Catching Up With The Joneses

Source: Weekend Today, 30 June 2007

The suburban residential market is finally catching up with the verve of the high-end luxury market, according to a report by real estate specialists CB Richard Ellis.

“The strong take-up recorded for suburban projects is in part due to the limited supply of new homes within the price range of $600psf and $800psf,” said Mr Joseph Tan, CB Richard Ellis’ executive director (residential). “Most new launches in the past 12 months have been high-end projects.”

While luxury projects continued to break price records for the second quarter of the year, three major projects in the suburban areas sold out within weeks of their launch.

The first batch of units at the 99-year leasehold, 556-unit Casa Merah near Tanah Merah MRT station averaged $590psf when it was launched in April. But these prices quickly rose to an average of $700psf, reflecting the demand for these units.

The 140 units at Northwood in Jalan Mata Ayer sold for an average price of $620psf while over at Woodleigh Close, Parc Mondrian’s 100 units averaged $680psf amid brisk sales.

Prices of mid-tier projects climbed as well, with The Seafront On Meyer and Wing Tai’s Riverine By The Park being offered to the primary market at prices between $1,400psf and $1,500psf.

Keppel Land’s Reflections at Keppel Bay set a new benchmark price for the Telok Blangah area with its launch price of $1,900psf.

Speculation on the property market has also resulted in a jump in the sub-sale market, with CB Richard Ellis expecting the sub-sale market to hit over 4,000 transactions by the end of the second quarter. This will be a slight increase over the 3,866 sales registered in the first quarter.

This hike, according to the property specialist, is because of the increase in the number of sub-sales of popular projects as well as a jump in collective sale numbers, resulting in an influx of buyers looking for replacement properties.

“Moving on to the third quarter, we expect the current positive sentiment to continue,” Mr Tan said.

“The take-up of new homes is likely to exceed 3,000 units while home prices may continue to head up by another 3 per cent to 5 per cent in the next quarter,” he added.

Awaiting this next batch of homebuyers in the next quarter will be developers with a variety of offerings to cater to these diverse tastes.

CB Richard Ellis expects Hilltops, Scotts Square and the 99-year leasehold condominium at the Marina Collection on Sentosa Cove to be launched for the high-end segment.

For the prime and mid-tier segment, there is the expected launch of the 99-year leasehold condominium project on Sinaran Drive and the developments on the sites of the former Dragon View Park and Eastern Mansion.

The suburban projects are also getting in on the act, with the possibility of the Versilia On Haig and the development on the former site of Westpeak in West Coast Walk being put on the market.