Usually, a property in Singapore’s Districts 9, 10 and 11 would cost an arm and a leg.
However, with new launches in the suburbs commanding a higher per sq ft pricing, it has made prime properties affordable in comparison. In fact, the second quarter witnessed resale activity taking place again in prime areas after the doldrums post-ABSD.
What is causing this strange market dynamics?
Firstly, there was a slight drop in pricing in districts 9, 10 and 11 as transactions took a dive for a while as investors retreated from the market after the ABSD was implemented.
Secondly, CapitaLand’s Sky Habitat launch has had a lifting up effect on prices in the suburbs with other developers now following suit.
Sky Habitat managed to shift units despite the steep pricing of around S$1,700 (US$1,337) to S$1,800 (US$1,415) per sq ft. This price range is similar to what resale properties in prime areas would be asking for. In fact, if you were to look a little closer and do some homework, you can get distressed assets in prime areas for around S$1,400 (US$1,100) per sq ft.
This anomaly makes in an incredibly attractive preposition for cash rich investors to look into buying a completed property in prime areas rather than wait three years for a new one to be completed in the suburbs. It appears that Orchard and other prime areas are now blossoming.
Source: PropertyReport – 2012 Jul 9