Apr 23, 2011

Mature estates are 'buyers' choice pick'

Infrastructure already there, not many such sites left, say analysts

By Cheryl Lim

HOME buyers are likely to react enthusiastically to the Government's plan to inject thousands of new homes into mature estates, industry analysts say.

Under the plan, more than 10,000 new private and public homes will be built in Commonwealth, Queenstown and Bishan in the next 10 to 15 years.

The Government aims to use high-rise housing to help increase the population density in these areas.

These mature estates, said analysts, usually feature established networks of recreational and educational facilities and they are often well-connected to transport links.

'The infrastructure is already there and you won't have to wait for things to be built, like when Punggol was first established,' said Mr Eugene Lim, ERA Realty key executive officer.

Mr Ong Kah Seng, senior manager for Asia-Pacific research at Cushman and Wakefield pointed out that most mature housing estates tend to be fairly densely built.

He added that there may not be many sites left for residential development that lie within close proximity of a town centre or MRT station.

Mr Lim agreed, adding: 'The only way to acquire them would be through an en bloc sale or in the case of public housing, through the Selective En bloc Redevelopment Scheme, in which case, a good proportion of old flats might be targeted.'

Some undeveloped sites in the Bishan and Queenstown estates have been made available through the first half of this year's Government Land Sales (GLS) programme.

Two prime plots in Stirling Road have been set aside under the reserve list.

But this could also mean prices for private homes in those areas could be significantly higher with developers bidding competitively for a slice of the action.

In February, a plum site next to Bishan MRT station attracted 19 bids. The was acquired by CapitaLand for $550.1 million, or $869 per sq ft per plot ratio.

Data from the Housing Board shows that median prices for a three-bedroom flat in Queenstown and Bishan estates rose between 19.5 per cent and 21.9 per cent in the fourth quarter of last year, as compared with the same period a year earlier.

Mr Ong said prices of non-landed private residential properties have increased by up to 18 per cent over the previous four quarters.

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