Bullish prices for Jurong condo launch

Average prices at J Gateway in new growth area tipped to hit $1,650 psf

J Gateway is said to be the first condominium launched near Jurong East MRT station in 10 years. Based on the Government’s Master Plan 2008, the 70ha Jurong Gateway encompasses amenities such as the MRT station, existing and upcoming malls like Jem, J Cube and Big Box, as well as Ng Teng Fong Hospital. — PHOTO: URA

By Cheryl Ong

THE upcoming launch of MCL Land’s J Gateway in Jurong East with prices in the bullish region of $1,600 per sq ft (psf) is set to test buyers’ appetite for suburban homes.

Average prices of homes at the 738-unit development are expected to range from as high as $1,650 psf for a 474 sq ft one-bedder to $1,450 psf for a 1,163 sq ft four- bedder, according to marketing agent Huttons.

International Property Advisor chief executive Ku Swee Yong said the launch price of $1,650 psf will be a record for the Jurong East area. But he said J Gateway will draw buyers as it is the first condominium to be launched near Jurong East MRT station in 10 years.

One agent said he has received over 100 queries from interested buyers in the past three weeks.

In comparison, developments launched in the area in the last few years are further from Jurong East MRT station – The Lakefront Residences, launched in 2010, is two MRT stops away while Parc Oasis is at Chinese Garden MRT station.

Echoing a similar view, R’ST Research director Ong Kah Seng said while prices at the new condominium are “slightly on the high side”, its prime location is a top draw for buyers.

Mr Ong believes the makeover of Jurong East will draw buyers. “I would think that a lot of buyers are excited about projects in new growth areas. I would suppose Jurong East is able to offer that.”

Based on the Government’s Master Plan 2008, the 70ha Jurong Gateway encompasses amenities such as the Jurong East MRT station, existing and upcoming malls like Jem, J Cube, Westgate and Big Box, and Ng Teng Fong Hospital.

In due course, a new hotel will be developed in Jurong Gateway – a site there was bought for $238.2 million in November by Resorts World Singapore, a unit of Genting Singapore.

Jurong Gateway is one of two zones – the other being Lakeside – that make up Jurong Lake District.

Other consultants say prices at 99-year leasehold J Gateway are not far off from what other condos are also asking.

Savills Singapore research head Alan Cheong pointed out that some units at recently launched The Trilinq at Clementi, just one MRT stop away, sold for $1,500 psf. He said: “If you adjust for J Gateway’s location within the new Jurong Lake District, you would think the range of $1,450 psf to $1,650 psf is definitely expected.”

If J Gateway has a successful launch, this will likely have a ripple effect on prices of homes in the Jurong East area, said Mr Cheong: “It’s like disturbing a quiet pond. With one mega launch like this, it will certainly create waves around the region.”

Prices of units at Keppel Land’s The Lakefront Residences in the Lakeside area are at $1,434 psf for a 495 sq ft unit, and are expected to inch up, said Mr Cheong.

That in turn, might lift resale prices of older condominiums such as Parc Oasis, which are at $1,022 psf for a 1,076 sq ft unit.

“Gone are the days where you can find anything below $1,000 in the suburban areas at new launches,” he noted.

An upcoming private residential project, J Gateway at Jurong East, looks set to shatter price records for suburban homes.

SINGAPORE: An upcoming private residential project, J Gateway at Jurong East, looks set to shatter price records for suburban homes.

According to property agents, the selling price for units ranges between S$1,400 and S$1,650 per square foot.

J Gateway is tipped to be the “hottest project launch” by property agents, but units will not come cheap.

According to a marketing mailer from agents, a one-bedroom unit is priced at S$1,650 per square foot. Larger three- and four-bedroom suites cost about S$1,450 psf.

Analysts said it works out to an average price of about S$1,550 psf for the project – a new benchmark for homes outside core central region.

Alice Tan, associate director and head of consultancy and research at Knight Frank, said: “Along with the increase in property prices islandwide as well as the low interest rate environment, private property in the suburban areas has already crossed S$1,200 to S$1,300 psf in some areas. For J Gateway to be priced at such a level, it would be something that is beyond the normal price range for the suburban region. So, price quantum will still be a key consideration for home buyers, whereby a price level of above S$1.2 million could be a stretch for many middle-income home buyers.”

Alan Cheong, research head at Savills Singapore, said: “In the initial years of buying anything like this where you are buying at benchmark prices, the key is to make sure that you survive paying your mortgage for at least 10 years, that means you have to do your sums, whether you have the reserves, whether you think that you can keep your job for the next 10 years.”

J Gateway is located near Jurong East MRT station and several new retail and commercial projects.

Property agents said the showflat is due to open from 15 to 26 June for viewing. Preview sales of the project are expected to start on 28 June.

Analysts said the take-up rate for J Gateway will be closely watched to gauge demand and whether it will push home prices up.

Prices of some new suburban condos have risen in the past months. According to Knight Frank, Urban Vista at Tanah Merah has an average price of S$1,482 psf while The Trilinq at Clementi was launched in March 2013 at a median price of S$1,513 psf for the 106 units sold in that month.

Ms Tan said: “The increase in property prices in tandem with benchmark prices being set by these new projects has to correlate with robust market fundamentals such as healthy income growth and sustained affordability, within reach especially by local home buyers. So if the increase in property prices goes beyond market fundamentals, I think there could be an inevitable correction down the road, especially when buying sentiments wane and market conditions decline.”

Market watchers said there could also be some spillover effect on resale prices in the Jurong East area. For example, when units at Lakefront Residences were sold at above S$1,000 psf in 2010, analysts said it lifted resale prices in the Lakeside area by some 16 percent from 2010 to 2011.

The next project to look out for is probably Keppel Land’s new development at Kim Tian Road.

Knight Frank forecasted units could potentially be sold at an average of S$2,000 to S$2,200 psf, possibly setting a new record price for 99-year leasehold private homes in the city fringe.

Analysts said there are presently no 99-year leasehold projects in the city fringe with a launch price that is higher than S$2,000 psf.

Knight Frank said the highest launched price achieved for suburban project in the 2012-2013 period was S$1,768 psf at Echelon in December 2012.

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