Your search results

Will New Launch Condos See a Drop in Prices Soon?

Posted by Jayson Ang on July 12, 2024

| All, Buying Tips, Opinion, Selling Tips

| 0

TLDR

The real estate market in Singapore is experiencing a trend of lackluster bids for prime properties in various locations.

Recent bids for land parcels near Springleaf MRT station and on Zion Road have fallen below predicted price ranges.

Factors contributing to this trend include cooling measures, rising construction costs, financing challenges, and global uncertainties.

Developers’ reluctance to participate in high-profile locations like River Valley and Marina Bay reflects a retreat in the market.

The Core Central Region (CCR) is particularly affected by these challenges.

To revitalize the CCR, suggestions include extending ABSD deadlines for developers to attract local buyers and reignite interest.

The release of land parcels in River Valley may not attract competitive bids due to low developer interest.

The shift towards creating well-rounded communities in prime areas like Orchard contrasts with the slow adaptation of the CCR.

Exploring mixed-use projects could accelerate the transformation of areas like River Valley.

Individual considerations are crucial when deciding whether to buy, sell, or wait in the current real estate market.

It is becoming increasingly evident that the rejected bid for Marina Gardens Crescent was not an isolated incident but rather a recurring trend. The solitary offer made for the coveted location was deemed too low and was swiftly dismissed, but it seems this was just the beginning. Now, we are witnessing similar lackluster bids for properties in River Valley and Upper Thomson.

GuocoLand and Hong Leong were the sole contenders for a prime plot of land near Springleaf MRT station, along Upper Thomson Road, with a bid of $779.6 million (equivalent to $904.60 psf). This was a far cry from the predicted $1,000 to $1,100 psf. One can’t help but wonder if the underwhelming sales figures of other condos like Lentoria, which only managed to sell 19% of units during its launch, played a role in this low offer. It’s not surprising considering GuocoLand’s already dominant presence in the area.

Similarly, CDL and Mitsui Fudosan were the only bidders for a massive land parcel on Zion Road, with a bid of $1.1 billion (capable of housing around 1,000 residential units). This equates to approximately $1,202 psf, below the estimated $1,300 to $1,700 psf.

These scanty bids, coupled with the reluctance of developers to participate in high-profile locations like River Valley and Marina Bay, reveal a clear retreat in the market. The recent cooling measures, particularly the raised ABSD of 60% for foreigners, has significantly impacted the prime region properties which heavily rely on this demographic.

Of course, there are other contributing factors such as rising construction costs (Singapore has been ranked the fourth most expensive country for construction since last year), financing challenges due to the higher interest rates, and global uncertainties. However, the CCR (Core Central Region) seems to be bearing the brunt of it all, compounded by the cooling measures.

Moreover, the upcoming land parcels at River Valley Green and the newly implemented GFA harmonisation rules may have also played a role in the lackluster bids.

Interestingly, this weak demand is in stark contrast to the 2017 bidding war for the Jiak Kim Street GLS site (now known as Riviere), which saw a whopping 9 bidders and a record high of $1,733 psf ppr. However, the not-so-impressive performance of Riviere may have acted as a deterrent, as the developers had to resort to price discounts in 2020 and the final average price of $2,819 psf was far from their initial expectations. After all, the original launch prices were hovering around $3,000 psf.

Why Are These Land Parcels Being Released Now? Unveiling the Timing Mystery

While the Government’s decision to put up land parcels in River Valley may have a sound rationale, it’s unlikely to attract competitive bids. In fact, it seems like a wasted opportunity, especially when developers have shown little interest. Even if the land prices were lower, it’s doubtful that the average Singaporean would even consider purchasing property in these upscale districts.

This move comes at a time when prime areas like Orchard are striving to revitalize themselves. The trend now is towards creating more well-rounded communities, with a mix of event spaces and play areas, rather than sticking to outdated notions such as “Orchard is only for shopping” or “City Hall is solely for banks.”

Interestingly, the CCR (Core Central Region) has been the slowest to adapt to this rebalancing, unlike its counterparts in the OCR (Outside Central Region) like Jurong, or in the RCR (Rest of Central Region) such as Beach Road and Paya Lebar.

If developers were to construct more mixed-use projects (and let’s not forget Marina, which was a white site, as explained here), it could greatly accelerate the transformation of the CCR. After all, River Valley could certainly benefit from more character than just being known as “that place with fancy mansions.”

Perhaps, considering the nature of CCR properties, which often have a high price tag and take longer to sell, we could explore other concessions for developers. This could include extending the usual five-year ABSD (Additional Buyer’s Stamp Duty) time limit, not necessarily by reducing land prices, but by providing a longer deadline. This would allow more time for local buyers to emerge and potentially reignite developer interest, with the added benefit of lower risks. Of course, this is a suggestion solely for the CCR.

Should You Buy, Sell or Wait?

If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?

It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.

I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.

I can help you by:

Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.

