Sant Ritz near Potong Pasir MRT station.

But the reason may not be because the fish are not biting. There are simply fewer launches in April. Although new home sales saw a spike in March, industry analysts are putting it down to pent-up demand following January’s cooling measures. Are April’s numbers more reflective of the actual effect of the property curbs? As the heat from Q1′s fever dies down, home buyers who are shopping for a home may be holding back in wait of potential launches in the coming months.

The most recent launches were Sant Ritz in Potong Pasir , Jade Residences in Upper Serangoon, Cosmoloft in Balestier and The Siena at Farrer Road. Data from the Urban Redevelopment Authority (URA) indicated 104 units sold at the 214-unit Sant Ritz, at an average of $1,494 psf. At Jade Residences, buyers snapped up nearly half of the 171 units at a medai of $1, 592 psf.

Buyers are becoming more savvy, and are increasingly not only drawn by a property’s location but also design and potential investment value. Do buyers now have the upper hand and will developers be pressed to lower selling prices? CBRE executive director of residnetial Joseph Tan believes that buyers now draw the line at properties ranging between $900 to $1, 600 psf. Properties selling above that price line may not see as many takers. For now.

Deputy Prime Minister Tharman Shanmugaratnam’s statement last month which spoke to the unlikelihood of more cooling measures could also mean buyers are now in less of a hurry to buy up properties and can well afford to play the waiting game. It may seem like a supply glut could be near, but as soon as population increases, and depending on how fast a rate, demand will soon rise as well. Is it better to buy now than to wait for prices to drop?

Upcoming launches include KAP Residences at King Albert Part, Corals at Keppel Bay, Liv on Sophia near Dhoby Ghaut MRT station and Stratum in Pasir Ris.

In the March sales launch alone, 32 per cent of Build-To-Order (BTO) flats were taken up by applicants under the PPS scheme. There is almost 100% possibility of all PPS applicants getting a flat. 3, 898 flats were launched in March in non-mature estates such as Sengkang, Punggol and Bukit Batok. A total of 12,000 applicants applied for BTO flats in the latest launch.

HDB’s next launch will be later this month, in Choa Chu Kang, Hougang, Jurong West, Sembawang and Woodlands. WIth 4, 850 new flats plus 3,000 balance flats from previous launches planned, response from PPS applicants may be even more than March’s 32 per cent. Other schemes which the HDB provides include the:

• Multi-Generation Priority Scheme (MGPS)
• Married Child Priority Scheme (MCPS)
• Third-Child Priority (TCP) Scheme
• Tenants Priority Scheme (TPS)
• Ageing-in-Place Priority Scheme (APPS)
• Studio Apartment Priority Scheme (SAPS)

It should be noted that for the hotly debated Executive Condominiums (EC), the priority schemes do not apply. And for previous Design Build and Sell developments, developers are required to give priority to buyers applying under the Married Child Priority (MCP) Scheme and the Third-Child Priority (TCP) Scheme.

Topiary Executive Condominium in Fernvale.

Under the MCPS, applicants who are a first-time married couple and who have at least one child below the age of 16 qualify for up to 30% of BTO and 50% of SBF (sale of balance) flats in each launch. This scheme began in January 2013 and many have since successfully secured a HDB Flat by applying under this scheme. Whether this will help population growth and fertility rate remains to be seen, but at least it has helped Singaporean couples secure a home more quickly and without the pain of waiting endlessly.

Previously married couples had joined engaged couples applying under the Fiancee scheme. However unmarried couples made up close to 50% of the applicants under this scheme, which lessened the chances of those who are already married or already have a child securing a flat.

While luxury homes here saw a 0.6 per cent dip in prices, in other major Asia cities such as Beijing, Shanghai, Bangkok, Kuala Lumpur, Manila, Jakarta and Mumbai, prices leaped an average of 6.1 per cent year on year. Singapore is the only city where year on year high-end home prices fell, at 4.3 per cent.

Corals at Keppel Bay.

Which city saw the largest jump in luxury property prices? Jakarta – with an increase of 8.7 per cent in Q1, that is a whooping 32.9 per cent year on year. Kuala Lumpur and Beijing saw steady quarterly rise in property prices as well. But it is worth noting that the Chinese government is quite aware of a possible property bubble and may be clamping down on building and investments soon. Jones Lang LaSalle‘s head of Asia Pacific research, Ms Jane Murray, is predicting a fall of up to 5 per cent for high-end property here in SIngapore. As population and economic growth slows, the same is expected of the property market.

Have investors veered away from Singapore properties to focus on real estate  elsewhere in Asia and are Singaporean investors doing the same? As property cooling measures continue to kick in, will they deter home buyers even further? What will it mean for Singapore’s real estate market and is this the intended purpose of the property cooling measures?

