As another mega condo launches, will there be enough demand in Singapore's property market?

As another mega condo launches, will there be enough demand in Singapore's property market?

A new property launch touted as Singapore’s largest private residential project opened for preview on Friday (Mar 15), amid signs of a rebound in home-buying activity. Cheryl Lin reports.

SINGAPORE: A new property launch touted as Singapore’s largest private residential project opened for preview on Friday (Mar 15), amid signs of a rebound in home-buying activity.

Treasure at Tampines, which sits on the sprawling 650,000 sq ft site of former Tampines Court HUDC estate, will offer 2,203 units. This makes it the biggest condominium development here, said developer Sim Lian Group which acquired the collective sale site for S$970 million in 2017.

Sales are slated to start later this month for its one to five-bedroom units at approximately S$1,280 per square foot (psf).

Singapore homebuyers at Treasure at Tampines (2)
Mega condominium development, Treasure at Tampines, has 2,203 units ranging from one to five-bedroom units. (Photo: Jeremy Long)

This follows the launch of another mega project earlier this month – Florence Residences, a 1,410-unit leasehold project in Hougang with an average selling price of nearly S$1,400 psf. Developed by Logan Property, this takes the site of another HUDC estate Florence Regency that was also sold en bloc in 2017.

A few more juggernaut projects offering more than 1,000 units are in the pipeline, according to market observers. These include Parc Clematis, Avenue South Residences and the former Normanton Park, said Huttons Asia's research head Lee Sze Teck, though Treasure at Tampines could remain the biggest in terms of units on offer.

Echoing that, CBRE’s research head for Singapore and Southeast Asia Desmond Sim said: “Mega developments are not surprising because we’ve already seen some of these major sites being transacted in previous en bloc sales.”
 
For the whole of 2019, some analysts expect about 40 to 60 new launches, totalling as many as 17,000 private housing units, to be announced.

“GENUINE” DEMAND?

This buffet of new projects hopes to capture “genuine” home buyers that remain in the market despite last year’s cooling measures, lingering worries about rising interest rates and economic uncertainties, analysts said.

They cited latest figures from the Urban Redevelopment Authority, which showed 455 private homes sold by developers in February. That marked a year-on-year increase of 18.5 per cent and was 4.4 per cent higher than the previous month – a “pretty encouraging” result, noted Mr Sim.

“I wouldn’t say there haven’t been any effect. Some buyers are taking longer to make a decision,” said Hutton's Mr Lee, referring to the property curbs that have raised acquisition costs for buyers and curbed their ability to take out larger loans to purchase private property.

Aspiring home buyers with a tight budget, in particular, would have to reconsider given how they may have to fork out S$35,000 to S$50,000 more under the new measures. “Some of these borderline buyers who face a shortfall of cash will need to save up again before they can enter the market," said Mr Lee. 

READ: New private home sales jump 18% in February

READ: Commentary: Who’s buying private property after last year’s cooling measures?

Nonetheless, there remains “genuine demand in the market, especially for projects that are well-located and attractively-priced”, said Mr Lee.

He brought up Affinity at Serangoon and Riverfront Residences, both of which were February’s top-sellers after receiving a boost from news of the upcoming Cross Island Line.

“(They) were already selling but the announcement of the Cross Island Line boosted demand even more. To capture this demand, they have released more units.”

And even as the pending supply onslaught could increase competition, mega projects may be able to hold their own when it comes to success rates, said Mr Sim.

“Mega developments usually come with a lot more facilities that boutique projects lack. The cost of operation is also shared by a larger pool of residents so the conservancy charges are going to be cheaper too.”

Echoing that, Mr Lee noted that some mega projects launched before last year’s property curbs have continued to receive interest from buyers. “Some are still clocking in double-digit sales every month, and are now about 50 per cent sold.”

LOCATION AND PRICE

For now, while some developers have increased commissions to incentivise their agents, they have stopped short at doling out goodies for buyers given the demand.

Still, analysts said that may change as more supply comes on and buyers opt to take their time to pick and choose.

“A lot of buyers know they are spoilt for choices so they may want to sit back and wait,” said Mr Sim. “There are buyers, such as the HDB upgraders, but it’s a matter of whether they will be making the decision as quickly so pricing and location will have to be competitive.”

Mr Stanley Lin is one home buyer who is keeping his options open.

The 38-year-old has been looking around for a new home for the past six months given that his flat has reached its minimum occupation period. Treasure at Tampines was the third condominium project he’s visited with his family.

“We stay in Tampines and Treasure happens to be one of the locations we frequent, especially with the market just beside it. So we thought we’ll come and check it out.”

Location tops his list of considerations, said Mr Lin, while the heftier duties have not been a major deterrent thus far. “As long as it’s not too much, it's fine.”

Singapore homebuyers at Treasure at Tampines (3)
Home buyers seen at the sales gallery of Treasure at Tampines - the mega condominium development which opened for preview on Mar 15, 2019. (Photo: Jeremy Long)

Speaking to Channel NewsAsia at the Treasure's sales gallery on Friday, OrangeTee & Tie’s managing director Steven Tan said he is “very optimistic” about sales given the new development's “attractive” pricing and other unique selling points.

These include its “strategic location” near employment clusters at the Tampines Regional Centre and Changi Business Park. Its size also means "flexible" design for unique facilities, such as a co-working space.

“We got feedback that our prices fall within the affordability range of many potential buyers, including HDB upgraders and investors … Because of this attractive pricing and other positive factors, we think the take-up rate will be high.”

Being among the first few mega projects to be launched will also help it to “capitalise on the market”, Mr Tan said. Orange Tee and Tie is one of the three marketing agencies for the Treasure at Tampines.

Source: CNA/sk(gs)

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