernvale which is scheduled to obtain its TOP in 2019, has a carnivalesque spread of 118 facilities over 366,000sqft of land designed to lure even the most house-proud hermit out of his cave. Besides the requisite pools, playgrounds and BBQ pits, the development’s array of facilities also include: Indoor and outdoor movie theatres, boxing rings, a three-metre high swirl and splash water slide, a flying fox, hammock garden and a jamming room for budding musicians. And as if that were not enough, the developer is also throwing in an additional seasoning of free lifestyle classes for two years, including kick boxing, yoga, baking, swimming, tennis and violin lessons

  • Westwood Residences, an EC project in Jurong launched in May this year, is the first bicycle-themed development in Singapore. The development, which is expected to get its TOP in August 2018, comes complete with an outdoor mini-velodrome, a covered bicycle garage to house up to 500 bikes and even a specially designed bike maintenance area with washing, drying and repair provisions. Developers Koh Brothers and Heeton Homes are also throwing in a free bicycle with every purchase of a home, while stocks last.

The report has got us thinking and the wife and I have come up with a few other "bells & whistles" that developers should consider offering in their upcoming projects:



1. Enrichment centre by Amy Chua: We have friends who went for the official launch of her enrichment centre "The Keys Academy" located at (no, not the Singapore Zoo) Odeon Tower and came back telling us that the event was packed! This may be indicative of the vast number of women out there who aspire to become "tiger moms" and their desire to produce brilliant (but lifeless) kids. 
2. Distribution centre for limited-edition Hello Kitty collectibles: Have you seen the queues (and occasional scuffles) for these outside McDonalds every time they are introduced?
3. Exchange counter for new dollar notes: This will be especially welcomed whenever Chinese New year approaches as residents can skip the lines in banks and just concentrate on queuing for Lim Chee Guan instead!
4. Sound-proof mahjong rooms: We have heard that playing mahjong is a good way to keep dementia at bay. The sound-proof rooms may also help foster closer relationships between neighbours when people stop complaining about the shuffling of tiles and shrill of delight/despair at two in the morning.
5. Dedicated pool for those who insist on wearing improper attire: And we aren't referring to the babes/dudes in skimpy swimwear rather those who choose to swim in everything else BUT swimwear.  

And before you said it developers, you are most welcome! 
                                                                               



The Malaysians and mainland Chinese buyers are back with a vengeance!

- August 19, 2015 No Comments

My Paper had reported today that political and economic uncertainty at home are likely behind the increase in the number of Malaysians and mainland Chinese who bought property in Singapore in the second quarter.

Malaysian snapped up 248 private units, 53% more than in the first three months of the year, while 234 homes were purchased by buyers from China, up 37%. This is according to real estate services firm DTZ.

Buyers from Malaysia and China had accounted for almost half of the 1,017 purchases made by non-Singaporeans in the second quarter. This total was 60% more than in the first quarter, but below the 1,298 units sold to foreigners in the same quarter last year.

DTZ's report also showed that Singaporeans had accounted for about 77% of private home purchases in the second quarter, unchanged from the same quarter in 2013, before tougher mortgage curbs were implemented. There were 3,867 units sold in the second quarter, compared with 2,141 in the first. Of these, 2,855 were bought by Singaporeans, compared with 1,564 in the previous three months.


What the wife and I find rather amusing after reading the report is that while Singaporeans are still crossing the causeway in droves to buy private homes in Iskandar and such, our (smarter) Malaysian counterparts are all moving in the opposite direction...




July new private home sales highest in 2 years, but...

- August 18, 2015 No Comments

Developers' private home sales (excluding executive condominiums) in July quadrupled to 1,594 from just 375 in June. The July figure released by the Urban Redevelopment Authority on Monday (17 August) is the highest monthly figure in about two years but is due largely to just one project.

Chip Eng Seng's sale of 1,169 units of High Park Residences in Fernvale Road accounted for 73% of the volume. The combination of a sub-$1,000psf average pricing (below that for typical suburban projects) and a good proportion of small-format units meant that the vast majority sold were below $1 million, putting them within reach of a wider pool of buyers.

