Parkwood Collection

Given their pricey price tag, although buying a traditional landed home in Singapore is a far-fetched fantasy for many, there is currently a more accessible variety of landed homes.

In addition to the discounted expense, unit owners can now use a full variety of amenities, including a spa, swimming pools, 24-hour surveillance and a private car park.

Yeah, you got it correctly. You heard it right. This is cheaper than traditional landed lodging and is equipped with condo.

What’s that, then? This is a clustered dwelling, a shape of landed houses in areas of landed accommodation, such as the Good Quality Bungalow (GCB).

Yet cluster houses are strata-titled properties, unlike traditional landed housing. As a consequence, architects will create multi-story homes with community amenities.

Cluster houses are like condominiums, but they are low-rise developments involving terrace homes, semi-detached homes and bungalows or a mix of these three property instead of high-rise apartment towers with several flats.

 

Advantages of Cluster Housing

Cluster houses, because of the many advantages they bring, are dear to the shrewd property investors:

 

Potential of Capital Appreciation

In Singapore during the two industry booms of 1H 2004 to 1 H 2008, and 1H 2009 to 2H 2013, development in cluster houses capital surpassed that of other private residential assets.

In reality, SLP International’s study in 2015 found that the average cost of free-hold cluster homes and landed strata houses in the first boom was 15.4 a year or 77.3 percent over a four-year cycle.

This is the quickest market increase relative to vacant landed dwellings, 99-year-old landed houses in leased strata and 99 year-old landed vacant assets in leases.

For eg, a terraced house in Casa Fidelio’s freehold cluster housing development at Siglap was purchased in 2004 for S$760,000. But by 2008, S$1.18 million had changed hands, translated into a 55 percent rise from its initial valuation.

Then it was 99-year leasehold cluster homes that recorded the highest rise in the second bull run of the property sector from the first half of 2009 to 2H 2013, with prices increasing by 20.1 percent per annum from S$357 psf to S$813 psf.

SLP International’s analysis showed that the median prices of freehold strata houses surpassed the average price of freehold non-strata landed houses by S$110,147 between 2004 and 2015. The S$329,205 was more expensive for 99-year leasehold cluster homes than non-strata landed houses with identical leasehold terms.

Based on the above results, owing to their considerable capital appreciation, it is smarter to spend your hard-earned cash on cluster houses, whether freehold or 99-year leasehold.

In comparison, cluster homes are not only more economical than landed residential estate, but their monthly rent is nearly equal to that of landed dwellings.

 

High Demand for Cluster Housing

Sales of strata-landed homes such as cluster houses decreased after the high in 2011. But since reaching rock-bottom in 2014, the number of transactions rebounded gradually.

As a matter of truth, between 2014 and 2017, purchases of such assets rose by 168 percent, surpassing the 141 percent rise in land-titled home sales.

Sales of strata-landed houses have hit 394 units in 2017, or the maximum since the overall debt servicing ratio (TDSR) system was adopted in June 2013. In addition, from the 2nd half of 2017 to 1st quarter 2018, over 100 strata-landed homes were sold.

 

Best of Both World with Condo Facilities

Parkwood Collection Pool

Cluster living blends the best advantages of buying a condo unit with a landscaped home. Not only can your privacy be guaranteed in a cluster home comparable to staying in a landed house, you can also benefit from a broad variety of condo-like amenities and services that are not present in many traditional landed homes, such as sauna spaces, gyms and swimming pools.

In order to guarantee the protection of both tenants and their friends, as well as their residences and possessions, cluster housing projects usually come with round-the-clock monitoring and surveillance cameras.

While all these services are shared by the inhabitants of a cluster housing estate, if you purchased a traditional landed home instead, you won’t have to think about building those amenities yourself.

 

More Affordable

The price tag of cluster homes are much lower than those of traditional landed dwellings, according to analysis by OrangeTee & Tie. The average price of freehold strata terrace houses was S$817 psf as of the last quarter of 2017 compared to S$1,417 psf for freehold property named terrace dwellings.

Fewer than 10 of the newer land-titled houses built 10 years ago or below and sold from 2013 to 2017 changed hands for up to S$2 million.

Cluster homes are considerably more accessible than land-titled properties, even with the TDSR system that restricts the amount of housing loans you can repay depending on all current debts and the stricter loan-to – value (LTV) caps imposed on 6 July 2018.

As a matter of fact, cluster homes costing less than S$2 million are simpler to locate. You may acquire those assets from S$1.52 million to S$1.85 million at The Shaughnessy, for example.

