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 Opinion Top 5

The Truth About Buying An Old Condo: Homeowners Reveal Their Top 5 Regrets

Jayson Ang – July 16, 2023 –

The Truth About Buying An Old Condo: Homeowners Reveal Their Top 5 Regrets Some homeowners may find themselves regretting certain...

All Blog Posts Buying Tips

5 Risks Upgraders Should Be Aware of To Avoid Financial Troubles When Progressing Their Property

Jayson Ang – July 3, 2023 –

TLDR The article delves into the intricacies of property asset progression in Singapore's real estate market. It highlights the risks...

All Opinion

Unseen Dangers of Putting Your Money in Upscale Freehold Properties in Singapore

Jayson Ang – February 17, 2024 –

TLDR Luxury freehold properties in Singapore may not always be the lucrative investment opportunities they appear to be. High-end properties...

All Buying Tips Top List

Finding the Perfect Match: Top 20 : A Guide to Choosing the Best Property Agent in Singapore

Jayson Ang – December 17, 2022 –

TLDR When it comes to buying or selling real estate in Singapore, having a professional and knowledgeable property agent is...

Mandarin Top 5

Top 5 Vegetarian Restaurants in Singapore

Jayson Ang – March 14, 2024 –

Singapore, a melting pot of cultures and cuisines, offers a diverse range of dining options for food enthusiasts. For vegetarians,...

All Opinion

“I Kept My Condo Empty for 7 Years” – Here’s What Singaporeans Living Overseas Do With Their Properties Back Home

Jayson Ang – February 14, 2025 –

TLDR In today's global workforce, many Singaporeans find themselves working abroad, raising questions about the management of their local properties....

Mandarin Top 5

5 Reasons : Why Investing In Conservation Shophouses In Singapore Can Be A Unique Opportunity

Jayson Ang – June 14, 2024 –

Conservation shophouses are a unique and valuable investment opportunity in Singapore. These historic buildings are a key part of the...

All Buying Tips Opinion

Are Early Bird Discounts At New Launches Genuine Or A Marketing Gimmick?

Jayson Ang – November 20, 2023 –

TLDR When considering investing in new property projects, understanding developers' pricing strategies is crucial. Early bird discounts are not just...

All Buying Tips

The Unsung Importance of Property Finishing: More Than Just Aesthetics

Jayson Ang – December 30, 2025 –

TLDR Many homebuyers overlook the importance of high-quality finishes in properties, assuming they will renovate later or that tenants won’t...

All Blog Posts Opinion

Singapore Property Price Set to Explode Upwards in 2024?

Jayson Ang – March 10, 2023 –

TLDR Understanding the factors influencing property prices in Singapore for 2024 can help in making informed decisions. Despite high rental...

All Reports

Finding Your Dream Home In The Near Future. Exciting Upcoming Property Launches In The First Half Of 2024

Jayson Ang – December 25, 2023 –

TLDR The real estate sector in 2023 saw significant policy shifts affecting both private and public housing, with various changes...

Mandarin Top 5

Top 5 Reasons : How Can A Reputable Real Estate Agent Help You When Investing In Singapore Property

Jayson Ang – April 5, 2025 –

Investing in Singapore property can be a lucrative venture, given the country's stable economy, strategic location, and high demand for...

All Buying Tips

5 Reasons To Invest In UK Property In 2024 Instead Of Saving

Jayson Ang – February 8, 2024 –

TLDR Investing in UK property in 2024 offers significant advantages over saving due to the potential for long-term value growth,...

Mandarin Top 5

Top 5 Thai Restaurants in Singapore

Jayson Ang – June 24, 2024 –

Singapore, a melting pot of cultures and cuisines, is a food lover's paradise. Among the myriad of dining options available,...

Mandarin Top 5

Top 5 Tips : How Does One Choose Good Property In Singapore?

Jayson Ang – November 11, 2024 –

Singapore, a thriving city-state known for its impressive skyline and robust economy, has always been an attractive destination for property...

All Buying Tips Opinion

Larger Living Spaces: The New Demand Surge Post-Pandemic

Jayson Ang – January 13, 2025 –

TLDR We explore the significant impact of digital marketing strategies on business growth in today's competitive landscape. It highlights the...

All Buying Tips Selling Tips

Singapore Homebuyers: Finding Hidden Value in ‘Undesirable’ Property Traits

Jayson Ang – June 15, 2025 –

TLDR Many perceived drawbacks in Singapore’s property market—such as mortgage lock-ins, leasehold status, west-facing units, nearby construction, inefficient spaces, and...

All Buying Tips Opinion

Beyond Buying: Innovative Strategies for Property Investment Success

Jayson Ang – September 14, 2024 –

TLDR The world of property investment and real estate trends offers vast opportunities. Stay informed with effective property investment strategies...