Feb 8, 2009


Condo developers biding their time

Few launches likely until sentiment picks up; the ones available offer interest absorption

By Joyce Teo, Property Correspondent

With much of the housing market staying soft, the largest soft launch this year, the Caspian, drew interest with 180 units sold by early yesterday evening. -- PHOTO: FRASERS CENTREPOINT

The Chinese New Year is usually a lull period for property launches. But with the celebrations almost over, it appears the lull will continue.

With the general mood still sombre as the economic climate worsens, few developers want to launch their projects.

A seasoned property market watcher, who declined to be named, said a few major projects are ready for launch any time, but until sentiment improves, most of these launches are unlikely to happen. 'The bad news is just coming out. Developers will wait for the dust to settle,' he said.

'Now, even if I want to upgrade, I will ask myself if I'll still have my job. There is no impetus to buy.'

Furthermore, he added, 'banks are unfortunately very cautious at the moment. Most of us need a loan to buy but the banks' credit review is a lot more thorough'.

Once the Singapore stock market stabilises, the property market may resume some momentum and that could be another three to six months, he suggested.

For now, those eager to check out new projects will have to make do with a handful of new ones or previously released projects.

Most of these projects offer the interest absorption scheme, which is almost similar to the popular deferred payment scheme.

Like the deferred payment scheme, interest absorption allows buyers to defer the bulk of their payments after they have paid the 20 per cent down payment.

The difference is that they have to take up a bank loan at the point of purchase, and only with the bank that has tied up with the developer to offer the scheme. The developer will absorb the interest payments on the loan until completion.

The biggest condominium to be soft-launched so far this year is the 712-unit Caspian next to Lakeside MRT station in Jurong West.

Frasers Centrepoint chief executive Lim Ee Seng said a pre-marketing testing survey showed that there was 'very good' interest in the condo. 'This gave us the confidence to launch despite poor general sentiment,' he said.

Initial response has indeed been very strong, with 180 units of the 99-year leasehold condo sold as of early yesterday evening.

About 31 per cent of the buyers opted for the interest absorption scheme, which means they have to pay 3 per cent more on the price.

Frasers Centrepoint first released Caspian for sale at a staff preview last Thursday, followed by the public preview. The official launch is slated for Valentine's Day. It is offering 250 units at $580 per sq ft (psf) on average - a sum described by a consultant as 'priced to sell'.

World Class Land is also absorbing interest payments for its 38-unit Palmera Residence project in Telok Kurau until its temporary occupation permit date in October 2011. It said it has sold 25 units.

It is not charging a premium for those who take up the scheme and said that about 70 per cent of its buyers opted for it.

Over in Balestier, Roxy Homes is launching its 48-unit Nova 48 in Prome Road, after releasing it at a soft launch earlier in the year. It is priced at just below $1,000 psf and the interest absorption scheme is available.

The freehold 293-unit Alexis @ Alexandra, near Queenstown MRT station, is an upcoming project that will also offer interest absorption at no extra cost, industry sources said. Its private preview will be held this weekend.

The project consists mainly of small units - there are 114 one-bedroom units costing around $450,000 each and 77 one-plus-one bedroom units at some $550,000 each.

Natura Loft, an HDB design, build and sell scheme project in Bishan launched by QingJian Realty late last year, began a two-day Chinese New Year marketing drive yesterday, where it offered visitors door gifts and an instant glamour family portrait.

'These are just gimmicks,' said a market watcher. 'Ultimately, it is pricing and location that matter.'

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