Lush Dream Home

Posted on 28 Jan 2016 | Comments Off

Compared to the robust market conditions seen in 2013, sales of new private homes in the last two years have been severely depressed, with transactions halving to 7,300 units in 2014 and 7,440 units last year, according to CBRE Research.

The report stated that Singapore’s housing market is likely to remain flat this year as demand continues to be hindered by the property cooling measures, economic slowdown and rising interest rates.

As sales have slowed, developers are finding themselves stuck with many unsold units, but the situation is not as bad as before. The number of uncompleted unsold units fell to 23,000 at the end of 2015 from nearly 27,000 in 2014, said CBRE.

“The reduction is due to lesser new projects being added due to fewer sites being sold in 2015, translating to a limited new supply going forward.”

Meanwhile, the private property price index has dropped by 8.4 percent since peaking in Q3 2013. Specifically, the price gap between the Core Central Region and the outer regions have narrowed, presenting a window of opportunity for investors looking for good deals in the prime market, noted the consultancy.

It believes that after suffering nine quarters of price and volume adjustments, the trough may be in sight as supply runs low and prices reach an equilibrium.

“Should the government relax the existing cooling measures, it may stoke buying interest. When that happens, the window of opportunity will narrow and prices might see some upside as early as 2018, led by the prime segment.”

Tenants rule the rental market

Posted on 27 Jan 2016 | Comments Off

Gone are the days when property owners and investors ruled the market as tenants today have the choice of being picky given the influx of new units, reported The Straits Times.

In the case of Celine Tan, her potential tenant wanted the unit to be fully furnished, have new bath towels and cutlery, a bigger TV set and free servicing of air-conditioners.

“It’s quite ridiculous. I never had this experience in the last 10 to 15 years of renting, but everyone in the market is so competitive… (that I) have to accede to most of their requests,” she said.

Although Tan did not provide new bath towels and cutlery, she gave in to the other demands, which included refurbishing the dining room and bedroom, with the tenants selecting the new furniture. “They took a picture at Ikea and showed me the model they wanted,” she added.

With that, she was able to rent her three-bedroom apartment at Robertson 100 in Robertson Quay last year for $4,600 per month, down from $5,200 previously.

Aside from lower rents, tenants are also demanding shorter leases of six months to one year, noted PropNex agent Anthea Yeo. “Rental is coming down; nobody wants to commit to two years because they know next year, it could be cheaper.”

She revealed that the lacklustre market also saw her income drop by $200,000 in 2015 from the year before.

According to data from the Urban Redevelopment Authority (URA), private residential rents dropped by 4.6 percent last year. The suburbs registered the biggest decline, with rents falling 5.6 percent, followed by the city fringe and city area at 4.9 percent and 3.8 percent respectively.

Analysts expect rents to continue sliding this year amid the weaker economy, tight immigration policies and a flood of 26,467 new private homes and executive condominiums.

In fact, rents may fall by more than eight percent this year, said Century 21 Singapore Chief Executive Ku Swee Yong. Private home rents in suburban areas are expected to face more pressure as the bulk of new homes are found there.

Cushman & Wakefield Research Head Christine Li expects the vacancy rate for private homes to increase from 8.1 percent in Q4 2015 to a “critical point” of nine to 10 percent this year.

“At that level, it shows that the market is correcting in a big way, and owners may be a bit jittery, so they may rush to offload their units,” noted Li.