An upcoming private residential project, J Gateway at Jurong East, looks set to shatter price records for suburban homes.
According to property agents, the selling price for units ranges between S$1,400 and S$1,650 per square foot.
J Gateway is tipped to be the “hottest project launch” by property agents, but units will not come cheap.
According to a marketing mailer from agents, a one-bedroom unit is priced at S$1,650 per square foot. Larger three- and four-bedroom suites cost about S$1,450 psf.
Analysts said it works out to an average price of about S$1,550 psf for the project – a new benchmark for homes outside core central region.
Alice Tan, associate director and head of consultancy and research at Knight Frank, said: “Along with the increase in property prices islandwide as well as the low interest rate environment, private property in the suburban areas has already crossed S$1,200 to S$1,300 psf in some areas. For J Gateway to be priced at such a level, it would be something that is beyond the normal price range for the suburban region. So, price quantum will still be a key consideration for home buyers, whereby a price level of above S$1.2 million could be a stretch for many middle-income home buyers.”
Alan Cheong, research head at Savills Singapore, said: “In the initial years of buying anything like this where you are buying at benchmark prices, the key is to make sure that you survive paying your mortgage for at least 10 years, that means you have to do your sums, whether you have the reserves, whether you think that you can keep your job for the next 10 years.”
J Gateway is located near Jurong East MRT station and several new retail and commercial projects.
Property agents said the showflat is due to open from 15 to 26 June for viewing. Preview sales of the project are expected to start on 28 June.
Analysts said the take-up rate for J Gateway will be closely watched to gauge demand and whether it will push home prices up.
Prices of some new suburban condos have risen in the past months. According to Knight Frank, Urban Vista at Tanah Merah has an average price of S$1,482 psf while The Trilinq at Clementi was launched in March 2013 at a median price of S$1,513 psf for the 106 units sold in that month.
Ms Tan said: “The increase in property prices in tandem with benchmark prices being set by these new projects has to correlate with robust market fundamentals such as healthy income growth and sustained affordability, within reach especially by local home buyers. So if the increase in property prices goes beyond market fundamentals, I think there could be an inevitable correction down the road, especially when buying sentiments wane and market conditions decline.”
Market watchers said there could also be some spillover effect on resale prices in the Jurong East area. For example, when units at Lakefront Residences were sold at above S$1,000 psf in 2010, analysts said it lifted resale prices in the Lakeside area by some 16 percent from 2010 to 2011.
The next project to look out for is probably Keppel Land’s new development at Kim Tian Road.
Knight Frank forecasted units could potentially be sold at an average of S$2,000 to S$2,200 psf, possibly setting a new record price for 99-year leasehold private homes in the city fringe.
Analysts said there are presently no 99-year leasehold projects in the city fringe with a launch price that is higher than S$2,000 psf.
Knight Frank said the highest launched price achieved for suburban project in the 2012-2013 period was S$1,768 psf at Echelon in December 2012.
Source : Channel NewsAsia – 12 June 2013