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Published October 13, 2006

Developers ride on improving sentiment with price hikes

Increases steeper for condos in Newton, River Valley than in outlying areas

By KALPANA RASHIWALA

(SINGAPORE) Developers have been steadily increasing prices of residential projects to ride on improving sentiment.

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The Coast on Sentosa: Average price is now $1,550 psf, up from $1,500 last week

Ho Bee Group this week raised the average price of The Coast condo on Sentosa Cove to around $1,550 per square foot from the initial $1,500 psf when it began previewing the 99-year leasehold project last Friday.

It has been releasing units in the 249-unit project in phases and has so far sold about 130 units.

Over in the Newton area, City Developments is said to be planning to jack up prices at its freehold Residences @ Evelyn condo. Its current average price is $1,250 psf - up from the initial $1,225 when it began previewing in late May. CityDev's spokesman yesterday confirmed that the group is planning to raise prices further but declined to elaborate.

Property consultants say they are not surprised, given the recent sale of a high-floor unit at the nearby Setia Residences at $1,600 psf - a new high for the area. CityDev still has about 100 or so units available for sale at its 208-unit Residences @ Evelyn condo, which should allow it to benefit from further price upside.

Further down Newton Road, Keppel Land was selling its Park Infinia condo at Wee Nam Road at about $950 psf on average a quarter ago. Since then, prices have been gradually raised by about 10 per cent. The 486-unit freehold project is about 80 per cent sold.

Over in the River Valley area, Frasers Centrepoint last week increased the average price of its freehold One Jervois condo by 10 per cent to $1,050 psf, and is said to be eyeing a further price gain 'in the near future' - given that nearby projects slated for release over the next few months are expected to be priced much higher. An example would be Lippo's 270-unit condo at Kim Seng Road, which it has said it is planning to price at $1,500 to $1,600 psf on average in the first quarter of next year.

Frasers Centrepoint has sold 210 of the 275-unit One Jervois and market watchers say the developer might even deliberately slow sales with a view to retaining units for later sale as prices in the area head further north.

Pricing power also seems to be returning to developers outside the prime districts, although to a lesser extent.

The developers of the Centris next to Boon Lay MRT Station have raised the average price of the 99-year leasehold project from an initial $497 psf on Sept 29 by up to 5 per cent. To date, 305 units - or half the total 610 units in the project - have been sold. 'Buyers of mass-market projects are much more price sensitive, so developers can only increase prices in this segment by very small quantums,' said a market watcher.

However, one developer that seems to be bucking the trend of raising prices is Wheelock Properties (Singapore). The high-end developer is sticking to the $2,300 psf average price for its Ardmore II condo. It has sold 90 of the total of 118 units in the freehold project over the past fortnight or so. 'Perhaps they may have sold too fast, and usually the best units go first. This could have clipped their ability to raise prices,' suggested a market watcher.

This weekend, Tripartite Developers is releasing its Ferraria Park condo in Upper Changi. The average price of the 472-unit freehold project is $530 psf. Tripartite is a three-way equal joint venture involving Hong Leong Holdings, CityDev and Trade & Industrial Development.