This week’s preview of MCL condo could indicate if demand has been dented

ALL eyes in the property market are on MCL Land’s preview this week of its Yishun condo to see if demand has been dented by last Friday’s anti-speculation measures.

One and two-bedroom units – which have typically been popular among some speculators at property launches over the past year – make up nearly 40 per cent of the total 608 units in the project, The Estuary.

The Hongkong Land subsidiary will preview about 200 units in the 99-year leasehold condo at an average price of about $750 per sq ft (psf), said MCL chief executive Koh Teck Chuan.

Property industry watchers will be focusing on the demand for smaller units – especially the 85 one-bedders which range from 590-603 sq ft. Smallish apartments have often been targets for speculators over the past year as the lump sum outlay is relatively more affordable. And for developers, smallish units can achieve the highest psf price.

MCL is pricing its one-bedders at $835 psf on average, translating to a lump sum investment of about $500,000.

Meanwhile, property giant Far East Organization said last Friday night’s government announcement of measures to cool the market had affected the number of show-flat visitors at the weekend.

The group’s chief operating officer, property sales, Chia Boon Kuah, said: ‘We have seen some impact on visitors. The weekend launch of Altez (in Tanjong Pagar) received about 600 groups of visitors. So far we have sold a total of 140 out of 155 units released.

‘Across our other show flats, we noticed a slowdown in visitorship, though the number of units sold remain comparable over a typical weekend.

‘The majority of Far East’s buyers are owner-occupiers or investors with a mid to long-term investment horizon. We will continue to meet demand from this segment and expect to proceed with our planned launches this year, while keeping a close watch on market reactions.’

As for Yishun, where MCL is gearing up to preview The Estuary, Mr Koh said: ‘We believe our buyers will comprise mostly owner-occupiers and will not be affected by the government’s measures. There hasn’t been any private condo launch in Yishun for many years.’

The development, in blocks of 15-17 storeys, is near Khatib Station and overlooks Lower Seletar Reservoir.

Last Friday night, the government announced the introduction of a seller’s stamp duty for those buying residential properties from Feb 20 and selling them within a year, in a bid to curb short-term speculation. The new seller’s stamp duty is in addition to the buyer’s stamp duty.

As well, the loan-to-value limit for all housing loans provided by financial institutions will be reduced from 90 per cent to 80 per cent to foster greater financial prudence.

Some property consultants say the second measure could have an impact on some buyers of entry-level private condos.

‘That can be quite a challenge for some HDB upgraders as effectively it could mean having to come up with 20 per cent cash downpayment, since their CPF savings would be tied up in their existing flats,’ said Knight Frank managing director (residential services) Peter Ow.

‘And schemes like interest absorption and deferred payment – which helped such buyers tide over the construction of their new homes – are no longer available.’

The Estuary’s two-bedroom units range from 904 to 926 sq ft and have an average price of $780 psf. Its three-bedders (1,184 to 1,302 sq ft) cost $722 psf on average, while the four-bedders (1,453-1,528 sq ft) have an average price of $689 psf.

Savills Singapore’s analysis of URA Realis caveats information as of yesterday showed 191 caveats for sub-sales – sometimes seen as a proxy for speculative activity – of non-landed private homes were lodged last month and 10 for February. The highest monthly figure last year was in June, when 597 sub-sale caveats were lodged. During the 2007 bull run, the highest monthly figure was in July, with 867 caveats.

Source: Business Times, 23 Feb 2010