Photo: Fernvale Development

The project's facilities and its location next to Thanggam LRT Station, one stop from The Seletar Mall, also helped with the marketing pitch, along with suggestions that rental demand could come from those working in Seletar Aerospace Park.

However, most market watchers are not expecting July's sales momentum to be sustained. For one, the Hungry Ghosts Month began last Friday.

Desmond Sim, head of Singapore and South-east Asia at CBRE Research, cited two other reasons why August and September would be relatively quiet - the Jubilee celebrations and election fever. "Only a handful of major projects of more than 300 units and a few prime district projects are expected (to be released) for the rest of the year."

However, sales momentum could come from executive condominium (EC) projects - a public-private housing hybrid. This Saturday, sales bookings will begin for MCL Land's Sol Acres in Choa Chu Kang Grove. The average price is $780psf for the 707 units in the initial phase of marketing of the 1,327-unit development. Other EC projects slated for launch include JBE Holdings' 525-unit Signature at Yishun, where e-applications will open on Sept 11, with bookings starting on Sept 26.

Next door, City Developments plans to launch its 505-unit The Criterion in the fourth quarter.

Eugene Lim, key executive officer of ERA Realty, said: "Developers are likely to step up EC launches once the imminent upward revision of income ceiling for EC buyers is confirmed."

In the private housing segment, there has been talk that Keppel Land may release new units at Highline Residences, near Tiong Bahru MRT Station - later this month or next month.

In October, UOL and Kheng Leong are expected to release their 663-unit Principal Garden condo along Prince Charles Crescent.

"Generally," said a seasoned developer, "developers are expected to price their projects reasonably to draw buyers - given the uncertainties that continue to weigh on the market including interest rate increases, exchange rate woes and stock market volatility as well as the looming high volumes of private housing completions."

In the luxury condo segment, Wing Tai in July sold a fifth floor unit at its freehold Le Nouvel Ardmore condo for $15.84 million or S$4,000 psf - the highest psf price for a non-landed private home so far this year.

The July private home volume marked a big jump from the 511 units a year ago and was the highest since June 2013, when 1,806 units were sold.

"But the high sales volume achieved in June 2013," pointed out SLP International executive director Nicholas Mak, "was before the TDSR (total debt servicing ratio) framework adversely affected buying demand."

As in the past, the strong pick-up in July sales was in tandem with an increase in units launched.

In the EC segment, developers found buyers for 495 units in July, up from 110 in June and 51 units a year ago. July's top-selling EC development was City Developments' The Brownstone in Canberra Drive, with 187 units sold at a median price of $818psf, followed by Singhaiyi Group and Kay Lim Investment's The Vales in Anchorvale Crescent (79 units sold at $788 psf median price). Both were launched last month.

In the first seven months, 5,021 private homes and 1,260 ECs were sold in the primary market. For the whole of 2014, the figures were 7,316 and 1,578 respectively.

Chua Yang Liang, JLL head of research for Singapore and South-east Asia, is sticking to his forecast that developers will sell 6,500-7,500 private homes this year. PropNex Realty CEO Ismail Gafoor expects some 8,000-9,000 to be sold.

As for ECs, Mr Lim of ERA reckons around 2,000 units could be sold.

Mr Ismail said that while selected projects that are reasonably priced and well located will continue to attract buyers, prices are expected to come under some pressure as the potential pool of buyers shrinks and developers face stronger competition.

As for the hope that cooling measures may be lifted soon, National Development Minister Khaw Boon Wan has quashed such talk. He told Today that while the property market was "a lot less hot", it has not reached a point where an adjustment, or even a lifting, of those measures is warranted.

"The right time is when the equilibrium is a lot more certain, more sustainable," he said. "And I don't think we are at that point yet."
Source: BT


Interesting homes along Cove Drive...

- August 16, 2015 1 Comment

The wife and I found ourselves at Cove Drive in Sentosa Cove for the first time this morning and were quite surprised by the sights of the landed homes around this area. Unlike the ones that we had seen around Ocean Drive (on the opposite side of the roundabout as you drive into Sentosa Cove) during our previous visits to the F&B establishments at The Quayside Isle, the houses here seemed to have no common theme whatsoever in terms of designs. This had resulted in a mix-match of different shapes and sizes that make for an interesting drive-about.

