Duo Residences: A good buy?

This post is not about introducing this historical iconic development. Therefore, I will not go into details. To read more, click on the links below.

Complete e-brochure

Draft Site Plan

Duo Diagrammatic Chart

Site and Facilities Plan

Videos

Video Link (Artist's impresson of DUO's design and architecture

Video Link (Development, uploaded in ERA's portal)

Indicative prices:

Unit sizes and indicative price breakdown

Analysis:

Criteria:

Type: Private Residential

Districts 1,2 & 7

Unit Sizes: 400 - 1100 sf

Age: 0 - 7 Yrs old. 

1) District Sales Trend (Most recent 24 months)

Please see the sales trend below which I generated based on the above criteria.

D1 : - 0.2% / yr
D2 : +8% / yr
D7 : +12.4% / yr
National: +6% / yr

Findings are that D7 condos / apartments are showing the highest growth rate of avg transacted psf over the last 24 months, followed closely by D2.

This could mean that either D1 has more supply hitting the market thus causing a slow down in capital appreciation or that it is near peak prices / overpriced.

2) Closest comparatives Avg transacted psf and volume (Most recent 24 months)

I have selected 5 developments which is very similar in age range; either not > 7 yrs old or under construction as a gauge.



There is quite a big gap between D1,D2 and D7 average transacted psf.
Taking Sky Suites @ Anson as the closest to Concourse Skyline which is still under construction nearby to Duo Residences, the gap is about $200 psf.


3) District Rental Yield & Rental psf

D1 : -0.5% / year
D2 : -3.3% / year
D7 : -11.3% / year

Do note that rental yield is an inverse relation to capital appreciation. ie when capital appreciation is +ve, rental yield is -ve if all other variables remain constant.

Note that all 3 districts are showing a lower rate of decline in rental yield than the rate of capital appreciation / avg transacted prices.

All 3 districts are showing pretty consistent rental psf. However, districts 1 & 2 are showing signs of softening in recent months. On the overall, still not really cause for concern.

Conclusion:

It appears that district 7 shows the highest potential upside. In addition, the area is zoned to be a growth region by the government in the masterplan.
There are not many newer (< 10 yrs old) private residential developments in that area. The only other comparable development is Concourse Skyline, a 99LH project which is still under construction.

Duo Residences is the only 4-in-1 mixed use development (5 Star Hotel, Grade A office, Retail + F&B outlets, private residential) as of now.

It sits right on top of Bugis MRT interchange and Bugis MRT station along the East West Line.

From a price point perspective, it is worth considering taking a second look at this development.

Other factors to consider: Location, iconic architectural design, the 1st JV development by both Singapore & Malaysia governments.

Some questions to ponder: Are you able to find another development at this quantum / psf that may have the potential upside?

To find out more, please contact me @ 9489-3594.

** Do note that if you are keen, the deadline to submit Expressions of Interest (EOI) is this Sunday 10th Nov'13 @ 6pm.


Disclaimer: All efforts were made to ensure the correctness of the information at the point of this post. I am not responsible for any errors or any decisions based on my analysis above.
This is purely my personal opinion.

Would Home prices dip up to 20% by end-2015?

There is an article in today's ST reporting that analysts from CIMB and Barclays Bank saying that they estimate that home prices may dip by 20% by end 2015.
I really wonder where they get these estimates from.

Remember not too long ago when the very same 'experts' predict that property prices will CRASH after the Xth cooling measures but it didn't materialise?
Also, I wonder how much mortgage loans do the above two banks have in their portfolio as opposed to the other 3 local banks.
If I am not wrong, it is not difficult to understand why they choose to release this set of news at this moment.

My own personal take on this. I have no doubt that overall residential property prices are stabilising or may dip a little over the next 6-12 months and beyond.

However, I am skeptical that the government will allow it to drop by so much. After all, the government collects a lot of stamp duties from transactions and it does not make sense to kill the golden goose.

Moreover, it is a very sensitive issue to cause such a drastic drop in asset prices with the next GE in 2016.

It is a fact that sales from new launches are indeed slowing as there are many more choices for buyers to consider today and a lot of buyers are price sensitive as they are fully aware of impending hike in interest rates and of course their budgets are affected by how much they can loan due to the TDSR (Total Debt Servicing Ratio) being enforced by financial institutions.

However, if one were to think about it. The impact is already in play today.

I did an analysis on the residential resale property prices and there are areas which are more resilient than the rest. What a lot of people fail to understand is that avg prices across Singapore may dip.

However, the term 'avg' means that some areas are seeing a rise in prices BUT more areas are seeing a softening of prices. Naturally, it will cause overall avg prices to dip.

