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Business Times - 22 Sep 2010

Stage set for upmarket property launches

Next 9 months could see slew of mid-tier and high-end projects in market


(SINGAPORE) Developers here plan to launch another 34 residential developments with more than 8,800 units by June 2011, data compiled by Knight Frank shows.

Most of the new projects rolled out will be mid-tier and high-end developments. Knight Frank's list shows that 21 out of the 34 possible launches are located in the upmarket districts of 1, 2, 4, 9, 10 and 11.

Developers BT spoke to trust that the latest round of government measures to dampen demand for private homes and HDB flats announced on Aug 30 will impact mostly mass market homebuyers.

They are hopeful that new launches, which are mostly for homes in the mid-tier, high-end and luxury segments, will see healthy take-ups.

'I believe that the hardest hit projects will be the mass market ones,' said EL Development managing director Lim Yew Soon. 'For the mid to high-end projects, the impact will be somewhat lesser.'

The large number of upcoming mid-tier and high-end developments is not a reaction to the latest round of property measures, developers and analysts said. Rather, having pushed out numerous projects targeted at upgraders, many property groups are left with pending mid-tier and high-end project launches.

CB Richard Ellis executive director Joseph Tan said that many developers who bought mass market sites launched them within nine-12 months, with some even pushing out their projects in six-seven months to ride on the exuberant upgrader market.

'The fourth quarter will see more of the mid to high-end launches,' Mr Tan said.

Added one developer: 'Most developers rushed to launch mass market projects last year when that segment of the market was very hot, so there are mostly mid-tier and high-end projects that are waiting to be launched now anyway.'

But, many developers did not want to commit to a firm launch date - even though in some cases, showflats are ready and brochures have been printed.

CapitaLand recently said that it will go ahead with the launch of its new 1,715-unit condominium on the former Farrer Court site in Farrer Road by the end of this year.

The chief executive of the group's Singapore residential arm, Wong Heang Fine, said that while the new government measures have created some 'flux' in the market, things should 'settle in a couple of months'.

The launch of the Farrer Road project will be closely watched as it is the largest single residential development likely to be offered to homebuyers in the near future.

CapitaLand is likely to hedge its bets by rolling out the development in phases, similar to what City Developments and the Hong Leong Group did with their 642-unit NV Residences in Pasir Ris.

EL Development's Mr Lim also said that he intends to launch his 115-unit freehold project on the site of the former Diamond Tower in Jalan Rajah, in the Balestier area, in Q1 2011. But, despite the more bullish outlook for the mid-tier and high-end segments, several large suburban projects will be launched soon.

Esparina Residences, a 573-unit executive condominium (EC) project at Sengkang by Frasers Centrepoint and Lum Chang Building Contractors, will be launched next month.

Major private suburban launches in Q4 2010 include Hoi Hup Sunway Property's 473-unit Vacanza @ East at Lengkong Tujoh; Far East Organization's 214-unit The Lanai at Hillview Avenue; and Keppel Land's yet-unnamed residential development at Lakeside Drive, which will have more than 600 units.

On Aug 30, the government said that it will now disallow concurrent ownership of HDB flats and private residential properties within the specified minimum occupation period.

Other measures were aimed at potential buyers of second homes. Those with an existing mortgage can now borrow only up to 70 per cent of a property's value for a second home, down from 80 per cent previously. They must also pay 10 per cent in cash, up from 5 per cent.

Developers and analysts said then that the measures will hit prices and sales of private homes, but mostly in the mass market segment.