You May Also Like …

Mandarin Top 5

Top 5 Mistakes to Avoid When Investing in Singapore Real Estate

Jayson Ang – October 29, 2024 –

Investing in Singapore's real estate market can be a lucrative venture, given the city-state's status as a global financial hub...

Buying Tips Mandarin Top 5

Singapore Living: 5 Must-Know Factors for Choosing the Perfect Neighborhood

Jayson Ang – June 30, 2023 –

Singapore Living: 5 Must-Know Factors for Choosing the Perfect Neighborhood When it comes to purchasing a property in Singapore, the...

Mandarin Top 5

Experience Singapore’s Best: 5 Districts with Unmatched Access to Shopping, Dining, and Entertainment

Jayson Ang – February 23, 2024 –

Here are my top 5 picks for districts in Singapore that offer easy access to some of the best shopping...

Mandarin Top 5

Navigating the Singapore Property Market as a Foreign Investor: What You Need to Know

Jayson Ang – August 7, 2024 –

Singapore, a thriving hub of business and commerce in Southeast Asia, boasts a highly developed economy and a robust real...

Mandarin Top 5

Top 5 Reasons : Why is Supply so tight for Singapore Property?

Jayson Ang – January 22, 2025 –

Singapore's property market has been experiencing a tight supply in recent years, leading to increased demand and rising property prices....

All Blog Posts Opinion

What Has Been The Most Significant Development In The Real Estate Market In 2022

Jayson Ang – December 24, 2022 –

TLDR In 2022, the real estate market saw significant interest rate hikes affecting home loan rates. Despite concerns, the market...

Mandarin Top 5

Top 5 : Greatest Challenges That Investors Face In Singapore’s Real Estate Market

Jayson Ang – December 23, 2024 –

Singapore's real estate market is a dynamic and attractive investment landscape for both local and international investors. Known for its...

Mandarin Top 5

5 Impacts Of The Singapore-Malaysia High-Speed Rail On The Property Market

Jayson Ang – June 10, 2024 –

The proposed Singapore-Malaysia High-Speed Rail (HSR) is a joint project between the two countries that aims to improve connectivity and...

Mandarin Top 5

Top 5 Reasons : Why Do Singaporeans Still Flood The Property Market?

Jayson Ang – August 25, 2024 –

Singapore, a thriving city-state with a robust economy and a strong demand for real estate, has always been an attractive...

All Buying Tips

Your Key to a Happy Retirement in Your HDB? Let’s Unveil The Mystery Behind the Lease Buyback Scheme!

Jayson Ang – March 30, 2024 –

TLDR The Lease Buyback Scheme (LBS) is gaining traction among older Singaporeans looking to boost their retirement income by selling...

All Blog Posts Buying Tips

Discover the Benefits of a SORA Home Loan in 2023: Why Consider SORA Interest Rates

Jayson Ang – May 17, 2023 –

TLDR The article discusses the transition from SIBOR and SOR to SORA as the new benchmark rate in Singapore's banking...

All Blog Posts Buying Tips Opinion

How Can You Prepare for Retirement in an Expensive Real Estate Market? Discover Your Options Now!

Jayson Ang – June 30, 2023 –

TLDR The article discusses the challenges of investing in a second property for retirement amidst Singapore's real estate market conditions....

Mandarin Top 5

How to Build a Property Empire in Singapore: Scaling Your Investments

Jayson Ang – May 8, 2024 –

Real estate investing is a popular way to build wealth and generate passive income. However, like any investment, it comes...

Mandarin Top 5

Top 5 Secrets : Foreign Investors Are Rarely Told About Singapore’s Real Estate Market

Jayson Ang – November 19, 2024 –

Singapore's real estate market has been a popular choice for foreign investors due to its stable economy, strategic location, and...

Mandarin Top 5

Top 5 Cafes in Singapore for Brunch

Jayson Ang – March 10, 2024 –

Singapore, a melting pot of cultures and flavors, offers an incredible array of culinary experiences to tantalize your taste buds....

All Blog Posts Buying Tips Opinion

6 Compelling Reasons Why 3-Bedroom Condos Might Shrink Further

Jayson Ang – November 15, 2024 –

TLDR Three-bedroom units in Singapore have significantly downsized from 1,700-1,800 sq. ft. in the 1980s to around 1,000 sq. ft....

Mandarin Top 5

Retiring in Singapore? Here’s Where to Find the 5 Best Property Investments for Comfort and Security!

Jayson Ang – March 22, 2024 –

Retirees have unique needs when it comes to property investments. They require properties that offer comfort, security, and easy access...

Mandarin Top 5

Top 5 Best Unique Nighttime Experiences in Singapore

Jayson Ang – December 13, 2024 –

Singapore, a vibrant city-state known for its stunning skyline and diverse culture, truly comes alive at night. As the sun...

All Blog Posts Buying Tips

Unveiling the Secrets: How Foreigners Can Buy Property in Singapore – 6 Essential Steps to Follow

Jayson Ang – December 19, 2024 –

TLDR Foreign investors find Singapore attractive due to its stable governance and transparent business practices. Foreigners, including Permanent Residents (PRs),...