Singapore's property sector has had a relatively “interesting” year in 2021.
Everything appeared to be slow and lackluster, particularly throughout the first half of 2021 owing to the COVID-19 epidemic.
Just when we believed the market was doomed, one new launch initiative rekindled it.
Yes, that was Pasir Ris 8 – a new launch integrated development in new property launches seastern sector.
85% of units were sold in the first weekend of availability – AVERAGE $1,617 PER SQUARE FOOT!
That is a ‘crazy' price for a property in the Outside Central Region, sometimes known as OCR.
Many people felt it was completely ludicrous, and the market exploded.
Indeed!
It generated a rippling effect throughout all market segments, resulting in a buying frenzy over the next three months.
This has given new vitality to the primary housing market, and property developers' confidence has returned.
As the number of unsold condo units decreases, developers have begun to boost prices for the existing stock.
What comes next?
As stock runs short, developers become hungrier by the day and must be aggressive while fighting for land supplies with New Property Launch In Singapore
As a result, with recent land bids and en bloc acquisitions, they have begun to set new price points.
Some of the most recent notable land sales in 2021 are as follows:
As you can see, these properties garnered a lot of interest, with roughly ten bids from developers on average.
This is a clear sign of how hungry they are.
The most current news is that the Urban Redevelopment Authority (URA) has listed two home properties in Pine Grove for sale on the Reserve List.
As I've previously mentioned to my friends and clients, the unsold inventory of new homes has been steadily decreasing.
With aggressive land offers and dwindling inventory, developers have become extremely eager for property.
We only need to remember that the most recent low point in unsold inventories was 16,929 in 2017.
It appears to be a large number, yet there is no way this unsold inventory can be reduced to zero.
In all circumstances, this will cause chaos and panic.
Returning to the two Pine Grove Reserve List sites.
It should be noted that land parcels under the reserve list system will only be released for sale if an offer of a minimum price acceptable to the government is received, whereas confirmed list sites are issued on time regardless of demand.
The majority of people on the ground will be asking the following questions, and here are my responses:
Will it be activated?
It's impossible to say.
Given how eager the developers are, I believe it is feasible. Other market observers, though, have differing opinions.
In fact, the more significant aspect to consider is what kind of bid prices might be predicted if it is ever triggered.
What does the expected price bid range of $920psf to $1400psf translate to?
For $920 per square foot, the land bid
—> The Pine Grove Sites are expected to launch at $1,9xx per square foot or above.
For $1,400 per square foot, the land bid
—> The Pine Grove Sites are expected to launch at $2,4xx per square foot or higher.
It was sold for $1,118 psf just 5 months ago, and the breakeven price would be $1,822 psf based on the expected costs.
In other words, the developer would very certainly be unable to sell at a lower price because it would be a clear loss.
Even with a just 10% profit, the forthcoming new launch at Ang Mo Kio Avenue 1 would easily sell for $2,000 psf.
Remember, this site is in the OCR.
This establishes a new floor price of $2,xxx psf for future launches in all regions, similar to how Pasir Ris 8 established a new benchmark price for all existing launches.
Let's be honest here.
Real estate developers do not run philanthropic organizations. They are all motivated by profit.
Losses can only harm their brand and cause shareholders to lose faith (share prices will undoubtedly fall as a result).
If you do not want to start paying more for a new launch property in the future (which is only next year), I strongly advise you to begin investigating your possibilities in the current market.
There are currently very few sweet spot units available in the market—very, – few.
As a result, investing in the wrong development will harm your portfolio.
0