HDB’s reports have shown that there were only 4,335 resale flat transactions in Q1 of this year, as compared to the average of 8,000 for the first quarters in previous years. However resale flat prices have continued to increase with a 1.3 per cent rise this year. Albeit slower than the 2.5 per cent increase from Q4 of 2012, it is still a 0.6 per cent rise when compared year on year.

Photo by HDB.

The latest property curbs could have had a part to play here. HDB flat buyers can now only loan up to 35 per cent (previously the cap was at 40 per cent) from HDB and bank loans are now capped at 30 per cent of the household income. Thus with these restrictions, some may now not be unable to upgrade to larger flats and thus taking away a considerable pool of buyers from the resale HDB flat market. PRs who previously form a significant number of buyers, may also be out of the picture as they are now subjected to an additional 5 per cent tax on their first home.

Skypeak @ Bukit Batok. Photo by HDB.

But with the drop in flat buyers, there is in turn an increase in flat renters. HDB reported a 15 per cent rise in subletting transactions, to 7,410 this quarter. The money is coming through rental now as more HDB owners hold on to their flats, hoping to reap in enough profit to help them make the leap to private property.

This, plus the number of new HDB flats being launched and built last and this year, have drawn buyers away from the resale market. Which type of resale flats are seeing the most activity? Is there now less competition for the larger 4 and 5-room flats? Are 3-room flats the current “hot property”? Come July, singles will also be able to purchase new flats directly from HDB. Will this impact the demand for the smaller 2 and 3-room flats?

Marina One residential project with 1,042 new condominium units. Photo by marina-one.org.

The Marina One development expected to complete by 2017 looks set to bring in even more money, both commercial and residential. Jointly developed by Temasek Holdings and Khazanah Nasional’s M+S, it will have a 341,000 sq m gross floor are and a gross development value of $7 billion.

Surrounding developments such as The Sail @ Marina Bay and V on Shenton are also seeing positive response over time. The Sail @ Marina Bay for example launched for $980 psf in 2004 but has more than doubled to $2, 180 as of the past 15 months.

V on Shenton condominium.

Marina Bay Suites sold one of the most expensive units in the area at $3, 313 psf. Median prices were at its peak in Q3 of last year at $2, 229. In the beginning of 2012 it was at $1, 926 psf.

Despite the dampened buying interest following January’s property tax hikes, tenants looking to rent homes nearby will continue to keep investment at a healthy level. Rental yields for apartments in Marina Bay are between 2 and 3 per cent. Median monthly rents range from $5.25 to $6 psf. Compared to rentals in other prime districts, it’s higher than their $3 to $5 psf median. It also helps that the proximity to the CBD and shopping and entertainment belt also helps keep selling prices high so whether its short or long term investment you’re looking for, the Marina Bay area may give you the best run for your money.

Do you know that commercial and industrial investments are not affected by government’s cooling measures and will be hot for the next 4 years at least? Join Mr David Poh and discover how you could benefit from commercial and industrial investments. Enjoying both high yield and capital gain!

About David Poh

David Poh has spent many years studying and understanding the commercial & industrial real estate market in Singapore. He manages companies that specialize in commercial & industrial investments, investments training, and real estate funds. With more than 15 years of real estate experience, David has also given sound advices to many investors in sourcing, marketing and managing their real estate investment portfolios. David is often interviewed on TV (Channel 5/8/U/NewsAsia), radio, and newspaper for his views and analysis in real estate market trends and related issues. Register your interest now!

Considering its prime city fringe location, the proximity to the Novena MRT Station, shopping malls such as Novena Square and United Square, post offices, churches and offices, Novena Regency looks set to bring even more life to the area. Launched just a few weeks ago, property developer Fragrance Realty, a subsidiary of the Fragrance Group, is predicting a more than healthy demand for both their shop and home units. Shop units are going for $7, 000 psf and the apartments at $2,300 psf.

Fragrance Group executive chairman and chief executive Koh Wee Meng has expressed positivity in buyer demand, “We are fairly confident that buyers will be attracted to its location – an exclusive private estate enclave within the Novena vicinity”. Commercial units will face the main road, where human traffic is heavy both on the weekdays from the offices nearby, and also on the weekends from the church-goers from Novena Church.

And if you’re looking for a home that is both private yet highly convenient, Novena is the prime spot. Already more than 44 units have gone to eager hands since its launch in mid April. Not many residential units, made up of one-, two- and three-bedroom units, are left. There are quite a number of condominiums nearby, but if you’re looking for a unique development that combines exclusivity with vibrancy and convenience, these Novena Regency units might be just the thing to look at. Will apartments in their vicinity see a corresponding response from buyers?

