Mass market for properties begins to stir

Red-hot weekend sales at a condominium next to Tanah Merah MRT station are being seen by some as a sign that the lower tiers of the property market are finally moving.

Mass-market home hunters, many likely to be buying their first condominium, snapped up 90 per cent, or 400 of the 450 units on offer at Casa Merah after its launch last Friday.

The strong demand for the entry-level condo prompted its developers to raise prices yesterday, said agents.

Joint developers NTUC Choice Homes and Wing Tai sold the units at between $590 and $660 per sq ft (psf), they said yesterday. The 99-year leasehold project has 556 units in all.

These prices are up from the average launch price of $588 psf reported previously, and property agents said that prices have been bumped up even further.

They average about $700 psf now, translating to about $840,000 for a three-bedroom unit of 1,200 sq ft.

Some market experts attributed the keen interest in Casa Merah to pent-up demand, due to few recent launches in this price range.

‘In terms of supply in this sector of the market, it’s still very limited,’ said Mr Joseph Tan, residential director at CB Richard Ellis, which marketed the project.

He added that ‘a good percentage’ of the launches last year and early this year were luxury projects located in central areas.

‘It’s not surprising that when a good upgrader project comes along, we see this kind of strong demand’.

Prices of 99-year leasehold condos, especially those near MRT stations, have gone up by 20 to 25 per cent in the last year, said Mr Tan.

Other upgrader projects that have been launched recently have also enjoyed good take-up, noted Ms Tay Huey Ying, director of research and consultancy at Colliers International.

She pointed to Yew Tee Residences, also developed by NTUC Choice Homes, where more than 80 per cent of units have been taken up. At Carabelle in West Coast Way, almost half its 338 units were sold in a week earlier this month.

‘People are now believing that the mass market is going to move, and they are feeling the pressure. They don’t want to be priced out of the market again,’ said Ms Tay.

But Mr Nicholas Mak, director of research and consultancy at Knight Frank, believes that only some mass-market projects have done well and that ‘it’s not an islandwide phenomenon’.

He pointed out that developments such as The Quartz in Buangkok, Kovan Melody, and The Raintree - all launched at least a year ago - still have unsold units.

Most of Casa Merah’s buyers so far are believed to be local residents, although there were also some Indonesian buyers.

But not all the buyers were upgraders from HDB flats, which is the usual market for mass-market condos.

Casa Merah drew ‘a wide range of buyers - upgraders of public and private properties, and… investors too because of the good rental potential’, said Ms Margaret Goh, NTUC Choice Homes’ chief executive officer.

The remaining units will be released for sale this coming weekend, she added.

Source: The Straits Times, 17 April 2007