IMPACT ON RESALE PRICES OF NEARBY FLATS?
On whether the announcement of the Plus and Prime BTO projects could affect the resale prices of nearby flats, analysts appeared to have varying views.
Huttons Asia’s Mr Lee, for one, said parallels can be drawn from the PLH model where buyers also have to wait 10, instead of the usual five, years before selling their units.
That has deterred some buyers, who in turn went for nearby resale flats. That has contributed to the increase in resale prices of non-PLH flats in the vicinity of these new launches, said Mr Lee, citing City Vue @ Henderson where a five-room unit sold for an eye-watering S$1.59 million in June.
ERA’s Mr Lim echoed that resale flats near Plus and Prime units may see some demand from buyers who prefer a home in the same location but with fewer restrictions.
“Being locked in for at least 14 to 15 years, including the construction period, may not be for everyone,” he said. “Prices for these flats (could) increase.”
On the other hand, Ms Sun said studies done by her team on the resale market around PLH projects in Bukit Merah and Queenstown have been less conclusive.
“There was an increase in the resale prices in these areas, but it is in tandem with the overall increase islandwide… We didn’t see a very apparent faster pace of increase in resale prices in these areas,” she said.
Other reasons could be a lack of new flats reaching the minimum occupation period in these areas and how Bukit Merah is predominantly an old estate.
But anecdotally, property agents have observed “more sellers asking for higher prices” in hope of capturing some demand from buyers who may find the extended minimum occupation period too restrictive.
“But it’s only anecdotal evidence for now. We don’t have enough data points,” said Ms Sun.
Ms Sun also posited that the longer-term trend of resale prices may be less certain, with the effects of the new classification system being an unknown.
“If there will be more Plus and Prime flats nearer to the city centre, and more Standard flats in the suburban areas, does it mean that in 5 to 10 years’ time, we will see a disparity in resale market activity?”
With price growth closely linked to market activity, she added: “Places with standard flats may see faster price increases, by virtue that they are put up in the market at a faster rate.
“If that’s the case, does it mean that the city centre may see a hiatus of 10-15 years? Will price growth be slower then?”
