Expect a period of correction for resale HDB flats and private properties which may favour buyers. Meanwhile, the rental market will continue to see strong demand favouring landlords.
By Khalil Adis
The cooling measures appear to have had an impact on the property market as it is now slowly shifting from a sellers’ to a buyers’ market.
Anecdotal evidence on the ground shows that sellers are more realistic in their asking prices while buyers are now able to get homes that are within their budget.
One such buyer is Ronald (not his real name) who is currently renting a room with his wife.
“We looked around in early November 2022 but prices for 3-room HDB flats that had recently achieved their Minimum Occupation Period (MOP) were not within our budget ranging from $420,000 onwards. Sellers were also not willing to budge on their asking price,” said Ronald.
However, in December, Ronald noticed that their asking price had started to come down at around the $400,000 mark based on listings on PropertyGuru.
Meanwhile, data from HDB say otherwise, showing that the median resale price for 3-room HDB flats in the third quarter of 2022 has remained somewhat consistent, ranging from $320,000 to $460,000 compared to $320,000 to $436,000 in the second quarter.
Sensing the market has turned, Ronald and his wife decided to make an offer for a corner unit in Bukit Panjang at $405,000 which was still lower than the asking price of $410,000.
With an estimated monthly mortgage of $1,137, Lee said buying the unit will be a much cheaper option than renting.
Ronald is currently paying $1.200 a month for his room rental.
Thankfully, his offer was accepted by the seller.
“The rent we are paying is currently quite hefty as rents have increased significantly by 20 to 30 per cent. Therefore, buying a house makes much more financial sense for us. Also, I am familiar with the area and it is within walking distance to Senja LRT station with plenty of amenities nearby,” he said.
Indeed, according to data from the Urban Redevelopment Authority (URA), rentals of non-landed properties increased by 8.3 per cent in the third quarter of 2022, compared with the 7.1 per cent increase in the previous quarter.
Meanwhile, data from HDB showed that the median price for the entire HDB flats for 2-room in the third quarter of 2022 was transacted at a median price of $1,930.
“Our completion is expected to be around March and April 2023 which we are looking forward to as we anticipate our rent to increase further. Finally, we are able to have our own home,” he said.
Sellers are more realistic
Meanwhile, sellers are also willing to accept lower offers as the cooling measures take their bite.
One such seller is Siti (not her real name) who has been trying to offload her odd-sized executive HDB flat since July 2022.
Marketing her unit has proved to be challenging as her master bedroom comes with odd corners that make the placement of beds and cupboards difficult.
Nonetheless, Siti received various offers starting from $660,000 and then $620,000.
Subsequently, the sellers backed out due to various reasons.
She finally settled for an offer of $615,000.
Another seller adjusted their expectations for their 3-room HDB flat from $442,000 to $435,000 after numerous viewings.
“We noticed that buyers are now taking time to make an offer,” said the seller who wishes to remain anonymous.
HDB’s Resale Price Index (RPI) for the third quarter of 2022 showed that while the index saw an increase, it was slowed than the previous quarter.
In the third quarter, the index was 168.1 points which was an increase of 2.6 per cent over that in the second quarter of 2022.
This is a slower increase than the 2.8 per cent increase in the second quarter of 2022.
Meanwhile, resale transactions rose by 10.7 per cent, from 6,819 cases in the second quarter of 2022 to 7,546 cases in the third quarter of 2022.
When compared to the third quarter of 2021, resale transactions in the third quarter of 2022 were 10.5 per cent lower.
Predictions for 2023
Looking ahead, the HDB resale market is expected to cool further due to the incoming supply from its Build-To-Order (BTO) exercise.
This will mean buyers can anticipate the prices for HDB resale flats to come down to a more realistic level.
According to HDB, in November, it launched 9,655 flats for sale which was by far the largest BTO offering ever in a single launch.
Spread across 10 projects in both mature and non-mature estates in Kallang Whampoa, Queenstown, Bukit Batok, Tengah, and Yishun, around 60 per cent (or 5,861 units) are offered in non-mature estates.
This makes up almost half the number of flats offered in non-mature estates in the whole of 2022
“The November 2022 BTO launch is the largest BTO sales exercise yet for HDB. The bulk of the almost 10,000 flat supply, or close to 6,000 new flats, are located in non-mature estates (NMEs). This number is in fact bigger than the total flat supply of a typical BTO sales exercise, thus offering a wide range of affordable flats for homebuyers. With 95 per cent of 4-room and larger flats in this bumper crop set aside for first-timer households, and additional ballot chances for them, we encourage first-time applicants to apply for flats in the non-mature estates to increase their chances of securing a new BTO flat,” said HDB’s chief executive officer, Tan Meng Dui.
When including the 1,071 units offered under the Sale of Balance Flats (SBF) exercise, a total of 10,726 new flats are offered in the November 2022 sales exercise.
Meanwhile, the rental market for both private and HDB properties is expected to heat up further as the incoming supply from private (49,384 units as of the third quarter of 2022) and HDB flats (10,726 units) will take a few years to come on stream.
Therefore, tenants may wish to exercise prudence by locking into a 2-year lease to mitigate any price increase.
With its experience in green urban design and master planning projects spanning three different continents, PLP Architecture says cities like London and Singapore are witnessing an increase in demand for green spaces while developers are now seeing monetary value in them.
By Khalil Adis
It took Covid-19 for developers around the world to realise the important connection between buildings and outdoor spaces.
