http://www.straitstimes.com/archive/...emand-20140426

HOT SPOT

City-fringe location keeps Bishan in strong demand

Published on Apr 26, 2014 1:10 AM

By Cheryl Ong


A FLURRY of new launches in Bishan in the second half of last year generated healthy sales, but the cautious outlook pervading the property market is likely to cause prices in the area to moderate slightly, analysts said.

However, Bishan's city-fringe location is its strongest selling point, and the traditional high values of resale Housing Board flats in the area will likely ensure that buying demand from upgraders remains strong, noted Ms Chia Siew Chuin, director of research and advisory at Colliers International.

Popular projects in the area that went on the market last year included Thomson Three, Three 11 and Sky Vue.

Woh Hup's Three 11 is fully sold, according to data from the Urban Redevelopment Authority; the last unit at the 65-unit condo went for $1,368 per sq ft (psf) in December.

The 445-unit Thomson Three in Bright Hill Drive, developed by UOL, is 87 per cent sold. The median price was about $1,308 psf.

CapitaLand's project Sky Vue in Bishan Street 15 was launched last September at about $1,500 psf. It has sold about 71 per cent of its units at a median price of about $1,465 psf, said Ms Chia.

The latest project to launch new units was CapitaLand's other Bishan development Sky Habitat, which is next to Sky Vue. The 509-unit condo, first launched in April 2012, saw slow sales after its record high prices of $1,700 per sq ft (psf) grabbed headlines then.

Last week's relaunch moved 80 units on the first day of sales at about $1,279 to $1,590 psf - translating into a discount of about 10 to 15 per cent from its price two years ago.

"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," said Mr Ong Kah Seng, director of R'ST Research.

But this is not expected to have a drastic impact on neighbouring launches or resale condos, noted Ms Chia.

"The overall market dynamics and price trends will be considered when setting selling prices," she said.

In fact, prices of resale units in Bishan were "fairly resilient", said analysts.

Ms Chia noted that they rose 13.7 per cent from $950 psf in the fourth quarter of 2011 to $1,080 psf in the fourth quarter last year.

At Bishan Loft in Bishan Street 11, for instance, the median price of units rose from $1,000 to $1,216 psf in the same period, added Mr Ong.

Despite this, resale activity in Bishan has cooled off.

There were at least 20 transactions per quarter before 2013, but resale activity fell below 10 per quarter after that.

Mr Ong pointed out that the dip was in line with moderated buying interest across the island, and that prices in Bishan are "fairly high", which could cause buyers to be resistant.

"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," he said.

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