When schoolteacher Mrs T H Tan, 33, was expecting her third son in 2009, the family found that they had outgrown their 1,700 sq ft three-bedroom apartment at Seletar Springs Condo, located on Gerald Drive, off Yio Chu Kang Road. They sold the apartment for S$785,000 and settled on an intermediate three-storey terraced house at Park Villas, a landed housing development in the Yio Chu Kang Road neighbourhood, an area they are familiar with and that is also close to their two older sons’ schools. The Tans paid S$1.12 million for the terraced house and after spending another S$80,000 on renovations, moved into the five-bedroom home last February.
“Our family loves the space. We have enough room for the kids to study and play and for us to entertain our friends,” says Tan. The move to a landed home also “offers us a sliver of land in otherwise land-scarce Singapore at a price that is wallet-friendly”, she adds.
For house hunters like Tan who want affordable landed property, there are still choices available in the suburbs in the form of new launches. However, the entry level today is S$2 million, compared with S$1.6 million before, says Joseph Tan, executive director of residential services at CB Richard Ellis (CBRE).
In fact, the increase in prices of landed homes has surpassed that of private condominiums and apartments over the past year. According to Ong Teck Hui, Credo Real Estate’s executive director of research & consultancy, over the last five quarters, from 3Q2009 to 3Q2010, landed home prices rose 54%, while condo prices grew 39%. Ong attributes the robust landed housing market to the limited supply and strong demand.
Supply of landed housing sites has been few and far between, notes Credo. Of 250 private residential redevelopment sites (including en-bloc sales) sold over the last five years, only 15 were for landed properties. From 2000 to 2010, more than 60,000 private condo and apartment units were completed, compared with just 4,000 landed homes. Last October, URA’s auction of 14 land parcels for landed property development in Sembawang Greenvale Phase 3 were hotly contested by developers, with prices well exceeding market expectations, says Credo.
William Wong, managing director of bungalow specialists RealStar Premier, has seen an increase in the take-up rate of landed homes in the suburbs, particularly in the established eastern districts of 15 and 16 (Katong-Siglap area) and districts 19 and 20 (Ang Mo Kio Avenue 5-Yio Chu Kang-Serangoon area). “This is not surprising, as some of the landed house prices in the central districts have exceeded the budget of some buyers, hence, the natural switch to landed homes in the suburbs, where prices have not climbed as much,” says Wong.
The government’s latest round of cooling measures introduced on Jan 13 could lead to a more stable landed housing market.
As was the case when the first three rounds of measures were introduced on Sept 15, 2009; Feb 21, 2010 and Aug 30, 2010, “we believe today’s [Jan 13] moves were motivated more by the rising sensitivities over deteriorating housing affordability, rather than the impact on housing inflation”, says Leong Wai Ho, senior regional economist at Barclays Capital.
Family-owned boutique developer Tong Eng Brothers is going ahead with its private preview of its strata landed housing development, Poets Villas at Tagore Avenue, over the weekend of Jan 15 and 16. Registration of interest had already started the week before.
New launches in Ang Mo Kio areaIn the northeast region, the Yio Chu Kang Road, Ang Mo Kio Avenue 5 and Seletar Road neighbourhood is sought after, and there are many new landed housing projects being launched or about to be launched. For instance, Bukit Sembawang Estates is developing Luxus Hills, a 999-year leasehold conventional landed housing development in the Ang Mo Kio Avenue 5 neighbourhood. When completed, the entire estate will have more than 900 houses. The most recent phase of 34 terraced units was launched last November, and all were snapped up. Transaction prices ranged from S$1.9 million to S$2 million for an intermediate terraced house to S$2.45 million for a corner unit with a larger land area, according to caveats lodged with URA. The developer is expected to launch the next phase of Luxus Hills in 2Q or 3Q this year.
Tong Eng Brothers also owns a huge swathe of land in the vicinity of Ang Mo Kio Avenue 5, off Seletar Road. The 999-year leasehold site has the potential to be developed into a strata landed housing project with about 400 homes, says Teo Tong Lim, managing director of Tong Eng Brothers. The development is expected to be launched in several phases, with the first phase of 120 units likely to be released towards year-end.
Strata landed or cluster housing projects are generally defined as landed houses with strata titles and condo-style facilities. “Prices of landed homes have jumped significantly,” adds Teo. “The price rise has filtered down from the GCBs [Good Class Bungalows] to conventional bungalows, semi-detached and terraced houses, and even strata-titled landed housing developments.”
Strata semi-detached houses at Poets Villa
According to Teo, Poets Villas is one of the first strata landed housing developments to be launched with units designed under the new URA guidelines. The guidelines, effective Feb 3, 2009, require that the minimum site area of individual strata landed housing units follow that of conventional homes. For instance, bungalows have to have a minimum land area of 400 sq m (4,306 sq ft); semi-detached houses, 200 sq m (2,153 sq ft) and terraced houses, 150 sq m (1,615 sq ft). The new guidelines have effectively reduced the potential supply of new strata landed homes, says Colliers International in an October 2010 report.
Tong Eng Brothers’ Tagore Avenue site is 86,403 sq ft, and the developer could have built a denser project with 64 houses, but chose to build just 40 units of semi-detached houses. “This way, the units will have a very spacious feel,” explains Teo. The project is expected to be completed in 2015.
