For sale mass market homes throughout the island is sufficient, say property experts, referring to the properties with $1,000 per square foot (psf) or a bit higher.
CB Richard Ellis (CBRE) states that aside from the upcoming launches, unsold units remain in other existing launches, including the phases left in Frasers Centrepoint’s and Far East Organisation’s development in Bedok Reservoir, as well as minor projects from other developers. Additionally, Hong Leong Group’s projects in Pasir Ris Drive 1 and Flora Road now possess no less than 3,000 units. On top of that, leasehold land for redevelopment remains amply available, although not all remains just as attractive.
Joseph Tan, CBRE executive director (residential), said that suburban sites bought by developers, include those in Optima in Tanah Merah, Toa Payoh, Yishun, Khatib and West Coast. While price outlook remains vague, Mr. Tan is sure that prices for mass market won’t be falling again. He also said that the latest suburban launches don’t seem to reach $500 psf or more, since land prices were sort of flourishing since then. Furthermore, HDB prices have increased as well.
“Broadly, initial launch prices of mass market developments are now in the range of $600 psf to $700 psf”, said Mr. Tan. He also mentioned that those positioned in better location are to demand a premium. Optima, for instance, began at $790 psf due to the fact that it is located beside a station entrance of Tanah Merah MRT.
According to experts, the ample supply of pipeline is going to keep an eye in suburban prices to a definite level.
Nicholas Mak, Knight Frank’s former director of research and consultancy and property veteran, said, first-time buyers should know that sentiment sometimes overtakes reality, with the recent market situation being a good example. Mr. Mak added that if foreign buyers remain distant, the momentum of buying will not be sustained for the current year.
“Some people think that they are buying at a ‘recession price’. They are wrong because developers always price at the level the market can bear”, Mr Mak said. He also noted that a few city-fringe and suburban projects has price levels close to the previous peak, and sometimes, at record levels.
“Developers are businessmen. If I can sell at a higher price, why not?”, said an anonymous developer.
“When the new launches are completed and the expected demand does not come, some investors will sell their units and prices could come down. Then some investors may be caught” Mr. Mak said. However, whatever the case may be, a huge pool of prospective supply is still out there to absorb if there is a rush in demand.
“You can’t just look at the new suburban launches from developers. You also have to look at the supply in the resale market and also the HDB resale market. Usually, resale units tend to be cheaper and bigger than newly launched units”, he said.
Urban Redevelopment Authority (URA)’s figures for Q2 reveal that uncompleted homes that are not yet sold reaches about 38,482 units, and 14,000 units of which are located in the suburban regions, or outside the central region as what the URA calls it.
Mister Mak continued by saying that since developers sold each year, around 3,200 units of private homes in the suburban areas for the last five years, supply will still last for just about 4 ½ years. This means that first-time buyers mustn’t rush into the market. Instead, they must spend some time to find their dream home.