SINGAPORE - Private home units going for less than $1,000 per sq ft (psf) may seem rare these days but there are still projects offering homes at this level.
Property consultancy OrangeTee Research has pinpointed 10 developments with units below what has become a key price point for buyers.
Ms Christine Li, head of research and consultancy at OrangeTee, told The Straits Times: "It has become less common for developers to sell at this price level (or under $1,000 psf) amid rising land prices.
"Our estimates for upcoming launches in the second half of this year, assuming developers get a 20 per cent profit margin, show that none of them are selling units at less than $1,000 psf."
However, new units selling at less than $1,000 psf do exist.
OrangeTee cites the 882-unit A Treasure Trove condo at Punggol Walk, which has had a median transacted price of $916 psf for units sold since 2011. The development is near Punggol MRT station on the North-East Line.
The project has nine unsold units, including ground floor units as well as penthouses, priced from $1.04 million as of Tuesday. It also had the lowest transacted price - $609 psf - for units sold at the 10 projects since January.
The Interlace at Depot Road has the highest transacted price this year at $1,312 psf among the 10 developments singled out by OrangeTee. Units at the 1,040-unit condo have been sold at a median price of $1,053 psf since its launch in 2009.
There are 216 unsold apartments at The Interlace - three and four-bedders, penthouses and garden homes.
The Beverly at Toh Tuck Road, in the west, also has units selling at under $1,000 psf. Each apartment in the 118-unit development is served by a private lift.
As of Tuesday, seven units were still on the market. The condo had transacted prices ranging from $761 to $830 psf for units sold this year.
OrangeTee's Ms Li sees a more subdued market ahead, with developers likely to be more nimble with pricing to avoid hitting buyers' resistance levels.
She believes this trend will be more pronounced following the implementation of a 60 per cent total debt servicing ratio threshold last month.
"This new framework could potentially cause sales volumes to fall by as much as 40 per cent (this month) due to the initial knee-jerk reactions to the tighter lending rules, as buyers adopt a wait-and-see attitude before purchasing their next property," Ms Li added.
She foresees a trend of existing home owners who are still keen to invest in real estate looking toward smaller homes which are priced at a lower quantum.
"Prices are unlikely to be affected much as developers have strong holding power... (and can) hold back some project launches in view of the cautious market sentiment," she said. "I'd expect sales of smaller homes to take the lead in the market once the appetite for new homes returns."
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