Even though transactions of new home sales have dropped, prices seem to have held up.
For bargain hunters who are looking for properties in the price range of $600 psf, one can consider Choa Chu Kang. Take for instance the 553-unit Regent Grove, a 99-year leasehold condominium located at Choa Chu Kang North 7 (near the Yew Tee MRT station.) It appears to be drawing homebuyers on the lookout for reasonably priced mass market condominiums in the suburbs. From June 8 to 15, there were five transactions at the development at prices ranging from $590 to $665 psf, according to caveats lodged with URA Realis.
With its proximity to an MRT station, the current prices at the 10-year-old condo developed by Far East Organization are considered attractive to buyers who are planning to buy a home that fits their budget. According to property agent Steven Chen of PropNex, affordability and proximity to the MRT station have been the two key attractions for homebuyers at Regent Grove.
In the latest transactions, the highest psf price achieved at Regent Grove was $665 psf on June 9, when a 926 sq ft two-bedroom unit on the 11th floor of Block 54 was sold for $616,000. This represents a 14% gain for the seller, who purchased the unit for $541,000 ($584 psf) from the developer in November 1999.
On the 10th floor of the same block, a 1,173 sq ft three-bedroom unit was sold for $770,000 ($656 psf) on June 8, providing a 25% gain for the seller who bought the unit for $617,400 ($526 psf) from the developer in October 2000.
On the seventh floor of the same block, a seller reaped a significant gain of 76% when he sold a 1,259 unit for $748,000 ($594 psf) on June 9. The seller bought the unit for $425,000 ($337 psf) in March 2006. Before this, the unit changed hands at a higher price of $638,000 ($507) on the resale market in March 2003.
Another similar-sized unit on the 12th floor at Block 52 was sold for $750,000 ($596 psf), giving a gain of 27% to the seller who purchased the unit for $589,000 ($468 psf) from the developer in August 1998.
Meanwhile, the fifth unit that changed hands was a 1,195 sq ft three-bedroom unit on the sixth floor at Block 50, which went for $705,000 ($590 psf). This represents a 34% gain for the seller, who purchased it at $525,000 ($439 psf) from the developer in March 1999.
Regent Grove is one of the few remaining developments in the Choa Chu Kang district where the average asking prices for units are still capped below $650 psf, according to Kelly Yu, marketing director of ERA.
Other condos in the area include Northvale and The Warren. At The Warren, which is newer given that it was completed in 2004/05, transaction prices over the last two months were between $648 and $731 psf, according to caveats lodged in May to June. Meanwhile, at the 12-year-old Northvale, transactions over the last two months have been in the range of $560 to $668 psf, according to caveats lodged with URA Realis.
At Mi Casa, a 457-unit Far East Organization project at Choa Chu Kang Avenue 3 (located across the street from Lot 1 Shoppers’ Mall ) that was launched late last year, more than 420 units have been sold as at end-May at a median price of $794 psf, according to URA’s monthly new home sales.
According to Citi’s latest research report last Monday, new mass-market condo prices will likely remain strong, given the support of capital gains from existing HDB flats at a seven-year high, and low mortgage rates. Fuelling investment demand for such properties is the rental yield of 4.25% compared with mortgage rates of below 2%. Citi expects prices in the massmarket segment to be capped at the $900 to $1,000 psf levels. Hence, investors may be zeroing in on older condos priced in the $600 psf range with immediate rental potential.