On 25 July 2021, a national record was broken and brought about a flurry of news articles published on multiple mainstream journalism platforms such as Business Times and Yahoo! News et cetera.
Although one of Singapore’s favourite swimming siblings Quah Zheng Wen did manage third in the Tokyo Olympics 100m backstroke event on this very same day, it was however not the broken record in mention – his result of 53.94 seconds just 0.15 seconds shy unfortunately.
So what was the broken record?
On this particular weekend of 24 and 25 July, property developer Allgreen Properties managed to sell 415 units or 85% of the total inventory during the launch of its Pasir Ris 8 project.
While achieving such transaction volume is nonetheless an impressive feat, what shook the property industry was the fact that units were selling for up to $2000 per square foot (psf) – a 721 square foot unit was transacted at $1.502 million, which works out to be $2,084psf (source).
The project was launched at an initial average PSF between $1400 to $1700 for the fortunate early buyers, with supposedly six rounds of upward price revisions taking place on Saturday itself as the developer welcomed an almost four times oversubscription of their 487-unit project.
How did this happen?
There was much interest and hype built up for this Pasir Ris 8 project for the period running up to its launch and rightly so due to a few reasons.
Firstly, there has not been a new private residential project in the estate since Coco Palms was last launched in May 2014.
At the same time, the dwelling population has also increased in Pasir Ris over the years, as younger families are enticed by the notion of balanced lifestyle made possible with the array of leisure amenities in the vicinity, and transformation plans such as HDB’s “Remaking Our Heartland” that promises to bring more jobs closer to homes for the region’s residents.
Also, with HDB BTOs increasingly planned and launched in the area over the years, it has possibly created a pent up demand amongst more HDB upgraders in the locality.
Secondly, Pasir Ris 8 is an integrated project – one that has both residential and commercial elements with additionally a direct access to a transportation node.
The project will sit over a multi-storey shopping mall (to be managed by the same team from Great World City mall) and the future Pasir Ris MRT interchange through which the future Cross Island MRT line will run through.
The increased accessibility allows better connections to employment hubs, and when coupled with the unparalleled convenience of having providers of daily essentials right at the doorstep, makes the project very investible.
Integrated developments in Singapore also have a strong capital appreciation track record and you can learn more about them in our previous article.
Thirdly, the situation of high demand has also been exacerbated by the dwindling unsold private residential supply in the market at this moment in time.
Developers have run down their land banks and are eager to replenish, as shown by the fact that 3 out of the last 4 Government Land Sales (GLS) have had double digit number of bidders.
The last time bidders amount to double digit was in 2018. Simple economics will serve to remind that a stronger bidding competition will naturally result in a higher eventual land sale price.
In fact 2 days before Pasir Ris 8 launch, a land for mixed development at Lentor Central (OCR) was awarded at a price psf of $1,204.
A conservative estimate projects this mixed development to be launched close to $2100 psf when launch time comes.
This current phenomenon could have not only contributed to a Fear-of-Missing-Out (FOMO) mentality amongst buyers – that prices would only keep rising and they would (a) not be able to upgrade in the future, and (b) miss out on potential appreciation; it also gave Allgreen Properties a bolstering shot of confidence in pricing their product.
What happens next?
In this day and age of peak information transfer efficiency, it is no surprise that other developers have taken almost immediate response to this piece of news that Pasir Ris 8 has broken this national record. Such information is a reflection of consumers’ appetite and real time market sentiment and just within the next few days, developers who felt that they were under-pricing their products were encouraged to adjust their prices accordingly.
So while the lucky early bird buyers of Pasir Ris 8 are grinning in their sleep every night since that fateful launch day, let us look at what some other options are in the OCR that can still put a smile on a buyer’s face:
Currently Available Projects
Tenure: 99 years Leasehold
Developer: CapitaLand & CDL
Total Units: 680
Expected TOP: 2024
This is the only other new integrated development still available in the market currently. It comprises 9 residential towers above a 3-storey mall including retail shops, supermarket, hawker centre, community club, childcare centre, and is connected with Buangkok MRT Station on the Northeast Line as well as a bus interchange.
