Residential prices to dip 5% despite robust interest in the market

But when an analyst visited Parc Rosewood and Bartley Residences, what did they find out?

According to DBS, the two residential projects showed that interests in the physical property market remain robust, particularly from Singaporean or PR buyers.

Here’s more from DBS:

Ground checks show strong interest. Our visits to two residential projects – Parc Rosewood and Bartley Residences showed that interests in the physical property market remain robust, particularly from Singaporean or PR buyers. Absolute quantum affordability of the units is one major factor at Parc Rosewood while the good location of Bartley Residences, in the proximity of schools and public transportation facilities are some of the major selling points.

In addition to record low unemployment rates and hence better job prospects, mortgage rates quoted also remained attractive at 0.65-1% above SIBOR for the first 3 years. However, with continued strong interests, we expect the government’s policy stance to remain hawkish in the sector. As such, we maintain our current forecast of a 5% dip in residential prices and 12,000 primary market transactions this year.

Absolute quantum affordability a driver. Parc Rosewood, a project by Fragrance and Aspial Land, is a 689-unit development located along Rosewood Drive in Woodlands. Take-up for the project was about 280 units or 41% of the total 689 units to date. Demand was strong for the smaller sized units due to absolute affordability. Much of the appetite was for investment demand coming from a fair spread of Singaporeans as well as Chinese and Indian PR buyers. Prices averaged $925-998psf, 8-10% lower than surrounding projects. This was after a total 18% discount (10% off list price, 3% early bird, 3% stamp duty and 2% furniture voucher).

Location and accessibility remain the attraction. Another upcoming launch is Bartley Residences, a project by City Dev/Hong Leong Holdings/TID. The 702-unit project is located at Lorong How Sun and opposite the Bartley MRT station. Registration of buyers’ interests is currently ongoing and preview of the project is expected in the later part of Feb. ASPs range from $994-1,416psf after an 18% discount (12% discount, 3% early bird and 3% stamp duty discount). We understand that most of the interest is from Singaporean buyers. The consortium, including City Dev, bought the site for $621psf ppr in a government land sale and we reckon breakeven would be closer to the $1000psf mark.