Just a few months ago, two separate property listings were posted with a price tag of $2M. Although they were eventually taken down by the authorities (one for the misleading ad and the other for an “unrealistic” listing price), that triggered discussions about when we might actually see a $2M resale HDB transaction.

Well, we have officially gotten much closer, courtesy of a 5-room resale HDB flat at SkyOasis @ Dawson transacting at a record $1.73M. This surpasses the previous high of $1.48M for a 5-room flat in the same development, which occurred last year. The last record-breaker, a 5-room flat at CityVue @ Henderson, which sold for $1.59M, is also located nearby. The sale has sparked discussions about the future of Singapore’s housing market and the concerning trend of million-dollar HDB flats. Let’s take a closer look at this transaction and its implications for the property landscape.

Most Expensive HDB Transaction To Date

SkyOasis @ Dawson, located in the sought-after Queenstown area, is a relatively new development completed in 2021. The project is part of HDB’s efforts to rejuvenate mature estates and offer modern living spaces with excellent amenities. Some key features of this development include:

• Strategic location in Queenstown, a mature estate with a rich history
• Proximity to multiple MRT stations (Queenstown and Redhill)
• Easy access to city centre and business districts
• Modern design with sky gardens and community spaces
• Unblocked panoramic views of the surrounding area

The flat that fetched the record price is a 1,195 sqft 5-room corner unit on the 45th floor of 39 Margaret Drive, two blocks away (and 4 storeys higher) from the flat that fetched the previous record price of $1.48M in the development. Like the previous record brokered by PLB Realty, this flat is a SERS replacement flat from those that were displaced from Tanglin Halt, which allowed the owners to fulfil the Minimum Occupation Period (MOP) with a balance lease of around 96 years.

It was originally listed at an initial asking price of $1.838M before receiving offers from two groups of buyers and eventually closing at the record price of $1,725,888. The unit had only been on the market for less than a month. 

With a similar facing, it boasts perpetual unblocked views as the GCB enclave right in front of SkyOasis @ Dawson is gazetted as a conservation area. The residential plot right beside also has a plot ratio of 2.1 translating to a maximum building height of 24 storeys, meaning that it will not obstruct the views from the 45th floor.

Is The Price Tag Justified?

Despite all the inherent attributes of the unit, is this flat really worth such a steep jump from the previous record price? Did the buyers overpay for this flat? Yes, we know – willing seller, willing buyer. But some food for thought: would HDB have taken this listing down if this had been listed on the HDB resale portal? And because of this “success story”, will more sellers be encouraged to push the envelope and list their flats at crazy prices?

If we really zoom in to the area, there are only 7 stacks across 4 developments in Queenstown that offer 5-room flats with this kind of elevation and view. And out of the 4 developments, SkyOasis @ Dawson is the closest to the MRT. Given the extremely low supply of flats with these attributes, along with the combination of factors, it did set the stage and created the perfect storm for high-value transactions in the area. So the more important question should be: 

Will This New Benchmark Pricing Ever Become The Norm? 

We think it’s unlikely, and here’s why.

Here’s a look at the top 10 most expensive HDB flats (all transacted in 2024): 

The top 10 most expensive HDB flats at the time of writing have all surpassed the $1.5M mark, but if you take a closer look, most if not all of these developments are flat models that are no longer in production or being offered by HDB. Six out of the top 10 are DBSS flats in the Bishan and Toa Payoh area. We may continue to see high-value transactions coming out of these developments, but it is rather unlikely for this to become the norm when there is a limited supply of such flats with rare and highly sought-after attributes. 

Furthermore, we do expect HDB to step in at some point if prices get even more rampant and out of control. We have already seen a major shift in the public housing market with the reclassification of HDB flats, namely the shift from the mature and non-mature classification of towns to the Standard/Plus/Prime models. With this new framework, stricter resale conditions such as a $14,000 income ceiling were also put in place, which effectively creates an upper limit for future flats with highly desirable attributes. After all, when these flats hit the resale market, it is not possible for buyers to afford a $2M HDB flat with a combined income of under $14,000 – although we would not rule out possible gaps in the system such as retirees with no income downsizing from private properties to such flats. But the pool of buyers that can exploit these potential gaps are going to be very limited as well, which prevents sellers from overinflating these flats (who can the buyers eventually sell to and not make a loss if it’s not a forever home?) and allow the market to correct itself.

Which Existing Flats Could Possibly Surpass $2M?

Aside from the developments already recording high-value transactions, more townships in the Outside Central Region (OCR) have been recording million-dollar transactions. For example, Sengkang recently recorded its first million-dollar HDB flat in April 2024, with the sale of an executive maisonette at Compassvale Lane. 

However, these million-dollar HDB transactions are mostly coming from flat models that are no longer in production, especially those that surpass $1.5M. With that said, we can’t deny that the number of million-dollar HDB transactions has been on the rise. The number of million-dollar HDB transactions hit an all-time high this year, with over 200 of such transactions in May and June combined. 

Despite the number of such transactions climbing, the average transacted price of million-dollar HDB flats is still hovering around $1.1M –  and this average is unlikely to climb to $2M anytime soon, given that the government is closely monitoring the public housing market. 

While we do not have a crystal ball to predict the future, if an HDB flat were to surpass $2M in the next few years, it would likely be an existing 40+ storey 5-room flat in one of the Queenstown developments.

The Silver Lining

Looking at the bigger picture, over the past 3 years, million-dollar HDB transactions make up less than 2% of the total number of resale HDB transactions. That’s 1,644 out of 83,969 transactions. The average transacted price of resale HDB flats as a whole in the same 3-year period is at $565,648 – significantly lower than the million-dollar transactions that make the headlines every time. 

