When the recent sub-prime crisis first hit, prices dropped between 15 and 20% from the buoyant period of 2007. Developers acknowledging the leaner economic climate ahead have started pricing their private properties at more affordable prices.
For instance, Rosewood Suites, situated in Woodlands, was initially expected to launch its units at $650psf. However, the last few weekends saw a take-up rate of over 60% of the released units at a mere $580psf.
“When you consider that land and construction costs can easily reach up to $700psf,” says PropNex CEO Mohd Ismail, “it is clear that the pricing for this development (Rosewood Suites) is exceptionally attractive.”
As a form of comparison, he points out that the DBSS (Design, Build and Sell Scheme) flats in Ang Mo Kio were fully subscribed at the price of $400,000–$500,000 for a 4-room flat, and $600,000–$670,000 for a 5–room flat. Another DBSS project in Bishan that was launched last month showed a 5% price increase to $465,000–$586,000 for a 4-room flat and $600,000–$739,000 for a 5-room flat.
“When you do a comparison of the costs per square foot for DBSS flats and this particular development,” Ismail reveals, “you will see that the pricing is almost on par. Serious buyer with a long term investment will see the obvious merits in taking up private properties with a psf price of below $1,000, such as Rosewood Suites.”
Indeed, for just a little more, HDB upgraders in suburban areas can enjoy full-fledged condominium facilities, as well as more superior finishes and fittings than those at DBSS units.
For those expecting the downward trend to continue, Ismail cautions: “There is a limit to how low prices can go, as the developers have to take into account their land and constructions costs. Furthermore, with the Government intervening by holding onto their land parcels, we can expect to see a price equilibrium sooner rather than later.”
Rosewood Suites, a 200-unit condominium in Rosewood Drive (Woodlands) that is marketed by PropNex, was well received during its preview. The developer, EL Development, had priced their units competitively, with the price for a 3-bedroom unit in this condominium going for approximately $620,000. EL Development intends to release more choice units this weekend.
