Weekend launches yield sales of 53 units across three projects
By Cecilia Chow
/ EdgeProp Singapore |
Preview crowd at TMW Maxwell (Photo: Chip Eng Seng)
Weekend sales on August 12-13 slipped to a new low, with just 53 units sold across three projects.
All three projects are redevelopments of en bloc sites located in different submarkets: the 78-unit Orchard Sophia in the Core Central Region (CCR); the 324-unit TMW Maxwell in the Rest of Central Region (RCR); and the 105-unit The Arden in the Outside Central Region (OCR).
"Sales have been muted compared to recent launches in terms of the number of units sold," says Ismail Gafoor, CEO of PropNex. "This is likely due to the fact that we have had nine new launches since July to date, and buyers have more options today."
Before the debut of five new projects this past fortnight in August, "July was already a hectic month" with four major projects launched, totalling more than 2,500 units, says Marcus Chu, CEO of ERA Singapore. "The July supply spilled over into August, affecting the new launches this month," he adds. "With a wide selection of projects on the market, homebuyers and investors are spoilt for choice."
Search for the latest New Launches, to find out the transaction prices and available units
'Choice paralysis'
The last time there was a deluge of new project launches was in November 2018, when eight projects with an aggregate of 1,265 units were offered for sale, says Mark Yip, CEO of Huttons Asia. "In terms of number of units launched, the highest was in 1Q2021, when 2,629 units across four projects were rolled out for sale." The bulk of the supply in 1Q2021 came from the 1,862-unit Normanton Park launched in January 2021.
The April hike in additional buyer's stamp duty (ABSD) for all except Singaporean and Permanent Residents (PRs) first-time homebuyers, combined with elevated interest rates, has made buyers more cautious, notes ERA's Chu. "For first-time buyers who do not need to pay ABSD, it's like having just one bullet left, so they want to make the best use of it."
PropNex's Gafoor reckons that beyond buyer fatigue due to the number of new projects launched in the past two months, "a bit of choice paralysis" has also set in, especially for RCR and OCR projects. Since April, six RCR or city fringe projects have been launched, with another three in the OCR or suburbs (excluding Altura, an executive condo).
"Buyers need time to analyse their options, and pricing is a major consideration," says Gafoor. "Developers are mindful that buyers are price conscious."
The Arden sold 27 units over the weekend at an average price of $1,750 psf (Picture: Qingjian Realty)
The Arden – 'most affordable new launch in OCR'
Qingjian Realty priced The Arden from $1,688 psf, which is "compelling", notes PropNex's Gafoor, compared to other OCR new launches, which fetched average prices ranging from $2,057 to $2,121 psf this year.
"With its attractive pricing and well-thought-out features, The Arden stands out as one of the OCR's most affordable new launch options," says ERA's Chu.
Over the weekend, developer Qingjian Realty sold 27 (26%) of the 105 units at The Arden on Phoenix Road, just off Choa Chu Kang Road. The average price achieved for units sold was $1,750 psf.
According to Qingjian general manager Ouyang Jing, the two-bedroom units were the most popular among homebuyers, followed by the three- and four-bedroom units, as many buyers are owner-occupiers.
Showflat of a two-bedroom unit at The Arden (Photo: Qingjian Realty)
The Arden is a redevelopment of the former 99-year leasehold Phoenix Heights, purchased en bloc for $42.6 million in July 2019.
"Our primary goal is to expedite the sale of the units to streamline our operations and focus on pursuing and securing new projects," says Yen Chong, deputy general manager of Qingjian Realty. "This is the driving force behind our highly competitive pricing strategy."
Just last weekend [Aug 5-6], Qingjian and joint venture partner Santarli Realty sold 220 units at Altura, the 360-unit executive condo (EC) located at Bukit Batok West Avenue 8 at an average price of $1,475 psf, which is a new record high for ECs.
Orchard Sophia saw 19 units sold at an average price of $2,800 psf over the weekend (Photo: Albert Chua/EdgeProp Singapore)
Orchard Sophia sells 24% of units at $2,800 psf
At Orchard Sophia, developer DB2 sold 19 (24.4%) of the 78 units over the weekend at an average price of $2,800 psf. The prices at Orchard Sophia are "appealing to buyers", says PropNex's Gafoor. He points to 1H2023, where new freehold projects in the RCR were selling at a median price of nearly $2,700 psf; and new freehold non-landed homes in the CCR went for over $2,900 psf, based on URA Realis caveat data.
The freehold Orchard Sophia is located at the top of Sophia Road in prime District 9 in the CCR. It's a redevelopment of two neighbouring condos, Fairhaven and Sophia Ville, which DB2 purchased en bloc in 2020 for $62 million.
According to DB2 founder and CEO Dennis Leong, the buyers over the weekend are a good mix of owner-occupiers and investors. "Many of them like the prospect of city living," he says. "Even though the project is on a hilltop, it is convenient, with the Dhoby Ghaut MRT station, Orchard Road shopping malls and schools nearby."
Showflat of a two-bedroom premium unit at the 78-unit Orchard Sophia (Photo: Albert Chua/EdgeProp Singapore)
Tertiary institutions in the vicinity include the Singapore Management University, LaSalle College of the Arts, Nanyang Academy of Fine Arts and School of the Arts. Another attraction is the proximity of Orchard Sophia to the Istana Park extension and Mount Emily Park, adds Leong.
"With St Margaret's Primary School nearby and Anglo-Chinese School (Junior) within a 1km range, young families with just one or two children of school-going age find the two- and three-bedroom units at Orchard Sophia ideal," says ERA's Chu.
