SINGAPORE: “The unique bike theme and value-added biking facilities are part of the developers’ strategy to differentiate the development from other executive condo,” said Mr Francis Koh, managing director and group CEO of Koh Brothers. The Terrace EC comes with dance studio while Signature At Yishun is designed with strong connection to our rich heritage.
A flying fox facility for adrenaline junkies? Check. A mini velodrome for cycling enthusiasts? Check. Indoor and outdoor movie theaters for film buffs? Check.
Add to that a biometric vein scanner, a boxing ring, a swirl and splash water slide, free music, swimming and cooking lessons, and a mobile app to book facilities and services within and outside the development.
These facilities are not part of a new theme park in Singapore. They are amenities offered by property developers here seeking to win back buyers after home sales – weakened by multiple rounds of cooling measures – dropped to a six-year low last year. Long gone are the days of impressing homebuyers solely with location, view, resort-style living or the usual trappings of 50m swimming pools, Jacuzzis, tennis courts and air-conditioned gyms.
With an impending oversupply of homes hitting a lacklustre market, developers today are going all out to design and develop dwellings that provide a new way of living for buyers with a more assured sense of value and quality and very specific tastes.
BEYOND THE USUAL TRAPPINGS
Take the recently launched High Park Residences condominium at Fernvale for example. The development, which is scheduled to obtain its Temporary Occupation Permit (TOP) in 2019, has a carnivalesque spread of 118 facilities over 366,000 sq ft of land designed to lure even the most house-proud hermit out of his cave.
Besides the requisite pools, playgrounds and BBQ pits, the development’s array of facilities include: Indoor and outdoor movie theatres, boxing rings, a three-metre high swirl and splash water slide, a flying fox, hammock garden and a jamming room for budding musicians. And as if that were not enough, the developer is also throwing in an additional seasoning of free lifestyle classes for two years, including kick boxing, yoga, baking, swimming, tennis and violin lessons.
“We wanted to create a place where homebuyers can have a lot of activities to play around with. It was also partly due to the land we bought – two parcels side by side – which allowed us to be more creative with the space, such as creating an interconnected water slide and cascading waterfall,” said Mr Chng Chee Beow, executive director for CEL Development, the developer for High Park.
A similar story is unfolding on the executive condominiums (EC) front. Westwood Residences in Jurong launched in May this year is the first bicycle-themed development in Singapore. The development, which is expected to get its TOP in August 2018, comes complete with an outdoor mini-velodrome, a covered bicycle garage to house up to 500 bikes and even a specially designed bike maintenance area with washing, drying and repair provisions. Developers Koh Brothers and Heeton Homes are also throwing in a free bicycle with every purchase of a home, while stocks last.
“The current property market has softened. With the current oversupply of residential projects and the slew of cooling measures including the new resale levy, it is becoming increasingly important to depend on the projects’ unique positioning, value propositions and pricing to attract buyers to enter the market.”
In another interesting move, one company has developed a mobile app to provide homeowners with post-handover services.
Qingjian Realty’s HiLife Interactive app, launched in June, allows homeowners of properties under its portfolio to book facilities and lifestyle classes within and outside the development. It is believed to be the first developer to offer such a service.
Home maintenance and lifestyle services such as air-con servicing, dance and tuition classes may be booked through the app, as are facilities such as tennis courts, function rooms and barbecue pits. The app also links homeowners with service providers around their estate, for example beauty salons, to enable residents to make appointments for a manicure.
The app debuted in June to homeowners of the 590-unit Riversound Residence at Buangkok area. Plans are in place to roll it out to the rest of the properties under Qingjian’s portfolio, which includes Natura Loft in Bishan, Nin Residence on Pheng Geck Avenue and RiverParc Residence in Punggol.
CURBS TO STAY
The new developments come at a time when the housing market is facing a slump. Last year, annual new home sales crashed by half to 7,557 units, the lowest since the 2008 financial crisis, according to data from the Urban Redevelopment Authority.
This year does not look any better. Between January and June this year, developers sold a combined 3,496 units, less than half of last year’s total. This has led analysts to forecast another annual drop this year.
The weak momentum reflects the Government’s anchor on residential property curbs since 2009, including higher additional buyer stamp duties, lower loan-to-value limits and a cap on debt repayment costs at 60 per cent of a borrower’s monthly income.
Adding pressure to the market are rising interest rates. The Singapore Interbank Offered Rate, commonly used to price mortgages here, has been climbing in anticipation of a rate hike in the United States.
Despite having its intended effect on dampening sales and prices – private home prices posted a seventh consecutive quarter of decline in the second quarter, the longest losing streak in 13 years – the curbs are not likely to be removed anytime soon.
Last month, Monetary Authority of Singapore’s managing director Ravi Menon said it would be premature to remove the cooling measures as the current price correction is “not all that much” when compared with the 60 per cent increase between mid-2009 to the peak in 2013.
