Pinnacle in name, and in pricing too?

Source : Straits Times – 6th Sep 2009

Property agents expect that the remaining 111 units of the iconic Pinnacle@Duxton in Tanjong Pagar, when sold, will make them the costliest public flats ever.

Built by the Housing Board, the 1,848-unit Pinnacle@Duxton is its tallest project at 50 storeys.

It will be completed by the end of the year.

The agents said that in the current property boom, the five-room units, the largest, may well fetch $700,000 or even more.

A likely spillover is that surrounding resale HDB flats will see their value rise appreciably.

The 111 units have yet to be put on sale – HDB could not say when but it did add that the units are a mix of four-room units of up to 97 sq m and five-room types of up to 108 sq m.

They are located on various floors and eligible for application by all ethnic groups.

The previous HDB release of Pinnacle@Duxton flats was in September last year, when 111 five-room units were put up for sale at $545,000 to $646,000.

At the time, the 317 four-room flats released were priced at $457,000 to $555,000.

HDB had said these prices were below the prevailing resale cost of comparable flats in Tanjong Pagar Plaza, Cantonment Close and Jalan Membina.

Ironically, when the project was launched in 2004, the property market was generally in the doldrums and prices started at $289,200 for the four-room flats and went up to $439,400 for the five-room units.

Five years down the road, it is a different picture, even considering the slight price dip earlier this year.

HDB resale prices are now at record highs.

ERA Asia Pacific’s associate director Eugene Lim expects the last 111 units at The Pinnacle@Duxton to fetch a premium because they are in a class of their own. ‘It is a landmark, designer HDB project built in the heart of the city,’ he said.

Besides, it has features seen only in top-end private properties – like its skybridges which offer residents panoramic city and sea views.

The project also has an international award-winning design, with unique features such as sky gardens and bridges linking its seven tower blocks, and planters, balconies and bay windows.

PropNex chief executive Mohamed Ismail believes the remaining units will set a record price for new flats. Prices of the five-room units are likely to exceed $700,000 and can even go up to $770,000, assuming a price of $700 per sq ft (psf), he said.

These prices would make The Pinnacle more expensive than surrounding resale flats, which were sold in August for up to $610,000 in Cantonment Close and up to $660,000 in Jalan Membina.

The HDB said it will announce the prices only when they are launched for sale.

‘However, as for all other new flats, these flats would be sold at a discount to the market, that is, their prices will be lower compared to the then prevailing market prices of resale flats in the vicinity,’ said an HDB spokesman on Friday.

National Development Minister Mah Bow Tan had said prices in the area reflected the value of the flats, which are located in the prime vicinity of Tanjong Pagar.

The strong demand seen previously for The Pinnacle@Duxton flats showed that people were willing to pay for flats with good value, he said.

At last September’s prices, the biggest 1,108 sq ft five-room flats at $645,000 would have cost $586 psf, said Mr Ismail.

Even if the remaining units were to fetch $700 psf, the price would be less than half of what a private condo in a similar prime spot could fetch, he noted.

The Pinnacle is unique as never before in HDB’s history has the price of its project doubled before the keys are ready for collection, he added.

Mr Chris Koh, director of Dennis Wee Group, said a rise of not more than 10 per cent from last year’s levels is fair.

But he added that it is a project targeted at first-time buyers and thus should not be compared to the way the private properties are being sold today.

Buyers of new flats such as The Pinnacle are subject to a household income ceiling of $8,000.

Mr Mah said last Wednesday that while HDB prices have risen, they remained affordable.

‘In 2006, we were building about 2,400 new flats. This year, we are building about 8,000-plus new flats,’ he said.

‘Supply has gone up to meet demand. That’s why HDB prices have gone up but they have not gone through the roof.