You see houses that seemed to have come straight out of a Robinson Crusoe movie


and some that would fit right into the next Sci-Fi flick


While some looked totally avant-garde,


we swear that THIS is really an actual home and not from some movie set!







Property news that you might have missed this week...

- August 15, 2015 No Comments


This one's for those who might have been too busy to take stock of the private home-related news and data that have been released this week.


But in essence: Resale volume and prices have remained sluggish while the rental market would continue to worsen further. And to add salt to injury, SIBOR has started climbing again!

Private property resale volume up 33.4% year-on-year in July: SRX Property

The resale volume of non-landed private residential units was up 33.4% year-on-year in July, with an estimated 515 units resold, SRX Property said on Thursday (Aug 13).

However, compared to the previous month, resale volume was down 10.4% from the 575 units resold in June 2015.

Resale prices inched up 0.3% from June, driven by units in the Core Central Region and Outside of Central Region, which posted price increases of 1.7% and 1% respectively. In contrast, prices of units in the Rest of Central Region were down 2.2% from the previous month, SRX Property said.

Overall resale prices were down 0.9%, however, when compared on a year-on-year basis.

The median Transaction Over X-Value (TOX), which measures whether people are overpaying or underpaying SRX Property’s estimated market value, remained neutral.

For districts with more than 10 resale transactions, District 9 (Orchard, Cairnhill, River Valley) posted the highest median TOX of $37,000. The lowest median TOX was in District 15 (Katong, Joo Chiat, Amber Road) and District 21 (Upper Buit Timah, Ulu Pandan) at -$35,000.

TOX has remained neutral at zero for the past four months.


July private home rentals down: SRX Property

Rental prices in the non-landed private residential market fell 0.3% in July compared with the previous month, according to SRX Property.

Units in the Core Central Region saw a 0.4% decrease in rent, and those in the Rest of Central Region and Outside Central Region saw decreases of 0.2% and 0.3%, respectively.

On a year-on-year basis, rents in July were down 5.7%, and down 12.5% compared with its peak in January 2013.

Rental volume rose from June’s 3,866 units to an estimated 4,147 units in July, SRX Property said.

Looking ahead, market watchers expect the downward pressure on rents to continue as more homes are built, and as the Government tightens foreign labour policies.

About 11,600 private homes are expected to complete this year, while another 21,043 units will come on stream next year.

Earlier last month, the Manpower Ministry said work pass holders will need to earn a minimum fixed monthly salary of $5,000 to sponsor their spouse or children to stay in Singapore on the Dependant's Pass, up from the current $4,000.

The salary bar will also be higher for who want to bring their parents to Singapore on Long Term Visit Passes. It will be revised to $10,000 a month, up from $8,000. 


SIBOR climbs to four-month high


A key interest rate benchmark hit a four-month high on Thursday (Aug 13), as sentiment towards the Singapore dollar remain weak following the depreciation of the Chinese Yuan.

On Wednesday, the three-month Singapore Interbank Offered Rate (SIBOR) rose to 0.9345%. On Thursday, the rate climbed further to 0.9388%.

Property analysts said banks have not yet adjusted mortgage rates that are pegged to SIBOR, which are currently hovering around 1.5 to 1.7%. The rate is expected to rise to 2% by the end of this year.

The vacancy rate for residential properties is also expected to climb, following the tightening of the labour market and slowing down of the economy. Experts said some owners may be forced to sell their properties due to difficulties servicing their loans.

Source: CNA

It'll be raining shoeboxes come 2017!

