http://www.businesstimes.com.sg/arch...homes-20140520
Published May 20, 2014
Knight Frank sees sustained demand for dual-key homes
No let-up in developers' interest in the concept introduced in 1986
By Lynette Khoo
[email protected] @LynetteKhooBT
WITH dual-key units in private residential projects still well sought-after by home buyers, they could potentially unlock value for both developers and buyers in the current tight market.
According to global consultancy Knight Frank, demand for dual-key units is likely to be sustained from yield-seeking investors and families looking to house multi-generations under one roof.
"In a price-quantum sensitive market, larger units in a development tend to sell at a slower pace. The dual-key concept is one strategy adopted by developers to move the sales of these larger units," said Alice Tan, director and head of consultancy and research at Knight Frank.
Another strategy deployed by developers is having larger units to be prime-facing, she added.
There has been no let-up in developers' interest in the dual-key concept yet. In the first two months of this year, four newly launched projects - Riverbank @ Fernvale, Rivertree Residences, The Santori and Lakeville - have dual-key units.
A dual-key home comprises two sub-units with two separate keys and, in some cases, separate entrances. When it was first introduced in 1986 by the HDB, it was meant to promote multi-generational living.
This concept has since been adopted in private housing, starting with Frasers Centrepoint's 712-unit executive condominium (EC) Caspian in 2009 where it introduced 15 dual-key units called "Trio Homes".
Subsequent condos that adopted the dual-key concept include UOL's Waterbank at Dakota launched in 2010 and Koh Brothers' Parc Olympia launched in 2012. Owners of dual-key units could also use the sub-unit as a home office or rent it out.
Out of 74 large-scale private condos and ECs (projects with at least 400 units) launched between 2011 and the first two months of this year, 35 projects rolled out a total of 1,976 dual-key units. Developers have allocated more units for dual-key, from an average 3.4 per cent of units in a project in 2011 to 7.5 per cent in 2013.
"Developers of private non-landed projects are recognising the potential of the dual-key segment and are capitalising on buyers' preference for such a living concept," Ms Tan said.
The additional buyers' stamp duty (ABSD) also tilts the favour to dual-key units as buyers can stay in the unit while renting out the sub-unit, instead of buying two separate homes.
But demand for dual-key units has softened; their take-up rate cooled from 100 per cent in 2011, 84 per cent in 2012 to 58 per cent in 2013 while the maximum price premium of dual-key units over similar-sized non-dual key units eased from 16 per cent in 2012 to 12 per cent in 2013.
Ms Tan noted that this is in part due to a low take-up for most of the projects following property cooling measures and the loans cap under the total debt servicing ratio (TDSR) framework.
Dual-key units still "offer a value proposition to a wider group of potential buyers", she said. Buyers of dual-key units are mainly in their late 20s to mid-30s, reflecting the trend of young families wanting to stay near their parents.
A significant 81 per cent of dual-key units are located in the North-east and East. Ms Tan said there could be new opportunities for developers to include more dual-key units for projects in the West where more regional and sub-regional centres are taking shape over the next five years.