That is the observation of Lee Polisano, president and founding partner of London-based PLP Architecture.
“What we learnt is that there was an actual preference for people to want to have a much stronger connection to what they did things to outdoor spaces,” said Polisano on the impact of Covid-19 on building design and architecture.
Polisano was speaking to reporters at a press conference held at the Four Season Hotel in Singapore where he noted there was a significant shift in terms of urban design pre-Covid-19 to Covid-19 times.
This, in turn, he said has had an impact on building materials and incorporating new technology.
“Materials that are less effective by bacteria are very, very popular. Touchless technology and buildings have become very, very popular. Dare I say, facial recognition in some places as an enabler has become very, very popular. There are a lot of things that are happening,” he said.
Transforming urban areas into green spaces
From London to Tokyo, PLP Architecture has designed and delivered a wide range of projects around the world ranging from office to master planning and urban design.
So what results are intelligent, ground-breaking and exciting designs through the firm’s profound commitment to social, economic and environmental ideals.
One example is the recently opened One Bishopsgate Plaza, in London, United Kingdom.
The project marks the completion of a mixed-use master plan that originated with the adjacent Heron Tower to the south.
The master plan envisioned a new City of London, moving away from the mono-culture of the office towards a rich aggregate of different uses that brings together hospitality, residential, amenity spaces, new types of retail as well as innovative public realm and place making.
Having created some of the greenest buildings on the planet, his architectural firm is now designing and building projects on three continents.
Increase in demand for green spaces in London and Singapore
With his firm's experience across different continents, Polisano notes that demand for green spaces had increased significantly in certain cities like London and Singapore since Covid-19.
“If you take, for example, London’s parks, the realisation rate of London’s parks increased by 200 per cent from pre-Covid times to Covid times. They have impacted the time people want in open spaces. I hear in Singapore, they increased,” said Polisano.
Meanwhile, New York City and Tokyo had witnessed a decrease.
“In New York City, it actually dropped to under 40 per cent than normal realisation. Tokyo also saw a decrease,” he said.
Regeneration project for midtown Tokyo
Speaking of Tokyo, Polisano and his team are currently embarking on an urban regeneration project by transplanting their green and sustainable design ideas in the city.
Called Tokyo Cross Park, the firm was appointed in March this year as the master designer and placemaking strategist for one of Japan’s largest, greenest post-war urban renewal projects.
It is also the architect for two of the four mixed-use towers on the 6.5- hectare site in the prestigious and culturally-significant Uchisaiwaicho 1- Chome district.
“We are deeply honoured to be part of this exciting enterprise. Everything that PLP embodies was brought to bear on this project. Through it, we will deliver our commitment to use design and technological innovation to contribute to the flourishing of life and business, and importantly to protect the built environment,” he said.
Located a stone throw’s away from the shopping district of Ginza, the multi-year, multi-billion-dollar project will connect the city to the 16-hectare Hibiya public park.
It will include four towers, a 31-metre-tall podium and a two-hectare public plaza.
When the project is fully completed by 2037, it will create a total of 1.1 million square metres of offices, commercial facilities, hotels and residential units.
“The Tokyo Cross Park will become a flagship for sustainable development in Japan and will showcase the possibility of reaching the government’s target of carbon neutrality by 2050,” said Polisano.
The regeneration of midtown Tokyo will also see the rebuilding of the Imperial Hotel.
This legendary landmark has welcomed royalty, heads of state and international business leaders for over 130 years.
Opened in 1890 by Japan’s aristocracy, it was rebuilt for its times in 1922 by American architecture doyen Frank Lloyd Wright before being redeveloped for the third time.
Designing Park Nova
In Singapore, the firm is responsible for the design of the upcoming garden-inspired, green-clad landmark residential building called Park Nova.
Interestingly, Polisano shared that Park Nova’s design concept was implemented pre-Covid-19.
Located in the prime district of Orchard Road, PLP Architecture took inspiration from Park Nova’s lush, green environment to create 54 spacious apartments that seamlessly marry indoor and outdoor spaces.
With an increase in demand for green spaces, one of the challenges PLP Architecture had faced is the city’s hot, tropical climate which is applicable also to Malaysia.
“I think you have to realise that, for example, to create this kind of space in a European context or North America, the climate allows you to do it more readily year-round than it is here. Here, you got to look at other ways of creating this connection through design. That’s still quite a challenge,” he said.
To overcome this challenge, the firm came up with a biophilic concept.
This concept could also be replicated in Malaysia.
“The whole narrative of Park Nova was creating outdoor spaces garden-like environment which everybody experiences when you move to Singapore for individual apartments. That indoor-outdoor biophilic connection was already there. But now, the influence is quite strong on the creation of outdoor spaces,” said Polisano.
Indeed, Park Nova’s design and architecture include a variety of dedicated resident amenity spaces that promote health and well-being while supporting active lifestyles.
Sitting on a site area of 43,356 sq ft, this freehold development integrates its outdoor and indoor spaces by incorporating a lap pool, garden seating and outdoor lounge, just to name a few.
“What’s interesting about it is that people discounted the value of this kind of space before. I think real estate developers now see there is a monetary value in them as well. It is a win-win for everyone. Unfortunately, it was a hard lesson to learn and a very, very difficult way. It has changed everyone’s lives forever,” he concluded.
An independent analysis from yours truly