Two takeaways can be drawn from the overwhelming response for High Park Residences. First, prices must correct but need not nosedive before buyers would commit. Second, it pays to offer unique selling points.
Buyers snapped up 1,100 of the 1,390 units available at High Park Residences in the first weekend of sales, at an average price of $970 psf. The project is a stone’s throw away from The Seletar Mall – a six-storey suburban mall with over 130 shops. New condos in the vicinity but further from the mall sold for $1,000 to $1,050 psf in 2014 and 2015 to date. To differentiate itself, High Park Residences offers future residents out of the ordinary facilities including Amore Fitness, violin studio, cooking classes, flying fox and boxing ring.
Recently, The Edge Property published a survey result involving 800 Singaporean respondents, of which about half were looking to buy a property within the next 12 months. The survey also found that price and proximity to amenities were the most important criteria when respondents looked for a property.
Besides High Park Residences, developments such as The Panorama, Lakeville and City Gate have maintained their sales momentum, averaging more than 20 sales per month this year (see table 1). All three developments have sold more than 60% of its total units despite a relatively weak start.
Affordability is again the key driving factor on top of their strategic location. Both prices of The Panorama and Lakeville have been adjusted downwards since launch (see Tables 2 & 3). The decline is more significant for larger units going as far as 20% for The Panorama. Location wise, Lakeville is situated in the up and coming Jurong area while The Panorama is located within proximity to popular schools served by the upcoming Thomson-East Coast Line.
City Gate, meanwhile, is competitively priced for a development just outside the Core Central Region. Median transacted price in the project averaged $1,834 psf, significantly lower than District 7 median sales price for new developments a year ago at $2,319 psf.
In North Park Residences, price correction was effected through smaller unit sizes where a typical two-bedroom unit started from 624 sq ft and a three-bedroom unit from 829 sq ft, resulting in affordable absolute prices. The project also positioned itself as the largest integrated development in the north region with Northpoint shopping mall at its doorstep, seamlessly connected to Yishun MRT station. The scarcity of integrated developments with proximity to train stations have propelled sales despite its relatively higher per square foot prices.
Soft market sentiments have taken its toll on developers’ sales. Since February, unsold inventory from new projects has crossed 30% of the available units in the primary market (see Chart 1). Unsold stocks soared to 18,136 units in June this year, after a slight respite from April’s all-time high at 18,922 units. A slight price correction and differentiated product offering could therefore go a long way.
Chart 1: Percentage of unsold inventory from launched developments in the primary market
Table 1: Developers’ projects with more than 10 average monthly sales from January to June 2015
Table 2: Median price ($psf) comparison for The Panorama
Table 3: Median price ($psf) comparison for Lakeville
This article appeared in The Edge Property Pullout of Issue 687 (July 27) of The Edge Singapore.