IMPACT ON RESALE PRICES OF NEARBY Condos?
On whether the news of the Plus and Prime BTO initiatives may affect the sale prices of local cottages, experts appeared to possess varying views.
Huttons Asia’s Mr Lee, for one, said parallels can be drawn from the PLH model where consumers also have to rush 10, instead of the common five, years before selling their products.
That has deterred some consumers, who in turn went for near selling cottages. That has contributed to the increase in sale prices of non-PLH cottages in the vicinity of these fresh launch, said Mr Lee, citing City Vue @ Henderson where a five-room product sold for an eye-watering S$ 1. 59 million in June.
ERA’s Mr Lim echoed that selling cottages near Plus and Prime models may see some demand from consumers who prefer a house in the same location but with fewer constraints.
“Being locked in for at least 14 to 15 times, including the design interval, may not be for everyone, ” he said. “Prices for these flats ( could ) increase. ”
On the other hand, Ms Sun said studies done by her staff on the resale industry around PLH jobs in Bukit Merah and Queenstown have been less convincing.
“There was an increase in the selling prices in these areas, but it is in combination with the total increase islandwide… We did n’t notice a very obvious faster pace of increase in sale prices in these areas, ” she said.
Other causes could be a lack of new flats reaching MOP in these places and how Bukit Merah is mostly an old house.
But interestingly, estate agencies have observed “more sellers asking for higher prices ” in hope of capturing some desire from buyers who may get the prolonged MOP too limiting.
“ But it ’s only anecdotal evidence for now. We don’t have enough information points, ” said Ms Sun.
Ms Sun even posited that the longer-term craze of selling prices may be less sure, with the effects of the fresh classification method being an unknown.
“If there will be more Plus and Prime cottages nearer to the city center, and more Standard cottages in the residential areas, does it mean that in 5 to 10 years ’ period, we will see a gap in resale marketplace activity? ”
With rate rise closely linked to business action, she added: “Places with regular flats may see faster rate increases, by virtue that they are put up in the market at a faster rate.
“If that ’s the case, does it mean that the city centre may see a hiatus of 10-15 years? Will price growth be slower then? ”