If we were to look at only 5-room or larger HDB flats, million-dollar transactions still only make up less than 4% of total transactions over the past 3 years (3.77% to be exact – 758 out of 20,096 transactions). And the average transacted price of 5-room or larger HDB flats is at $672,492, which is not as bad as the headlines make it out to be.

Closing Thoughts

Even though these million-dollar (possibly soon-to-be $2M) transactions are outlier deals that make up a very small percentage of overall market transactions, many have taken to social media to voice their concerns for the future generations. And these concerns are not completely unwarranted – if prices of public housing continue to rise at this rate, and million-dollar HDB flats inevitably become the norm, how will the next generation be able to afford a roof over their heads without relying on the great wealth transfer, or old money, so to speak?

However, with the government closely monitoring the public housing market and steadily increasing the supply of BTO flats, the increase in pricing will not see too drastic of a jump. And as we continue to propagate in our podcasts and webinars, there are still affordable options that are within reach for Singaporeans, now with even more support from the government in the form of additional grants. 

If you are on the hunt for your next home and want a second opinion, feel free to contact us here. Our experienced consultants stand ready to assist you every step of the way in your search for a dream abode. PropertyLimBrothers, always happy to show you the place.

The post 5-Room HDB Flat At SkyOasis @ Dawson Sold For Record $1.73M: Here’s What We Make Of It appeared first on Insights by PropertyLimBrothers.

Many Singaporean families aspire to upgrade from their cosy HDB flats to private properties, with landed homes representing the pinnacle of such aspirations. However, the steep appreciation of private landed properties has posed an increasingly significant hurdle in recent years, given their exorbitant costs compared to HDB flats. While there’s a widespread belief that owners of private landed homes inherited their properties through generational wealth, it’s important to note that a significant proportion of buyers actually transitioned directly from HDB flats to private landed homes.

Between 2004 and 2013, nearly a third (23.3%) of all landed property transactions involved buyers who own a HDB flat, with the peak reaching 29.5% in 2009. In 2014, this trend persisted as 24.5% of landed homes were purchased by HDB flat owners, marking the second highest proportion in the past two decades. However, since then, there has been a gradual decline in the percentage of HDB upgraders transitioning to private landed homes, accounting for only 15.3% of the market share in 2023.

This article delves into the factors contributing to the decreasing number of HDB homeowners making the leap to private landed properties.

Drivers Behind the Rise in HDB Upgraders

When analysing the historical data, it becomes clear that the surge in HDB upgraders entering the private landed market was closely tied to a decline in landed home prices. Following the 2008 Global Financial Crisis, the price index for landed housing experienced a significant drop of 19.1% over the span of 12 months, from mid-2008 to mid-2009. It was during this period, in 2009, that the proportion of HDB upgraders in the landed housing market reached its peak.

Another compelling example highlighting the relationship between declining prices of landed properties and an increase in HDB upgraders can be observed in 2014. During this period, the price index for landed homes experienced a 5.4% contraction, largely attributed to various cooling measures announced in 2013. Interestingly, there was a slight uptick in the proportion of landed homes purchased by HDB upgraders, rising from 22.6% in 2013 to 24.5% in 2014. The decrease in the landed home price index in 2014 likely stemmed from public sentiment reacting to the introduction of measures such as the Additional Buyer’s Stamp Duty (ABSD) and Total Debt Servicing Ratio (TDSR).

Hurdles Confronting Prospective HDB Upgraders

Since 2014, the prices of private homes, whether landed or non-landed, have significantly outpaced the appreciation seen in HDB flats, presenting a significant challenge for HDB upgraders. Over the past decade (2013 to 2023), the prices of private landed homes increased by 31.7%, while private non-landed homes saw a growth of 31.6%. In comparison, the price index for HDB resale flats grew by only 23.7% during the same period.

Over a two decade period spanning from 2003 to 2023, the price escalation in various housing segments reveals notable discrepancies. Private non-landed housing witnessed a significant 143.1% increase, closely followed by HDB resale flats with a rise of 140.2%. In contrast, the prices of landed homes surged even higher, experiencing a remarkable 180.6% increase over the same timeframe.

When we compare the median prices of different property categories, it highlights the significant challenge for HDB upgraders. In 2013, the median price of a five-room HDB resale flat, the largest type built in recent decades, stood at $537,000. In contrast, the smallest type of landed property, a terrace house, had a median price of $2.68 million, already five times higher than the five-room flat. Fast forward to 2023, the median price of terrace houses increased by 34.3% to $3.6 million, while the median price of a five-room resale flat grew at a slower rate of 21% to $650,000. Consequently, the typical terrace house has become 5.54 times more expensive than the average five-room flat. The gap in absolute prices between terrace houses and five-room HDB flats widened from $2.14 million in 2013 to $2.95 million in 2023, a 37.7% increase, surpassing the 21% increase in the price of five-room flats over the same period.

Examining Preferred Locations and Types of Landed Homes Among HDB Upgraders

Terrace houses, the most common type of landed homes in Singapore, are often favoured by HDB upgraders due to their comparatively lower prices compared to semi-detached houses and detached houses (bungalows). Over the past decade, terrace houses accounted for 59% of all landed property transactions, while bungalows made up 12.3% and semi-detached houses comprised 28.7% of sales. In 2023, 71.2% of landed homes purchased by HDB residents were terrace houses, followed by semi-detached houses at 23.2% and bungalows at 5.6%.

In terms of location preference, the Outside Central Region (OCR) appears to be the top choice for most HDB upgraders, with nearly eight out of ten houses purchased by HDB upgraders in 2023 located in suburban areas within the OCR. While some HDB upgraders have substantial financial resources, with 9.9% of buyers opting for properties in the Core Central Region (CCR) and 10.7% in the Rest of Central Region (RCR).

