Bartley Residences Case Study

Channel News Asia reported last night about the CRAZY numbers of vacant homes based on figures provided by URA latest numbers. Read the news article here  http://www.channelnewsasia.com/news/singapore/singapore-private-home/2005662.html

In that article it reported URA’s figures of 

Latest URA numbers show there were 25,071 completed but unoccupied private homes as at Jun 30. This is higher than the 22,346 unoccupied units at the end of March and the largest number on record.

Lets take a look at an infographic released in Feb 2015 by Ministry of National Development (the overall big boss of HDB an URA – if you didn’t already know).

pipeline-supply-2015 (MND)

From this infographic we can see that the number of completed units for HDB has reduced, but a marginal increase of about a 100 units for Executive Condos and a slightly larger increase of 1500 units for Private Condo units. But these are just estimates for the 2015 Pipeline. 

Without a doubt, we are currently experiencing an OVERSUPPLY of residential units. Which is GREAT for buyers that are looking to pick up some good buys. There are bound to be units that have to be sold at close to launch prices, and yet are move in ready.

BUT as a Property investor that has already invested, the key question is – HOW DOES IT AFFECT ME? Lets examine a Case study for Bartley Residences that is expected to TOP later this year (2015)

bartley residences - squarefoot research

There also has been no SUB-SALES for this project and for a very meaningful reason which I will reveal in a short while. I have clients that had bought Bartley Residences and also Bartley Ridge, and they will benefit from the developments in that area very soon. 

There are a few other developments in this area, that are useful in comparing with Bartley Residences. They are:

1) The Bayou (Freehold, Upp Paya Lebar Rd), TOP 2008, 29 units boutique development 

2) La Dolce Vita (Freehold, Upp Paya Lebar Rd), TOP 2012, 41 units boutique development

3) The Vue (Freehold, Upp Paya Lebar Rd), TOP 2013, 50 units boutique development

But all these developments are small developments that are not near MRT, and are clustered amidst small roads and other landed developments, and are low rise developments. 

The newest of these 3 is The Vue, which is a single block development and an infinity pool at the roof of the development, a gym, BBQ pit and children playground, but it is admittedly smaller than Bartley Residences (which is a much larger development).

Lets have another graphic to put things into perspectives. It may appear that these freehold developments are being sold at a cheaper price than the 99 year leasehold Bartley Residences, with The Vue having a recent transaction in Feb 2015, at $929psf, but that is not the benchmark, let us look at developments nearer the Bartley MRT, namely Bartley Ridge and Botanique at Bartley. There is a support for prices averaging at $1200 psf, its about the same price as Bartley Residences when it was launched. 

Bartley Residences - Compare Sqft

Like I said lets look at some figures. At Bartley Residences unit prices sold directly by the developer averages at about $1,180psf, with the bulk of the units above 800sqft.

Specifically a 2 bedroom unit here (872sqft) was sold by the developer at $1.088M, if The Vue (which is approximately 10 minutes walk to Bartley MRT), is able to rent out at an average of $4.5psf per month (based on actual logged transactions – data by squarefoot research). It is reasonable to assume that Bartley Residences is able to lease out at $4psf per month. Hence a 872sqft 2 bedroom unit at Bartley Residences should be able to transact at $3488 (of rent) per month. For a $1.088M property (80% loan, 2% interest, 30 year loan), their mortgage is $3.2K. If the rental is $3.4K, it is sufficient to manage the mortgage. Therefore, given these figures, we do not see any Sub-Sale transactions for this development. Given that Bartley Residences is going to receive its TOP in the upcoming months, and despite there being a OVERSUPPLY situation for residential property, I can forsee that my property investors that had purchased units at Bartley Residences should still be very comfortable with their investment.

We may see some investors abandoning ship (ie selling out upon TOP), there may be some good buys for this development, investor buyers – do contact us to be informed of good deals.

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DISCLAIMER –  this is based on existing circumstances based on current data and research that is available in to the public via government websites. Please consult with us, should you consider selling or buying any unit. 

 

 

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