OPINION: Purchasing almost completed condominiums may be a wise choice

By Elizabeth Choong / EdgeProp Singapore | February 21, 2022 9:59 AM SGT
The Gazania (Picture: Samuel Isaac Chua/EdgeProp Singapore)
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Tight supply lends support to buoyant rental market

SINGAPORE (EDGEPROP) - Construction delays due to manpower shortages and disrupted global supply chains are just some of the woes faced by the construction sector due to the recent pandemic. This has led to a tight supply situation with many turning to the rental market for interim housing. Working-from-home arrangements have also pushed many singles out of their family home and into the rental market in search of more space and privacy.
While current average rental prices for condominiums are still below the peak of $3.94 psf per month in 2013, it is definitely on an upward trend. Rental transaction volume has also grown from 80,666 in pre-pandemic 2018 to 90,204 in 2021.

What can buyers do?

Owner-occupiers can consider purchasing a property that will be completed soon or TOP (Temporary Occupation Permit), thus removing the need to rent and the inconvenience of moving multiple times. Investors would be able to capitalise on the current red-hot rental market and secure a tenant fairly quickly. (Check all latest Singapore property Market Trends)
In addition, potential buyers can visit the actual site and check out the quality of some fixtures and fittings that are already installed. Buyers can also visualise the orientation of each unit and the layout of the entire site based on the constructed buildings.

Popular developments that are almost fully sold

A few projects that are nearing their expected TOP date are almost sold out. The majority of these projects are in Rest of Central Region (RCR) or Outside Central Region (OCR) which is not surprising as these regions tend to attract more local buyers and owner-occupiers.
Potential buyers should take a closer look at the projects in Table 1 below. They may be able to secure a deal as some developers may be more willing to negotiate and sell off the remaining few units to close their books for the project. However, the remaining units are unlikely to be choice units.
Daintree Residence is a family-friendly development located near a primary school, two playgrounds and Beauty World Centre. The leasehold project sold for an average of $1,706 psf but interested buyers would have to turn to the resale market as the development is fully sold. Buyers who love the area could look at nearby completed projects such as The Creek @ Bukit; a freehold development with a lower average price of $1,683 psf which could be due to its age. The Creek @ Bukit received TOP in 2017.
Homebuyers could also consider Nyon which is a freehold boutique development with Peranakan influences; making it the perfect home for buyers who appreciate smaller design-centric developments. It is also a short walk to Amber MRT station. As Nyon is not fully sold at the time of writing, interested buyers can still snag a unit for an average price of $2,316 psf; lower than two other uncompleted freehold projects in the neighbourhood. Coastline Residences and Amber Park are fetching an average of $2,501 psf and $2,455 psf respectively.
Nyon (Picture: Aurum Land)

Projects worth a second look

If buyers prefer to have more units to choose from, they can look at the projects in Table 2 below. There are also more projects in the Core Central Region (CCR) that would be more attractive to buyers looking for properties in a prime district.
Investors can consider Sloane Residences because it has a lower average price of $2,956 psf compared to nearby The Hyde ($2,993 psf). Both projects are expected to receive TOP this year. The lower price level of Sloane Residences offers investors an affordable opportunity to purchase an asset in the exclusive Balmoral enclave.
Sloane Residences - EDGEPROP SINGAPORE
Sloane Residences (Picture: Samuel Isaac Chua/EdgeProp Singapore)
Buyers who prefer a more centralised location may want to consider Petit Jervois in prime District 10. The freehold condominium is near Valley Point, Great World City, Tiong Bahru MRT station, Orchard Road and the CBD. The convenient location and numerous amenities make it an excellent choice for investors and owner-occupiers with an eye towards investment.
Owner-occupiers who want to get away from the hustle and bustle of the city need not look further than The Gazania. Minutes-walk away from Bartley MRT station and surrounded by numerous childcare centres and kindergartens as well as two schools makes it a top contender for families with young children. Additionally, the freehold project is transacting at an affordable average price of $2,089 psf. If that is still too steep, buyers can check out its neighbour, The Lilium, which is transacting at a lower average price of $2,046 psf. Both projects are expected to receive TOP this year.
East Coast has always attracted many families with its laid-back vibes and Infini at East Coast may just tick all their boxes. The freehold project is within walking distance of Marine Terrace MRT station and located near Katong Shopping Centre, a wet market and numerous schools. As it is a small development with limited available units, interested buyers will have to act quickly.

Potential to secure a good deal

Astute readers will notice that all projects in Table 3 below are in CCR. Their centralised location makes them attractive to foreign buyers but travel curbs due to Covid-19 has prevented site visits. In addition, the increase in Additional Buyer’s Stamp Duty (ABSD) after the recent cooling measures have caused a number of local investors to relook their budget and buy intent.
Buyers with sufficient budget could score a good deal as some developers turn to innovative ways such as promotional discounts, maintenance fee rebates and lucky draws to boost sales for some projects. However, fire sales by developers are unlikely because the government had extended the ABSD deadline for sales by six months for all developers in view of the pandemic.
Leasehold Cuscaden Reserve is surrounded by freehold developments which could have affected its sales. However, the project could be attractive to savvy investors looking to get a foot in prime District 10. Cuscaden Reserve is fetching an average of $3,817 psf; lower than uncompleted freehold Park Nova ($4,930 psf) along Tomlinson Road.
To sum up
  • Tight supply situation has led to increased demand in the residential rental market which gave a boost to rental prices and volume.
  • Buyers can consider purchasing a unit that will receive TOP soon. Owner-occupiers can avoid the need for interim rental housing while investors can capitalise on the buoyant rental market.
  • RCR and OCR have many projects with high take-up rates so interested buyers will have to pick a unit from limited and less ideal choices. They will also have to be prepared to act fast.
  • Buyers considering projects with lower take-up rates or very few remaining units may be able to secure a good deal from developers but should not expect a fire sale.

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