Felicia Tan Published on Tue, Sep 07, 2021
The launch of Watergardens at Canberra, which reached a new high of $1,400 psf, has prompted DBS Group Research analysts Derek Tan, Rachel Tan, Dale Lai and Geraldine Wong to wonder if property prices will continue to rise in the near-term.
Watergardens, during its launch weekend on Aug 29, sold 60% of its 448 units.
The project is a 99-leasehold residential condominium priced at $1,400 – $1,500 psf.
“The strong sales achieved for the project is somewhat expected given the dial-up in sentiment in the property market in recent months,” write the analysts on Aug 31, in a Singapore property flash note.
Next on the analysts’ watchlist is the launch of the neighbouring The Commondore Condo @ Canberra and the Parc Greenwich executive condominium at Fernvale Lane.
Separately, the Urban Redevelopment Authority (URA) has awarded the 99-leasehold mixed commercial and residential land parcel at Jalan Anak Bukit to the Far East Organisation and Sino Group consortium for $1.028 billion, or $989 psf ppr.
The parcel measures 3.22 hectares and is located at the junction of Bukit Timah Road and Jalan Jurong Kechil. It can be built up to 96,555 sqm or 1.04 million sq ft with an underground pedestrian link to Beauty World MRT on the Downtown Line.
“Based on the current high construction cost, we estimate the overall project will cost $1.7 billion with the residential component’s breakeven at close to $1,700 psf, implying launch prices could touch $2,000 psf,” write the analysts.
The prices put it at around the same levels as The Linq @ Bukit Timah, a freehold mixed-use development nearby, which transacted at $2,000 – $2,200 psf when it was launched in November 2020.
To the analysts, the strong sales rates at record prices, as well as “robust” tender prices seen in recent bids in the government land sales programme may continue to fuel higher prices for condominiums in suburban areas.
“The question is how much more can developers continue to push the pricing envelope to attract homeowners to take the plunge,” they ask.
The answer? Prices may continue to climb further “for a while longer” as a strong pipeline of HDB units are now reaching their minimum occupation periods (MOPs).
A recovering economy and job stability are also contributors to the increasing prices for now.
Photo of four-bedroom showflat at The Watergardens: Samuel Isaac Chua/The Edge Singapore