TRE RESIDENCES in Geylang East sold a fifth of its 250 units at its launch over the weekend. The units were sold at an average S$1,416 per square foot (psf) including a 5-per cent early bird discount.
Its developer, marketing agent, and other consultants agreed that this was an encouraging result, very much in line with expectations given the current lukewarm market.
A spokesman told BT that most of the units sold were one- and two-bedroom units, and the buyers were a mix of house hunters and investors.
"In such times where the total debt servicing ratio framework plays a big part in many home purchasing decisions, we expect the sales momentum to pick up after a while as most potential buyers need some time to obtain their loan approvals," he said.
But when asked whether prices will increase from hereon without the early bird discount, he declined to comment, saying this will be subject to a strategy review.
The 250-unit condominium project is jointly developed by Sustained Land, MCC Land and Greatview Development. Their prices were originally at an average $1.560 psf.
Huttons and PropNex are its official marketing agents.
Mohamed Ismail, chief executive of PropNex, said the sales result was positive, "given that there wasn't a major advertisement campaign like for Lake Life (an executive condo) where developers go on TV and radio". In contrast, TRE Residences had a relatively quiet campaign.
The condo is located near Aljunied MRT station, several stops away from the city. The developers paid S$776 psf per plot ratio for the land, which translates into a breakeven price of about S$1,300 psf.
Commenting on the market, Mr Ismail said: "Buyers today are extremely selective and price sensitive. They don't have an urgency that they used to have in a positive market. Many will only fully come in when they are very certain that there is not likely to be any further price correction."
In a way, some developers have fuelled this buyers' mentality, he added, referring to aggressive price discounts at Wheelock's Panorama, as well as CapitaLand's Sky Habitat and D'leedon. "Some of the buyers are fearful that if they rush to buy at the launch, they may end up paying a higher price when the developer gives a subsequent discount."
He thinks that the developer of TRE Residences may continue to offer the condo at lower prices, but repackage it as something else other than "early bird discounts".
R'ST Research director Ong Kah Seng said that the lower launch prices meant that investors could lower their asking rental prices to attract expats amid the weak leasing market.
"The original S$1,560 price was probably a bit steep, given that Central Glove(another 99-year leasehold condo nearby) is reselling at about S$1,000 psf. The post-discount S$1,410 is more within buyers' expectations," he said.
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