Earlier this month, Minister for National Development Khaw Boon Wan also signalled in wide-ranging interview with TODAY it is still not the right time to adjust the curbs.
“Measures have to be adjusted and perhaps even lifted, when it’s the right time. The right time is when the equilibrium is a lot more certain, more sustainable. And I don’t think we are at that point yet,” he said.
FREEBIES NO LONGER ENOUGH
In the past, property market downturns have seen developers and sales agents dangle everything from discounts, lucky draws, free gifts, holidays and even country club memberships to promote their projects or clear unsold stock.
Today’s unique palette of amenity-rich offerings are, however, something else altogether, analysts said.
“Property cycles come and go depending on the macro economy, the country’s fundamentals, population policies and housing policies. The previous cycles have seen deferred payment schemes, furniture vouchers, even lucky draws to win a car. But I don’t recall any crazy ideas for promoting ECs,” said Mr Ku Swee Yong, chief executive of property firm Century 21.
In May 2012, developers of Flo Residence at Punggol said it would give away 18 Volkswagen cars in a lucky draw to buyers. A couple of months later, Far East Organization dangled a massive carrot in the form of free country club term memberships worth more than S$16,000 apiece for buyers of selected units at its Seastrand project in Pasir Ris.
More recently, in May, Singapore Land, the developer of high-end boutique condo Pollen & Bleu at Farrer Road, slashed prices by 15 per cent at its 106-unit development to attract buyers.
While discounts may help developers entice buyers in a depressed market, it can also backfire on them, analysts said. “Discounts can lead to price wars, which eventually would not benefit developers,” said Mr Nicholas Mak, executive director of research and consultancy at SLP International Property Consultants.
“Firstly, a price war would lead to smaller earnings for developers. Ultimately the branding of the developer may also be affected, as buyers would also associate the particular developer as one who is likely to give discounts, and may hesitate when purchasing as they wait around for possible discounts,” Mr Mak added.
WELCOME CHANGE FOR HOMEOWNERS
For developers of properties such as High Park and Westwood though, their efforts in differentiation seem to be working.
Homebuyer Mr Tan, in his mid-30s who came to High Park’s showflat with his family and two kids in tow said: “I’m looking to upgrade from my flat and was considering this development because of my children. The water park facilities make it easier for the kids to find things to do during the weekends. Also the free lessons can add savings for us. It is a win-win situation. We wanted a new home and the free lessons helped induce our interest in buying the home.”
Mr Xing Lei, 32, an accountant, who bought a three-room apartment at High Park for his parents said: “The purchase is near to my current flat. What attracted me to it was the whole package: the pricing, location, free lifestyle lessons and facilities.”
About 78 per cent of the 1,390-unit High Park was snapped up at a median price of S$989 psf in its first weekend of sales alone.
Over at the 638-unit The Brownstone EC in Canberra Drive, developers sold 30 per cent of the units in the first weekend of the launch last month. Brownstone, whose facilities include a skating rink, is developed by City Developments. The units were sold at an average price of S$810 psf.
Buyers also snapped up about one-quarter of the 480 units at Westwood Residences on the first day of booking in May. The units were sold at an average of S$783 psf.
“I think the market has not seen anything similar to what we have so far,” said Mr Ken Taguchi, senior marketing director for Huttons, which is marketing High Park.
“A few factors attracted the customers. The facilities are above anyone else in the market and the price band made a difference as well … We had several buyers come in looking at a three bedroom, but later upped their purchase to a four bedroom instead because of the attractive price,” Mr Taguchi added.
Despite the strong response to this new trend of developments, analysts have cautioned the need for building owners to tread carefully and be mindful of the costs.
“Creativity is good. But in many of the cases we have seen, especially those with very attractive outdoor landscaping, the long-term maintenance is my top concern. Many attractive features can be designed into condominiums, but we need to ensure that the designs cater for long-term, easy, low-cost maintenance,” said Mr Ku.
“Furthermore, some features such as flying fox may have stringent safety requirements and need regular safety checks. I am not sure if the homeowners and the management running the MCST will continue footing the bill and taking the effort to upkeep the facilities well,” said Mr Ku.
High Park’s Mr Chng said maintenance fees for the condo will be reasonable. “It should be about S$200 to S$300 per unit a month. We have a large number of units and will be able to maintain economies of scale for maintenance costs of the shared facilities.”
DOWNTURN-INSPIRED CREATIVITY TO CARRY ON
According to analysts, Singapore has added about 8,000 new private homes per year over the past 10 years. This year, more than 20,000 units are expected to be completed.
With a weak market facing a bigger supply pipeline, developers are expected to continue coming up with new ideas to stay competitive.
“Private non-landed prices might drop 30 per cent before flattening off,” said Mr Ku, adding that the downcycle can be expected to extend for another three years. “This downturn-inspired creativity could carry on for as long as developers need to compete strongly to move sales.”