While The Hillford could offer potential buyers a chance to buy into the highly desired Bukit Timah address cheaply, demand could be limited by its 60-year leasehold.
Marketed as the first retirement resort in Singapore – albeit with no age limit placed on potential buyers – the 281-unit project offers a mix of one-, two- and two-bedroom dual-key units which are equipped with built-in elder-friendly features.
Both the young and old thronged the showflat when it opened last Saturday, out of which more than 400 cheques have been collected and the majority came from younger investors. Key pull factors for the project include its attractive quantum and location.
Indicative prices for units start from $980 psf, which translates to about $388,000 for a one-bedroom unit, $498,000 for a two-bedroom unit and $648,000 for a two-bedroom dual-key unit. Market watchers likened the retirement resort to that of a legitimate shoebox development in a very attractive RCR (Rest of Central Region) location.
In addition, given that there are no restrictions on either ownership or tenant mix, it came as no surprise that the project attracts younger investors. Although the indicative price is still on the high side, there are fewer such small developments in the area which would probably not deter people from buying. Units at Creek@Bukit, the latest launch in the area were transacted at the median price of $1,637 psf when it was launched last November.
In a nutshell, The Hillford hopes to attract a mixed group of buyers spanning singles, downgraders in their 50s and 60s, and even investors who might have previously been priced out of the market because of the Total Debt Servicing Ratio (TDSR) and other cooling measures.
However, the downside of the project is the 60-year leasehold cap where investors might find it harder to finance the property since it may be harder to get bank loans for a shorter lease. Unloading the property in the resale market might prove a challenge too.
For instance, assuming the buyer holds the property for five years to avoid paying Seller’s Stamp Duty, the development would have a remaining lease of 55 years. Based on the remaining tenure, a 30-year-old buyer can only withdraw up to 55% of the value left in his or her Central Provident Fund.
Another factor that could potentially limit the scope of buyers is the design of the project, where according to the developer World Class Land, the project was designed to be “significantly different” from that of a typical condominium, given its specially tailored facilities, elder- friendly features, and provision of services such as a 24-hour concierge service and dedicated Resort Manager.
In conclusion, The Hillford is indeed the cheapest option to get a condo in Bukit Timah but ultimately, it is marketed and designed for the elderly so one must not expect the amenities and features of a lifestyle home.
With The Hillford being a pilot project, if it performs well, it will inevitably spark off other related projects, perhaps in the suburbs where costs can be better managed.
Source : buybyeproperty – 7 Jan 2014