But what people interpret it is that prices on the whole are dropping and their expectations are way below sellers' asking prices.

This is also causing a drop in transactions other than the TDSR framework.

My observations tell me that residential properties with strong fundamentals are always in demand and are resilient.

New launch coming up opposite Tanah Merah MRT station - The Glades @ Tanah Merah

Among the recent launches that I have seen in the past few months, I am looking forward to this particular development that is going to be launched right opposite Tanah Merah MRT station (See pic below).

Jointly developed by Keppel Land and China Vanke Co Ltd, I believe this is going to be the gem of Tanah Merah. 

Sitting on a plot bigger than 343,000 sqf, it is quite a large piece of land as compared to the recently launched Urban Vista.

This development is made up of 9 blocks giving a total of 726 units and 3 units of shop space; 1 bedroom - 4 bed dual key units. 

Launch prices are estimated to be between $1400 - $1600 psf. 

Looking at the draft layouts, I think the design is pretty decent without any bay windows or planter boxes. 

What really catches my eye is the beautiful landscaping and water features throughout the estate, the patented 1 bedroom SOHO units and the double volume 4 bedroom units. 

The excellent location and close proximity to the MRT station, Changi Business Park, future 4th University (SUTD), shopping malls, airport, ECP, golf courses, Expressways that lead to the city, numerous schools from primary, secondary, tertiary to International schools makes this a pretty sound investment choice or for own stay. 

I expect strong interest if the development is really launched at the estimated range mentioned above with additional early bird discounts as the prices are very similar to the recently launched Urban Vista in the 1st half of this year. 

* Information may not be 100% accurate. Please do your own research. 

  

Tanjong Pagar Centre by GuocoLand to launch at $3000 psf ?

There is a very interesting piece of news which was published on the front cover of the Straits Times on 3rd May 2013.

The heading reads "Tanjong Pagar Centre set to be tallest building at 290m"

This is an iconic development by GuocoLand which will be made up of a tower housing Grade A office space, residences and retail space.

Its office portion - to be called Guoco Tower - will occupy 38 storesy and have 850,000 sq ft of net lettable space. The residential portion will take up the 39th - 64th storey and it will be called TP180. It will have nearly 200 units ranging from one to four-bedders and penthouses.

This white site was previously purchased at $1.71 billion - or $1,006 psf per plot ratio back in February 2011.

What caught my eye is really the speculated launch price of $3,000+ psf due to the location and proximity of being right about above Tanjong Pagar MRT station.

It will be very interesting to see how the lauch will impact the prices of surrounding residential developments.

Searching for a home or an investment property

On many occasions whenever I speak to potential clients who are shopping to buy a new home or for investment purposes, I realise that a lot of them are going around calling up listings advertised either on the papers or various online portals and then arranging viewings on their own. This process can be significantly shortened if only they engage a professional and competent real estate salesperson to assist them.

A person is usually very tied up in going about their day to day activities, let alone to squeeze the extra time in searching through the papers or web portals to look for a home or investment property on their own. 

This is especially so when they are 1st timers in purchasing an investment property. It is not easy to find a good investment property, especially if you choose one whose value drop and/or remains very difficult to rent out over time. 

A lot of people confuse buying an investment property over one for own stay. One thing to note about property investment is that you see with your mind and not with your heart as you'll not be living in it. It is going to be your passive income tool which helps you to grow your wealth. 

Our job as professional consultants come into play and a good real estate salesperson would be in a better position to assist in identifying good properties with good potential. After all, we do this day in and day out. We have a good feel of what is happening on ground level even before any transactions appear on URA's website. By the time a transaction is reported, there is already a time lag of approximately 8-10 weeks. 

We are also able to research and point out ongoing or future developments in a certain locality that may not be apparent to a typical buyer or they may overlook potential issues.  

In the real estate realm, transactions occur all the time and it is no different from the stock exchange. The only difference is the volume, quantum and time taken for transactions to take place. It is precisely the long duration for a transaction to be reported to the public is when buyers and sellers are able to capitalise on either entering or exiting the market before a trend emerges. Of course, not everyone will get it right but it's usually either gaining a bit more or losing a bit less. 

I notice that most savvy and successful property investors usually have a real estate salesperson whom they work regularly with regarding their purchases, sales and rentals of their property portfolio. This is no different from building a good professional relationship with your private banker. After all, the bankers help you manage your wealth by advising on various instruments that benefit you. Building a long term relationship with a competent real estate salesperson is the same. The only difference is they advise you on acquiring, selling and renting your million dollar investments.   

