Monday, April 12, 2010

Units at Kovan Melody going for over $890 psf

Since the start of the year, units at Kovan Melody have increasingly crossed the $800 psf level, which is especially good news to sellers who purchased their units for less than $500 psf when the project was first launched in 2004. According to a March 10 caveat lodged with the URA, an 893 sq ft unit on the 15th floor was sold for $800,000, or $895 psf, surpassing the peak in 2007.

The 778-unit Kovan Melody, developed jointly by Wing Tai Holdings, NTUC Choice Homes and Great earth Developments, is located next to the Kovan MRT station, just one stop away from Serangoon MRT station, where the upcoming nex mall is expected to be completed by year-end. The condominium is opposite Kovan Heartland Mall and near good schools like Paya Lebar Methodist Girls’ School and Serangoon Junior College.

There are several types of units in the 17-storey, 12-block development, ranging from two- to four bedroom units measuring 872 to 1,894 sq ft. Though one side of the development faces the busy Upper Serangoon Road, units facing low rise landed properties along Kovan Road will appreciate the lower traffic levels along this road.

Andrew Teo of Singapore Properties And Assets Network says there is good demand for the development from both buyers and investors because of its proximity to the MRT station. The condominium is more popular among Singaporeans and Permanent Residents as they are more familiar with the Kovan area, he adds. Enquiries for the project have been strong, he says. Currently, his team has a number of units for sale, including a three-bedroom unit facing the pool going for about $1.1 million. In terms of rental, a two-bedroom unit at Kovan Melody can fetch about $3,000 a month, he adds.

The strong interest could also be due to the increasing number of new projects coming up in the area. For instance, across the road, units at the 99-year leasehold Kovan Residences have increasingly been sold for over $900 psf since January. The 521-unit project jointly developed by Centurion and Lian Beng Group was launched in 2008 and comprises eight blocks of apartments. The units range from an 883 sq ft two-bedroom apartment to a 4,693 sq ft duplex penthouse. Kovan Residences is scheduled for completion in 2013.

About a five-minute walk from Kovan Melody is D’Pavilion, which is expected to be completed by year end. Prices at the 50-unit freehold project developed by MCL Land are hovering above $970 psf.

Also along Upper Serangoon Road, next to a row of shophouses, is an upcoming boutique freehold development known as Suites@Kovan and to be completed in 2012. Since January, prices of the 16-unit, five floor condominium developed by TSL Capital have ranged from $1,045 to $1,225 psf, according to caveats lodged with URA Realis.

At Kovan Melody, for the period March 16 to 23, there were three transactions, with all the units facing Kovan Road, according to caveats lodged with URA Realis. Prices were in the $790 to $893 psf range.

A 1,291 sq ft unit on the third floor was sold for $1.02 million, or $790 psf. This represents a 41% gain for the previous owner, who purchased the unit from the developer for $725,300, or $562 psf, in 2006.

A 1,302 sq ft unit on the 14th floor changed hands for $1.05 million, or $806 psf. That’s a 26% gain for the seller, who bought it for $830,200 on the resale market in 2007. A smaller unit on the 10th floor of a separate block went for $798,000, or $893 psf. The seller made a gain of 62% from the sale of the unit purchased for $491,400 in 2004.

However, because prices have increased significantly since last year, buyer resistance has started to creep in, even though interest remains strong, notes Eric Gan, a property agent from Remax. “There are fewer enquiries as prices are getting a bit too steep,” he admits. Gan has been marketing a 1,227 sq ft three-bedroom unit facing Kovan Road, with an indicative selling price of $1.04 million to $1.16 million (or $847 to $945 psf), since April 7.

Given its location — with an MRT station right at its doorstep and its proximity to a shopping mall as well as good schools — it is evident that demand for units in Kovan Melody is likely to remain strong among both investors and owner-occupiers.

Source: The Edge, 12 Apr 2010

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