Prospects on the Horizon: Outlook for Aspiring HDB Upgraders

As Singapore experiences rapid urban development, land scarcity becomes increasingly pronounced. Consequently, recent trends in new property launches indicate a shrinking of unit sizes, be it a move by developers to make quantum more palatable for buyers or to optimise unit-to-land size ratio. This makes landed properties even more sought after and valuable. This trend sets off a domino effect, leading to a rapid escalation in the prices of landed homes and further widening the price gap compared to HDB flats.

Anticipating additional housing measures being introduced on top of existing ones to control property prices, especially for HDB homes, we anticipate a slowdown in the price growth of HDB resale flats. This poses a challenge for HDB residents aspiring to upgrade to private landed homes, as the increasing price disparity between landed properties and HDB flats means they’ll need a substantially larger financial commitment to enter the landed market after transitioning from their HDB flats.

Another significant factor expected to affect the dream of upgrading from an HDB to a landed property in the future is the implementation of rules governing Prime and Plus BTO flats, starting in the second half of 2024. In real estate, timing is crucial. The 10-year Minimum Occupation Period (MOP) and the clawback of subsidies upon resale, along with Loan-to-Value (LTV) cooling measures, will pose additional challenges for aspirants trying to align their life stages with their long-term goals. These measures will force them to allocate a higher financial investment. Moreover, since the maximum LTV is largely determined by the applicant’s age, it further exacerbates their financial burdens.

As the government continues to increase the supply of HDB flats, with an annual range of 18,000 to 23,000 units, the gap in pricing between HDB homes and landed properties is expected to widen further. Over the past decade, the annual average of newly completed landed housing units has been around 300. With land becoming more scarce in Singapore, this disparity in supply between the two housing categories is projected to grow even more pronounced.

In Summary 

The journey of HDB owners aspiring to upgrade to landed properties in Singapore is marked by significant challenges and evolving dynamics in the real estate landscape. Despite the allure of transitioning from HDB flats to private landed homes, steep price differentials, coupled with changing market conditions, present formidable obstacles. However, though it is becoming increasingly difficult, with prudent financial planning and thorough long-term planning aligning with life-stages, upgrading to your dream landed home might not be a pipe dream.

Historical trends illustrate moments where economic downturns coincided with increased opportunities for HDB upgraders to enter the landed property market. However, recent years have seen a divergence in price growth between HDB flats and landed homes, making the transition increasingly daunting.

The preference for terrace houses among HDB upgraders, especially in suburban areas within the OCR, underscores the importance of affordability and location in housing decisions. Yet, even with deep pockets, navigating regulatory measures like the MOP and LTV ratios adds layers of complexity and financial strain.

Looking ahead, anticipated housing policies and the continued scarcity of land are poised to further widen the gap between HDB and landed property prices. As such, the dream of upgrading from an HDB to a landed property may become more elusive for many, necessitating careful planning and consideration of long-term goals amidst a dynamic housing market landscape.

If you are looking for guidance in your real estate journey, feel free to reach out to us. We will be glad to guide you through the process and offer a tailored consultation to help you reach an informed decision. 

Thank you for reading and following PLB. Do stay tuned as we bring you more updates and insights on Singapore’s real estate market.

The post Is Upgrading From An HDB Flat To Landed Property Still Possible In Today’s Market?  appeared first on Insights by PropertyLimBrothers.

If you are thinking about applying for a Build-to-Order (BTO) flat, you might already be aware of the various schemes that HDB offers to help young couples in their journey to homeownership. The existing schemes, such as a staggered downpayment scheme and deferred income assessment, allow young couples, including students and NSFs, to afford the initial costs of booking a new flat. 

On 5 March 2024, the government announced additional support to help lighten the initial financial burden for eligible young couples buying a new flat. Details of the temporary rental vouchers that were announced during Budget 2024 by Deputy Prime Minister Lawrence Wong were also unveiled. 

In this article, we go through some of the changes announced and weigh in on the potential impact on the public housing market. 

Reduced Initial Downpayment for Young Couples

Starting from June 2024, young couples looking to buy a new HDB flat will receive additional support. Eligible couples will only be required to make an initial downpayment of 2.5% of the flat’s purchase price, and defer their income assessment to just before key collection. 

The deferred income assessment is tailored for young couples. Specifically, those who are either full-time national servicemen (NSFs), students, or have recently completed their studies or national service within the last 12 months before applying for their HDB Flat Eligibility (HFE) letter. 

The policy allows these couples to apply for a flat first and delay their income assessment for housing grants or loans until just before they collect their keys. This delay is strategic, considering that income assessed at the application stage might render them ineligible for certain grants, such as the Enhanced CPF Housing Grant (EHG), which demands that at least one partner has been in continuous employment for at least 12 months.

By postponing the income assessment to a later stage, couples enhance their chances of qualifying for grants and potentially secure a larger loan amount. This makes homeownership more accessible and financially manageable for young couples embarking on this significant life milestone.

Enhanced Staggered Downpayment Scheme

The current staggered downpayment scheme breaks the minimum downpayment of 20% into two instalments. The first downpayment of either 5% or 10%, depending on the type of loan taken, is paid during the signing of lease (second HDB appointment) and the second downpayment of the remaining 15% or 10% is due at key collection. With the new change implemented from June 2024 onwards, this is how the staggered downpayment will look like for eligible young couples:

We believe that this change will allow more young couples, whose main obstacle to applying for a BTO flat is the initial downpayment, to feel more confident about affording a new flat. With the new HDB classification framework rolling out possibly from June 2024 onwards as well, the average price of a 4-room BTO flat under the standard model should be in the ballpark of $400,000. This means that for a $400,000 flat, the initial downpayment by an eligible young couple will be around $10,000 – an amount that can easily be covered by CPF savings. This new change will very much ease the initial financial burden for these couples in buying a flat.

Temporary Rental Vouchers

During Budget 2024, it was announced that the government will be rolling out 1-year temporary rental vouchers to help more families that are eligible under the Parenthood Provisional Housing Scheme (PPHS) rent an HDB flat or bedroom in the open market. 