In summary, engage a competent real estate salesperson and they will be able to assist you based on your requirements. 

A hint that EC pricing and subsidies will change?

I read on Channel News Asia yesterday evening about our National Development Minister, Mr Khaw Boon Wan discussing about EC prices.

In short, he said that that something is a sense of inequity here that the lower-income group is getting lower subsidies than somebody who is earning S$12,000, so something is wrong somewhere and therefore the current EC mode cannot continue.

Mr Khaw also said he is confident that he can bring down the price of new flats in non-mature estates to four times the annual median salary of a buyer - down 30 per cent from the current 5.5 times. He is wary of some "transitional problems".

He said there needs to be "distinct differentiation" between the cheaper new flats and those built earlier.

I hope that a fairer system of pricing and subsidising EC flats will be announced soon.

As for creating a new class of HDB flats based on 4 times the annual median salary of a buyer, I think it is a really good idea but there will be a lot of issues to address before the scheme can be implemented successfully.

Cluster Housing or landed property? How do they compare?

It's been a while since I last posted anything. This is mainly due to work and working with cluster housing.

As I have been serving clients looking to buy alternative types of property; mainly landed property and cluster houses, I decided to examine both types and point out the advantages vs disadvantages.

One of the most frequently asked questions from talking to people is that they do not know what are cluster houses?
In short, it is often described as basically individual condo units built on land.
There are 99 years leasehold cluster houses and freehold cluster houses.
Nevertheless, it is sort of like a hybrid. Having a pseudo 'landed' property with shared facilities.

Some recent launches and upcoming launches that are often talked about are:
Whitley Residences,  Palms @ 6th Avenue, Charlton 27 and Belgravia Villas.

I will not do a comparison on which is better but instead talk about cluster houses vs landed property.

Advantages of cluster houses

1) Guaranteed 2 parking lots.
Most intermediate, inter-terrace houses can only accommodate 1 car in the car porch and the other car would need to be parked along the street outside the compound.
Many landed property owners 'chope' the space outside their compound for another vehicle using dustbins, traffic cones etc.
You are most certainly to get 2 full sized carpark lots within your compound.

2) Shared facilities
Most cluster house developments would at least come with a swimming pool, a gym and BBQ pits.
It is nearly impossible to conceive having your own swimming pool and gym in a landed property unless the land size is very big.

3) Security
This is definitely a selling point for cluster houses as you get 24hrs security all the time. For landed properties, you would need to install your own alarm system or pay a fair bit more to link up with private security firms.

4) Open communal space
You'll usually have a fair bit of open space for you to walk or let children roam about within the compound under security. However, most landed properties have limited open space.

5) Bedrooms with attached en-suite bathrooms
Most cluster houses tend to have at least 4 to 5 spacious bedrooms with attached bathrooms. You usually do not get that in older landed properties.

6) Home Lift
As more cluster houses are built with multiple storeys, they usually come with a private home lift. A lot of landed properties do not have a private home lift and it is usually tougher for elderly people to climb up and down the stairs.

7) Consistent Facade
It is very nice to see a development with a consistent facade rather than driving into a street with landed properties looking totally different with various height differences.
Personally, I think this would actually affect the valuations in that street.
I know of people who intentionally move from such areas into cluster houses as they like the consistent facade which they know would not be changed by the owners over time.

8) Affordable Maintenance charges
The monthly maintenance charges paid for the upkeep of the development and the facilities appear to be of more value than landed properties. A lot of landed property owners always insists that there isn't much maintenance expenditure required but upon further investigation, this is not true.
For landed properties, a typical owner will need to take care of roofing, external painting, gardening, pest control, rodent control and security charges and if the charges are averaged out into monthly payments, it may come up to about the same as cluster houses.
However, there is no swimming pool, gym and other facilities to be enjoyed.

Disadvantages of cluster houses 

1) Entrance is via basement
A lot of people do not like entering via the basement as opposed to a traditional landed property where you enter the compound at ground level.

2) Narrow width
Most cluster houses are narrower than landed properties.

3) Lack of front porch / garden
It really depends on the design of a particular development.

4) Lack of privacy
Most cluster houses appear to be built quite close to the opposite unit and prospective buyers tend to point out that there are privacy issues. If you look closely to the designs, some developments offer privacy screens or reflective windows, making it hard to see into a unit.
Some landed property areas are serviced by a single lane 1 way street. The distance is no different from cluster houses.

The above is a general summary of the pros and cons of cluster houses vs landed properties.

Feel free to contact me @ 9489-3594 or write an email to me if you are looking for one or want a more in depth discussion on a particular property.