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Commonwealth Towers: Average price $1,600 - $1,700 psf?

Wednesday, April 16, 2014

After so many rounds of cooling measures, the heat is still on if the response to Commonwealth Towers is anything to go by. Apparently, more than 1,500 people turned up at the preview.

This is going to be one densely populated piece of land. The land area is a little more than 130,000 square feet which is decent enough but what is the plot ratio? 5.38!

Imagine that this was where Queenstown Test Centre was located. People went there to take their driving theory tests years ago. I remember. I took my test there too.

There will be 845 units with 11 units per floor in two towers. I wonder how many lifts they have per tower? My guess is 3 lifts per tower. This means 141 households share one lift, more or less. I think there might be problems if the experience shared by people who stay in the condominium across the road (i.e. Queens) is anything to go by.

Well, maybe Commonwealth Towers will be generous and will have 4 lifts per tower, the ratio improves to 106 households per lift. Still, people who stay in HDB 5 room flats in point blocks should smile since, in their case, 96 households share two lifts.

The location is good but I just don't know about living in such a densely packed project. Oh, if you are interested, you want to consider buying units facing away from the MRT tracks. Commonwealth MRT station is an above ground station.

Oh, what about the price?

It is estimated that the average price could be in the range of $1,600 to $1,700 psf! So, for a 441 sq ft one bedroom unit, I would not be surprised if the price is even $1,800 psf which means a price tag of $793,800. Almost $800K and this could be the price for the low floor units!

Mind boggling!

I don't know about you but I am perspiring from the heat. More cooling measures, please.

Related posts:
1. To rent or to buy: Rule of 15.
2. Make your first million in real estate.
3. Buying a private property?
4. Slaving to stay in a condominium.
5. Never lose money in real estate?


Gary said...

Didn't know that the psf could go up to $1,800!!!!

AK71 said...

Hi Gary,

Well, Echelon at Alexandra saw the one bedders going at $2,000 psf and Skyline at Telok Blangah was priced similarly too. So, $1,800 could be a bargain to some. ;p

JY Chua said...

At this price, what is the potential updside? Very high or low?
For rental, what sort of net rental yield?

Does not make sense for the pockets.

AK71 said...

Hi JY,

I certainly don't know if prices will go much higher from here or if they have formed a top. However, instinctively, I feel that prices are toppish.

I still remember not so many years ago how some people had to sell their investment properties at a loss. Not a pretty sight.

The oversupply and weakening demand in the residential property sector is very real. I have friends who told me they have had no luck in getting tenants in the last 3 to 4 months. Then, there are those who had to slash their expected rents by 10 to 15%.

The unravelling will take a few years to play out. Those who borrowed heavily to fund their purchases either directly or indirectly will suffer.

Ron said...

Despite the restrictions & limits on the total debt, it appears everything is just as it was!

I am inclined to disbelieve that people's income has not risen. I think their incomes have gone up very much!

With COE being over 70K and now 2000psf properties..

but then again, media hype reports that 1,500 visited... it may not translate to sales at all. Singapore does not offer much activity... except universal studios, casinos.. so visiting showrooms is a cheap way to remain in air-con comfort and be nosy about what is the current trend in interior decor!

Even without a car, visitors can walk from MRT to showroom, then adjourn to eateries nearby or catch a MRT to clementi mall!

Gary said...

Actually agents on the preview day did not reveal the pricing. Instead they are seeking public on the pricing!

Musicwhiz said...

The news just reported that a property agent was so despondent and depressed as he had not much income in the last three months that he took upskirt videos of ladies and was arrested for it.

A sign of the times?

AK71 said...

Hi Ron,

You are right, of course. How many units are sold and how quickly they sell will depend on the price. We will just have to wait and see. :)

AK71 said...

Hi Gary,

Yes, for sure. :)

The average price of $1,600 to $1,700 psf is what I got from reading what the analysts think the project is going to go for. This is based on the prices of projects like Echelon and Alex Residences which were launched a few months ago.

Actually, I could be a bit optimistic that the smaller formats will go for $1,800 psf which is only $100 psf above the higher end of the average price estimates.

AK71 said...

Hi MW,

OMG! For real?

I missed that piece of news. Well, no loss to me but that is actually funny. ;p

Patty said...

What I don't get is the logic here - a plot ration of 5.38 is almost 2x that of a regular HDB plot (2.8-3.0).

For "upgraders", I just don't see how stacking double the amount of people in the same amount of space is considered upgrading. Even with a swimming pool and parking lot.

Hence, I can only conclude the buyers are out for rentals. So this is really a high class foreign worker dormitory?

Cory said...

Well the market is trying to absorb the last leg of bull gas by driving for shoe box units for those who is desperate for the last piece of the pie i guess. Now, where is the lighter ?

AK71 said...

Hi Patty,

There are new HDB estates now with plot ratios of 4.0x or higher. It is really scary. The BTO next to Tiong Bahru Plaza that is under construction now is just an example I can think of right now.

I think housing estates with higher population density are going to be the norm if we want to stay in CCR or RCR in future.

AK71 said...

