Are new home launches below $1000 psf becoming rare?

New price benchmark for mass market condos anticipated.

According to Knight Frank, prices of new mass market homes launched in September 2012 are mostly above $1,200 psf, reflecting increased prices in OCR. It thus claims that new private home launches with prices below $1,000 psf are becoming rare nowadays and mostly found in Pasir Ris (Flora Drive) and Hougang areas.

Is it really so?

Here are other views from property experts:

Alan Cheong, Director Research & Consultancy, Savills Singapore

Successful bids for the past couple of government residential sites in the suburban areas have breakeven prices ranging from $800 psf to a high as $1,200 psf. Developers who are building on these lands cannot under normal market conditions be expected to launch these projects merely at breakeven levels.

Therefore, when these projects are launched in 2013, the launch prices should range from $950 – 1,500 psf. Ultimately, as Singapore becomes more and more compactified due to the influx of foreigners, and dense as more and more infill sites in public housing estates are tendered out for various forms of development, comparable (stressed) properties within suburban estates located within any similarly defined distance from public transport networks should be similarly priced.

Therefore it is not a tall order to expect mass market condominiums to be priced at $1,200 psf and continue rising beyond this if such trends persists.

Mohamed Ismail, CEO, PropNex Realty

Based on the recent mass market project launches (especially in the Outside Central Region) like Parc Centros that was sold at median resale price $924psf, Parc Olympia sold at $870psf while Riversails sold at $849psf, we do not think $1,200psf is going to be the new benchmark for mass market condominiums.

Only these properties near MRT (walking distance of less than 500m) will command the $1,200psf price tag. Mass market private properties in the outside central region near amenities will still command $1,000psf - $1,050psf.

Nicholas Mak, Executive Director, SLP International Property Consultants 

Property prices are increasing. The property launch price does not depend on location only, but also other factors such as the land tenure. It is still possible to find condominium with launch price at below $1,000 psf. They are usually 99-year leasehold condo located at the newer, non-matured housing estates.

But condominiums that are located near MRT stations are usually priced near or above $1,000 psf.

Eric Tng, Senior District Director, ECG Property 

The last 6 land sale in OCR have an average break even price of around $1100 psf.

Therefore, upcoming launches below $1000 psf will be almost impossible to find. For under $1000 psf deals, one has to look at Flora Drive, Parc Olympia or Palm Isles which transacted at an average of $871 psf and $885 psf respectively.

With the continuous aggressive bidding by developers, $1250 psf could be the new benchmark for the mass market. 

Lee Sze Teck, Senior Manager, Training, Research and Consultancy

In September, we have new launches like eCO, Kovan Regency, Gambir Ridge, Onerobey and Riversails. Of these, only Riversails is below $1,000 psf. In that context, you are right to say most launches in September are above $1,200 psf.

Quite a number of mass market launches are around $1,000 psf with exceptions in some areas like Yishun, Punggol, Pasir Ris. We cannot compare to launches in the previous property cycles because developers are building higher quality and better designed developments.

In this current market cycle, we believe that the $1,000 psf mark is the norm. The property market is stable now so we do not believe prices will increase much.