Does size matter?
By Elizabeth Choong
/ EdgeProp Singapore |
EDGEPROP (SINGAPORE) - Mega condominium developments with at least 1,000 units have sold very well in recent years. Parc Clematis sold 70% of its launched units during the first day of sale. Likewise, Treasure at Tampines sold 55.5% of its launched units during its launch weekend. Normanton Park was the best-selling project in 1H2021, having sold 923 units or about half of its units.
There are 22 mega condominium developments in Singapore, including eight developments that are still under construction. All these mega developments have tenures of 99 years.
The largest uncompleted mega development is Treasure at Tampines (2,203 units). It is also the only development with more than 2,000 units. The largest completed mega development is D’Leedon(1,703 units), which is also the only mega development in prime District 10.
District 19 (which includes Hougang and Serangoon) has the most mega developments among all districts. Three of the five mega developments in District 19 are still under construction.
The average price of units in the mega developments ranges from $794 psf for Melville Park to $2,439 psf for Marina One Residences. Melville Park is the second-oldest mega development, having obtained its temporary occupation permit (TOP) in 1996. The oldest is Bayshore Park which obtained TOP in 1986.
Why are mega developments attractive to buyers?
Some buyers prefer mega developments with at least 1,000 units because there are more family-friendly facilities within the development. Mega developments tend to have larger or more function rooms which gives parents more space to host parties or playdates for their children. The function rooms can also double up as a workplace for parents working from home. Some large developments even have retail and F&B stalls within the development.
For example, The Florence Residences will have 15 themed pavilions, 12 clubs and 128 facilities including an 80m-long lagoon pool. Affinity at Serangoon will have five retail shops, wading pools and a 50m lap pool, as well as three man-made islands that house various facilities including a clubhouse and a gym.
Additionally, mega developments have more owners to share the maintenance cost for the common areas and facilities as well as the cost of replacing or upgrading big-ticket items such as lifts. This could help to lower the regular maintenance fees payable by each unit owner.
Hence, mega developments tend to attract families with school-going children.
How about boutique developments with fewer than 100 units?
Boutique condominium developments with fewer than 100 units can be broadly divided into two categories — luxury developments offering exclusiveness and privacy to buyers, and no-frills developments with limited facilities.
The niche luxury developments tend to attract well-heeled local and foreign buyers who are willing to pay premium prices for privacy and exclusiveness. Buyers also value the unique design features, spacious common areas and lush landscaping usually found in these luxurious condominiums. The limited number of units in these developments means that a unit is often seen as a trophy home and status symbol.
Small no-frills developments tend to attract buyers who are looking for an affordable private home or investment property. They do not foresee themselves using the common facilities so they do not mind having fewer facilities in the development. Additionally, fewer common facilities translate to lower maintenance fees for owners. As such, these no-frills boutique developments tend to attract singles or couples without children who value affordability.
District 19: Home to mega developments
District 19 has the most number of mega developments at five, compared to other districts that have at most two such developments. Three of the five mega developments in District 19 are still under construction, namely Riverfront Residences, The Florence Residences and Affinity at Serangoon.
Three mega developments in District 19 have boutique developments within a 500m radius. The three developments are The Minton, The Florence Residences and Affinity at Serangoon. Among the trio, The Florence Residences is the most expensive at $1,739 psf and has the least nearby boutique developments.
On the flip side, The Minton has the lowest average price of $1,220 psf and the most nearby boutique developments. The 10 boutique condominiums are all freehold developments, unlike The Minton, which has a tenure of 99 years. Additionally, nine of the boutique condominiums have fewer than 50 units, with the 99-unit Suites @ Paya Lebar being the exception. Suites @ Paya Lebar is located just across the road from The Minton.
Among the 10 boutique developments near The Minton, Suites @ Paya Lebar is the most expensive at $1,445 psf — even more expensive than The Minton ($1,220 psf) despite both condominiums having obtained TOP in 2013. The price disparity could be because Suites @ Paya Lebar is freehold while The Minton is 99-year leasehold.
It is notable that the average resale price for The Minton has been trending below the average resale price for condominiums in District 19 since 2017. However, average price for Suites @ Paya Lebar is consistently higher than The Minton and District 19.
The average resale price for The Minton is also less volatile compared to Suites @ Paya Lebar. The average resale price for The Minton hit a peak of $1,127 psf in 2015 before declining. However, average price for The Minton has gradually recovered and surpassed the peak set in 2015. In contrast, average price for Suites @ Paya Lebar achieved a record high in 2015 ($1,543 psf) before declining and has since remained below the peak.
Suites @ Paya Lebar have only one- or two-bedroom units, which makes the development less suitable for families. Moreover, the population census for 2020 indicates that only 8% of residents in the Hougang planning area are tenants which translates to weaker rental demand for the small units in Suites @ Paya Lebar. The nearest MRT station — Kovan — is more than 900m away, thus further dampening rental demand.
Paya Lebar Methodist Girls’ School is within walking distance of both condominiums, thus making the area attractive to parents with daughters. Families generally prefer larger developments with more facilities and spacious units. As such, buying demand for The Minton is expected to be stronger than Suites @ Paya Lebar despite its leasehold tenure. The more affordable price of The Minton adds to its appeal.
