Property News & Market Trends

Bubble or Boom? You decide.

Ever since the 1^st parcel was put up for tender at the Marina Bay area, the sizzle never stopped. With a staggering price of S$1.2b and an estimated S$5b to be pumped in by Sands, the entire Marina Bay was brought to life in one swoop!  Thanks to the indigenous master planner from URA, a new era was born.

The first heat cooked up by the vibrant and outstanding sales of The Sail, developed by CDL.  Within the 2 months, most of 1,100 super prime residential units were snapped up, hitting a record high of $1,500psf!

That price set the new benchmark for the up coming 428 luxurious Marina Bay Residences (MBR), jointly developed by 3 Developers; Cheung Kong, HK Land & Keppel Land.

Many consultants felt that MBR should price from $1,400 - $1,700psf. However, that record price was overthrown by zealous buyers pushing the price to an all time high of $2,500psf!  Eye witnesses testified to the frenzy in the show flats.  “Nobody was browsing, they were just grabbing!” said one Studio buyer, who has been in the real estate business for more than 10 years. No wonder, the penthouse went for a mouth-watering $3,400psf!

Tongues were wagging and the heat was gearing up for the next project launch –  One Shenton.

Not to be outdone, CDL, the developer for One Shenton, got ready for the ultimate challenge. Can they cross the $2,500psf?  Hundreds queued up for the much hyped project, even braving the rain.  In just 2 days, 95% of the 341 luxury units were sold out!  From the starting price of $1,500psf, it spirals up to $2,200psf.  Admirable, comparing the MBR has a slightly better location.

Immediately, eye witnesses said some were already touting their sales to the crowd for a modest 10% profit.  Somehow, it gives an impression of the property frenzy in 1990s, though it was more like mass frenzies then.  Is this a bubble growing? Not yet, many agreed.  From minister to consultants, developers & even buyers, nobody feels it’s a bubble.  However, just to “play safe”, the IRAS issued an order to collect Stamp Duty upfront instead of a delayed payment.  Guess that’s a prudent move. But by the frenzy look of those buyers at MBR & One Shenton, there’s no hint of stopping.  What’s the worry of 3%, when one can make a 10-15% margin?

Frankly, the bubble is insignificant at this point as it’s restricted to the Marina & Sentosa area.  Let’s watch Orchard sizzle this year.  In fact, many analysts feel this is the Year of the Orchard, not the Pig!

Looks like “Queues-for-hire” may come in handy for 2007!

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