The year began on a high with positive sentiments carried over from the last.
The property market was well on its road to recovery but July’s new round of property cooling measures may have subdued the exuberance, perhaps a little too soon.
Redas chief expects challenges ahead in developer sales segment
July’s round of property cooling measures raised the stakes not only for developers looking to fill their land banks but also for buyers looking to enter the private property market and especially real estate investors.
Stamp duty rates and development charges were raised and so have the barriers for buyers to get into the market. Global issues such as trade tensions and rising interest rates may also indirectly affect investors and hence the real estate sector here.
The market is expected to cool down or at least quieten with the new property curbs in place, according to Mr Augustine Tan, president of the Real Estate Developers’ Association (Redas). He also urges the government to reconsider their various policies on the property market as the impact could be better aggregated.
Sales of new homes sold directly by developers are likely to fall 15% to 20% to 8,500 units, about 1,000 lesser than the 9,500 last year.
However, properties situated near MRT stations and in prime locations or districts will still be very much sought after. Demand for such properties will come not only from investors but also first-time buyers and owners who have been displaced by recent collective sales.
Collective sales market welcomes another 2 properties
As far as the en bloc segment goes, the decreasing rate of success for properties which have gone en bloc in the last few months may not have deterred others from entering the market.
And the most recent 2 sites which are going en bloc are located near transport nodes, which may make them attractive fodder for developers.
The first is Waterloo Apartments in Waterloo Street. It has an asking price of $115 million and a land area of 14,369 sq ft. Located near the Bencoolen and Bras Basah MRT stations, it is in a prime area not only for buyers who wish to live near the city centre and Central Business District (CBD) but also a great spot for property rental.
It is zoned for “residential with first-storey commercial” and has an outline planning permission for hotel use. It has a plot ratio of 2.8 and should it be converted into a hotel, allows the existing 30-unit block to potentially be converted into 180 hotel rooms sized at an average of 215 sq ft each.
The second property is Yuen Sing Mansions in Geylang. The site currently only houses 9 units and is within walking distance of Aljunied and Kallang MRT stations. The area is highly accessible to good food and a short drive to the CBD via Nicoll Highway.
All 9 owners have agreed to the collective sale and are expecting in excess of $17 million for the site.