Decisions, decisions

May 26, 2023

Michelle Low

WE ARE just rolling into March, and the year’s new launch machine is cranking up fast. Three new residential projects are already on the market and two much larger developments are set to start previews in a few weeks’ time.

The options opening up for househunters are plenty, starting with two major projects in the east situated less than 1 km from each other.

City Developments Ltd and MCL Land are expected to start previews of the 638-unit Tembusu Grand, their 99-year condo along Tanjong Katong Road, on Mar 25. Barely a week after, Hoi Hup Realty and Sunway Developments are scheduled to market The Continuum with over 800 freehold units at Thiam Siew Avenue. A third District 15 project will come to market later this year, on Dunman Road where SingHaiyi is building about 1,000 units in a 99-year project.

That’s about 2,400 units in total coming up in a concentrated radius in this Rest of Central Region (RCR) location. Pricing has not been officially disclosed, but analysts put the current average price of RCR transactions in the region of S$2,500 per square foot (psf).

Also akan datang are about 600 units at Hong Leong and GuocoLand’s Lentor Hills Residences, and 275 units at EL Development’s Blossoms by the Park in Buona Vista.

Over the weekend just past, The Botany At Dairy Farm sold 48 per cent or 187 of its 386 units at launch, at an average price of S$2,070 per square foot (psf). The Outside Central Region (OCR) condo being built by Sim Lian was priced a shade under the S$2,088 psf average selling price of new OCR condos in January.

Hoi Hup Realty and Sunway Developments booked 102 sales or 38 per cent of their 270-unit Terra Hill at the Pasir Panjang launch in February. The freehold condo in the west is priced at an average of about S$2,650 psf.

In the east, Sceneca Residence moved 160 units or 60 per cent of 268 units at S$2,070 psf on average at its January launch. MCC Singapore, Ekovest Development and The Place Holdings are jointly developing the Tanah Merah site.

The sales story so far? At The Botany and Sceneca Residence, the bulk of sales at launch were one and two-bedroom units ranging from just under S$1 million to about S$1.7 million. At Terra Hill, some 90 two-bed and three-bed units were sold, priced from S$1.56 million to S$3.56 million (there were no one-bedroom units), according to caveats data as at Mar 6. Data also shows one four-bedroom unit costing S$5.11 million signed and sealed on Feb 14, the day before the Budget’s hike in buyer’s stamp duty (BSD) for higher value properties kicked in.

Those watching the market found the 40-60 per cent take-up rate of the year’s first three launches to be “within expectations”. Are the days of projects moving over 80 per cent of units at launch over?

At the very top end of the market, ultra-prime projects such as Les Maisons Nassim command S$5,700-S$6,000 psf and have sold for S$35 million to S$75 million. Luxury condos are selling steadily and demand drivers look strong. As Leslie Yee writes in The Level Ground, assuming an annual price rise of 5 per cent, a S$5,500 psf unit today could be worth over S$7,000 psf in five years’ time.

While eye-watering, this should not impact prices in other market segments, he argues. The high values also mean higher duties and property taxes collected from the super-wealthy. So stay calm when more luxury condos shoot above S$6,000 psf.

After all, Knight Frank’s latest Wealth Report ranked Singapore sixth for sales of ultra-prime and prime residential properties among the top prime markets worldwide in 2022. London sat at the peak of the consultancy’s high-end activity index, followed by New York, Los Angeles, Hong Kong and Miami. The ultra-wealthy are also finding rich pickings in commercial real estate, outpacing institutional investors’ buying for the first time.

In Hong Kong, the China reopening story is starting to play out. The city’s biggest developers saw sell-out launches last week in a sign that the housing market is visibly recovering from last year’s slump. On the Singapore Exchange, the largest China-focused real estate investment trusts (Reits) by market capitalisation have outperformed most of their peers over the last six months.

Back in Singapore, tighter rules for buying new public housing flats were introduced last week, aimed at shortening the queues for Built-To-Order (BTO) flats. Top priority will go to first-timer parents and married couples.

Within a week of the announcement of the new rules, data from the Housing and Development Board showed that for the BTO launch just opened, the number of first-time applicants is down to its lowest since 2020. Evidently, more homebuyers are now considering their options more seriously - good news for those who have felt crowded out or had their hopes dashed by the long lines ahead of them.