http://www.businesstimes.com.sg/spec...point-20140401
Published April 01, 2014
Sales at The Santorini disappoint
Only 80 of the 200 units released at the 597-unit condo's weekend launch sold
By lee meixian [email protected]
OF the 200 units released at The Santorini's launch over the weekend, only 80, or 40 per cent, have been sold, leading analysts to suggest that the market is tiring of too much supply of similar mass-market projects, particularly ones with low-quantum compact units.
The units sold at the "Mediterranean-inspired" Tampines condominium were mostly one and two-bedroom units, a spokesman for developer MCC Land (Singapore) Pte Ltd told BT. This was expected, since over half of the condominium's 597 units are one and two-bedders.
Compact units have become the rage since the Total Debt Servicing Ratio (TDSR) framework rolled out last June lowered the loan-to-value limits for buyers who have an existing home mortgage and are still looking to buy more residential properties.
Buyers have therefore had to scale down their sights to lower-quantum investment property purchases.
"For most middle-class buyers, this is all they can afford as a second property. The TDSR framework has restricted the liquidity in the market," said SLP International research head Nicholas Mak.
Prices at The Santorini start from $508,200 for the smallest unit, a 463-sq-ft one-bedder.
From the developer's point of view, selling units at "small quantum with higher-dollar per square foot prices" will also help it to break even more easily, given the high price at which it bid the land for - at $562.01 per square foot per plot ratio - for a plot not walking distance to the MRT station and in an area with quite a lot of new supply, Century 21 chief executive Ku Swee Yong said.
He estimates that more than 25,000 units will come onstream in the Punggol, Sengkang, Tampines and Pasir Ris area in the next three to four years.
Price at The Santorini's units average $1,100 per sq ft, slightly higher than the nearby Waterview and Q Bay Residences condominiums.
Looking ahead, most consultants believe that the appetite for one and two-bedders will dwindle.
Mr Ku said: "It will be tougher to find additional new sources of buyers even at the $500,000 mark. This segment of mass market buyers buying at low quantum may have been exhausted already."
He added that compact investment units are also untested in terms of rentals. Referring to The Santorini development, he said: "How many people will be looking to rent a one-bedroom of about 500 sq ft? What sort of rents can you get? Would a renter rather take a three-room HDB flat that he can share with a colleague for $2,000 a month, or pay for a much smaller room with more facilities? It's a bit of a struggle."
But Chesterton Singapore managing director Donald Han thought otherwise. He sees the trend of developers releasing and buyers snapping up low-quantum small units continuing.
"The sweet spot is really $800,000 and below - which is what one- and two-bedroom units are targeting at," he said. "The fact that The Santorini can sell 80 units is deemed a fairly good number to achieve in a slowing market."
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