Going into 2015, property developers are gearing up to roll out new private residential projects. Amid challenging market conditions, analysts said the new units will likely be more competitively priced.
Looking at past transactions, real estate agency PropNex Realty said prices of new homes have weakened by 10 to 12 per cent on average over the past year.
Symphony Suites at Yishun was launched over the weekend. To appeal to homebuyers, its developer EL Development said the project was designed with affordability in mind.
Prices at the 660-unit development average at over S$1,000 per square foot. As at Monday, 61 units have been sold.
“In order to keep units affordable, we have done away with large units, we have no balconies, no personal enclosed space, no roof terraces and no penthouses. We have tried to keep the layout of our units optimised,” said Mr Lim Yew Soon, managing director at EL Development.
The largest unit type at Symphony Suites is the four-bedroom unit, which spans 1,023 square feet. The project does not have studio units or five-bedroom units.
Another upcoming project is GuocoLand’s Sims Urban Oasis at Sims Drive. Market watchers said the units there could potentially be priced from S$1,300 to more than S$1,400 psf. They expect to see the about same prices for North Park Residences – an integrated development by Frasers Centrepoint in Yishun Central.
Sales of new homes have slowed down substantially in recent years – following the introduction of property cooling measures and loan curbs, including the Total Debt Servicing Ratio framework in June 2013.
In 2014, new home sales dipped by more than half on-year to over 7,000 units, and this is having an impact on how new homes are priced.
“What the buyers can expect is this – the price will be relatively attractive because today, buyers are price sensitive, developers are also relatively anxious in many of the launches to have that momentum,” said Mr Mohamed Ismail, CEO of PropNex Realty. “You look at it today, the different segments, OCR, RCR, CCR, prices have taken a dip especially for new launches in the tune of about 10 to 12 per cent lower than a year ago.”
Based on transactions at the end of 2014, PropNex said the market prices of new units in the suburban areas range from S$1,000 psf for projects further away from MRT station, to S$1,400 psf for those that are well-located.
The range hovers around S$1,400 to S$1,900 psf for units in the city fringe and between S$1,900 and S$2,400 for homes in the core central region.
But while home prices moderated, property consultancy Century 21 believes there is room for further downside.
“The potential target customer base has shrunk a lot and this current pool that has money and is looking around would expect a bit more discount before they would step in,” said Mr Ku Swee Yong, CEO of Century 21 Singapore.
“Right now according to the latest URA statistics, new launch prices versus completed homes – there is still a gap of 15 per cent on average price, so I would believe that the new launch price has to come down by 15 per cent to be at the resale home prices before people would find it attractive.”
Private home prices in Singapore fell by 4 per cent in 2014 – the first year of overall price decline since 2008. This year, analysts are expecting home prices to fall further, by about 3 to 5 per cent.
Source : Channel NewsAsia – 10 Feb 2015