Comparing uncompleted condominiums in District 19
Among the uncompleted mega developments in District 19, Affinity at Serangoon has the most boutique developments within a 500m radius. Five of the seven boutique developments near Affinity at Serangoon are 999-year leasehold and one is freehold. The remaining development, Parkwood Residences, has a 99-year tenure and is uncompleted.
Affinity at Serangoon and Parkwood Residences are located diagonally opposite each other. Both condominiums are developed by Oxley Holdings.
Parkwood Residences have only 18 units consisting mainly of three-bedroom units of 800 to 1,000 sq ft. This development is an example of boutique developments targeting singles or couples who value their privacy. Parkwood Residences has sold out while Affinity at Serangoon still has six unsold condominium units.
Based on new sales transactions for the past 12 months, average prices for Affinity at Serangoon and Parkwood Residences are $1,580 psf and $1,562 psf respectively. However, average price for Affinity at Serangoon has jumped to $1,748 psf in 3Q2022, while that for Parkwood Residences only inched up to $1,580 psf.
However, the small number of units for Parkwood Residences means a lower sales volume and hence every transaction will have a greater impact on the overall average price for the development. On the flip side, the numerous units for Affinity at Serangoon means that each transaction will have less impact on the overall average price for the development.
Parc Esta has 25 boutique developments within a 500m radius
Among all mega developments, Parc Esta has the most boutique developments within a 500m radius. In fact, Parc Esta is an anomaly because all condominiums within a 500m radius are boutique developments. Additionally, Parc Esta is the only leasehold development in the neighbourhood.
Among the boutique developments, Le Reve is the largest with 65 units, followed by Eunos Park (55 units). Despite all three developments being in District 14, Parc Esta is under the planning area of Geylang while Le Reve and Eunos Park are in Bedok.
Among the trio, Parc Esta is the youngest, having obtained TOP this year. Le Reve and Eunos Park obtained TOP in 2007 and 1995 respectively.
In terms of average price, Parc Esta ($2,022 psf) is outperforming Le Reve ($1,228 psf) and Eunos Park ($1,074 psf). This could be due to the impact of lease decay on the two boutique developments. Average resale prices for Le Reve and Eunos Park are also trending below freehold condominiums in the Bedok planning area.
Le Reve could be a good compromise between the price and age of a condominium for a small family. The units in the development have two or three bedrooms. Eunos MRT Station is within a 500m radius and there are two primary schools within a 1km radius.
D’Leedon is the sole mega development in prime District 10
D’Leedon is the only mega condominium development in prime District 10 and there are no such developments in Districts 9 and 11. There are seven boutique developments within a 500m radius of D’Leedon, of which six are freehold and Charming Garden is 999-year leasehold.
The Cornwall is the largest boutique development with 99 units, followed by the uncompleted Wilshire Residences with 85 units.
Among the boutique developments, Wilshire Residences ($2,631 psf) is the most expensive, followed by The Cornwall ($1,949 psf). Both boutique developments are more costly than D’Leedon ($1,751 psf). The disparity in price could be attributed to tenure because both boutique developments are freehold while D’Leedon is leasehold.
D’Leedon might be a more affordable option for families who want to live in a prime district. The condominium is within a 1km radius of two popular schools, making it especially attractive to parents. D’Leedon is also near Empress Road Market and Food Centre as well as two MRT stations.
According to caveats lodged with URA, 55 units of Wilshire Residences are sold, indicating a take-up rate of 64.7%. Investors with deep pockets can consider adding this freehold property in a prime district to their portfolio especially since the population census of 2020 indicates that 16% of residents in the Bukit Timah planning area are tenants; higher than the islandwide average of 12.1%.
Another nearby uncompleted development is 638-unit Leedon Green ($2,780 psf), which is more expensive than D’Leedon by $1,029 psf. The higher price could be attributed to Leedon Green’s freehold tenure compared to the leasehold D’Leedon. According to data from URA, 473 units in Leedon Green are sold, reflecting a take-up rate of 74.1%
Average prices for Wilshire Residences and Leedon Green are trending below new sale prices for freehold condominiums in District 10, thus making the two developments a worthwhile consideration for interested buyers.
To sum up
- By comparing mega-developments and nearby boutique developments, we can conclude that there is little correlation between development size and average price of the units. Prices depend on location as well as age and tenure of the development.
- Mega developments tend to attract families with their numerous family-friendly facilities.
- Boutique developments can be simple no-frills condominiums that attract buyers with their affordability or luxurious condominiums that offer buyers exclusiveness and privacy.
- District 19 is home to five mega-developments, the most among all districts in Singapore. Three of them, namely Riverfront Residences, The Florence Residences and Affinity at Serangoon, are still under construction.
- The newly completed Parc Esta has the most nearby boutique developments, suitable for couples or investors.
- D’Leedon is the only mega-development in a prime district. Its leasehold tenure makes it more affordable than surrounding freehold boutique developments.
- There is no definite answer to which type of development is a better buy. It depends on the buyer’s profile and housing needs.
Check out the latest listings near The Florence Residences, The Minton, Affinity at Serangoon, Parc Esta, Wilshire Residences, Treasure at Tampines, D’Leedon, Melville Park, Marina One Residences, Bayshore Park, Riverfront Residences, The Minton, Suites @ Paya Lebar, Parkwood Residences, Le Reve, Eunos Park, Eunos MRT Station, Charming Garden, The Cornwall, Wilshire Residences
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