Bullish bid for land may mean higher home prices

A bid $65 million above the expected offer for a land plot is not something to scoff at. It also points to the site as having tremendous potential, are at the very least possesses characteristics which the winning developer is confident will eventually bring in profits.

The Creek in Bukit Timah.

The Creek in Bukit Timah.

Malaysian developer, S P Setia has offered $265 million for a 18,721.4 square metre site on Toh Tuck Road. The location, while tucked away behind Toh Yi Drive, is near enough to the Beauty World MRT station on the Downtown Line, as well as the series of shopping malls and eateries in the vicinity. Property analysts consider the bid bullish though understandable as the prices reflect the potential of the site’s location and size. It is also near the Bukit Timah housing district and schools such as Pei Hwa Presbyterian Primary and Ngee Ann Polytechnic.

The robust bid sets the benchmark for sites in the vicinity. Recent tweaks in the property cooling measures might have had developers in a slight tizzy over the procurement of land plots for future projects. While demand is strong, supply from the Government Land Sales (GLS) programme is slower this year.

For the consumer, the fierce bidding on recent land sites could be indicative of the direction home prices might be taking. The number of successful new launches this year could however account for the spending. The 99-year leasehold plot on Toh Tuck Road is expected to yield approximately 325 new private homes and is the first of 5 residential sites under the GLS confirmed list.

First private condominium launch in 2017 – Clement Canopy

Open for preview today is a new condominium in the west – on Clementi Avenue 1 to be exact. The 505-unit Clement Canopy is a joint venture between UOL Group and Singapore Land and the developers are hopeful about an uptick in demand, as shown by a pickup in new home sales last year.

The-Clement-Canopy-1Photo credit: http://clementcanopy.info

Situated in the Jurong Lake District – which is earmarked to be developed into the second Central Business District (CBD)– and with a number of schools such as the NUS High School of Mathematics and Science and the Yale-NUS College, this new condominium project will benefit from high rental demand. The 99-year leasehold development will consist of two 40-storey blocks holding a range of 2- to 4-room units. 194 out of the 505 units are 2-bedders sized between 635 to 732 sq ft and priced between $85,000 to $1 million. These smaller units are more palatable in terms of the total quantum price and also more in demand in the rental market.

The TrilinqOther bigger units include 3-bedders starting at $1.28 million and 4-bedders priced from $1.62 million. Selling prices are pegged between $1,340 to $1,360 psf. As a comparison, the neighbouring private residential condominiums, The Trilinq, is going for $1,400 psf but it is a tad nearer the Clementi MRT station; and Parc Riviera on West Coast Vale is selling at around $1,200 psf . There are no one-bedroom apartments at Clement Canopy and developers are hoping this will help differentiate their product from the rest of the market. Swimming pools and smart home features will be included in the project.

This year, the  would probably be all about timing. Launched at the right time, when demand is high and supply slow in stirring consumer interest, a new development could do very well indeed.

Rare landed public housing – HDB Terrace Houses

Who knew public housing was not always high-rise and towering 50-storey blocks.

HDB terrace houses are a rare commodity in modern Singapore and there are only 258 of these on the island. Two storeys, mostly in mature estates, and commanding high prices – most may not even have realised these gems were in their midst.

QueenstownHDBTerracePhoto credit: Queenstown.org.sg

A recent sale of a Jalan Bahagia HDB terrace house at $958,000 may rise eyebrows but considering the rarity and floor area of the unit (241 sq m), and recent sales of resale HDB units at the Pinnacle @ Duxton have already been closing on the $1 million mark, it is quite a steal indeed. It sold at a mere $370 psf and with 60 years or more left on its 99-year lease. In comparison, private properties in the vicinity sell at $2,200 psf. Earlier in the year, another such unit sold at $1.06 million. Previous sales include a 85 sq m unit which went for $760,000 in January; a 104 sq m unit at $875,000 in February and a 81 sq m unit for $708,000 in March.

Built decades ago by HDB’s predecessor, the Singapore Improvement Trust (SIT), these rare landed public housing units reside mostly in Jalan Bahagia in Whampoa, and Queenstown. Although the land can be taken back by the government anytime, and it is not a freehold private property (where the deed belongs to the home owner), these units are nevertheless much sought-after properties and provide the space and luxury of a private property at much less. Taking into consideration that there are an increasingly number of 99-leasehold private properties, being able to get your hands on one of these rare HDB terraced units is quite a coup indeed.

Property Price Rise in 2013

The dawn of a new year may bring great joy for property sellers as property experts expect a continual rise in property prices. Rising land costs may be the leading cause of the rise. And low interest rates will keep the buyers coming. Non-landed mass market homes are again expected to be the first in the race, running far ahead with a 10 to 15 per cent rise. The luxury property sector is also expected to rise, but at the lower margin of 3 to 5 per cent.

Singapore property condo

Neck in neck with the suburban mass market private homes are Executive Condominiums (ECs). This particular property type has been enjoying spectacular success with home buyers this year, and especially this quarter. By the end of 2012, the target sales of EC units will hit 4000. That’s still more than the number of units sold in 2010 and 2011 combined.

Despite the government’s efforts to cool the market, it seems to have a life of its own and the growth is too strong to be suppressed. What were the government’s motivation behind the cooling measures, and is it enough that those aspects are controlled, leaving those who can afford to push up overall prices? Or should the authorities be doing more to ensure that the little people and the middle class is still able to afford what they can.

Demand and supply. The balance awaits scrutiny. And the guessing game continues.