http://www.straitstimes.com/archive/...emand-20140520
Some housing projects seeing little to no demand
Two developments have not sold any units; more price cuts likely: Report
Published on May 20, 2014 1:15 AM
By Cheryl Ong
AT LEAST eight housing projects on the market here have sold fewer than 10 per cent of their homes - and some none at all, a new report shows.
Home seekers may have helped to drive healthy sales at some new property launches of late, but the report indicates that buying interest has yet to spread to projects on the market for some time.
The report, released yesterday by property firm HSR International Realtors, said more discounting is likely to be on the way.
Of the projects selling poorly, two have not had any transactions since going up for sale last year.
Hiap Hoe's 48-unit Treasure on Balmoral at Balmoral Road, launched in January last year, has yet to shift a unit. Victory Ville, a cluster-housing project of eight homes at Toh Drive by Regal Development, has not snagged a buyer since last September. It is expecting its temporary occupation permit in December.
"We expect more property developers to follow the step taken by CapitaLand to cut prices, especially for slow-moving projects," said HSR research analysts Tong Kooi Ong and Penny Yaw.
The firm, which compiled a list of 50 projects that sold less than 50 per cent of its units, found that the average take-up rate had only risen 2.9 percentage points from 23.6 per cent since last December.
Projects on the list include Devonshire 8, a freehold development by Ivy Lee Realty launched last July. The condo at Devonshire Road has moved only one of its 30 units at a median price of $2,500 per square foot (psf).
Popular Holdings put its 26-unit project 8 Raja on the market in May last year, but the condo at Balestier Road has recorded sales of just two units at a median price of $1,336 psf.
Hong Leong Holdings' One Balmoral at Balmoral Road has sold seven of its 91 units at a median price of $2,411 psf since it went on sale last June.
HSR tipped that a drop of 15 per cent to 20 per cent in prices could be the key to shifting more units. CapitaLand, for instance, sold 106 units at Sky Habitat after it cut prices to $1,267 psf to $1,622 psf - a 12 per cent to 13 per cent drop from when it first launched two years ago.
A similar move by Wheelock Properties for its 698-unit project The Panorama, launched in January, is expected. Earlier reports noted that more units are expected to be launched at a 10 per cent discount later this month.
But Ms Alice Tan, research head at Knight Frank, noted that price cuts are often a developer's last resort, because they would have already incurred high land costs. Instead, they could remodel their projects if they are still under construction.
"Developers will also have to compare with their competitors in the vicinity. Some may have to reduce prices by more than 20 per cent, especially those in prime areas," said Ms Tan.
But a looming supply of new units coming onstream next year will add pressure on older projects with tepid sales. "Developers could hold out for perhaps another six months before they evaluate their options," Ms Tan said.
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