Developers lowering launch prices: URA data
Straits Times: Sat, Jul 28
DEVELOPERS appear to be lowering the prices of their
launches, with fresh figures showing prices for uncompleted homes falling
slightly in the second quarter.
Data from the Urban Redevelopment Authority showed that
prices of uncompleted non-landed homes dipped 0.9 per cent in the three months
to June - the first fall since mid-2009.
Prices for completed private homes, however, climbed 2.3 per
cent.
Experts say the fall could be explained by the fact that
some launches in the period were in less desirable locations, including those
further from MRT stations and amenities, thus fetching lower prices.
Another factor they cited is that some of the new launches
were in estates such as Punggol and Pasir Ris, where many projects had already
been pushed out. This led to stiff competition and more conservative pricing.
Mr Png Poh Soon, head of research at Knight Frank Singapore,
said developers are not as aggressive as before in their pricing.
They are more willing to launch new projects at lower
prices, and then gradually move prices up if buyer response is good, rather
than launch at high prices, which might result in them getting stuck with
unsold units.
'Uncompleted home prices might continue to ease marginally,
but it is unlikely to fall significantly unless there are some negative
developments in the macroeconomy that bring about concern about a recession,'
said Mr Png.
Colliers International research and advisory consultant Tay
Huey Ying pointed out that prices for homes in the city centre fell 0.6 per
cent. This is at a steeper rate than the 0.2 per cent slide in the first
quarter.
'This could be tell-tale signs of deepening fault lines in
the high-end market, where some developers might be beginning to succumb to the
pressure of persistent weak demand by reducing price in order to move sales,'
she said.
Mr Png said that as high-end sales volumes have been slow,
developers are often willing to negotiate the selling price with genuine buyers.
Experts add that mass market home buyers are price
sensitive, and projects priced less than $1,000 per sq ft (psf) have been
seeing higher take-up rates.
For instance, recent mass market launches such as Wee Hur
Holdings' 618-unit Parc Centros in Punggol, priced at an average of $950 psf,
enjoyed healthy sales.
Koh Brothers' 486-unit Parc Olympia on Flora Drive in the
Upper Changi Road vicinity, priced at an average of $820 psf at its launch
earlier this month, also saw at least 170 units snapped up.
However, potential home buyer J.J. Lim, who is in her 40s
and has been looking for a home in the city fringe area for the past year, said
she has not seen prices fall as yet.
'A 0.9 per cent fall is not discernible. Homes are still
expensive. Maybe if it is a 9 per cent drop, I will be able to tell... But I am
quite optimistic that prices will come down eventually,' she said.
Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
Email: marshe_inc@yahoo.com.sg
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