- August 13, 2015 No Comments

High Park Residences in Sengkang has enjoyed roaring sales in recent weeks, but investors in its smaller units may have trouble leasing them out.
Many shoebox units are coming onstream, peaking around 2017, according to data from R'ST Research. Most will be in District 19 - Hougang, Punggol and Sengkang - with at least 700 of them set for completion over this period, based on caveats lodged.
Leasing demand is untested but supply is rising and fewer foreigners here may be able to afford them.
"Increasingly, many (overseas nationals) can't even afford renting a single shoebox unit, but would instead rent a room in an apartment... Rents will be under further pressure," said Savills Singapore research head Alan Cheong.
In District 19, projects with shoebox units completed last year and in the first half of this year include A Treasure Trove in Punggol Walk and Bartley Residences in Lorong How Sun. Others due this year and next year include The Promenade@Pelikat in Hougang, Parc Centros in Punggol Central and River Isles in Edgedale Plains. Later projects include Jewel@Buangkok and La Fiesta in Sengkang Square.
Other shoebox hot spots are District 14, with Eunos, Geylang, Kembangan and Paya Lebar, with at least 527 units; and District 12, including Balestier, Moulmein, Novena and Toa Payoh, with at least 383 units on the way.
In the suburbs, District 17, which takes in Changi, Loyang and Pasir Ris, will have at least 224 units, while District 22, covering Boon Lay, Jurong and Tuas, will have at least 151 units, said R'ST Research.
Overall, shoebox units account for an estimated 18% of new sales for projects completing in the second half of this year and next year, according to SRX Property.
Prices of some newly-completed shoebox units in the Guillemard to Changi Road area in District 14 and 15 were about $1,350psf in 2013, rising to over $1,400psf for new completions late last year and this year, said Savills' Mr Cheong.
But rents for a 41sqm shoebox unit have fallen from $2,600 a month in 2013 to about $2,000 to $2,200 now, taking the gross yield from about 5.2% at end-2013 to about 4.1% now.
Most owners have holding power, preferring to keep a unit rather than sell at a low price, so yields have further room to fall to the mid-3% level for shoebox units in more accessible areas like District 14, with rents below $2,500 a month. "Once we venture into the new developments in the outlying HDB estates, the market is untested. There, yields may tend closer to 3% or even dip below that," Mr Cheong said.
Overall, prices of completed small units have fallen about 10% from their last peak in August 2013, according to flash estimates for the NUS Singapore Residential Price Index. They slipped an estimated 1.1% in June from May. But R'ST Research director Ong Kah Seng said while prices will keep falling owing to rising supply, the shoebox apartment remains relevant. "These tend to be occupied by younger tenants or owners, who will bring energy to the development and area - especially important for newer residential areas like Bartley, or those undergoing rejuvenation like Hillview and Lakeside."
Still, for those on a low budget, suburban shoebox units are not a persuasive proposition, said Century 21 chief executive Ku Swee Yong. One with about $2,000 a month can opt for much larger three-room flats in city fringe areas like Ang Mo Kio, Geylang or Toa Payoh, according to HDB's second-quarter housing data.
Mr Cheong noted that many people possess the liquidity or equity to stomach the total debt-servicing ratio, and even the 50% loan-to-value ratio for a second housing loan. "Even if rents collapse, households feel that real estate is something tangible and are more interested in deploying their capital, rather than looking at fundamentals... (Yields) will be challenged in some areas."
Source: ST

The wife and I remember cautioning (and quite repeatedly so) back when shoeboxes were the rage that a situation of "cannot sell, cannot rent" will be likely once all these tiny units start flooding the market. So here's hoping that investors who are already vested in shoeboxes will continue to be deep-pocketed enough to hang on until the market improves.  


Our wishes for Singapore on SG50!

- August 10, 2015 No Comments

The wife and I have finally gotten the time to sit down and write about our wishes for Singapore on its 50th year of independence. We had initiated this "wishing" column last year and while taking a refresher on what we had written then versus what we have in mind now, we were rather surprised to find that quite a few similarities had remained:

1. Do the LABB

What we had wished for in 2014: LABB, which is our acronym for "Let Able Buyers Buy". We are not seeking a total removal of ABSD for Singaporeans buying a second private property. But with the TDSR already showing its "teeth" in restraining buyers from overstretching themselves financially and SSD putting a curb on speculative activities, maybe the government can consider reducing the ABSD from the current 7% to say, 3%?

What we wish for in 2015: LABB is all the more relevant given the deluge of new private home units that had come on stream over the past year and with more expected to TOP over the next year. With the continual effectiveness of TDSR and SSD, a reduction or even abolishment of ABSD may help to reduce the increasing stockpile of new units in the market. 

