Week in Review – 28 May 2015

HDB puts 9,400+ BTO and SBF units on sale

9,431 new flats in 24 Housing and Development Board’s (HDB) towns and estates have been put on sale by the HDB in its biggest Build-To-Order (BTO) cum Sale of Balance Flats (SBF) exercise. This consists of 4,044 BTO flats in Punggol, Sembawang, Clementi and Tampines that will be launched this month. HDB will also offer 5,387 balance flats in their May Sale of Balance Flats (SBF) exercise. Approximately 27 per cent of balance flats are near completion, while the remaining is under construction. 
According to analysts interviewed by Channel NewsAsia, projects in Clementi will draw the most interest and be among the priciest, with four room BTO flats ranging from S$478,000 to S$621,000. Mr Colin Tan, Director of Research and Consultancy at Suntec Real Estate Consultants, noted however that buyers often make decisions based on the location, value of the property and potential appreciation instead of considering the price alone.
Up to S$60,000 of housing grants will be provided for first-timer families, subject to eligibility. This comprises the Additional CPF Housing Grant (up to S$40,000) and the Special CPF Housing Grant (up to S$20,000). With grants, two room flats may be purchased for as low as S$15,000. 
Pioneer smart homes launched in Punggol Northshore
The pioneer batch of homes built and equipped with smart technologies – Northshore Residences I and II – was launched by the Housing and Development Board (HDB) on May 27. The new flats will be situated in Punggol Northshore, one of the seven waterfront housing districts. 
The star feature of this eco-friendly project is its integration of smart technologies. Playgrounds and fitness corners will be built with the help of environmental modelling technology, which will study the best locations with the help of wind flow measurement and solar irradiance. The project will use smart technologies such as a pneumatic waste conveyance system to monitor recycling efforts and waste disposal, as well as a car park management system that studies and allocates spaces for visitors and residents alike. Individual units come with an option to install personal smart systems. For instance, the Home Energy Management System (HEMS) allows residents to monitor their energy use in real time. 
The homes are more affordable than transacted prices of resale flats within the area, but are eight to 20 per cent pricier than new flats previously launched, due to the new smart systems. Prices, including housing grants, start from a minimum of S$28,000 for a two-room flat, S$132,000 for a three-room flat, S$249,000 for a four-room flat and S$354,000 for a five-room flat.
Mr Eugene Lim, Key Executive Officer at Real Estate Agency ERA, said to TODAY that the flats are considered competitively priced considering its location. The homes will be near a Light Rapid Transit station (LRT) and a neighbourhood centre, and is located in Punggol’s first waterfront district for public housing.
The project is due in Q2 of 2020 and will be part of the 4,040 flats in the Build-to-Order (BTO) exercise. Other BTO flats will be located in Clementi, Sembawang and Tampines. 
Luxury property likely to extend decline
The luxury property segment is set to continue its decline into 2015 according to RHB Group, with only 25 units sold in April. High-end units made up only 2.1 per cent of April sales, dipping from 2.3 per cent in March. 
The sluggish sales in the luxury segment have been attributed to the overall gloom of the property market, as well as to the restrictive Additional Buyer’s Stamp Duty (ABSD). The ABSD now stands at 15 per cent for foreigners, who typically make up a large portion of luxury buyers.
New home sales this month are likely to fall further due to the lack of prominent launches in May. 
Price and location still drawing factors for property buyers
Although cooling measures will continue to deter buyers, PropNex CEO Mr Ismail Gafoor noted to Singapore Business Review that buying interest will be piqued by project location and reasonable pricing. 
Ms Alice Tan, Director and Head of Research at Knight Frank Singapore, added that the quality of the development and less competition in the surrounding area will also attract interest. Buyers will also be attracted to new incentives and fresh marketing campaigns.
Without competitive advantages, housing projects will merely be playing the pricing game, said Jones Lang LaSalle’s (JLL) National Director for Research and Consultancy Mr Ong Teck Hui; projects need to have a unique selling point. 
Orange Tee’s reveals best rental yields in Singapore  
Orange Tee has revealed that overall non-landed rental yields are at 2.7 per cent to 3.9 per cent. Rental yields in the Outside Central Region (OCR) came in highest, commanding 3.2 per cent to 3.9 per cent. This is followed by yields in the Rest of Central Region (RCR) averaging at 2.8 per cent to 3.6 per cent and rental yields in the Core Central Region (CCR) at 2.7 per cent to 3.5 per cent.
These findings are based on rental data from major non-landed projects comprising over 100 units, as well as the resale data for the corresponding projects from Q2 2014 to Q1 2015. External factors such as falling residential prices and rentals were also taken into consideration.
Among all housing types, 99-year leasehold properties, smaller units such as shoebox apartments, as well as suburban properties above ten years of age were identified to command better rental yields. 
Orange Tee highlighted Queenstown in particular for attractive rental demand. Factors for the demand were its close proximity to Orchard Road, the Central Business District (CBD) and education clusters. 
The real estate agency also noted that rental yields for projects within walking distance of MRT stations were not necessarily high. This is demonstrated by the higher rental yields held by 20 out of the 34 projects not situated near MRT stations. This was due to higher prices of projects located nearer to MRT stations, ultimately affecting rental yields.