Punggol resale flats fetching good prices, trend to accelerate

Prices of HDB flats up 3.7%, higher than national average of 2.3% rise

RESALE prices in Punggol have risen faster than the national average this year, data shows.

And analysts say this trend will accelerate, spurred on by the HDB announcement on Tuesday of comprehensive plans for the area.

According to data-crunching firm Singapore Real Estate Exchange (SRX), which collates sales by major property agencies, median resale prices in Punggol this year have gone up 3.7 per cent, compared with the overall median figure of 2.3 per cent.

The bulk of the increase comes from larger flats as not many of the three-roomers have hit the resale market yet, said Dennis Wee Group spokesman Lee Sze Teck.

Based on his data, four- and five-roomers which sold for about $500,000 last year are worth about $530,000 now, representing a 6 per cent jump.

"One reason for this is that flats in the area are newer. Sellers have also been pricing the increased development of the area into the cash over valuation (COV)," he said, referring to the cash component that is paid above a flat's valuation to entice the seller.

The major boom has come in the form of recent developments such as the Punggol Waterway and the increase in the number of homes, said ERA Realty key executive officer Eugene Lim.

"Punggol today, compared to five years ago, is a totally different place," he said. "With more infrastructure and amenities to be built in the next 15 years, we can expect property prices to increase so long as economic and employment fundamentals are progressive."

Property agent Joseph Tan, who specialises in the area, said COVs, as well as enquiries for a Punggol property when it is put up for sale, have doubled in the past five years.

"The whole feel of the area is very different now," he said.

He recently closed a $650,000 deal with a $100,000 COV for a five-room unit. It was on a high floor, had designer decor and an unimpeded view of the surrounding area.

The typical COV is between $40,000 and $60,000, he said.

New flats sold by the Housing Board in the area have also gone up in price, in tandem with the area's development, analysts say.

As a rough estimate, a four- room premium flat cost up to $254,000 in 2007, while a pre-mium counterpart in a sales launch this year is selling for up to $379,000.

PropNex chief executive Mohamed Ismail said: "Punggol's trump card of water and seafront living is a formidable lure for potential flat buyers. Flats there are able to provide waterfront- style living, which other towns are unable to provide."

He expects higher demand for these projects, translating into buyers paying a premium when the flats hit the resale market.

Mr Lim added that higher resale prices will be tempered by the supply that is coming on-stream in the area.

darylc@sph.com.sg