4 Simple Strategies to Help Future Homeowners Save Money
TLDR When it comes to being a new homeowner, it's essential to prioritize regular maintenance to avoid costly repairs down...
Read More
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 …
Top 5 : Factors Influence Real Estate Investors’ Decisions when Investing in Singapore Condos?
Singapore's real estate market has always been an attractive investment option for both local and foreign investors. The city-state's stable...
Read More
The Future Of Singapore Property Investing: 5 Trends To Watch Out For
The future of Singapore's property market is shaped by several emerging trends that reflect cautious optimism, enviable locations, and sociable...
Read More
Are Cluster Landed Homes Still a Good Investment? Analyzing Their Performance Over the Past Decade
TLDR When it comes to cluster housing, freehold properties like Bishopsgate Residences command top prices, whereas bargains can be found...
Read More
5 Reasons : Why Investing In Commercial Real Estate Can Offer Stable Long-Term Returns
Investing in commercial real estate has become an increasingly popular choice for investors seeking stable long-term returns. There are several...
Read More
Freehold Properties vs Leasehold Properties: Which is Better?
TLDR When it comes to property investments in Singapore, understanding the differences between leasehold and freehold properties is crucial. This...
Read More
Singapore Property Price Set to Explode Upwards in 2024?
TLDR Understanding the factors influencing property prices in Singapore for 2024 can help in making informed decisions. Despite high rental...
Read More
Sell High Buy High : Will This Still Make You a Profit?
TL;DR Summary: Timing of Property Sale: Selling high and buying high may seem counterintuitive, but understanding market dynamics can...
Read More
3 Things You Need to Know if You Are Buying a Second Property
TLDR When considering buying a second property in Singapore, ensure eligibility by meeting the Minimum Occupancy Period (MOP) and understanding...
Read More
Is it Possible for the Government to Truly “Reclaim Your Home” in Singapore?
The Singaporean government possesses considerable authority to reclaim land, whether freehold or not, in accordance with the Land Acquisition Act....
Read More
Top 5 Factors to Consider When Choosing a Property in Singapore
The top 5 factors to consider when choosing a property in Singapore. Whether you're a seasoned investor or a first-time...
Read More
Discover Affordable Executive Condos in 2024 Starting at $560,000
TLDR The Executive Condos (ECs) offer affordable options compared to private properties in Singapore. Despite price variations, most ECs remain...
Read More
Top 5 : Best Laser Tag Arenas in Singapore
Laser tag has become an increasingly popular activity in Singapore, offering adrenaline-pumping experiences for people of all ages. This exciting...
Read More
5 Points : Singapore’s Property Market vs. Stock Market: Which is the Better Investment Option?
Investing is an important aspect of personal finance and can be a valuable way to grow wealth over time. However,...
Read More
What Is The Cost Of Constructing A Landed Property In Singapore?
TLDR Building a landed property in Singapore can be a costly endeavor, with prices ranging from $300 to $500 per...
Read More
When Should You Consider a Shorter/Longer Home Tenure?
TLDR Understanding the benefits of long-term home loans is crucial for financially conservative individuals in Singapore. Opting for a longer...
Read More
4 Intriguing Property Trends in Singapore for 2024
TLDR The dynamic shifts in Singapore's real estate market following Covid, highlighting three key trends: the surprising resilience of the...
Read More
6 Essential Factors HDB Upgraders Should Be Aware Of Before Purchasing a Condo in 2023
TLDR When upgrading your property, consider factors like rental rates, Buyer's Stamp Duty adjustments, higher interest rates for bank loans,...
Read More
Top 5 Rooftop Bars in Singapore with Amazing Views
Top 5 Rooftop Bars in Singapore with Amazing Views Singapore, the Lion City, is known for its stunning skyline and...
Read More
5 Tips for Renting Property in Singapore
Renting property in Singapore can be a challenging task, especially for those who are new to the country. With Singapore's...
Read More