The scale model of TMW Maxwell where seven units were sold at an average of $3,310 psf (Photo: Albert Chua/EdgeProp Singapore)
TMW Maxwell sells seven units, hits a high of $3,739 psf
Seven units at the 324-unit TMW Maxwell were sold at prices between $1.5 million to $2.47 million, or $3,143 to $3,739 psf. The developer said it had released just 80 units in phase one of its launch. Hence, the seven units sold reflect a take-up of 9% based on units launched. However, it's 2.2% based on the total number of units in the project.
The remaining units will be released for sale in subsequent phases, according to the developer, a consortium made up of Chip Eng Seng, SingHaiyi Group and Chuan Investments.
According to ERA’s Chu, recent transactions at Midtown Bay and Midtown Modern range from $3,275 to $3,841 psf. Midtown Bay and Midtown Modern are part of Guoco Midtown integrated development located in the Beach Road/Bugis area in District 7 and part of the CCR. “TMW Maxwell’s prices from $3,100 psf is very reasonable,” he says.
Of the seven units sold, four are studio units, two are one-bedders, and another is a two-bedroom unit. Prices start from $1.5 million for a studio. "This project is about quantum play given its larger mix of smaller apartments," says PropNex’s Gafoor. "About 85% of the units are within a $1.5 million to $2 million price range, which is a sweet spot for many buyers."
Flip/Switch studio units make up 62% of the units at TMW Maxwell. "We expect this concept to be well accepted by new home owners," says Desmond Sim, CEO of Edmund Tie (Photo: Albert Chua/EdgeProp Singapore)
The 324-unit TMW Maxwell is part of a mixed-use development on Tras Street, within the Tanjong Pagar Conservation Shophouse Area in District 2 and near Chinatown. The 99-year leasehold TMW Maxwell is a redevelopment of the former Maxwell House, which the consortium purchased en bloc for $276.8 million in 2021.
As the original site has 'Commercial' zoning, the developer is not subjected to ABSD nor under pressure to sell out all the residential units within five years to be eligible for an ABSD remission.
"TMW Maxwell is the first of four residential projects to be launched in Singapore's CBD," says ERA's Chu. The other launches in the pipeline include Perennial Holdings and Alibaba's 215-unit Skywaters Residences (redevelopment of the former AXA Tower at 8 Shenton Way), City Developments' 246-unit Newport Residences (former FujiXerox Towers at Anson Road) and IOI Properties' 748-unit Marina View Residences.
“I foresee the demand for TMW homes and retail spaces to gather pace along with a return in interest for properties in the Central Area, backed by future growth plans at Southern Singapore,” comments Alice Tan, Knight Frank head of consultancy.
The crowd at Orchard Sophia preview (Photo: EdgeProp Singapore)
'Friction in weekend launch sales'
Gafoor expects "some friction in weekend launch sales" from here on, as buyers are in no hurry to lock in their purchase, preferring to shop around for a unit that will give them the best value while still meeting all their needs.
Weekend launch sales will vary from project to project, depending on whether there is an ample supply of unsold units nearby, adds Gafoor. "Developers still have a fairly long runway to sell the units in their new projects before they hit the stipulated five-year ABSD deadline."
"In the normal course of sales, developers may roll out promotions from time to time," says Huttons' Yip. "They may give discounts or a one-off price promotion for selected units. These are different strategies developers can use to increase sales."
Showflat of Pinetree Hill, which UOL launched in mid-July and 29% of the units have been sold at an average price of $2,383 psf (Photo: Samuel Isaac Chua/EdgeProp Singapore)
New project launches in 2003 already surpassed 2022-level
In 2022, developers launched 15 new private residential projects with 4,528 units (excluding ECs) for sale. Developer sales last year amounted to 7,099 units.
This year to date, developers have already launched 17 private non-landed residential projects with a total of 6,300 to 6,500 units (excluding ECs), according to Liam Wee Sin, group CEO of UOL Group, in the 1HFY2023 results briefing on Aug 10.
Huttons Data Analytics estimates developer sales of more than 5,000 units in the first eight months of this year. With another 10–13 new launches in the pipeline this year, developer sales could end the year at around 8,000 units, still higher than 2022's 7,099 units.
UOL launched its 520-unit Pinetree Hill condo at Pine Grove in mid-July. The project is 29% sold at an average price of $2,383 psf, based on caveats lodged as of August 12. The 99-year leasehold project is located off Ulu Pandan Road in District 21.
Altura EC sold 220 of the 360 units at an average price of $1,475 psf, a new record high for ECs on the weekend of August 5-6 (Photo: Qingjian Realty)
Extending EC ABSD remission to private condo buyers
"Given that the market has shown signs of stabilisation and prices have moderated, it's perhaps timely to consider extending the same ABSD remission period for EC buyers to private condo buyers," says UOL’s Liam.
Currently, EC buyers do not need to pay ABSD upfront. They are given six months to dispose of their existing HDB flats upon collecting the keys to their new EC unit upon obtaining a Temporary Occupation Permit (TOP). "This helps them to transition smoothly and achieve their aspirations on upgrading," Liam explains.
On the other hand, private condo buyers must pay 20% ABSD within 14 days of purchase and dispose of their HDB flats within six months. "This can be disruptive to families," Liam says. "It also causes undue distortion in the residential rental market, which could be a drawback in the attractiveness of Singapore as a talent hub."
According to Liam, this appeal has been made by the Real Estate Developers' Association of Singapore (REDAS) "several times" in the past.
The upcoming Hungry Ghost Festival from Aug 16 to Sept 14 should see a pause in new project launches. “Developers will need some time to evaluate their options, given the injection of new launches this year,” says PropNex’s Gafoor. However, he doesn't expect developers to cut prices or roll out incentive schemes just yet.
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