Cluster homes are likely to stay sought-after by buyers hanging on to a large amount of funds, such as condo upgraders and others who have successfully resold their homes by joint purchases, provided the better affordability. These assets might also be appealing to HDB upgraders, who can manage big private condos more than they can, but instead strive to landed residential properties.

 

Limited Supply of Cluster House

Over recent years , demand for cluster homes has also grown owing to their scarcity and meagre availability. For example, in 2014, not a single new plan for cluster housing was introduced. The annual availability of new units then plummeted below the 10-year level of 200 cluster homes in 2015.

From 2015 and 2017, only five cluster housing ventures with a total of 107 units joined the sector, a long cry from the 896 cluster homes across 26 developments built between 2010 and 2014.

The unsold stock of cluster homes in January 2018 marked the lowest amount since 2014, based on the URA ‘s monthly poll of real estate developers.

From June 2017 to March 2018, the monthly sales of cluster houses by amount have increased significantly, indicating that the high demand for such properties exceeded the supply available.

In the future, the dearth of cluster housing supplies is also expected to intensify. This is because in 2014, the URA modified the planning criteria for strata landed homes, forcing architects to reserve at least 45 percent of the site area for shared open space compared to 30 percent earlier.

A limit of 20 percent of this 45 percent should be used for communal amenities such as playgrounds and swimming pools, whereas trees and greenery must be reserved to at least 25 percent.

Due to the lower profit margins for pursuing such residential projects, developers are likely to construct less cluster homes provided the greater necessary area for accessible communal space.

Nonetheless, with their small availability, the capital prices of cluster homes are expected to hold up. Their values are therefore expected to be more robust than private condos, since high-rise non-landed strata homes are set aside for a larger amount of valuable space in Singapore.

 

Don’t have to maintain Communal Facilities

In comparison to having a traditional landed estate, you would not have to think about keeping the exterior of your home as well as the amenities in the construction by buying a cluster property.

The management company of your creation or the Management Corporation Strata Title (MCST) would either supervise the routine maintenance of the cluster housing scheme. This involve looking after the pool and spa, recruiting cleaners and security officers, doing maintenance, and repainting the home’s fa├žade. Alternatively, a managing agent can be named by the MCST to manage all these items.

As a consequence, there is fewer bother and concern over how to manage those items individually, which is not the case if you bought a typical landed house.

As all tenants of a cluster housing project would contribute to the repair and sinking budget, the upkeep costs are often smaller. In contrast, if you purchased a titled landed home, you would just have to count on your own money for maintaining your property.

 

Exclusive Communal Facilities

Cluster housing developments are smaller relative to massive condominiums with thousands of apartments, where you have to share similar amenities with several persons, where the number of homes usually does not reach 150 units. This suggests that the services of the latter are more exclusive and would be utilized by less persons.

However, please be aware that the recurring utility payments or repair payments in the cluster housing project are likely to be higher since, as in big condominiums, there are less individuals shouldering the upkeep expenses.

 

Ideal for Families with Kids

You don’t have to use an elevator to get to your apartment and go out, unlike high-rise condos, and all units have first floor entry. This set-up allows it easy for children to go and play outdoors. 24h surveillance is therefore expected to be available to deter the incidence of any untoward things.

In addition, in most cluster housing developments, swimming pools are typically placed only a few steps from the buildings. As such, from the safety of their own home or when sitting on a nearby beach chair, parents can comfortably watch over their offspring.

 


Potential of Cluster Housing in Singapore

The scarcity of cluster houses can retain their value, rendering more exclusive. The appetite for such assets is projected to continue to grow as it is more affordability versus normal landed homes. One of such selling direct from developer now is Parkwood Collection which is located at Lorong 1 Realty Park at Hougang. TOP set to be in 2022. Click here for more info.

As thousands of families who have successfully sold their units may certainly search for replacement dwellings, the huge amount of cumulative sales before the imposition of the new property curbs on 6 July 2018 can also fuel demand for cluster houses.

Many en bloc vendors are well-capitalized to acquire cluster homes with en bloc sales revenues of about S$ 1.5 million to S$ 3 million. Aside from that, recent condo owners who are used to loving the many facilities provided by condominiums would possibly cater to such properties.

Moreover, over the last few years , demand for landed housing in Singapore has risen dramatically. In reality, URA shows that sales of such properties jumped from 968 units in 2014 to 2,369 units in 2017 by 145%.

In January 2018 , the average sale price of strata landed houses such as cluster housing also rebounded from 2015 to S$805 psf, whereas that recovered to S$1,290 psf for land-titled houses.