Knight Frank sees sustained demand for dual-key homes

[reporter2]

http://www.businesstimes.com.sg/archive/thursday/specials/property/knight-frank-sees-sustained-demand-dual-key-homes-20140520

Published May 20, 2014

Knight Frank sees sustained demand for dual-key homes

No let-up in developers' interest in the concept introduced in 1986

By Lynette Khoo

[email protected] @LynetteKhooBT


WITH dual-key units in private residential projects still well sought-after by home buyers, they could potentially unlock value for both developers and buyers in the current tight market.

According to global consultancy Knight Frank, demand for dual-key units is likely to be sustained from yield-seeking investors and families looking to house multi-generations under one roof.

"In a price-quantum sensitive market, larger units in a development tend to sell at a slower pace. The dual-key concept is one strategy adopted by developers to move the sales of these larger units," said Alice Tan, director and head of consultancy and research at Knight Frank.

Another strategy deployed by developers is having larger units to be prime-facing, she added.

There has been no let-up in developers' interest in the dual-key concept yet. In the first two months of this year, four newly launched projects - Riverbank @ Fernvale, Rivertree Residences, The Santori and Lakeville - have dual-key units.

A dual-key home comprises two sub-units with two separate keys and, in some cases, separate entrances. When it was first introduced in 1986 by the HDB, it was meant to promote multi-generational living.

This concept has since been adopted in private housing, starting with Frasers Centrepoint's 712-unit executive condominium (EC) Caspian in 2009 where it introduced 15 dual-key units called "Trio Homes".

Subsequent condos that adopted the dual-key concept include UOL's Waterbank at Dakota launched in 2010 and Koh Brothers' Parc Olympia launched in 2012. Owners of dual-key units could also use the sub-unit as a home office or rent it out.

Out of 74 large-scale private condos and ECs (projects with at least 400 units) launched between 2011 and the first two months of this year, 35 projects rolled out a total of 1,976 dual-key units. Developers have allocated more units for dual-key, from an average 3.4 per cent of units in a project in 2011 to 7.5 per cent in 2013.

"Developers of private non-landed projects are recognising the potential of the dual-key segment and are capitalising on buyers' preference for such a living concept," Ms Tan said.

The additional buyers' stamp duty (ABSD) also tilts the favour to dual-key units as buyers can stay in the unit while renting out the sub-unit, instead of buying two separate homes.

But demand for dual-key units has softened; their take-up rate cooled from 100 per cent in 2011, 84 per cent in 2012 to 58 per cent in 2013 while the maximum price premium of dual-key units over similar-sized non-dual key units eased from 16 per cent in 2012 to 12 per cent in 2013.

Ms Tan noted that this is in part due to a low take-up for most of the projects following property cooling measures and the loans cap under the total debt servicing ratio (TDSR) framework.

Dual-key units still "offer a value proposition to a wider group of potential buyers", she said. Buyers of dual-key units are mainly in their late 20s to mid-30s, reflecting the trend of young families wanting to stay near their parents.

A significant 81 per cent of dual-key units are located in the North-east and East. Ms Tan said there could be new opportunities for developers to include more dual-key units for projects in the West where more regional and sub-regional centres are taking shape over the next five years.

[johnlee]

Demand for dual key homes is a good sign that some Singaporeans still have their Government promoted values intact! Given that filial piety has been on the wane in recent years.

[reporter2]

http://www.straitstimes.com/archive/tuesday/premium/money/story/developers-still-keen-dual-key-units-20140520

Developers 'still keen' on dual-key units

Report: Loan curbs not holding back construction

Published on May 20, 2014 1:29 AM

By Melissa Tan


DEVELOPERS are still building "dual-key" units in private condominiums even though an initial surge in the allure of such homes has largely petered out, property consultancy Knight Frank said in a report yesterday.

These units, which have two separate entrances for privacy, typically appeal to investors who want to rent out part of their home and to young couples who want to live with their parents.

However, their relatively large sizes have recently made dual-key units harder to sell, as loan limits imposed last June cap how much home buyers can afford.

Dual-key homes have been included in four new private projects launched this year so far, which Knight Frank said indicated developers' "continued interest" in this type of unit.

It added that their appeal had grown in recent years, though the concept seems limited to the suburbs and parts of the city fringe.

Knight Frank research head Alice Tan said dual-key units tend to be found in private projects with a larger number of units.

Such homes can also be found in executive condominiums (ECs), a hybrid of public and private housing, though sales of dual-key units at EC projects are restricted to multi-generation families.

Dual-key units featured in eight private developments last year, up from seven in 2012 and three in 2011 - in terms of large projects with 400 or more units.

The proportion of large private projects that had dual-key units also rose from 19 per cent in 2011 to 32 per cent in 2012 and then to 53 per cent last year, Knight Frank noted in its report.

Within those large projects with dual-key units, developers have also been devoting a greater number to that format.

Dual-key homes accounted for 3.4 per cent of total units in those projects in 2011 on average, but that climbed to 7.5 per cent on average last year, Knight Frank said.

At the height of their popularity in 2012, dual-key units in private projects commanded prices that were as much as 16 per cent higher than for other homes of a similar size in the project, it said.

Developers also managed to move 84 per cent of those units that year.

However, the price premium fell last year to a maximum of 12 per cent as property market curbs dampened buyer sentiment. The take-up rate also tumbled to 58 per cent.

Dual-key units in private projects first appeared in 2009 in the 712-unit Caspian condominium by Frasers Centrepoint, which had 15 such units.

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