Property launches still seeing strong demand

[Musicwhiz]

I find it laughable when I read such headlines! So what in the world can "dampen" Singaporean's love and propensity for property? Seems that FOUR rounds of cooling measures introduced over 18 months have scant effect on the exuberance, with a whopping 85% of buyers being Singaporean (so no one can accuse foreigners of being responsible for jacking up prices).

Or are we simply destined to end up being "The Next Hong Kong" in terms of exorbitant property prices?

Mar 8, 2011
Property launches still seeing strong demand
Home buyers seem unfazed by property cooling measures
By Esther Teo, Property Reporter

New property launches have continued to attract healthy interest from home buyers, who seem unfazed by January's market cooling measures.

City Developments' (CDL) 521-unit H2O Residences in Sengkang led the pack over the weekend, with 150 units out of 200 on offer sold, at an average price of $920 per sq ft (psf).

Only 120 units were released for Phase One of the private preview on Friday, but more units were released progressively to cater to strong demand, CDL said.

Singaporeans comprised 85 per cent of the buyers, with permanent residents and foreigners from places such as China, Vietnam, Malaysia, Hong Kong, India and Indonesia making up the rest.

In its first residential launch of the year, CDL said that units sold were mainly the two-bedroom, two plus study, three- and four-bedroom types.

CDL group general manager Chia Ngiang Hong said he was pleased with the good take-up rate from buyers who found potential in Sengkang's rapid development.

'H2O also presents an exciting investment opportunity for savvy investors who can leverage on the development's proximity to the future Seletar Aerospace Park for rental and capital value appreciation potential,' he added.

Over in the east, buyers were also quick to pick up units at Fragrance Properties' 116-unit Suites@East Coast in Upper East Coast Road.

More than 80 units were sold during the official launch over the weekend and the preview three weeks ago, with prices starting from $1,100 psf.

HSR chief operating officer Callie Liew, the marketing agent for the freehold project, said most of the studio apartments and smaller units were sold first, mainly to investors attracted by their affordability.

Far East Organization said it sold 17 units at 561-unit Waterfront Isle in Bedok Reservoir Road over the last week, bringing total sales to 370 units, at an average price of $947 psf. This is slightly up from the average of $940 psf two weeks earlier.

CapitaLand also said it has sold 66 per cent of 470 units released at d'Leedon on the former Farrer Court site, with the average price holding firm at $1,680 psf since its preview launch in November.

The Interlace in Alexandra Road has sold 72 per cent of 900 units released at an average price range of $850 to $1,300 psf, CapitaLand said.

At Chip Eng Seng's 301-unit My Manhattan, next to Simei MRT station, there had been no more sales from a week earlier, when the total stood at 75 units at an average price range of $1,100 to $1,200 psf.

esthert@sph.com.sg

[thefarside]

Consider this: the latest round of cooling measures have imposed a 40% cash downpayment for those buying a new house with a mortage still outstanding. Some of the buyers here are likely to fall in to the category - so it tells me that out of the whole gamut of property buyers, the cooling measures have pushed the marginal speculators or investors out the market, but have not affected the strong which is fundamentally a cash rich group.

Also, a lot of first generation HDB owners who purchased their houses direct from HDB, or when prices are still not obscene, would probably have no mortgages outstanding after about a decade of payment. So these people could get up to 80% financing.

In addition, the real cause of the continuing boom is the ultra-low interest rate environment. Excluding the downpayment, the interest carrying cost for a S$1 million loan is just 10k p.a., at 1% rates. With credit this cheap and the whole banking system flush with cash, property is bound to boom. The boom will stop only when interest rates start to rise again - at 3-4% it will be enough to brake the system.