Singapore-based developer Hoi Hup Realty and Malaysia’s Sunway Group sold more than one-third of a 270-unit luxury condo project in Pasir Panjang during the launch weekend despite rising interest rates and increased taxes showing signs of slowing the city’s housing market.
Buyers snapped up 102 units, or about 38 percent of the total homes at the Terra Hill condo complex at an average price of S$2,650 ($1,964) per square foot over the weekend, including seven homes sold within an elite subdivision of the project where units traded at an average of S$2,850 per square foot.
While the one-third take-up rate is below the 70 percent sales that new projects averaged in their launch weekends last year, Siew Ying Wong, head of research and content for PropNex Realty said Terra Hill’s performance still fell within the agency’s expectations as homebuyers become more cautious in their purchases.
“Buyers may now need more time to come to a decision, and with more new launches coming up this year, some of them could be looking at comparing options before they purchase a property,” Wong said in a statement. “We think the average transacted price is reasonable in today’s market for a freehold development in the city fringe.”
Hillside Development
Jointly developed by Hoi Hup and Sunway Property, the real estate arm of Malaysian conglomerate Sunway Group, Terra Hills consists of nine, five-storey blocks on a 208,443 square foot (19,364 square metre) hillside site which was formerly occupied by the Flynn Park condo complex.
The partners spent about S$371 million, roughly S$1,318 per square foot of permissible built area to buy the freehold residential land plot via a collective sale in September 2021.
The developers said that a two-week preview of the project that began on 10 February welcomed at least 10,000 visitors while the weekend sales launch “received an enthusiastic response from the public.”
Marcus Chu, chief executive of APAC Realty and ERA Asia Pacific, said the project received healthy demand from homebuyers given the site’s freehold tenure and location.
“Only 14 percent of the transacted private residential non-landed properties in District 5 are freehold, while the rest are leasehold homes,” Chu said. “Furthermore, Terra Hill is accessible by public transport as it is located within a few minutes’ walk to the Pasir Panjang MRT Station. This enhances its attractiveness to both homeowners and investors.”
Chu also noted that the project is convenient to major roads such as the West Coast Highway and the Ayer Rajah Expressway.
The project is also close to the Greater Southern Waterfront, a government-backed urban renewal project which seeks to transform a 30 kilometre (18.6 mile) stretch of industrial and aging commercial neighbourhoods from Pasir Panjang to Marina Bay into a residential and recreational area.
Based on the transactions brokered by PropNex, the majority of buyers over the weekend were Singapore residents buying the units for own use. Prices at Terra Hill range from around S$1.5 million for two-bedroom units to as much as S$5 million for bigger apartments in the project’s Prestige Collection, a 30-unit section located at the highest point of the site.
New Standard
With Singapore having recently raised taxes on pricey homes and with interest rates biting into consumer buying power, PropNex’s Wong expects upcoming condo projects to post take-up rates of between 30 and 40 percent on their launch weekends this year after many new projects sold out rapidly in 2022.
“Looking back at the take-up rates of over 70 percent achieved at some RCR (rest of central region) launches in 2022, we feel that they are the exceptions rather than the norm,” she said, noting how buyers snatched up more than two-thirds of the homes available at Piccadilly Grand – a joint venture between – City Developments Ltd (CDL) and MCL Land – and Bukit Sembawang Estates’s LIV @ MB project during their launch weekends last May.
Since that time, the city-state’s central bank has raised the three-month compounded Singapore overnight rate average from at least 0.3 percent in May 2022 to about 3.2 percent as of 24 February, she said.
Also, while a dearth of project launches in 2022 led to pent up demand for new homes, Wong noted that there are more projects debuting this year, including Tembusu Grand – another CDL and MCL Land joint venture — and Far East Organization’s The Reserve Residences in Bukit Timah.
Singapore has also cooled the market by rolling out demand dampers such as the hike in buyer’s stamp duty imposed on high-end homes on 15 February, which raised taxes on sales of homes valued at S$1.5 million or more.
That latest measure was introduced after data from the city’s Urban Redevelopment Authority showed that sales of new private homes, excluding executive condos, more than doubled to 391 units in January from just 170 in December, although that number was still 43 percent below the 684 homes sold in January 2022.
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