Mass market prices picking up, say property agents

Mass market prices picking up, say property agents

The Housing & Development Board (HDB) has received a top bid of $310 million or $375 per square foot per plot ratio (psf ppr) from Sim Lian Land for a site at Bishan Street 22/25. The award of the site should be announced soon.

Not including two Design Build and Sell Scheme sites, this will be the first solely private residential site sold by HDB since 2002.

The Urban Redevelopment Authority has also received a minimum bid of $30 million or $257.18 psf ppr for a site at Woodsville Close near Potong Pasir MRT Station. It will now be put up for public tender and if sold, will be the first suburban residential site sold by URA this year.

Sim Lian’s bid was only 1.2 per cent higher than CapitaLand’s CRL Realty and US-based Wachovia Development Corporation’s bid of $306.3 million. The tender, which closed yesterday, attracted seven bids from developers including GuocoLand, Allgreen Properties and ChoiceHomes Investments.

Sim Lian managing director Kuik Sing Beng said it now expects to launch a 600-unit development on the site by Q2 2008 at an estimated price of between $700-$750 psf. ‘It will be aimed at HDB upgraders,’ he said.

Savills reckons mass market property prices could achieve double-digit growth this year. ‘Price increases in the mass market are beginning to gather pace and we may well see a 10-12 per cent increase for the full year,’ said the firm’s director of investment sales Steven Ming.

On the Woodsville Close site, Mr Ming said: ‘It is not unreasonable to expect bid prices to cross $300 psf ppr given the site’s close proximity to the Potong Pasir MRT station and the imminent rebound of the mass market.’

Based on recent transactions, ERA assistant vice-president Eugene Lim says mass market property prices are accurately reflected by the latest property price index (non-landed) in Q1 2007 for Outside Central Region which increased by 2 per cent quarter on quarter.

‘Some of the buyers are those displaced by collective sales,’ Mr Lim said. And the ‘herd instinct’ to buy was working on most of the other buyers.

On bids, CBRE Research executive director Li Hiaw Ho said: ‘It is evident that developers are generally confident that the mass market is strengthening.’

The Woodsville Close site could attract bullish bids. ‘Based on a possible average selling price of $750 psf, bids could range from around $40 million ($343 psf ppr) to $45 million ($385 psf ppr),’ Mr Li said. ‘As the site is within walking distance to Potong Pasir MRT station and has easy access to expressways, condominium units developed at this site will be sought-after by potential upgraders from the surrounding HDB estates.’

Source: The Business Times, 06 June 2007