Residential Market News Extract - 22 June 2012

Only 6 bids for Farrer Drive reserve list site

A smallish private housing plot at Farrer Drive has attracted just six bids, though the top bid of $1,048.52 per square foot per plot ratio (psf ppr) from a Singapore Land unit marks a new high for 99-year private housing land offered at a state tender in recent years.

When the Urban Redevelopment Authority announced on May 11 that the reserve list site had been triggered for release following a successful application from an unnamed party with a commitment to bid at least $823.33 psf ppr, analysts forecast 10-20 bids, given the site's proximity to Farrer Road MRT Station and the relatively manageable investment quantum.

One of the property consultants then polled by BT predicted a top bid of up to $1,100 psf ppr. Three others forecast winning bids of $850-950 psf ppr, $930 psf ppr and $1,000 psf ppr.

Despite the site's District 10 address, most developers who carefully examined the site and its terrain decided to give it a miss. One of them told BT: "The configuration is awkward; it has an irregular, elongated shape with a narrow road frontage. There's also an electrical substation next door and an eight-storey height control; it tends to be inward-looking.

SingLand's proposed scheme for the Farrer project will comprise some 100 units, mostly two-bedders of about 1,000 sq ft, with some smaller units (primarily one-bedders with a study). The project will have basement carparking and "good quality" specifications.

"Units on the sixth, seventh and eighth floors will have beautiful views of the Botanic Gardens. And the development will be close to Farrer Road MRT Station and amenities like HDB shops," he added.

The project could be launched in the first half of 2013. "We'll target singles, couples as well as investors; the development should appeal to expat tenants," he added. Older freehold condos with mostly larger apartments in the Holland-Farrer Road vicinity are selling at about $1,500-2,000 psf, he notes.

BT understands that SingLand's breakeven cost could be around $1,600 psf and it could be looking at an average selling price of about $1,800 psf.

However, analysts also point to substantial unsold stock in CapitaLand's nearby 99-year project, d'Leedon, which will pose competition and be a pricing constraint on any new development in the area. As at end-May, 503 of the d'Leedon's 1,715 units had been sold. The condo will rise to 36 storeys. Its developers sold 30 units in May at a median price of $1,484 psf, or at a range of $1,432-1,765 psf.

Source: Business Times – 22 June 2012

 

Far East dangles 'club with condo' deal

Buy an apartment and get a free country club term membership worth more than $16,000.

Developer Far East Organization recently dangled this offer to tempt home hunters to buy a unit at the upcoming Seastrand condo.

Property consultants said developers may be using promotional moves like this to clear unsold stock before more homes hit the market, posing more competition.

Far East is offering a nine-year term membership at Seletar Country Club, as well as five-year condo maintenance fee absorption, for those who buy three- or four-bedroom units - the only sizes left.

The membership plus the maintenance fee absorption - worth about $15,000 for five years - translates into a discount of about 3per cent on a $1 million unit.

Earlier, it was reported that Far East is giving a 2 per cent 'celebratory discount' this month for various projects, to mark a sales record. But that cannot be used together with this promotion.

Holding onto unsold stock could be risky, as developers face market changes and competition from new projects, they said.

In this case, Far East might be trying to raise more awareness of Seastrand.

The project may have been overshadowed by other pending condos like Sea Esta and Ripple Bay, launched after Seastrand.

But it is unlikely developers would cut prices if plenty of units have been sold, as this could upset earlier buyers.

Still, 'nothing comes for free', and that developers could have factored the discounts into the pricing.

Such offers could trigger a freebie war among developers, which could end up as a disservice to buyers who might have no use for some of the freebies.

Source: The Straits Times – 22 June 2012