Mass market condos in the spotlight again

From Straits Times – June 16, 2007:

“AFTER years of being the poor cousin in the private home sector, the mass market condominium is back with a vengeance.

It has been a long time coming with all the attention of developers seemingly on building pricey high-end homes in prime sites over the past couple of years.

But Thursday’s release of a slew of suburban sites – from Pasir Ris to Woodlands – should spark renewed interest by developers in the mass market sector, where prices are already rising.

The expected flow of new mass market housing should nip any looming supply crunch in the bud, property consultants said.

Colliers International director of investment sales Ho Eng Joo said the release of so much suburban land ‘is to prevent any surge in mass market prices’.

Mr Li Hiaw Ho, executive director of CB Richard Ellis Research, believes buyers will not have it all their own way. ‘Demand for suburban sites will be good because there has been a lack of affordable mass market launches in the past year.’

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The strong response to and some relatively high bids for a recent tender for a suburban Dakota Crescent site show there is demand for non-prime plots.

Thursday’s release was part of a huge land sales programme for the second half of the year, with 20 residential sites, including those rolled over from the previous programme, up for grabs.

Some sites are on the confirmed list – that means they will be put up for sale at a scheduled date regardless of whether developers have shown interest.

The Government also sells sites on the market-friendly reserve list, which are put up for sale only after developers indicate interest.

There is a wide range of suburban sites – new hotspots like Tiong Bahru, central areas such as Ang Mo Kio and Bishan and outlying areas such as Woodlands.

Consultants said some of the reserve list sites are far more attractive than those on the confirmed list, and so those are likely to be triggered for sale.

The hottest site on the reserve list is the 0.89ha plot in Tiong Bahru, which can accommodate about 395 mid-tier homes.

Consultants said it was in a coveted location given that units at The Metropolitan next door sold well at an initial average price of $780 per sq ft (psf) with values rising further due to sub-sales.

A new condominium on the site could sell for as high as $1,000 psf, said consultants.

The large condominium sites in Bishan and Toa Payoh – which can accommodate about 535 units each – could probably fetch prices of $700 psf to $800 psf, they said.

A new condominium of about 555 units in Simon Road next to Kovan MRT Station could sell for $600 psf to $700 psf while the Boon Lay plot for about 685 units should attract good demand as well, they said.

‘The Boon Lay site could sell for about $600 psf. It is in between NUS and NTU and may see demand from expatriates working in the high-value industries in the west,’ said Savills Singapore director of marketing and business development Ku Swee Yong, referring to the National University of Singapore and Nanyang Technological University.

He also reckons there could be some demand from expatriates for a new condominium in Woodlands, where the Singapore American School and the Singapore Sports School are also located.

Generally, though, consultants are less enthusiastic about the confirmed list sites in Elias Road, Choa Chu Kang Road and Woodlands. That is good news for home buyers who like those locations because it will mean lower bids and lower end-prices of possibly between $500 psf and $600 psf.

joyceteo@sph.com.sg

SUPPLY BOOST

The expected flow of new mass market housing should nip any looming supply crunch in the bud, say property consultants.”

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