Strata landed homes continue to appeal to homebuyers as an alternative housing option, especially for those “seeking the best of both worlds”, that is, a landed property with condo-style facilities, says Colliers International in the report. However, only Singaporeans and foreigners who are permanent residents are eligible to buy landed homes (including strata-titled ones). Foreigners can only purchase one landed property for their own residence. They also have to seek approval from the Singapore Land Authority’s Land Dealings (Approval) Unit when it comes to landed property.
The semi-detached houses at Poets Villas have built-up areas of 3,200 to 3,700 sq ft. There are two types of semi-detached units in the 99-year leasehold development. Type A has five levels (including the rooftop terrace) and comes with private underground parking for two cars, a lift and six bedrooms. Type B is a three-storey unit with five bedrooms. The car porch of intermediate units can accommodate two cars, while that of corner units has space for three cars. The indicative selling price for the semi-detached houses is likely to be in the range of S$2.1 million to S$2.3 million each.
Next door to Poets Villas is the fully sold Meadows @ Peirce, a 479-unit freehold condo developed by UOL Group. When the first phase of the project was released in mid-2009, units sold averaged S$880 psf. Sub-sales in August and November 2010 have been at S$995 and S$1,052 psf. Based on caveats lodged, for around S$2 million, one could get a maisonette unit of 2,659 to 2,702 sq ft unit at the condo and for around S$2.2 million, a duplex penthouse of 3,035 sq ft.
Projects in Yio Chu Kang Road area
A significant leasehold strata landed housing project located on Sunrise Terrace off Yio Chu Kang Road is Far East Organization’s 119-unit, 103-year leasehold Cabana. Launched in phases, 54 units were released as at end-November last year, and 17 have been sold, according to URA data. The most recent transaction was for a terraced unit that sold for S$1.85 million in November. The three-storey homes have four bedrooms and a roof garden and a built-up area of 2,800 to 3,000 sq ft. Each unit also comes with basement parking for two cars.
Along Seletar Road, off Yio Chu Kang Road, is MCL Land’s 190,964 sq ft freehold residential development site. Located on Nim Road, the new development will be a strata landed housing project with 121 units of terraced houses and a pair of semi-detached houses. According to Koh Teck Chuan, CEO of MCL Land, the project is likely to be launched in 3Q or 4Q. Construction is under way and the developer intends to launch when a show unit in the development is completed.
MCL Land also has another strata landed housing development in the pipeline that is already “launch-ready”, says Koh. It’s the 32-unit linked bungalow project Palms at Sixth Avenue, situated on a 69,017 sq ft freehold site and near another of the developer’s strata landed development completed in 2009 — the 163-unit Hillcrest Villa. The 99-year leasehold development is fully sold, and the most recent transaction was for a unit that changed hands in a resale for S$2.9 million, or S$942 psf, last October, according to a caveat lodged with URA.
In the northwest region, in the leafy neighbourhood of Bukit Batok Nature Reserve and located off Bukit Batok Road is Allgreen Properties’ Pavilion Park. Launched in phases over the past decade, the entire housing estate will contain more than 500 homes when it is fully completed. The development is a freehold landed housing project with a mix of terraced and semi-detached homes.
The latest launch at Pavilion Park was Phase 2F, with 40 units of terraced houses released last November. To date, all the units have been snapped up, at prices of around S$2 million for an intermediate terraced house and S$2.5 million for corner units with a larger land area.
“The main reason that the property has been popular with homebuyers is that prices are pegged pretty much at market value,” points out a property consultant. Owner-occupiers are also drawn to the units’ spacious bedrooms, all of which can accommodate a queen-sized bed and come with an en-suite bathroom.
The upcoming phase to be released at Pavilion Park within the next two weeks is Phase 1D. It comprises 37 units, with a mix of intermediate and corner terraced houses, as well as a pair of semi-detached houses. The land area of the intermediate terraced units is 1,700 to 1,800 sq ft, while the corner ones have a land area of 3,000 sq ft. Built-up areas of the units range from 2,900 to 3,000 sq ft.
The semi-detached homes have a land area of 4,000 sq ft and a built-up area of around 3,000 sq ft. The prices of the units at Phase 1D are expected to be slightly higher than those at Phase 2F, as the unit sizes are larger, says CBRE’s Tan.
Conventional versus strata landed homes
Conventional landed homes are likely to see higher future capital upside compared with strata landed homes, given that homeowners own the title to the land, observes Tan. However, strata landed properties are an alternative for those who are priced out of the landed housing market, he adds.
RealStar’s Wong reckons that there’s a 20% to 30% difference between the prices of a conventional and strata landed property in the same vicinity. “Some buyers prefer to buy a conventional landed property and take up a country club membership to enjoy the [same] facilities,” he adds.
The number of new launches of strata landed housing projects is expected to be limited in the future, with around 600 units in the pipeline, notes Colliers in its report. This is because developers with the option of developing either non-landed and/or strata landed housing are likely to prefer the former, which allows them to maximise the potential gross floor area of a site, says Colliers.
According to Colliers’ report, based on caveats lodged with URA for the first nine months of 2010 alone, 420 strata landed homes changed hands. The average price was S$648 psf, which is 14.1% higher than 2009’s level and surpasses the previous peak of S$621 psf in 2007 by about 4.4%.
Cecilia Chow is City and Country editor at The Edge Singapore
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 842, Jan 24-30, 2011
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