As we usher in the new year following an eventful 2019, TODAY takes a look at what to expect in several areas affecting Singaporeans' lives: Economy, property, environment, politics and transport. In the second of five instalments, we examine what is in store for Singapore’s public and private property market.

SINGAPORE — 2019 was a busy year for the Ministry of National Development, with several major announcements related to housing policies. 

Analysts told TODAY that they expect 2020 to be a “quiet year” with few to no policy changes, especially with a General Election around the corner — it has to be called by April 2021.

Mr Nicholas Mak, the head of research and consultancy at real estate agency ERA Realty, noted, for example, that despite much talk of an oversupply in the private property market, the Government has so far not signalled that it plans to intervene.

“If they were to do something that hammers down the prices of private property, it is going to make private homeowners unhappy, especially those who want to sell,” he said. 

“If they do anything to boost prices of private property, it will make those who aspire to buy private property unhappy.”

But even as it may be quiet on the policy front, the property market will continue to be a source of much excitement this year, analysts said. 

Here are some of the issues they expect to take centre stage in 2020:

POTENTIAL SERS SITE IN HOLLAND VILLAGE OR QUEENSTOWN

Since 2012, there has been one Selective En bloc Redevelopment Scheme (Sers) announcement every two years, which means analysts are anticipating another this year.

The last site to come under the scheme, which involves HDB choosing certain older flats to undergo a redevelopment, were Blocks 81 to 83 at MacPherson Lane, which were about 50 years old. This was announced in May 2018.

This time round, analysts speculate that homeowners in the older parts of Holland Village or Queenstown might be told that their flats will undergo Sers. Affected homeowners get the opportunity to move to a new home with a fresh 99-year lease and are given a package comprising compensation and rehousing benefits.

Holland Village is a strong contender as it was earmarked under the URA’s 2014 master plan to serve as a “signature community node for formal and informal events”, and was again featured in the 2019 draft master plan as a “familiar place” to rejuvenate, analysts noted.

Mr Lee Sze Teck, the head of research at Huttons Asia, pointed out that there are some empty plots of land nearby at Ghim Moh, which could be used as sites for new homes for the displaced households.

Queenstown is also a strong contender for Sers, analysts said, as HDB’s tender document for a traffic impact assessment there in October revealed that the agency is considering building about 7,000 new flats in the area. The new flats could be launched as early as 2021 or 2022 if plans go through, according to the tender documents.

SERS, VERS OR SOMETHING ELSE ENTIRELY?

The issue of decaying flat leases and the concern that some homeowners might outlive their flats was hotly debated in 2017 and 2018, and this discussion carried on into 2019, with the Workers’ Party making recommendations in a 60-page working paper.

In it, the opposition party proposed an alternative scheme to Sers, called Sers Plus, whereby the Government need not secure a proxy site before it launches a Sers exercise to speed up urban renewal. Instead, affected residents could be given priority and guaranteed placement in units under existing Build-to-Order and Sale of Balance Flat exercises.

It also came up with a scheme called Universal Sale and Lease Back to give HDB flat owners a right to monetise their flats once they are into the final 30 years of their lease tenure, making HDB the “buyer of last resort”.

The Government’s own response to the issue of decaying flat leases came in the form of the Voluntary Early Redevelopment Scheme (Vers), which was announced in 2018.

While details about Vers are still scant, the idea of this scheme is that owners of flats that are 70 years and older would be able to vote if they want the Government to buy back their homes for redevelopment before their leases run out. 

Separately, property consultant Ku Swee Yong, veteran architect Tay Kheng Soon and economist Yeoh Lam Keong issued a “citizen’s non-partisan proposal” of a one-time automatic top-up of the leases of all HDB flats to 99 years once its Singaporean owners are 50 years old.

In a blog post last month, National Development Minister Lawrence Wong said the ministry will study the alternative suggestions to Vers that have been raised by various parties. 

However, analysts are doubtful there will be any major changes to the way Sers exercises are conducted while the Government is still working out the details of Vers, which will take effect only in about 20 years as that’s when the first HDB flats reach 70 years old.

Said Mr Lee: “If they reduce the benefits for Sers, does it mean that Vers benefactors can expect to benefit less when their turn comes?”, adding that this is an “awkward” issue. So it is unlikely that the Government will make any changes to Sers until Vers is ironed out, he said.

Mr Alan Cheong, the executive director of research and consultancy at real estate service provider Savills Singapore, said the Government might even ramp up Sers this year to create a feel-good effect before the election. 

Former director of property market research company R'ST Research Ong Kah Seng said that Sers remains relevant as an exercise to redevelop prime, under-utilised and centrally located sites that can yield a much higher economic value. As such, he added, payouts for Sers should not be less generous. 

CHEAPER PRIVATE CONDOS TO COME? 

Want to buy a condominium unit in 2020? It might be wise to wait until the second half of the year, as some analysts note that the market is working towards a “soft landing” in prices.

Since cooling measures were introduced in July 2018, private property prices have not eased much and in fact hit a five-year high in the first half of 2019, but this is likely to change amid an oversupply of units, analysts say. 

According to Mr Ong, the “stress point” for private property prices will come in the middle of the year, under the pressure of 31,948 unsold units as at the end of the third quarter of 2019 and a supply surge expected from 2021.

Developers have so far refused to lower the prices of their new projects as they had paid handsomely for en bloc sites in 2017 and 2018, he noted.

