Kaeden Ong

House prices in Bishan to slip despite strong demand

Posted by Kaeden Ong on 29th April 2014 in Blog

Despite a slew of new launches in Bishan that resulted in robust sales in the second half of 2013, property prices in the area are expected to moderate slightly as a cautious outlook spreads throughout the market, said analysts quoted in the media.

However, Chia Siew Chuin, Colliers International’s Director of Research & Advisory, noted that Bishan’s strongest selling point is its city-fringe location and the demand from upgraders will stay robust due to the high prices of resale HDB flats there.

In 2013, popular projects in Bishan that entered the market included Woh Hup’s 65-unit Three 11, CapitaLand’s Sky Vue and UOL’s Thomson Three.

Three 11 is fully sold, while Thomson Three and Sky Vue have sold 87 percent and 71 percent of their units respectively.

Meanwhile, the latest project to launch new units in the area is Sky Habitat, also developed by CapitaLand and located next to Sky Vue. The 509-unit condo experienced slow sales when it was first launched in April 2012 due to its record high prices at the time.

The project’s relaunch saw 80 units sold on the first day of sales at a discount of 10 to 15 percent from its original price – around $1,279 to $1,590 psf.

Ong Kah Seng, Director of R’ST Research noted, “Any new project in Bishan in the near future will have to price itself relative to that of Sky Habitat and Sky Vue, as it seems this is the pricing which buyers find affordable and attractive.”

But Chia does not expect this to have any significant impact on nearby launches or resale condos, saying that “the overall market dynamics and price trends will be considered when setting selling prices”.

Notably, resale prices in Bishan have been fairly resilient, climbing by 13.7 percent to $1,080 psf in Q4 2013 from $950 psf in Q4 2011.

However, resale activity moderated from 20 transactions per quarter before 2013 to less than 10 per quarter after that.

Despite the decline in resale activity, Ong underscored that prices within the area are fairly high.

He said, “Investors should consider getting a unit here as it is an established central locality. More importantly, prices of new launches have been cut to better match affordability, and lowered prices means it’s easier to achieve expected investment returns.”

Credits: Property Guru

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