Under the PPHS, eligible families can rent a flat from HDB while waiting for their BTO flats to be completed. HDB recently announced that it will be increasing the supply of such rental flats to meet demand, aiming to double the current 2,000 units to 4,000 by 2H2025. 

More details on the rental vouchers have been released, including its quantum of $300 per month. This quantum was carefully calibrated to offer a measure of relief to eligible families, while also taking into account any possible inflationary effects on the rental market. 

To be eligible for the rental voucher, families must be eligible for the PPHS and have a rental tenancy registered with HDB at the point of application. The voucher will be on a reimbursement basis within the stipulated one-year period and the duration of their tenancy, and families renting from immediate family members or relatives will not be eligible. 

With the voucher slated to start from July 2024, final details will be shared by the authorities closer to the date of implementation. 

While the rental vouchers are unlikely to have a significant impact on the HDB rental market, we do not rule out the possibility of landlords raising their rents in anticipation of this government subsidy. Furthermore, because of the low quantum, high rental costs in the open market, and the intended beneficiaries (families with an income ceiling of $7,000), these vouchers might ultimately not do much for families that require long-term interim housing if the waiting time for their BTO flats is 3-4 years.   

Closing Thoughts

The introduction of the reduced initial downpayment for young couples seeking to purchase a new HDB flat, alongside the temporary rental vouchers, represents a thoughtful and balanced approach by the authorities. These measures are designed with dual objectives in mind: to make homeownership more attainable for young couples at the start of their journey together, while also carefully managing the broader economic implications, such as minimising inflationary pressures on the rental market. These initiatives underscore a commitment to supporting family formation and providing financial assistance in a manner that maintains market stability.    

What do you think of these changes? Will these announcements give you more confidence to apply for a flat now? If you are still uncertain about your housing options and need help navigating the market, we will be happy to offer a second opinion and weigh your options. Do reach out to us here and we will get back to you shortly.

Till next time, take care.

The post HDB Announces Further Support For Young Couples, Details Of Temporary Rental Vouchers Unveiled appeared first on Insights by PropertyLimBrothers.

In the heart of Singapore’s bustling real estate scene, Executive Condos (ECs) stand out as an attractive option for homebuyers looking for an entry into the private market. They’ve carved a niche, merging the affordability of public housing with the allure of private facilities. This unique blend has not only kept them in the spotlight but also marked them as a lucrative investment despite their premium pricing.

In this article, we unravel the journey of ECs, spotlighting their growth, the magic behind their appeal, and the trends that predict their continued profitability.

The Remarkable Rise of Executive Condos

In recent years, ECs have experienced significant growth, with transactions reaching record levels. However, it’s worth noting that they have experienced a more gradual appreciation compared to other private housing options. 

For instance, the median price for new landed properties jumped from $1,053 PSF to $2,242 PSF (a rise of 112.9%), and from $1,664 PSF to $2,486 PSF (a rise of 49.4%) for new non-landed properties between 2019 and 2023. In contrast, prices for ECs within the same period have risen by 28.9% from $1,101 to $1,417 PSF.     

The slower degree of price appreciation with ECs compared to other housing options could be due to various reasons such as the restrictions on the ownership and resale of executive condos, the limited pool of buyers resulting from the eligibility criteria requirements, and a regulated supply of these properties. 

Despite the slower rate of price appreciation, ECs are still highly sought after. We could say that this factor, amongst others, contributes to the overall appeal of ECs. 

Price Comparison: ECs Over the Years 

In analysing the price trends of ECs over the decades, it is evident that the different contributing factors such as market dynamics, economic situations, and the pandemic have all played an essential role in shaping the pricing of these residential properties. The prices of ECs over the last two decades have experienced a growth rate of 241 per cent, with a steady and gradual increase from the early 2000s to present, including pre and post-pandemic. 

As we can see on the graph, the average price of ECs from the year 2000 to 2010 was consistently under $700 PSF, while gradually increasing from $403 PSF to $613 PSF. The EC prices from the pre-pandemic and post-pandemic period illustrate a steady but slightly steeper rise, with prices going from an average of just under $1,000 PSF in 2020 to $1,374 at present. 

Pre- and post-pandemic, the prices of ECs continued to appreciate, going from $954 PSF in 2020 to $1,156 PSF in 2022. Despite the challenges posed by the pandemic over the last few years, the prices of ECs have shown growth throughout the crisis. The sustained demand for this housing type, along with government support and a limited supply could be contributing factors for the price appreciation.

The data indicating price growth in the EC market throughout the years highlights the segment’s strength and its position as a preferred choice for buyers seeking quality housing options for affordable prices in Singapore.     

Transactions with the Highest Profits

When researching the potential benefits of purchasing a property, buyers should take into account the potential for capital gains to get an estimate of how profitable their property will be if they decide to sell it to new buyers. Analysing factors such as location, market trends, the condition of the property, and developer reputation can provide buyers with a comprehensive understanding of why certain properties may achieve higher capital gains than others. Additionally, looking at the transaction history of properties close by can give buyers further insights.

The top 10 EC transactions reported gains of $1,167,000 to $1,667,846, not including any fees and costs (i.e stamp duty) incurred based on the data we gathered from URA Realis. The unit at Bishan Loft saw the highest profit of $1,667,846–which was over double the price the previous owner bought the property for, at $632,154. Similarly, the other units with substantial profits, as indicated in the table, were sold for nearly double, if not more, than the initial purchase price of the property.

Please take note that the table does not reflect the holding period of the previous owners but rather, how much the prices of these properties have appreciated since the time of their launch. 

Factors Contributing to the Success of ECs

Several factors have and continue to contribute to the growing success of ECs, making them the winning choice for many first-time homebuyers and those looking for an upgrade from public housing options. 

