[LATEST UPDATE] North Gaia EC achieves 27% sales at an average of $1,302 psf

/ EdgeProp Singapore |

April 23, 2022 9:57 PM SGT

The 616-unit North Gaia is located at Yishun Close and just across the road from Khatib Bongsu Nature Park (Photo: Samuel Isaac Chua/EdgeProp Singapore)

SINGAPORE (EDGEPROP) - North Gaia, the first executive condo (EC) project to be launched this year, saw an estimated 164 units snapped up as at 7pm of April 24. This indicates a take-up rate of 26.6% out of a total of 616 units at the EC project located at Yishun Close. According to developer Sing Holdings, average price of units sold was said to be $1,302 psf, as 62% of the units were purchased under the deferred payment scheme and therefore priced 3% higher than the units purchased under the normal progressive scheme.

Three-bedroom units of 958 to 1,076 sq ft, made up 84.5% of the units purchased. Four-bedroom units of 1,313 to 1,389 sq ft accounted for 9.9% of the units, with five-bedroom units of 1,593 sq ft making up the balance 5.6%. In fact, it was the larger three-bedroom units that saw strong take-up rate, and nine out of the 14 five-bedroom units were snapped up over the weekend.

"Two-thirds of the buyers were HDB upgraders and the majority of the units sold were the larger units, which are clear indications of the desire for more space," says Mark Yip, CEO of Huttons Asia.

When e-application closed on April 19, a total of 1,045 parties registered their interest. Balloting day (April 22) saw 364 cheques deposited into the ballot box. Hence, the 163 units sold works out to a conversion rate of 44.8%.

Despite the strong interest in the project, one of the stumbling blocks was the mortgage servicing ratio (MSR), which applies only to HDB and EC buyers: It has been capped at 30% of gross monthly household income. “Even though EC prices have increased by over 60% over the past five years -- from about $800 psf to $1,300 psf today, the MSR remains unchanged at 30%,” says Ismail Gafoor, CEO of PropNex. “That was one of the major hurdles we encountered on the ground. We had expected the take-up for North Gaia to be stronger.”

About 3,700 visitors thronged the sales gallery of North Gaia on the first weekend of preview, with another 2,000 visitors the following weekend (Photo: Sing Holdings)

About 3,700 people had visited the sales gallery the first weekend, and another 2,000 the previous weekend. However, they did not appear to be in a hurry to commit to a purchase, knowing that there are three more ECs in the pipeline between 3Q2022 to 1Q2023, namely at Tengah Garden, Tampines Street 62 and Bukit Batok West Avenue 8, according to property agencies.

“Because of the other opportunities that they have in other locations, some of the potential buyers may have been hesitant about committing to a purchase too quickly,” adds PropNex’s Gafoor.

Homebuyers are more cautious as “they have only one shot” at buying an EC, says Nicholas Mak, head of research & consultancy at ERA Realty Network. For ECs, developers have to set aside 70% of the units for first-time homebuyers at the initial launch. However, first-timers are eligible for HDB Built-to-Order (BTO) projects too. They may also be considering the upcoming BTO projects in May and August, in locations such as Ang Mo Kio, Bukit Merah, Ghim Moh, Queenstown and Toa Payoh, especially the prime location public housing flats (PLH), Mak points out.

NORTH GAIA SHOWFLAT - EDGEPROP SINGAPORE

Showflat of a three-bedroom unit at North Gaia (Photo: Samuel Isaac Chua/EdgeProp Singapore)

At North Gaia, about 70% of the buyers on launch day were second-timers or HDB upgraders, says Ken Low, managing partner of SRI. "The initial take-up rate of 26.5% is respectable," he notes. “It is a good pace of sales for the developer as subsequent EC projects at Tengah, Tampines and Bukit Batok will potentially be launched at higher prices,” he says. “And North Gaia will be the most attractively priced EC project in 2022.”

ERA's Mak agrees: "Selling 26.5% of the units on the first day of launch is not too bad," notes. "The developer has a runway of another 3.6 years to sell the remaining units."

After all, there isn’t much competition from existing EC projects and even suburban private condominium projects that are either substantially or fully sold, he adds. For instance, only six units remain unsold at the 496-unit EC project Parc Greenwich at Seletar Hills, which was launched last September. Meanwhile, the 413-unit Provence Residence EC at Canberra Crescent, launched last May, has sold its last two units, hence it's 100% sold to date. The 700-unit Parc Central Residences was fully sold within 12 months of its launch in January last year. Private condominiums such as the 1,410-unit The Florence Residences at Kovan which is already 95.5% sold and the 1,052-unit Affinity at Serangoon is 99% sold, while the 460-unit Dairy Farm Residences and 2,203-unit Treasure at Tampines are both fully sold.

As at 1Q2022, unsold inventory of private homes totalled 14,362 units, according to URA data. The Core Central Region had the most unsold stock (5,781 units) followed by the Rest of Central Region with 4,635 units. In the Outside Central Region, unsold stock was 3,946 units at the end of 1Q2022 – the lowest of the three regions, says Mak. “The unsold stock is at a historical low,” he adds.

Showflat of a four-bedroom penthouse at North Gaia (Photo: Samuel Isaac Chua/EdgeProp Singapore)

The latest government land sale (GLS) tender at Lentor Hills Road with a winning bid of $1,060 psf per plot ratio (psf ppr) points to a future where “launches of suburban residential projects will be in the $2,000 psf range,” remarks ERA’s Mak.

Given the December property cooling measures, homebuyers have become even more price sensitive, note property consultants. Is the 26.5% sales rate achieved at North Gaia a harbinger of the performance of the upcoming project launches?

“I still believe that developments in good locations, near public transport and amenities that are reasonably priced should perform well and see good take-up rates,” says PropNex’s Gafoor.

Sing Holdings CEO Lee Sze Hao remains confident about the prospects for North Gaia: “This is a unique proposition for buyers in view of the limited supply currently, and we are confident that given some time, the project will be fully sold,” he says.

Check out the latest listings near North Gaia, Tampines, Bukit Batok, Parc Greenwich, Seletar Hills, Provence Residence, The Florence Residences, Affinity at Serangoon, Dairy Farm Residences, Treasure at Tampines

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