Mass market private homes established a positive start to the recovery of the property market last year, which was spurred by stable demand and priced-to-sell projects in the early part of the year.
Home buyers, dominated by HDB upgraders, were responsible for the overcrowding in showflats during that period. The increasing numbers of units appearing on the market and the large number of crowds gathering at property launches stunned most market watchers.
The strong sales of new mass market homes saw the prices of new launches slowly climbing up over the past few months. The transacted prices of new homes increased to between $750 per square foot (psf) and $1,000 psf in November from between $500psf and $700 psf in July 2009.
The number of mass market transactions exceeding the $1,000 psf mark also increased, with 392 transactions last year, compared to 75 in 2008. The highest price recorded for mass market homes were for units in Centro Residences in Ang Mo Kio, at $1,289 psf.
Although mass market private home prices have increased, a large number of developments are also offering a new mixture of products to keep the prices at an affordable level.
The demand for smaller units such as studio type, one room plus study, two bedroom, and two room plus study, within the central area appears to have brought down the mass market sector.
Unlike the mid-tier and high-end segment, mass market homes are typically larger in sizes as buyers frequently purchase them for their own occupancy rather than for investment. Thus, only 10 to 20 percent of units in the mass market development have smaller sizes.
However, more mass market projects are now offering smaller units. For example, 43 percent of Hundred Trees and 59 percent of Optima @ Tanah Merah are allocated to smaller type units. Buyers seem to have had a good response, and good take-up rates have been seen in both projects.
And as the Singapore government transforms the country into an attractive satellite island, more investors are now starting to invest in mass market private homes in the region.
For instance, the renovation of the Jurong Lake District contributed to the increase of property transactions in the western part of the country. The expansion of Bedok Town Centre, the rejuvenation of Changi Business Park and Tampines Regional Centre, and the building of the fourth university also increased the developments in the eastern suburbs such as The Gale, Optima @ Tanah Merah, Livia, Oasis @ Elias, Ferraria Park Condominium and Waterfront Waves.
As more and more places undergo rejuvenation and expansion, mass market homes will become more attractive in the near future.