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Private home market likely to stay muted, say analysts

Some analysts say the private residential market is likely to stay muted for the next few months, as developers are faced with an increasing number of unsold units in the market.

SINGAPORE: Some analysts say the private residential market is likely to stay muted for the next few months, as developers are faced with an increasing number of unsold units in the market.

There were 6,948 launched but unsold units as of March 2014, 252 units more compared to February 2014. In contrast, the number was at 5,560 in March last year.

It has been 10 days since the show flat of the Coco Palms in Pasir Ris opened its doors.

Its developer City Developments said more than 3,000 people visited the show flat last weekend.

Indicative prices are at about S$1,075 per square foot (psf) for a 1-bedroom unit and some S$960 psf for a 2-bedroom unit.

Property analysts say that while the prices are "reasonable", it remains to be seen if buyers will bite as demand may have been "soaked up" by other new private residential projects in the area.

Coco Palms is City Developments' fifth development in the Pasir Ris Grove estate.

Three of them -- Livia, NV Residences and The Palette -- are fully sold while the fourth project D'Nest, which launched in March last year, is 94 per cent sold.

Over in the northeast, a soon-to-be-launched project is freehold condominium Trilive Condo along Tampines Road.

The prices have not been announced, but property watchers say that other than land costs, developers are likely to take the cue from resale prices in the Kovan area.

"The developers would take into account what the recent transactions have been for the secondary market in that vicinity, and of course whether there are competitors who may be launching sometime in the near future,” said Ku Swee Yong, CEO of Century 21 Singapore.

“In the more discreet basis, developers will also consider in this location, were there similar launches in the past 10 years."

The median price of The Tembusu, another freehold condominium in the vicinity, was at some S$1,550 psf when it was launched in August last year.

Other 99-year leasehold properties in the vicinity -- Kovan Melody and Kovan Residences -- are trading at some S$1,100 to S$1,300 psf.

"In the case of Tembusu, when it was launched, there was no significant good-size piece of freehold land with condominium launched in Hougang, I think, in the last decade,” said Mr Ku.

“And so that was an attractive selling point in itself and that deserves a premium because there would be demand."

Mr Ku said the other freehold developments in the area generally come in smaller packages -- apartments comprising about 20 to 50 units.

The Tembusu had 220 units out of 337 units booked when it was first launched.

The Trilive Condo is expected to open its doors for preview at the end of the month.  

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