Monday, December 11, 2006
[RealEdge] BT : Central districts challenge traditional prime addresses
| Published December 11, 2006  | |
| Central districts challenge traditional prime addresses Median sales price of districts 1-4 condos surpassed that of 9-11 in Q3
By KALPANA RASHIWALA
(SINGAPORE) The central districts of Singapore - which cover the CBD including Marina Bay, the Keppel Bay area and Sentosa Cove - are shaping up as a strong contender to the traditional prime districts for home buyers. DTZ Debenham Tie Leung observes in a recent report that the number of developer sales of private apartments and condos in the central districts - or Districts 1 to 4 - has been rising. At the same time, the price gap between the central and traditional prime districts of 9, 10 and 11 has been narrowing. This is on the back of a slew of new projects in the Marina Bay area and Sentosa Cove offering strong lifestyle attractions like city and waterfront living. Developers' sales of private apartments and condos in Districts 1 to 4 jumped 597 per cent quarter-on-quarter in Q3 this year to 308 transactions. This was against a backdrop of declining developer sales in the traditional prime districts of 9, 10 and 11 during the same period, DTZ observed in its report, which was based on an analysis of caveats captured by the URA Realis system. DTZ attributed the surge in Q3 developer sales in the central districts largely to the success of The Oceanfront@ Sentosa Cove condominium released in July by City Developments and TID. The property consulting group also highlighted that the median price of developer sales of condos and apartments in the central districts exceeded that in the traditional prime districts in Q3 this year. In fact, the same phenomenon was observed in the fourth quarter of 2004 and the following quarter. Said DTZ: 'The gap in average selling prices for developer sales in these two areas has been narrowing as prices of new exclusive launches in the central districts increased. 'This was notwithstanding the fact that most of the newer quality projects in the central districts have been leasehold, and this was especially evident from Q4 2004.' That was when City Developments and AIG launched the first tower of The Sail @ Marina Bay and Ho Bee released The Berth by The Cove condominium on Sentosa Cove. These were the first residential projects in the Marina Bay and Sentosa Cove areas respectively. Elaborating on the narrowing price gap between the traditional prime and emerging central districts, DTZ said: 'The median developer sale price in districts 1 to 4 has exceeded that in the traditional prime districts 9, 10 and 11 during Q4 2004, Q1 2005 and Q3 2006, while for Q2 2005, Q4 2005 and Q1 2006, this difference was less than 15 per cent. This was due to several quality, lifestyle-driven projects that were available in those periods.' Prior to Q4 2004 (between the start of 2000 and Q3 2004), the average premium for new homes transacted in prime districts usually ranged between 8 and 28 per cent. During these 19 quarters, there were 12 quarters in which the median prices of properties transacted in the prime districts exceeded those in the central regions by at least 15 per cent. Market watchers expect strong sales activity in the central districts to continue into the current quarter - following the strong reception to Ho Bee's The Coast condo launched in October, as well as this week's release of Marina Bay Residences. Looking ahead, DTZ said that while sales activity in the traditional prime residential districts may improve due to new launches in those locations, the momentum for exclusive homes in the central districts is also likely to strengthen. 'Particularly in periods where scalable lifestyle projects such as Keppel Bay phase 2 will be launched, the spotlight will be recast to the central districts,' it suggested. 'In addition to the buoyant sales activity, numerous exclusive projects such as Marina Bay Residences as well as Lippo Group's condo at Sentosa Cove will increase the average selling prices of new homes transacted in the central districts.' This, said DTZ, will continue to lend support for a narrowing premium between the prices of quality homes in the traditional prime and central districts. |
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