Home buyers flock to suburbs

While the latest cooling measures have dented demand for private properties in the central region, the appetite for suburban homes has remained resilient thanks to an increasing number of launches that are attracting mass market buyers with good locations and relative affordability.

Prices of homes in the Outside Central Region (OCR) surged 3 per cent in the second quarter this year from the previous three months, according to preliminary data from the Urban Redevelopment Authority published yesterday. That was more than double the 1.4 per cent rise in the first quarter and helped drive the overall private residential index up 0.8 per cent, adding to the 0.6 per cent increase previously.

Meanwhile, prices of homes in the Core Central Region fell 0.2 per cent in the quarter in what PropNex real estate agency noted was the first decline in this region since the first quarter of last year, while prices in the Rest of Central Region were up 0.2 per cent.

Many of the buyers in the OCR are first-time home buyers and the Housing and Development Board (HDB) upgraders, who are largely unaffected by the cooling measures introduced in January aimed mainly at curbing investment demand.

SLP International Property Consultants’ Executive Director Nicholas Mak said: “Compared to the central region and the city fringes, the suburban market is driven not so much by investment demand. The cooling measures are not to discourage people from buying their one or only property, or changing their property from HDB to private.”

Recently launched OCR projects that boast attributes such as proximity to MRT stations as well as leisure and dining options, have been popular, driving up prices of these homes.

“This is largely a function of the number of projects with good connectivity that were released by developers in recent months,” said CBRE’s Executive Director for Residential, Mr Joseph Tan. He added that the proportion of new homes sold in the suburban areas accounted for 60 per cent of the total transactions in the last quarter.

Jewel@Buangkok, near Buangkok MRT Station, achieved more than 70 per cent sales during its debut weekend last month, with units priced at an average of S$1,250 psf, according to its developer City Developments. Jade Residences at Lew Lian Vale, close to Serangoon MRT Station and nex shopping mall, sold close to 80 per cent at its April launch at a median price of S$1,592 psf.

Besides attractive locations, some of the new projects are benefiting from a government-backed redevelopment plan to set up regional commercial centres outside the Central Business District.

One of them is J Gateway, the first condominium to be launched near the Jurong East MRT Station in 10 years. All 738 units of the project were snapped up at the weekend at S$1,450 to S$1,650 psf.

Source – Today – 3 Jul 2013

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