Property bull run extends to some mid-market areas

March 22, 2007

Property bull run extends to some mid-market areas

Record prices set in locations such as Buona Vista and Farrer Road

By Joyce Teo, Property Correspondent


THE high-end property boom is gradually spilling over to homes further down the scale, with record prices being set in areas such as Buona Vista, Farrer Road and Meyer Road.

Still, price rises in these areas are proving to be slower than the meteoric rises seen recently in the high-end market - and they are not as widespread, market sources said.

Demand is partly being fuelled by the collective sale boom, as sellers in prime estates seek new homes on the city fringes and beyond, they said.

The middle classes are also supporting demand, said Mr Nicholas Mak of property consultancy Knight Frank. They cannot afford luxury homes but are still keen to get a slice of the market's bull run.

Earlier this month when sales started, the 405-unit One North Residences set a new benchmark at the new one-north hub in Buona Vista.

The sell-out project has reached an average of about $900 per sq ft (psf), with a top price of just under $1,200 psf.

In Farrer Road, MCL Land quietly sold units at its Waterfall Gardens project at new benchmark prices of $1,450 psf on average.

Some developers have adopted a strategy of first selling on the quiet in a bid to test out new benchmark prices. Orchard Turn Developments, a joint venture between CapitaLand and Sun Hung Kai Properties, did that recently.

It had declined to confirm talk that its sales had started - that is, until it announced yesterday that it had achieved a record price of more than $4,000 psf for its project.

In the Balestier area, developer UOL also started selling its 180-unit Pavillion 11 in Minbu Road last weekend.

The project's launch takes place today but more than 40 per cent of units have already been sold at prices from about $850 psf to $1,000 psf, sources said. The top prices are a record high in the Balestier area where projects were mainly selling for about $600 psf to $700 psf.

This should help prices of Soilbuild's soon-to-be-launched 151-unit Montebleu nearby, said a market source.

Mr Joseph Tan, director of residential at CB Richard Ellis, said the market's new benchmarks have so far been confined mainly to Meyer Road and one-north.

Meyer Road area prices have nearly doubled from $750 psf a year ago to $1,300 psf to $1,500 psf, he said.

One North Residences, the only new project launched in the Buona Vista area since the late-1990s, was priced at about 50 per cent above the $550 to $650 psf price for nearby condos.

But no other projects in the mid-tier and mass-market segments have shown such a 'remarkable' price rise, he said. And much of the spillover is largely driven by particular projects, Mr Tan added.

Yesterday, property consultant Jones Lang LaSalle said in a report that the positive buying sentiment in the prime market had cascaded to the mass market this year.

Prices in the secondary mass market have risen by 9.5 per cent in the first quarter of this year - the highest quarterly rise since 2000 - to an average of $460 psf, it said.

Analysts expect new projects to set benchmark prices in their areas. Reflections at Keppel Bay, which will be launched early next month, is set to be one of them. More than 1,000 buyers have registered interest in the 1,129-unit condo, said Keppel.

In the River Valley area, where a three-bedroom unit at The Cosmopolitan was said to have been sold recently for a high of around $1,700 psf, another condo could sell for more, sources said.

The Lippo group will launch The Trillium at an average price of about $1,700 psf this weekend, they said.

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POSITIVE SENTIMENT

Prices in the secondary mass market have edged up by 9.5 per cent in the first quarter of this year, says Jones Lang LaSalle