The 99-year leasehold condominium project called The Vission, which is located in the quiet suburbs of West Coast Crescent, was launched at a whopping price of between $1,000 to $1,200 psf.
However, at least 160 buyers laid down their money for the mass market project that comes with quality finishes and branded fittings, said property developer Cheung Kong (Holdings).
Several industry players said that this has set the benchmark price for the area, and the project will not be the last to have such a high price.
Mohamed Ismail, chief executive of PropNex, said that this trend will likely continue over the next few months.
But he said that such a price level is not likely to become normal for the mass market category, given that affordability will become a serious issue.
The price level was first seen after FEO launched the 329-unit Centro Residences in Ang Mo Kio last year at more that $1,100 psf. During that time, many property agents were surprised, stressing that the price would become a new suburban record.
Until then, the Bishan 8 project was believed to be holding the leasehold record in 1997, which Far East set at $1,100 psf.
Still, buyers were seen at the Centro Residences project, with five deals in February registered at $1,220 psf.
Some of last year’s popular mass market launches, with price levels at $1,000 psf, included Meadows@Peirce in Upper Thomson, Elliot at the East Coast and Trevista in Toa Payoh.
Looking ahead, industry players said that the $1,000 psf price level may not be surprising, given the higher bids achieved at the government land tenders.
“For the next half year, you will likely see new mass market launches hitting the price level,” said Peter Ow, managing director for residential services at Knight Frank.
“The psf price is one thing, the quantum is another. As long as the total quantum is at $1 million or less, buyers can still afford to buy.”
He added that units will become smaller to keep with the affordability price range.
“If the developers bought land above $500 psf ppr, they would try to sell it for more than $900 psf ppr,” said Nicholas Mak, a real estate lecturer from Ngee Ann Polytechnic.
However, the aggressive bidding situation will not last.
“Demand is still strong. But as more supply comes onstream, developers’ landbanking needs will gradually be satisfied.”
Their bids will come down gradually, he said.
Mr. Mak also added that developers are wary about overpricing their projects as they would then have difficulty selling them.
Ms. Chua Chor Hoon, DTZ’s South-east Asia research head, also said that “not all mass market projects can be sold at above $1,000 psf. They would need to have very attractive attributes in order to attract home owners or investors.”
This would include a close proximity to MRT stations and employment hubs, or sought-after educational institutions to provide a ready pool of good tenants
Mr. Mak said that “developers will try to maintain the ($1,000 psf and above) price level as the norm for very well-located mass market condos.” But he stressed that it will not be the norm for mass market condos in general.
“We are not seeing a strong growth in household income, so how can we support those kind of prices?”