Affordability

The first and one of the key factors contributing to the success and popularity of ECs is the affordability of this housing option compared to other private housing options. Due to their public-private hybrid nature, ECs are priced lower than their private counterparts. This makes them a good choice for buyers seeking an upgrade from an HDB flat or first-time homebuyers. Of course, owning an executive condo also comes with certain regulations and eligibility criteria that buyers must qualify for. 

Amenities and Features

ECs come with a range of facilities and amenities that residents can take advantage of. These include communal spaces, swimming pools and gyms. These amenities enhance the overall living experience for residents and add value to the property without the premium price that private condos have. 

Government Regulations and Subsidies

The government has regulations and eligibility criteria including income ceilings and restrictions in place to ensure that the exclusivity and affordability of ECs are maintained within Singapore’s property market. In addition to this, grants and subsidies that are available for eligible buyers further incentivise the purchase of ECs by homebuyers. 

Potential for Capital Appreciation

Another factor contributing to the success of ECs over the years is the potential these properties have for capital appreciation. As they reach their MOP, the restrictions on resale are partially lifted – Singapore Permanent Residents (SPRs) will become eligible to purchase. When an EC reaches 10 years, foreigners will be eligible to purchase. This enables EC owners to benefit from a larger buyer pool, making it an attractive investment opportunity.

Closing Thoughts 

As buyers continue to seek value and the potential for high returns in the housing market, executive condos continue to remain as a winning option for homebuyers in Singapore. The factors driving the success of ECs, coupled with the developments that highlight significant profit margins, highlight the wealth building potential and investment opportunities on top of the benefits of living in ECs for buyers. 

If you are planning on starting your property journey this year or are looking to expand your portfolio, feel free to contact us here. Our consultants will be happy to help you on your journey. 

Until then, see you in the next one. 

The post Why Executive Condos Remain Top Choice for Homebuyers in Singapore appeared first on Insights by PropertyLimBrothers.

Everyone has been watching the results of the first two private condominium launches of the year – namely Hillhaven and The Arcady. The sales at both projects are a promising start to the new year, and the market can anticipate an improvement in uptake as buyers gradually re-enter the market as mortgage interest rates are gradually lowered. In comparison to the likes of J’den and Watten House, the first two launches of 2024 pale in comparison to the robust interest for the last two launches of 2023. While buying sentiment remains strong, prospective buyers are taking their time to assess the market and explore their options, indicating a price-conscious and selective approach to purchasing property. Let’s take a deeper look at how these two projects fared and what it could mean for the year ahead. 

Hillhaven

For Hillhaven, developers sold 59 out of 179 units in the first phase of launch for Hillhaven, constituting 17% of total units. The average price comes up to $2,066 psf and of the available units launched, all 11 of the two-bedroom-and-study units and 25 out of 38 two-bedroom units have been sold. According to a press release by Far East on Saturday, all 59 buyers are Singaporeans and permanent residents, and those in the age range of 31 to 50 constituting approximately 70% of the buyers. The project is a collaboration between Far East Organisation and Sekisui House Ltd, with a majority of the sold units being two and three bedroom units. Hillhaven offers an appealing price point in comparison to the average transacted price of $2,150 per square foot for new 99-year leasehold non-landed private homes in the Outside Central Region that were sold in 2023.

The Arcady

Looking at The Arcady which was developed by KSH holding, SLB Developments and H10 Holdings, 51 out of 172 units of the freehold’s launch were snapped up. In a reverse trend compared to Hillhaven, this project’s one-bedroom and study units proved to be popular and were all sold along with 25 of 38 two-bedroom units. In particular, smaller family sizes have driven a preference for the two-bedroom units at The Arcady at Boon Keng. Within 1km of The Arcady includes several primary schools such as Hong Wen School, Bendemeer Primary School and Farrer Park Primary School. Rental prices in District 12 have been on a steady upward trend, increasing from $3.34 psf to $5.08 psf between 2020 to the end of 2023. Among the projects being launched this year, only 11% of the expected 11,000 units will be freehold. The project presents an appealing option for HDB upgraders seeking freehold developments in a thriving and strategically located neighborhood near the city.

Why The Slow Start?

2023 saw the lowest number of private home transactions since 2008, hence the same sentiments could have trickled down into the first few months of 2024. Along with the increased cost of borrowing as interest rates reached a high, dampening the motivation for buyers to make quicker purchase decisions. In the year 2023, a total of 6,452 newly constructed private residences, excluding executive condominiums, were purchased. This figure represents the lowest number of sales since 2008, when only 4,264 units were transacted.

The slow start of the two real estate projects in 2024 in Singapore could be attributed to a combination of factors. Firstly, if the inflation rate is high, developers may face increased construction costs, which they might pass on to buyers, leading to higher property prices. This inflation-induced price hike could potentially deter prospective buyers, particularly those who are price-conscious or have limited purchasing power. 

Secondly, if inflation prompts the Monetary Authority of Singapore to raise interest rates to control price growth, borrowing costs for mortgages may increase. As a result, potential homebuyers may find it less affordable to finance their property purchases, leading to subdued demand in the real estate market. These dual effects of inflation on construction costs and borrowing costs could be contributing to the sluggish performance of the two real estate projects in Singapore. With Singaporeans being more conscious of increasing interest rates and inflation, household debt has been decreasing, alluding to a slowdown in property transactions. 

We can anticipate that transactions will pick up in February, after the Lunar New Year. While the sluggish start may seem discouraging, buyers can look forward to 30 other launches slated to be revealed this year. With so much competition in the market, developers may price more competitively which benefits homeowners this year. 

