Private homes for $1 million or less

Straits Times: Sat, May 19

BUYERS can still snap up private apartments of reasonable size for less than $1 million - but do not expect up-to-the-minute styling or prime locations. Yet such buys could end up being a good deal if they are in an area that is set to be revitalised or developed. Buyers have been quick to jump in. There were 1,249 private flats of 1,000 sq ft or more sold for below $1 million in the period from Jan 1 to May 4, consultant Nicholas Mak said. This includes new and resale private and executive condominiums. Mr Mak, the head of research at SLP International Property Consultancy, added that most sales were made in 99-year resale condos in suburban areas. The freehold properties were mostly in city fringe areas such as Geylang, where there is a higher concentration of such homes, he said. Homes costing less than $1 million can be found in both new launches and the secondary market but it is rarer in the former, because the increase in land prices has led developers to offer higher per sq ft (psf) prices and smaller units, R'ST Research director Ong Kah Seng said. New launches of flats of at least 1,000 sq ft and costing below $1 million can be found in the north-eastern areas like Hougang, Sengkang and Punggol. Mr Ong noted that in the first four months of the year, there were 74 such transactions at The Minton, an upcoming 99-year condo in Lorong Ah Soo, and 36 at Sengkang's Riversound Residence, a 99-year condo. Deals can also be found in upcoming condos in Pasir Ris. There were 24 sales at The Palette and 12 at Ripple Bay. For example, a 1,076 sq ft flat at Ripple Bay was sold for nearly $902,000 last month. That works out to $838 psf. The 99-year condo is expected to be completed in 2015. '(These areas) are more valued propositions as the north-east promises exciting future growth while Pasir Ris is an established and refreshing resort-living area,' he said. In Yishun and Sembawang, some similar transactions were made at The Nautical and Eight Courtyards. These areas are also good scouting grounds for buyers looking to get a resale unit, which could be as big as 1,400 sq ft for that price, Mr Ong said. Based on caveats lodged in the first quarter of the year, completed condos like Regent Heights, Changi Rise Condominium, The Mayfair, The Warren and Hillview offered bargains. Last month, a 1,346 sq ft unit at Melville Park in Simei was sold for $888,000. The 99-year condo was completed in 1996. Many shoebox units - measuring about 540 sq ft or less - cost less than $1 million but these are said to be too small for a family. Decent-sized units can also be had for a similar price, but buyers have to bear in mind the trade-offs, like how an older condo may look dated. Mr Lee Sze Teck, senior manager of research and consultancy at Dennis Wee Group (DWG), pointed out: 'When a property is older... there will be more maintenance issues which may require higher upkeep.' He warned that major repairs, if any, will 'dip into the sinking fund of a strata-titled property' and if it is not enough, buyers will have to pay in cash. 'Also, banks may not be willing to lend to leasehold properties with short leases remaining,' he said. While R'ST Research's Mr Ong noted that some people might not mind buying a older project, those looking for homes with lasting power may find it worthwhile to look into executive condominiums instead, Mr Mak suggested. 'Other than that, private condos that are more than 10 but less than 20 years old can beat newer launches in size and price, even though there might be some wear and tear,' he said. Credo Real Estate executive director Ong Teck Hui pointed out that a freehold unit would be 'better value compared to 99-year leaseholds'. 'The latter would have run down by quite a number of years and may not appreciate as well over the longer term,' he said. Buyers, of course, must know what they are buying the unit for before snagging a deal. For instance, investors must consider the 'rentability' of the unit, said Mr Danny Yeo, group managing director of property consultancy Knight Frank. 'They will also look at capital appreciation. Thus, it's better to select locations closer to MRT stations and town,' he said. However, owner-occupiers could be more willing to trade a good location for a family-sized unit, given that budget. Aside from private projects, landed homes have also recently sold at low prices. DWG's Mr Lee said a 60-year leasehold terraced house at Geylang's Lorong 3 was sold for $90,000 this year, although it only had seven years of the lease left. 'People who buy such homes are likely to be looking at getting passive rental income ... it is unlikely that they will be able to resell it for gains,' he said. [e-mail] Decent-sized units can also be had for a similar price, but buyers have to bear in mind the trade-offs, like how an older condo may look dated. Source: The Straits Times