Hi Cory,

I believe that there are still bargains to be had but we will have to look much harder. Of course, if we have to look so hard, why bother, some might ask? ;p

How does this sound to you? RCR freehold, 8 minutes walk to bus stops and 15 minutes walk to MRT station at $1,200 psf. :)

Benjamin Yeo said...

Hi there, there is a hint that the Developer can actually launch at an average price of betw $1.4k - $1.5k and still make just to sell out the project due to the relatively low land cost.

This was stated in the ST just about a week ago.

Another thing to note. There are 6 lifts, Not 2/3/4 serving each level. This would bring down the ratio of households to lifts.

If looking at the masterplan, this is the 1st plot of land out of future possible 4 or 5 more which a date to release the land has not yet been finalised. It could be a few more years to go BUT this is the by far the plot which is at the door step of Queenstown MRT station.

This is the first new condo launch in over 10 years in the area. I see some 1st mover advantage.

Even if we take an average price of 1 bed units going for $800k, conservatively fetching a never seen before monthly rental in that area of $3k, you're still looking at over 4% gross yield.

Depending on the actual launch price, there may be more upside and good rental yields to be had but this is definitely at least a 5-7 yrs investment IMHO.

AK71 said...

Hi Benjamin,

6 lifts per tower? That means about 70 households share 1 lift. OK, I guess, although I still think that a maximum of 50 households to a lift is what I would call comfortable. Anyway, it is better than having 3 lifts per tower. How did you find out?

As for the rental quantum, the jury is really still out on this one. With about half of the units being one bedders, there will be plenty of competition. $3,000 a month would be nice. :)

I have a feeling that my estimate of $800,000 for the lower floors one bedders could be too low. A real estate agent friend told me that price could start from $880,000 or almost $2,000 psf. Well, hearsay.

I know that D3 has traditionally attracted Japanese and Korean expatriate families. They are unlikely to be attracted to the one bedders. Well, only guessing.

Frankly, given a choice, I would rather buy a condo that is blocked by Commonwealth Towers from the MRT station. Above ground MRT stations are very noisy and can be heard far away.

Still, if priced well, I am sure there will not be any shortage of buyers.

Anonymous said...

Hi AK,

Given that property is such a huge outlay for people living in the red dot, and your blog is to inspire financial freedom, would you consider doing a blog post for 1st time home buyers?

Understand that you bought and sold condos, and that you're currently staying in one, perhaps that can be a start?

Thanks in advance ya? :)


AK71 said...

Hi Tree,

Actually, I would not be a good candidate to blog about buying an apartment for 1st timers in Singapore because, in Singapore, for first timers, it would usually mean a HDB flat and I don't have any experience in that area.

However, I have quite a few blogs on buying real estate in Singapore and you can find these in my right sidebar under "Wealth Creation: Investing in real estate." :)

KC Liew said...

Obviously the developer is not pricing to sell much. Look more like they are pricing to benchmark for this Queenstown area, and/or pricing to give a discount when they are unable to move bulk. Maybe Hong Leong have eyes to tender more of the lands around this relatively unoccupied side of the Queenstown.
Also, calling it Commonwealth Tower is more of a misnomer as it is actually next to the Queenstown Mrt and not Commonwealth Mrt...very confusing.

AK71 said...

Hi KC,

Oh, yes, you are right. Queenstown MRT station it is. ;p

Yes, when a reader expressed hope that the property could be priced to sell, I had my doubts too. If they could ride on the silly optimism of buyers, why sell cheaper? They could always lower the price if it proves to be hard to sell. Do a Sky Habitat then. ;p

soup said...

just attended the balloting...lucky to have a queue number but unable to get the deisred unit. 2 bedroom up to 15floor about 689 sq ft cost about SGD996K

that is about SGD 1445psf...even if the price increase to SGD 1700psf..the capital appreciation is only SGD 135K

soup said...

hi...just return from the balloting and lucky enough to get a queue number. However, the stack which i want already snap up...2 bedroom 689sq ft costing SGD 1445 psf about SGD 996K..
that is about 15floor of the 43 floor....

if the psf appreciate to sgd 1700, it is a capital appreciation of SGD 140K...will it reach SGD 1700 psf ?

AK71 said...

Hi soup,

I suppose the response was really overwhelming just like many suspected it would be. :)

Well, prices could weaken further and you could get a chance to buy a similar property at a bargain in the next couple of years. ;)

soup said...

some units at the top floor is already at 1700+ psf, that is high compared to Queens...of course queens area are bigger..

strange i saw the news that they only release 300 units today but there are many people attending the balloting...not sure if they pay a higher PSF tomorrow after the preview VIPP end today...

AK71 said...

Hi soup,

For the higher floors, $1,700+ psf sounds very expensive but it is hardly surprising. I think there are still many people with lots of spare cash. :)

soup said...

The plot of land appears small now since there are 845 units...this is one of the largest number of units living in this small plot of land...can imagine that every day might be crowded day and will.never get to book the facility cos too many people.....the surrounding plot of land will have tallerhousing....block all my view

AK71 said...

1BR from $734,800
2BR from $965,000
3BR from $1,515,900
3BR/ Yard from $1,784,100
4BR from $2,175,600

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