Closing Thoughts 

The initial condominium launches in 2024 reflect a sluggish start amidst cautious buyer sentiment and a year-end lull in activity. Prospective buyers, remaining selective and price-conscious, are taking their time to assess the market and review their options, suggesting a prudent approach to property acquisition in uncertain times. The launch of freehold projects like The Arcady at Boon Keng presents opportunities for buyers, given the limited availability of freehold units and rising demand for such properties, particularly in desirable locations. With an abundance of new residential projects expected in 2024, competition among developers may lead to more moderate price growth, ultimately benefiting homebuyers in the long run. If you are interested in starting your property journey this year, do not hesitate to contact us and our consultants will be happy to help. See you in the next one. 

The post Navigating the Slow Start: Insights into Singapore’s 2024 Condo Market Dynamics appeared first on Insights by PropertyLimBrothers.

In Deputy Prime Minister (DPM) Lawrence Wong’s Budget 2024 speech, several points directly affect the real estate market, with potential implications both positive and negative. While it’s too early to determine the long-term effects of these announcements, similar to past housing measures, they aim to maintain a resilient and strong local real estate market. This article provides a summary of the key points from the Budget 2024 speech impacting real estate.

Extension of Additional Buyer’s Stamp Duty (ABSD) Concessions

Presently, married couples with at least one Singaporean Citizen can seek a refund of Additional Buyer’s Stamp Duty (ABSD) upon buying a new private residential property. To be eligible, they must sell their first property within six months of purchasing the replacement or its completion. 

In Budget 2024, DPM Lawrence Wong announced an extension of this concession to singles aged 55 or older. This change aims to support senior citizens looking to downsize. Similar to married couples, eligible singles must sell their initial property within six months. The additional requirement is that the replacement property must be of lower value than the first property to qualify for the ABSD refund. This change will take effect on February 16, 2024.

The ABSD rates for private residential developers will be decreased. Previously, developers would be granted ABSD remissions if they manage to sell all units in the development within five years; otherwise, they face a full clawback. Now, they’ll face lower ABSD rates if they sell 90% of units within a 5-year timeframe. This change aims to ensure timely housing supply and give developers more flexibility. More information will be released in a statement on February 16.

New Annual Value (AV) Bands for Property Tax

Property taxes for residential properties are determined by their market value, with rates varying based on annual value bands. The lowest band threshold will rise from $8,000 to $12,000, and the highest threshold will increase from over $100,000 to over $140,000. Adjustments will also be made to intermediate bands. This adjustment means homeowners can expect to pay the same or lower property taxes within each band, assuming no change in their annual values and before any rebate. Annual values, on which property taxes are based, reflect the estimated yearly rent if the property were rented out. Owner-occupied homes receive lower tax rates. These new annual value bands will take effect in January 2025. The table below outlines the current and upcoming annual value bands.

1-Year Voucher for HDB Rentals in the Open Market

Image courtesy of HDB’s posting on X

This initiative aims to assist families, particularly those with young children, in securing a rental HDB flat from the open market while they await the completion of their Built-To-Order (BTO) flats. Presently, the Housing Board provides subsidised rental housing through the Parenthood Provisional Housing Scheme. To enhance support for young families facing urgent housing needs, the Government will introduce a Parenthood Provisional Housing Scheme (Open Market) Voucher, which will be valid for one year.

In Summary

In conclusion, Budget 2024 introduces significant measures impacting Singapore’s real estate landscape. Deputy Prime Minister Lawrence Wong’s speech outlines extensions to the Additional Buyer’s Stamp Duty (ABSD) concessions, offering relief to both married couples and senior singles. Moreover, the reduction in ABSD rates for private residential developers aims to stimulate housing supply and foster flexibility in the market. Additionally, adjustments to annual value (AV) bands for property tax signal a recalibration to ensure fair taxation, benefiting homeowners across different property segments. Lastly, the introduction of a Parenthood Provisional Housing Scheme (Open Market) Voucher underscores the government’s commitment to supporting families, particularly those with young children, in their housing needs. These initiatives collectively reflect a proactive approach to maintain a resilient and robust real estate sector while addressing the evolving needs of Singaporean households.

We will continue to keep you informed about the effects of these announcements and any upcoming housing measures. Stay tuned to stay informed about the latest developments in the local real estate market.

If you are looking for guidance in your real estate journey, feel free to reach out to us. We will be glad to guide you through the process and offer a tailored consultation to help you reach an informed decision. 

The post Budget 2024: Implications on Singapore’s Real Estate appeared first on Insights by PropertyLimBrothers.

In December, the Singapore property market witnessed a stark decline in new private home sales, marking the lowest levels since January 2009, reminiscent of the impact of the 2008 global financial crisis. Buyers exercised caution amidst rising macroeconomic uncertainty and increased borrowing costs due to high interest rates, while developers opted to withhold new launches during the customary year-end lull.

December Sales Downturn

The final month of 2023 saw a staggering 82.8% drop in developers’ sales month-on-month from November, excluding executive condominiums (EC), with a meagre 135 units sold, representing the lowest monthly sales tally since January 2009. Year-on-year figures painted a gloomy picture, with sales plummeting by 20.6% from the 170 units recorded in December 2022. When including ECs, the overall new home sales figure witnessed an 81% decrease, totalling only 152 units.

Throughout 2023, the average take-up rate of new projects featuring at least 100 units in the first month of launch decelerated to 55%, down from the more robust 72% observed in 2022. Notably, the total new home sales (excluding ECs) for the entire year fell to 6,452 units, marking the lowest annual sales since the global financial crisis of 2008.

Developers’ Strategies and Prospects

December reflected a cautious stance from developers, as only 36 new units were introduced to the market, reaching a six-month low. Looking ahead to 2024, approximately 40 residential projects are scheduled for launch. However, headwinds including weakened demand from HDB upgraders, investor concerns, and the hesitancy of foreign buyers due to heightened ABSD rates may not cause all 40 to launch in the year. 

How Are The Different Regions Doing?