2. Upsize the shoebox

What we had wished for in 2014: The government had already tried to manage the proportion of shoebox units in suburban areas by insisting an average unit size of 70sqm gross floor area for new developments. We say let's do one better by putting a minimum size requirement for all "small format" units and set this at, say 400sqft. With the demand for such unit type waning in both the sales and rental fronts, we are probably already in an excess supply situation. Maybe buyers and tenants have finally realised that a space of around 300sqft (some even less) is really a tad too small? 

What we wish for in 2015: As the hype for shoebox units continued to wane over the past year and situations of over-supply and lack-of-rental had started staring us in the face, the wife and I would extend our wish for the government to not only upsize the shoebox but also set a limit on the actual number of such type of units for each new development. 

3. Strengthen our MRT, not just the SAF

What we had wished for in 2014:  While residential projects near/next to a MRT station is still a big draw, this notion is increasingly being challenged these days with the more-than-frequent train break-downs. Although the occasional "walking tour of our MRT train tunnels" sounds fun, it may not be so once this becomes a regular chore. So if the one-point-something million fine that the government had imposed so far is no deterrent enough, maybe we can consider increasing this to, say 10 million?

What we wish for in 2015: What could we say? Even the latest Circle Line had been giving commuters "break-down pains" and with 12 stations of the Downtown Line 2 (DTL2) scheduled to start operation in December, one could only pray that all the maintenance and water-proofing works would be completed in time to provide Singaporeans with more reliable train rides. And we remain convinced that the government should have taken us up on the $10 million fine...

4. Better water/glass proofing at our Shopping Malls

What we had wished for in 2014:  And we aren't talking about those old and dilapidated ones rather the glittering (literally speaking, from water and glass fragments) new mega malls that have commenced business recently. While an interior water fountain may be an attraction, a "waterfall" from bursting water pipes is not. Same goes with shattering glass roofs or doors. And speaking of glass door, this is meant to keep the air-conditioning in and not as a form of amusement for toddlers - we sure hope that parents with young children can keep this in mind.

What we wish for in 2015: We like to add sewage water and rat proofing to the list. Getting rained on by sewage water or serving rats in hot-pots are not exactly the kind of "Uniquely Singapore" dining experience that customers would desire.

5. Cut back on "bunching" of GLS especially in new towns

This one is new and what we mean is the launching of numerous Government Land Sales (GLS) sites within the same area at consecutive tenders. While this might have provided buyers with more options, it also mean a higher chance of low take-up for some projects due to severe competition happening on/about the same time. We have already seen this happening with new EC launches in places such as Punggol and Woodlands.


Finally, if the wife and I might add one of our PERSONAL wish on SG50: That there would be more professional courtesy shown by parties who write to us asking about possible collaborations.

The wife and I had been contacted by two separate parties recently and after we had responded to their emails with our suggestions/proposals, they suddenly gone MIA! We had initially thought that maybe our replies had fallen through the cracks somehow and thus had proceeded to send another "By the way, did you receive our reply and if so, can you please let us know?" email to the parties concerned a couple of days later. But all we had gotten so far is deafening silence. 

We could have live with a short and simple reply such as "thanks but no thanks". Or maybe one that says "we are currently digesting your email and will let you know". Or even an outright "your proposal is way off the chart so kindly bugger off" rejection. But we find it rather unbecoming (actually downright rude) for them to simply ignore the people who had taken time and effort to respond to their emails. And what we find most incredible is that one of the party is actually the media agency (which we understand to mean that they specialize in communication) representing the largest private developer in Singapore while the other had proclaimed itself to be quite the guru (whom we were surprised at its lack of professional courtesy) for the real estate market! 

Maybe the wife and I are just too old-schooled and had been brought up in a generation whereby we were taught to acknowledge and respond back to people as a matter of courtesy so that everyone could have the necessary closure to move on. This is especially if we had initiated the communication in the first place. Have times really changed that much, or is this just part and parcel of the ills of progress? 



And what is YOUR wish (property-related or otherwise) on SG50?


Click on the link to read our wishes for Singapore last year: Our wishes for Singapore on its 49th birthday!