Condo Sales At Showflats Tapering Off

Source : The Business Times, July 15, 2008

One developer blames Livia's pricing for 'spoiling' other projects' sales

WHILE City Developments managed to sell 96 units last week at its Livia condo at Pasir Ris, developers of most other projects suffered rapidly declining sales at their showflats.

Woodsville 28: When Frasers Centrepoint previews its project this weekend, the stakes for nearby Kovan Residences are expected to go up

At least one developer blamed Livia's attractive pricing - $650 psf on average - for 'spoiling' sales of other projects, while others said a tapering off was to be expected given negative news flows from overseas on the state of the financial and stock markets.

Developers and property agents generally reported still strong turnouts at showflats last weekend, although take-up slowed.

Sim Lian sold 19 units last week at its Clover By The Park condo in Bishan, less than the 59-unit sales it achieved in the preceding week. To date, Sim Lian has sold 273 of the total 616 units in the project. 'That's almost 45 per cent of a large project in just three weeks; that's quite an achievement given current market sentiment,' Sim Lian Group executive director Diana Kuik said when approached by BT.

The 99-year leasehold project's average price remains at $750 psf.

Sim Lian also sold a unit at The Amery, a freehold project in the Telok Kurau area, last week - again a less sparkling performance than the four units it sold a week earlier.

Next to Geylang River, NTUC Choice Homes and Ho Bee found buyers for another nine units at Dakota Residences last weekend. This brings total sales to 170 units in the 99-year project, which has an average price of about $980 psf.

Over in the Kovan MRT Station vicinity, the developer of Kovan Residences sold about 20 units last week, bringing total sales to over 100 units since the 99-year project was previewed at a private party on June 28. The average price is somewhere in the $870-900 psf range. Nearby, MCL Land sold another three units at its D-Pavilion, a freehold project priced at $900 psf on average last week. This was a slower sales rate than initial sales of 10 units the preceding weekend.

The stakes will go up for these two developers when Frasers Centrepoint previews this weekend its Woodsville 28 near Potong Pasir MRT Station - which is three MRT stops closer to town than Kovan MRT Station.

The 110-unit condo will have an average price of $880 psf. The 99-year leasehold development comprises two 17-storey blocks.

'The two- and three-bedder units, with respective average sizes of 883 sq ft and 1,195 sq ft, are about 5 to 6 per cent smaller than conventional units as we've adjusted our sizes to fit the profile of the market we're targeting - those just starting their families or young couples who want to stay near the city and even retirees.

'Two-bedroom apartments start at $700,000 and three-bedders from just over $1 million,' says Frasers Centrepoint Homes chief operating officer Cheang Kok Kheong.

CDL's spokeswoman said Livia saw strong take-up of various unit types last week, especially two- and three-bedders. 'The four-bedroom apartments were purchased either for owner occupation or rental potential in view of United World College's East Campus coming up in the vicinity.

'The project's average price remains $650 psf, with prices for certain unit types and facing being upped by 1-3 per cent for the latest release of 120 units last weekend,' she added.

The 96 units sold at Livia last week contrasted with sales of 160 units in the preceding week when CDL previewed the 99-year leasehold project, resulting in total sales of 256 units. So far, 320 of the condo's total 724 units have been released.

A veteran property consultant said: 'Crowds were generally still very good at showflats last weekend, though take-up has slowed. In any development, demand for 30-40 per cent of units comes from the surrounding population catchment. Usually that's the case, good or bad times.

'Once sales in a project launch hits a certain percentage from this catchment demand, developers have to attract people from other parts of Singapore. That's a tougher job, with a lot more convincing to be done compared with selling to people who already know the area.'

Another problem is that buyers are unsure of the property market's direction. 'Even when there are attractively priced projects, potential buyers worry if property prices will go down further. They also ask themselves whether they really need to upgrade; they worry about the economy and their jobs. The bad news coming out from financial institutions in the US is a big concern,' a property agent said.

On a more positive note, Sim Lian's Ms Kuik said: 'If you have a good product in a location where there's a pool of buyers and if your pricing is reasonable, there will be take-up.'