The Rest of Central Region (RCR) took the lead in December, with developers selling 66 new units, a notable decrease from the 94 units sold the previous month. This marked a nearly 30% month-on-month decline, the smallest among the three sub-markets. Highlight projects in the RCR include The Continuum and The Landmark, selling 17 and 13 units, respectively, at median prices of $2,775 PSF and $2,853 PSF. Other RCR projects, namely Blossoms by the Park, Grand Dunman, and Pinetree Hill, each transacted 6 units during the month.

In the Outside Central Region (OCR), developers experienced a sharp decline, selling 45 new units in December—down by a significant 92% from the 539 units transacted in November. Notable projects like J’den in Jurong East and Hillock Green in Lentor contributed substantially to November’s sales. Top-performing OCR projects in December included The Myst, selling 9 units at a median price of $2,182 PSF, Lentor Modern with 8 units at $2,119 PSF, and J’den with 7 units at a median price of $2,577 PSF.

Core Central Region (CCR) new home sales also took a hit, dropping by 84% month-on-month from 151 units in November to 24 units in December. The launch of Watten House in November set a high base for comparison. December’s monthly sales in the CCR, at 24 units, represent the lowest since December 2018 when 16 units were sold. Leading CCR projects in December 2023 were Midtown Modern and Watten House, each selling 6 units at median prices of $2,882 PSF and $3,258 PSF, respectively.

In the Executive Condominium (EC) market, developers sold 17 new units in December, a slight uptick from the 16 units sold in the previous month. North Gaia emerged as the most popular EC project, selling 9 units at a median price of $1,298 PSF, followed by Altura, which sold 6 units at a median price of $1,490 PSF. According to URA data, only 288 unsold new EC units are currently on the market. Notably, the 512-unit Lumina Grand EC in Bukit Batok is set to be launched for sale on January 27.

Developers introduced a total of 36 new units (excluding EC) for sale in December, marking a substantial decrease from the 970 units released in the previous month. This represents the lowest number of new units launched since June 2023 when 31 units were introduced to the market.

Outlook for 2024

An estimated 11,000 new private homes may enter the market in the upcoming year, contingent on developers’ assessments, sales plans, and strategies. Anticipations include a more nuanced pricing strategy from developers. However, major price corrections are not foreseen due to factors such as elevated land and development costs, a low unemployment rate, ample market liquidity, and potential economic improvement in the second half of 2024.

There is a potential uptick in new home sales in January 2024, driven by the launch of projects like The Arcady at Boon Keng, Hillhaven in Hillview Rise, and Lumina Grand EC in Bukit Batok. These developments are expected to garner attention due to their comparatively more affordable pricing and potential market demand.

Closing Thoughts

As Singapore’s property market navigates through challenging terrain marked by cautious buyers, limited launches, and economic uncertainties, industry stakeholders closely monitor developments in 2024. The market’s resilience, coupled with strategic launches and pricing considerations, will play a pivotal role in shaping the property landscape in the months ahead.

If you are in the market for a property or are considering a move and are unsure about how to navigate the coming season, do look out for our upcoming webinars or reach out to us here for a tailored consultation with our team.

The post Singapore’s Private Home Sales Plummet to Decade Low in December Amid Economic Uncertainty appeared first on Insights by PropertyLimBrothers.

In recent times, the scourge of property rental scams has escalated, leaving in its wake at least 287 victims who have collectively lost a staggering $1.8 million between July to November 2023 alone. Property scams of this kind have been on the rise since February 2022, as scammers have been looking for ways to cheat unknowing victims of their money through online means. The culprits, posing as legitimate property agents, deploy cunning tactics on popular online platforms like Facebook, Carousell, and various property advertisement websites. This surge in fraudulent activities emphasises the critical need for increased vigilance and awareness among potential renters. 

How can renters protect themselves from these ruses and ensure that they are dealing with credible agents? Read on to learn about the tactics scammers use to trick you and how to safeguard yourself from them. 

Tactics That Scammers Use 

False Credibility and Virtual Illusions

The playbook of these scammers involves presenting a façade of authenticity. Victims are initially wooed with images of Council for Estate Agencies (CEA) registration numbers, credentials, and virtual tours of the advertised property. These elements, though fabricated, serve as a smokescreen to win the trust of unsuspecting individuals.

High-Pressure Ploys

Once contact is established, scammers resort to high-pressure tactics. They assert that the property in question is in high demand, coercing victims into making deposits to secure viewings. Unfortunately, after the deposit is made, the scammers disappear into the digital abyss, leaving victims without recourse.

The “Personal Assistant” Ruse

In a more elaborate scheme, victims are instructed to meet a supposed “personal assistant” to facilitate property viewings. Rental payments are then demanded from these victims through PayNow or bank transfers. 

Fake Invoices and Letters

Taking their deception a step further, some scammers provide victims with fraudulent invoices or Letters of Intent, adding an additional layer of complexity to their already elaborate ploy.

How to Protect Yourself Against Property Scams

In your home search, it is crucial to prioritise the verification of Council for Estate Agencies (CEA) registration if the property is being handled by a property agent. Always ensure that the property agent you are dealing with is indeed a registered CEA agent. Additionally, cross-check the provided phone number against the details available on the CEA public register. If the person you are dealing with claims to be the owner or landlord of the property in question, you may request to see the title deed to verify the property’s ownership. Any discrepancies should be treated as red flags, signalling potential fraudulent activity.

When navigating financial aspects, exercise prudence by adhering to the principle of no payments before viewings. Make it clear that payments are not a prerequisite to secure property viewings or rentals. Instead, advocate for all payments to be made directly to the property owner, bypassing intermediary agents. Recognise that property agents are not authorised to demand payments for property viewings, and any such requests should be met with scepticism.

