SINGAPORE - A 710 sq ft two-bedroom condominium unit at Pasir Ris 8 was sold at $1.49 million - or $2,101 per sq ft (psf) - in November 2023, a price almost 37 per cent higher than the launch price in 2021.
The unit was the last two-bedder to go in the fully sold 99-year leasehold integrated development, one of a number of mixed-use projects that saw handsome price hikes shortly after they were launched, checks by The Straits Times found.
ST looked at the sales transactions of 11 leasehold condominiums launched in 2021 across different districts and found that mixed-use developments generally saw stronger median unit price growth, compared with purely residential developments.
In the case of the Pasir Ris 8 condominium, which is integrated into the recently opened Pasir Ris Mall, a two-bedroom unit was sold at $1.09 million, or $1,537 psf, at its launch in 2021.
But there was such strong demand from the outset that the developer raised the selling price for the units six times in a single day during its launch weekend.
Experts said this underscored the increasing appeal of mixed-use developments, particularly those integrated with retail and transportation hubs.
The rise in popularity of such integrated developments - combining residential, commercial, and retail spaces, and sometimes located near or above MRT stations - has been a significant trend in recent years.
Property experts noted the amenities and transportation links have been key drivers of their value appreciation.
Mr Eugene Lim, key executive officer of ERA Singapore, said: "The convenience of having an MRT station and retail mall at your doorstep makes these developments appealing to buyers and they tend to hold their prices well."
Mr Wong Xian Yang, head of research for Singapore and South-east Asia at Cushman & Wakefield (C&W), said mixed developments on average have outperformed purely residential developments.
He pointed out that this could be due to the former's relative rarity.
Looking at major projects (more than 100 units) launched from January 2023 to May 2024, mixed developments achieved on average about a 47 per cent sold-out rate in their month of launch, as compared with single-use residential developments at about 39 per cent, said Mr Wong.
PropNex chief executive Ismail Gafoor said it is not uncommon for such projects to achieve higher take-up rates at their project launches as well. A number of mixed-use developments launched in recent years saw more than 70 per cent or 80 per cent of the units sold during the launch, he said.
Pasir Ris 8 sold 85 per cent of its units at its launch.
Another mixed-use development, J'Den in Jurong East, which will be directly connected to Jurong East MRT interchange and malls such as Westgate, IMM and Jem, sold 88 per cent of its units at its launch in 2023.
The 323-unit leasehold development is built on the site of the former JCube mall.
"We think prospective buyers may be willing to pay a bit more if it means they will have a mall downstairs with a range of shops that fulfil their daily needs, such as a supermarket, eateries, pharmacies, and other services," said Mr Gafoor.
Urban Redevelopment Authority's (URA) data on caveats lodged from 2021 to May 2024 showed the overall median unit price at One Bernam in Tanjong Pagar rose by 19.5 per cent, followed by Midtown Modern (in Tan Quee Lan Street in Bugis) at 16.4 per cent.
One-North Eden in Buona Vista, fully sold in 2022, had a 1,410 sq ft unit bought at $2.54 million - or $1,800 psf - in 2021, which was resold at $3.28 million - or $2,326 psf - in May 2024, marking a 29 per cent profit for the owner.
Located in the suburbs, Pasir Ris 8 noted an overall price increase of 12.7 per cent, compared with the purely residential Bartley Vue at 7.9 per cent, which was launched in the same year.
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Another purely residential development, The Commodore, a 219-unit project in Sembawang, saw an overall price drop of 1.2 per cent when the last few units were sold in 2023.
A separate study by ERA also noted that all mixed-use developments recorded the highest median prices in the first half of 2024 compared with developments of a similar age in the same area.
Park Place Residences at PLQ achieved a higher median price of $2,230 psf in the first half of 2024, compared with Tre Residences' $1,730 and Sims Urban Oasis at $1,867 psf, noted Mr Lim.
Compass Heights in Sengkang, completed in 2002, noted a higher median price of $1,167 psf over $996 psf for Rivervale Crest, a purely residential development that was completed in 2003 and is less than 2km away.
Mr Wong of C&W noted that a recent increase in mixed development supply has come as a result of the authorities releasing more sites through the government land sales (GLS) confirmed list.
Sites on the confirmed list will be launched for sale according to schedule, and most of the land parcels are sold through tenders.
The release of land boosted overall private residential supply, moderating price growth.
Between 2018 and 2023, about 33 per cent or 16 GLS sites awarded were for mixed-use projects. And in the first five months of this year, three out of five sites awarded were for mixed-use purposes, The Business Times reported recently.
Both home buyers and developers have indicated their preference through the exuberant project launches.
"Mixed-use development sites tend to attract a higher land premium, and this typically translates to higher launch prices compared to a pure residential development with similar locational and project attributes," said Mr Wong.
This article was first published in The Straits Times. Permission required for reproduction.