But price reductions in the resale and leasing market are likely to be “stickier” from the second half of the year amid concerns of a property glut, he said.

And developers with projects based on “mediocre concepts” in far-flung locations will likely have to price units at lower rates to drum up sales, he added.

“Most private property cooling measures should ideally strive to achieve slight, suitable price corrections for longer term price sustainability,” said Mr Ong. “It is also quite hard for property prices to remain at a record high. The only way forward is to eventually come down.”

Ms Christine Li, the head of research for Singapore and Southeast Asia at Cushman & Wakefield, noticed that some developers have started to incentivise salesmen with higher commissions to drive sales for older launches. 

But she added: “The market is not experiencing launch fatigue as buyers are still attracted to projects that offer a reasonably high value proposition.”

A MORE EXCITING EXECUTIVE CONDOMINIUM MARKET 

There was only one executive condominium (EC) launched last year — the Piermont Grand in Punggol in July. As of late December, it has sold only 56 per cent, or 456 of its 820 available units. 

While this might sound like the popularity of ECs is dwindling, analysts believe the EC market will be livelier this year.

Pointing out that ECs sold out fairly quickly at Yio Chu Kang’s Hundred Palms Residences and Rivercove Residences in Anchorvale, Ms Tricia Song, head of research for Singapore at Colliers International, said developers will likely keep prices of new ECs stable in 2020, which will help drive demand. 

Agreeing, Dr Lee Nai Jia, senior director and head of research at Knight Frank Singapore, said prices would likely remain in the range of S$1,000 to S$1,100 psf. 

This year, the first EC project to launch would likely be the 495-unit Parc Canberra, located near Canberra MRT Station, later this month.

A 548-unit EC at Anchorvale Crescent, Ola, is expected to launch next month, followed by what is looking to be the year’s only EC launch in a mature estate. The development along Tampines Avenue 10, which is not named yet, is targeted to be launched in the third quarter of the year and will offer an estimated 695 units. 

Mr Lee said demand for ECs will be robust, especially with the raising of the monthly income ceiling for EC buyers from S$14,000 to S$16,000 last September, which expands the pool of eligible buyers. Depending on the pick-up rates, there could even be a fourth EC launch at a site beside Parc Canberra, he added.

THE CO-LIVING DISRUPTORS

As co-working became mainstream, co-living was the property buzzword of 2019.

Co-living is a form of mid-to-long-term home leasing, whereby operators pack in a large number of residents in a single property, to create what is basically a dormitory for grown-ups. 

Millennial expatriates globally have lapped up the idea as co-living spaces, which usually come fully furnished and include weekly housekeeping services, also provide them with a community of other young professionals as close neighbours.

Mr Cheong said: “I think 2020 will still be a year of co-living… There’s too much money in the system (funding sharing economy startups), and the money is just moving from one concept to another.”

The co-living space is currently made up of at least eight companies, including Singapore-based co-living startup Hmlet and lyf in Funan Mall, started by Capitaland’s wholly-owned lodging business unit, The Ascott.

Another co-living space provider, Commontown, a South Korean startup that is now based in Singapore, told TODAY that the sector is growing fast.

It started with four rooms for rent when it launched here in April 2019. Since then, demand – mainly from young expatriates aged between 25 and 35 – has fuelled its growth to 74 rooms today. 

Currently, some 70 members pay S$1,300 to S$2,500 a month to live in one of its 12 properties here, mainly at city-fringe locations such as Lavender, River Valley, Tiong Bahru, Newton and Novena.

Over at lyf Funan, which is the only co-living operator here with a hotel licence, its 412 rooms across 329 apartments have seen strong demand, with an occupancy of as high as 98 per cent since its opening in September, said Ms Mindy Teo, Ascott’s deputy managing director for lyf.

About 12 per cent of its residents are Singaporeans, and 25 per cent stay at lyf for at least a month. Their average age range falls between 29 and 32, she added. 

“Co-living fills a niche in the global market for millennials who want to live independently in a convenient location, including Singaporeans who are not yet eligible for public housing or do not have the financial means to purchase private properties,” said Ms Teo. 

One of Commontown's residents, Malaysian Yap Wern Sheng, who relocated to Singapore last month to work in the financial advisory services sector here, told TODAY that the company’s flexible lease terms, which start with a base of a three-month rental followed by a monthly rolling lease thereafter, was why he picked the more expensive option of co-living over a traditional rental unit.

“I only had one weekend to look for a place, but most landlords wanted me to commit to a long-term lease of at least one year,” said the 28-year-old. 

Analysts told TODAY that 12 months is a common standard in the Singapore rental market, although the authorities have pushed down the minimum lease period to three months. 

An additional perk, Mr Yap said, was that he could “come in with a suitcase and feel like he is at home already”. 

“I didn’t need to buy anything to settle down,” he said, noting that the house he lives in is well-managed, with a kitchen, appliances and nicely-furnished rooms.

Commontown’s executive director, Mr Ian Lau, said requests for its rooms go as far ahead as July 2020. And while only about one in 10 of its tenants are Singaporeans, the firm is receiving more enquiries from locals, he added.

“There is more awareness of co-living as a mid-to-long-term rental option in Singapore,” he said. “There is a lot of institutional money (venture capitalists and other investors) looking at co-living, and that’s a good indicator of demand and interest.”