In times of uncertainty, seeking guidance becomes paramount. Consult trusted individuals, such as family members or reputable real estate agents when in doubt. Their insights and experience can provide valuable perspectives and help navigate potential pitfalls. Furthermore, do not rely solely on Facebook or Carousell listings; instead, verify details through official means such as title deeds or CEA public registry for an extra layer of assurance. 

In the face of fraudulent activities, taking prompt action is imperative. Report any encountered fraudulent listings on online platforms should you come across them. This not only protects you but also helps prevent others from falling victim to similar scams. In addition to reporting, consider direct verification by reaching out to the agent’s agency through trustworthy channels to check the validity of these posts. Validating details directly with the agency can provide more assurance and allow the respective agencies to investigate further if there is a need to.

Closing Thoughts

At PropertyLimBrothers, our commitment to serving our clients with integrity remains unwavering. To ensure your security, prioritise being on our official website when engaging with our services. In your interactions with our consultants, do not hesitate to request credentials and verify contact numbers against the CEA public registry. 

Your safety and peace of mind are our utmost priorities, and we stand by our dedication to maintaining the highest standards of trust and accountability. For more assistance on your property journey or to report any fraudulent postings, contact us here and our consultants will be ready to assist you. 

The post Safeguarding Your Home Search: How To Spot Property Rental Scams appeared first on Insights by PropertyLimBrothers.

The Singaporean government has introduced an initiative to pilot a new category of serviced apartments with a minimum three-month stay requirement. This move aims to address the growing demand for extended rental accommodations, particularly in the face of competition from short-stay tenants such as tourists and business travellers. Minister for National Development Desmond Lee unveiled this initiative at the Real Estate Developers’ Association of Singapore (REDAS) 64th-anniversary dinner, highlighting the need for a targeted approach to meet the rising demand for longer-term stays. With more young people keen to move out earlier or have short term housing options, this decision comes as a welcome alternative to renting amid long leases and rising rental rates.  

The key difference between existing serviced apartments and the new category of serviced apartments would be on the minimum stay period. Existing serviced apartments have a minimum 7-day stay requirement, and while this is still in the benefit of those that require a longer stay duration. They will have to compete with visiting tourists and expatriates on short term visits. The new pilot will alleviate the competition that longer term renters face. 

URA’s Supervision and Key Locations

The Urban Redevelopment Authority (URA) will oversee this pilot project, introducing long-stay serviced apartments coexisting alongside traditional short-stay options. The new apartments, equipped with kitchenettes or kitchens and providing support services like concierge, housekeeping, and laundry, will not be subdivided for sale. They are somewhat similar to co-living spaces, such as Lyf or The Assembly Place. Two strategically located sites at Upper Thomson Road and Zion Road, listed under the Government Land Sales (GLS) Programme for the second half of 2023, will be the initial locations for this innovative housing model.

The leasehold sites that are released for sale are Zion Road Parcel A and B and Upper Thomson Road Parcel A, with Upper Thomson Road Parcel B on the Reserve List. These sites, part of the second-half 2023 Government Land Sales (GLS) confirmed list, can collectively yield 535 long-stay serviced apartments. Developers with hospitality experience might find these projects appealing, considering the potential for lower operating costs compared to traditional hotels. The combined total of 3,360 units can be obtained from the four leasehold sites situated in Zion Road and Upper Thomson Road, which are conveniently positioned near stations on the Thomson-East Coast line – Havelock (TE16) and Springleaf MRT stations (TE4). 

The introduction of a fourth site, Zion Road Parcel B under the Reserve List, further emphasises Singapore’s commitment to innovation in housing solutions. With a potential yield of 610 residential units, including serviced apartments, the government signals a proactive stance in catering to evolving housing demands. As analysts predict the potential success of this pilot project, there’s anticipation that more sites may be released, potentially paving the way for a “build-to-rent” model. This initiative reflects the government’s foresight in ensuring a stable housing supply amid future uncertainties. The attractiveness of Zion Road Parcel A, with its proximity to Orchard Road and the city centre, contrasts with potential caution from developers regarding Upper Thomson Road plots. The integration of biodiversity-sensitive urban design strategies in proposed developments near the Central Catchment Nature Reserve highlights Singapore’s commitment to sustainable and eco-friendly practices. 

Adapting to Diverse Tenant Needs

The coexistence of long-stay and short-stay serviced apartments recognises the diversity of tenant needs, demonstrating adaptability within the real estate sector to cater to a broad spectrum of residents. Many categories of individuals can fall into those who need such a housing option – tertiary students, working adults working remotely, those undergoing home renovations and couples who are experimenting with home owning. 

However, challenges may arise, including potential adjustments in property management strategies and marketing efforts.  The minimum rental period for private residential properties is 3 months, while for HDB it is 6 months. However. majority of landlords in the rental market, whether for private or public housing, tend to prefer a two-year lease. Hence this nicely fills in the gap between those who are not able to commit to a longer lease. Developers and property managers will need to navigate the nuances of catering to different rental durations, ensuring that each segment remains viable and competitive. 

By offering long-stay serviced apartments, the government aims to provide diverse housing options, reflecting an understanding of changing residential preferences. The move acknowledges the importance of maintaining a healthy rental supply to accommodate those who wish to have their own space. This development could influence the dynamics of the real estate market by addressing a specific gap in the market for individuals seeking extended stays, potentially leading to increased occupancy rates and demand for such accommodations. 

Closing Thoughts

Singapore’s venture into long-stay serviced apartments signifies a proactive response to evolving housing demands. The success of this pilot project could shape future policies and offerings in the real estate market, emphasising adaptability and targeted solutions. Stakeholders will closely monitor tenant preferences and market dynamics, anticipating shifts in demand and adjusting strategies accordingly. While this move seems positive on a whole, it will take time to see the long term effects on the market and the take up rate of such apartments over the years against traditional renting options.

If you have further questions on this topic, or are looking for guidance in your property journey, do contact us here and we will be happy to help! See you in the next one.

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