Launched in November 2019, the project has since seen 80% of its units sold at an average selling price of $1,700 psf.
The unit sizes range from 474 sqft for their smallest 1-Bedroom + Study to 1324 sqft for their largest 4-Bedroom Premium + Flexi.
However all their smaller units (1-Bedroom + Study and 2–Bedroom) have been sold and remaining options start from a 2-Bedroom + Study of 624 sqft onwards.
Tenure: 99 years Leasehold
Developer: Hoi Hup Sunway
Total Units: 660
Expected TOP: 2025
This project at Brookvale Drive is at the spectrum opposite compared to the integrated developments we have been discussing about. The nearest MRT station is approximately 1.3km straight line distance away, and even with a new access road connecting to Clementi Road it is not exactly the shortest drive in.
However not everyone prioritises convenience over other attributes of a home – what Ki Residences is found lacking with respect to perceived convenience, buyers may appreciate that they make it up with the tranquil privacy and value for money.
This project with a Japanese-inspired concept is located well at the Sunset Way Estate, which is known as a foodie enclave. A short drive will also take you along Bukit Timah for more lifestyle amenities.
With 68% sold and only launched last December, an average price of $1,803 psf will seem attractive to buyers looking for an affordable entry into a freehold equivalent property.
Tenure: 99 years Leasehold
Developer: Hillview Rise Development
Total Units: 564
Expected TOP: 2023
For the nature-lovers, the developer (a subsidy of Hong Leong Holdings Limited) has chosen this land within walking distance from the Rail Corridor.
The Rail Corridor is a former railway line that stretches 24km north to south of Singapore which is currently being transformed into a leisure communal space known as the “green corridor ”.
According to the URA website, the Rail Corridor once connected will spur development of surrounding lands and rejuvenation of older districts.
A probable testament is as shown on URA’s Masterplan 2019 where there are other 5 plots of empty land around Midwood zoned for future residential development.
It is just 5-6 minutes walk to Hillview MRT Station on the Downtown Line and HillV2 mall is also a stone’s throw away for daily necessities. Launched in October 2019, it is currently 63% sold at an average price of $1,653 psf.
Upcoming OCR New Launches in 2021
Tenure: 99 years Leasehold
Developer: United Venture Development
Total Units: 448
Expected TOP: 2026
Originally slated to launch 1 week after Pasir Ris 8, developer UOL had decided to postpone the launch date due to the government’s Covid-19 Heightened Alert restrictions.
The project is situated near Canberra MRT Station on the North South Line. Bukit Canberra Integrated hub, a 12 hectare space with amenities such as hawker centre, indoor and outdoor sporting facilities, polyclinic, senior care centre, is also in the vicinity.
Comprising 2-Bedroom to 4-Bedroom units, marketing agencies are estimating a very affordable entry price for the HDB upgraders in the estate to start from $1,3xx psf.
This figure is based on a $650 psf per plot ratio (psf ppr) land bid price paid by the developer which translates to a breakeven cost of $1,224 psf ppr.
Project in mention:
Tenure: 99 Years Leasehold
Developer: Allgreen Properties
Total Units: 487
Expected TOP: 2026
The only integrated development currently in both district 17 and 18, Pasir Ris 8 comprises 7 blocks of residential units atop a 4 storey commercial podium, which also encompasses a bus interchange, HDB town plaza and polyclinic. Located in the heart of the region’s transformation, this project has unit types of 1-Bedroom to 4-Bedrooms.
As of time of writing, the developer has sold almost 89% of their 487 units at an average price of $1,614 psf. Except for eight 2-bedroom units, majority of the remaining units available are that of 3- and 4-bedrooms which are suitable for families who are keen to stay in the coastal town and looking to upgrade to a new project.
It is easy on hindsight to comment on a project’s appreciation potential or compare its performance with other projects, but it is a challenge on foresight. It is also therefore also challenging for developers when it comes to pricing their product ideally, and because of that there may be arbitrage opportunities.
Here at The Origins Property, we always emphasise that every buyer has his specific objectives to meet when it comes to purchasing a property, and what’s important is to establish a framework that can help properly assess your selections before making a decision and to determine if your purchase will eventually allow you to achieve your objectives.