$1 billion. In tax revenue.

Following January’s new Additional Buyer’s Stamp Duty (ABSD) hikes, in February and March $158 million were added to the taxman’s coffers. The ABSD is now up to 15 per cent. $580 million came from foreign buyers, were 3, 041 homes were sold since December 2011. Singaporeans and Permanent Residents (PRs) forked out $386 million for 7,269 homes. ABSD was introduced in 2010, and since then, home owners have paid up a total of $66.6 million of this levy.

Foreign home buyers have retreated somewhat, with a 36 per cent drop from last year. The ABSD currently stands at:

• 15 per cent for foreign buyers
• 5 to 10 per cent for Singaporeans and PRs

Starlight Suites condominium.

Since new home sales have continued to push on, strongly, despite the measures, the ABSD may not have entirely been a deterrent nor an aid to managing home prices. Property developers are also helping to bolster the market by providing discounts, rebates and other incentives to home buyers.

Many buyers are willing to suffer a little now and buy when they can, rather than wait for something that may or may not happen. As the population continues to grow, they are perhaps preemptive of the future where rental could be a considerable means of income and should homes become out of reach for their children.

Ever since the Government announced that new HDB flats will come at a lower price, HDB flat owners have been expressing fears of losing their nest egg should prices of flats drop. But as new flats are limited to only certain groups and limited in terms of type and location, will there necessarily be a drastic drop in resale flat prices and are we worrying too early? Though the number of resale flat transactions have decreased, prices continue to remain high. And there will always be those who wish to choose a flat of their liking in a location they prefer, as opposed to trying perhaps numerous times in the HDB ballot queue.

Mr Khaw reassured Singaporeans that while prices of HDB flat will only drop “a few per cent over the next few years”, but in the same breath said that the prices of HDB flats cannot keep rising forever. “If housing prices keep rising,it won’t be good. When I came into the MND (Ministry of National Development) two years ago, that was my target”. And much has been done since then, with the ramp up of BTO flat supply, changes in income ceiling, limits on HDB flat sizes, increase in number of allocated flats for both first and second-timers, and even allowing singles to buy new HDB flats.

During the recent Our Singapore Conversation (OSC) dialogue, the idea of selling back new flats only to the Housing Board was faced with much opposition. Homeowners naturally worry that their homes will lose  their value and cut them off from the profit they can earn by selling it in the open market. Mr Khaw admits that resale flat prices are difficult to manage as they are largely subjected to the market demand. SLP International executive director Nicholas Mak speculates that one way of gently letting resale HDB flat prices drop is to decrease the prices of new HDB flats in the same estate.

Forestville Executive Condominium.

Recent debate also surround the Executive Condominium (EC) scheme\. While some have said that those who can afford an EC should not receive subsidies from the Government, the scheme was specifically initiated to help those who may not qualify for other HDB subsidy schemes. Thus should ECs still be considered a value-added profit-making asset for their owners?

Altez condominium.

Designated as one of the very few conservation areas in Singapore, Tanjong Pagar holds a distinct charm and mixture of the old and new, straddling chinatown and outram and the Central Business District. The Pinnacle@duxton towering over old conservation shophouses outlining the upcoming arts and design enclaves, modern condominiums, hotels embracing the skyscrapers of Shenton Way and old HDB flats just round the corner.

With the new Maxwell MRT station on the Thomson Line coming up within the next decade, this area might once again be vibrating with the heartbeats of a cosmopolitan melting pot. The new MRT station is expected to largely increase the amount of human traffic in the area, including residents from across the Causeway. Shophouses along Tanjong Pagar road have seen a sharp hike in rents in recent years, as new properties along the stretch bring new residents and human traffic to the area. And in turn, as the area becomes more vibrant, rents of residential properties may also rise.

New high-rise residential properties such as Altez, Skysuites@Anson and Spottiswoode Suites; and a mixed-use development along Peck Seah Street all hold a considerable amount of investor potential. Shophouse units along the main road are calling the shots in term of rental prices as well. Recent price appreciation have rised rents to around $4,000 per month on average for a 700 sq ft ground floor unit, to up to $10,000 per month for restaurant owners.

One of the major concerns about living and running a business in the area could be the lack of parking space. Street parking is almost impossible and there are hardly any parking areas near enough to the business or residential homes in the vicinity. Do homes in this area command higher rents? As compared to other prime district and city centre homes,  is the investment value higher? Once the Pinnacle@Duxton completes its Minimum Occupation Period (MOP), will units in the area flood the resale HDB flat market?