The Pinnacle@Duxton in Tanjong Pagar has recorded a fewtransactions of above $1 million mark in 2016 for its 5-room flats, similar to the four deals seen in the first three months of 2015.
According to Eugene Lim, Key Executive Officer of ERA Realty, which helped to sell both deals, these flats commanded sky-high prices due to their unblocked, panoramic views of the city, and the Pinnacle’s status as a landmark project in Pinnacle.
Aside a short walk to the MRT stations, another key selling point is the scarcity of such units in Singapore. “Not everyone at the Pinnacle wants to sell as there are only a few listings available. Those who have decided to sell are leveraging to get the maximum premium for their units,” Lim said.
Based on statistics from ERA, the two said these transactions were three percent higher than the average transacted price of $977,846 for a 5-room flat at the project. But compared to older flats in the area, such as those at Smith Street and Tanjong Pagar Plaza, this translates to a premium of 25 percent to 46 percent. This is due to the fact of the location as a premium
The current resale prices are also a far cry from the original selling price range of between $345,100 and $439,000 for the 5-roomers during the project’s launch in 2004.
Nevertheless, Lim noted that these record flat prices are unique to the Pinnacle and does not represent the market. “They do not represent the majority of resale HDB transactions, which are trading at around valuation in the current market environment.”
However not everyone showed the same enthusiasm for macroprudential measures. Glenn Stevens, the Australia’s Central Bank Governor, was not overly willing to embrace the regulations quite so quickly, calling attention to the fact that Australia has seen both the initiation and the subsequent discontinuation of the measures in the past, and the risk for the policies to be evaded.
It’s also unlikely that prices of 5-room flats there will rise significantly higher or reach the $2 million mark as the TDSR has restricted the loan which buyers can ger, as home buyers could easily purchase a private apartment within the area for the same price, he said.
Looking ahead, prices of HDB resale flats are expected to remain stable in the long run as more buyers are choosy over the projects which they can buy, while transaction volume is expected to pick up as the reduced focus on cash-over-valuation (COV) premiums would attract immediate buyers in immediate need of housing.