HOME buyers and investors keen on getting a cluster house may soon find themselves with an increasingly limited pool of new choices to select from.
This is because the number of new cluster-housing launches looks set to fall after this year, following a recent change in Government regulations, say property experts.
In the new ruling, which came into effect last February, the Government stipulated a cap on the number of units which can be built in each development, depending on the total size of the land.
For developers, this means that it is no longer as viable for them to use the land purchased to build cluster homes, as they usually want to build more units to maximise profits, said Mr William Wong, managing director of RealStar Premier Property Consultant, which specialises in marketing cluster houses and other landed properties.
Instead, Mr Nicholas Mak, realestate lecturer at Ngee Ann Polytechnic, said that developers might find it more profitable to develop land from the Government Land Sales programme into low-rise apartments.
Usually about two to three stories high, cluster houses are similar to landed properties, with their size ranging from about 2,500 sq ft (terrace) to as much as over 6,000 sq ft (bungalow).
Cluster houses, however, do not come with land titles but are instead strata-titled – the land in the development is shared by all owners, who do not have the flexibility of tearing down their properties and rebuilding them.
With communal facilities such as gyms, clubhouses, swimming pools and security service, cluster housing is more like condominium developments.
Mr Wong noted that there have already been fewer new cluster homes launched lately, and, of these, almost all were for land bought before the new ruling came into place.
“This is probably going to be the last year where we’ll see more launches of new cluster houses, especially for developments consisting of as many as 20 to 30 units,” he said.
The demand for cluster homes has been relatively strong since the concept first made its appearance in Singapore in 1993, say experts.
One example is Estrivillas, a cluster- housing project in Jalan Lim Tai See, near Sixth Avenue, which comprises 38 semi-detached houses and one detached unit. Two months after its launch last November, 24 of the 39 units had already been sold.
According to real-estate group Knight Frank, cluster houses are popular among larger families, who prefer the bigger built-up space typical of landed homes but want to have condo facilities as well.
Hybrid feature popular among investors
This hybrid feature proves to be popular among investors, too.
Said Mr Wong: “Investors are beginning to show more interest in cluster houses, as they fetch a relatively high rental yield as compared to other types of landed properties.
“A rental yield of 4 to 5 per cent is possible for some of the new cluster bungalows, as opposed to about 3 per cent for some landed properties.”
The fall in supply of new cluster homes, however, is unlikely to push prices up too steeply, with many buyers taking a wait-and-see approach because of the crisis in Europe and its effects on other parts of the world, he said.
With the new regulation, cluster-housing developments now typically consist of bungalows, instead of semi-detached houses or terraces.
This means that each unit would have more space for its own pool or private lift, said Mr Dennis Yong, head of Special Projects at HSR Property Group.
Recently launched clusterhousing projects such as Verdana Villas near Lorong Chuan, 80 Meyer Road, and Shamrock Villas at Namly Place, for example, all come with private pools.
To attract buyers, cluster homes here are banking increasingly on exclusivity and innovative design.
“Besides the usual quality furnishings, developers are now also including special features such as water fixtures to run within the whole unit, to give residents a paddy-field experience,” said Mr Yong.
With these additions, each unit is estimated to be able to fetch 10 to 15 per cent more in price, depending on location and size.
The price for cluster houses is expected to move in tandem with that of other types of premier landed properties in general, which has the potential to climb, say industry players.
“The price-per-square-foot transacted for landed properties is still relatively low compared to condominiums… but in view of land scarcity in Singapore, there is good potential for it to increase to a level to match that of condominiums,” said Mr Wong. “An increase of at least 5 per cent by the end of the year is within reach.”
Source : my paper – 4 Jun 2010
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