Tight Supply Provides Support for the Rental Market
Construction delays caused by manpower shortages and global supply chain disruptions are just some of the difficulties the construction industry has faced due to the COVID-19 pandemic. The delays in construction have led to a tight supply, causing many to turn to the rental market for interim housing. Work-from-home arrangements have also prompted many singles to move out of their family homes and into the rental market, seeking more space and privacy.
Although the current average rent for condominiums is still below the peak of $3.94 psf per month in 2013, it is definitely on an upward trend. The volume of rental transactions has also increased from 80,666 before the pandemic in 2018 to 90,204 in 2021.
What Can Buyers Do?
Owner-occupiers can consider purchasing properties that are nearing completion or have already obtained their Temporary Occupation Permit (TOP), thus eliminating the need for renting and the inconvenience of moving multiple times. Investors will be able to take advantage of the current hot rental market and find tenants fairly quickly. (Check out the latest Singapore condominium prices)
Additionally, buyers can visit the actual site and inspect the quality of some of the fixtures and fittings that have already been installed. Buyers can also get a visual understanding of the orientation of each unit and the layout of the entire site based on the constructed buildings.
Popular Projects That Are Almost Fully Sold
Some property projects that are about to obtain their TOP are almost sold out. It is not surprising that most of these projects are located in the Rest of Central Region (RCR) or Outside Central Region (OCR), as these areas tend to attract more local buyers and owner-occupiers.
Potential buyers should take a closer look at the condominium projects in Table 1 below.
Table 1: Condominiums Expected to be Completed in 2022
| Project Name | Address | Launch Date | Est. Completion Date | Total Units |
|---|---|---|---|---|
| Coastline Residences | 7 and 9 Amber Road | April 2019 | December 2022 | 144 |
| The Antares | 19 – 25 Mattar Road | September 2019 | November 2022 | 265 |
| The Jovell | 11 – 29 Flora Drive | September 2018 | April 2022 | 428 |
Homebuyers can also consider Nyon, a Peranakan-influenced freehold boutique development; it’s the perfect home for buyers who prefer smaller, design-centric developments. It is also a short walk to the Amber MRT Station. At the time of writing, Nyon is not yet fully sold, and interested buyers can still purchase the remaining units at an average price of $2,316 psf; a price lower than the other two nearby uncompleted freehold private residential projects. Coastline Residences and Amber Park have average selling prices of $2,501 psf and $2,455 psf, respectively.
Projects Worth a Second Look
For buyers who wish to have more units to choose from, they can refer to the condominium projects in Table 2 below. There are also more attractive projects in the Core Central Region (CCR) for buyers looking for properties in prime locations.
Table 2: Condominiums Expected to be Completed in 2022
| Project Name | Address | Launch Date | Est. Completion Date | Total Units |
|---|---|---|---|---|
| 1953 | 11 Balestier Road | March 2019 | Q2 2022 | 58 |
| 15 Holland Hill | 15 Holland Hill | April 2020 | Q4 2022 | 57 |
| Boulevard 88 | 86 and 88 Orchard Boulevard | March 2019 | Q4 2022 | 154 |
| Fourth Avenue Residences | 2 – 18 Fourth Avenue | January 2019 | Q4 2022 | 476 |
| Haus on Handy | 28 and 30 Handy Road | July 2019 | Q4 2022 | 188 |
| Juniper Hill | 39 Ewe Boon Road | July 2019 | Q2 2022 | 115 |
| Petit Jervois | 33 Jervois Road | November 2018 | Q1 2022 | 55 |
| Sloane Residences | 17 Balmoral Road | June 2019 | Q2 2022 | 52 |
| The Hyde | 11 Balmoral Road | July 2019 | April 2022 | 117 |
| Meyerhouse | 128 Meyer Road | May 2019 | Q2 2022 | 56 |
| The Gazania | 5 – 19 How Sun Drive | May 2019 | Q4 2022 | 250 |
| The Lilium | 31 and 33 How Sun Road | May 2019 | February 2022 | 80 |
Investors might consider Sloane Residences, as its average price of $2,956 psf is lower than the nearby The Hyde ($2,993 psf). Both projects are expected to receive their TOP this year. The lower entry price of Sloane Residences offers an affordable opportunity for investors to purchase a property in the Balmoral area.
Buyers who prefer a more central location can consider Petit Jervois in the prime District 10. This freehold condominium is close to Valley Point, Great World City, Tiong Bahru MRT Station, Orchard Road, and the Central Business District. Its convenient location and numerous amenities make it an excellent choice for both investors and owner-occupiers.
For owner-occupiers who want to get away from the hustle and bustle of the city, The Gazania is suitable for you. A few minutes’ walk from Bartley MRT Station, it is surrounded by many childcare centers and kindergartens, as well as two schools, making it a top choice for families with young children. Moreover, this freehold condominium project has an average transaction price of $2,089 psf. If this price is still too high, buyers can check out its neighbor, The Lilium, which has a slightly lower average price of $2,046 psf. Both projects are expected to receive their TOP this year.
Possible to Get a Good Deal
Keen readers will notice that all the projects in Table 3 below are in the Core Central Region. Their concentrated location is attractive to foreign buyers, but travel restrictions due to the COVID-19 pandemic have prevented physical viewings. Furthermore, following the recent cooling measures, the increase in the Additional Buyer’s Stamp Duty (ABSD) has caused some local investors to reconsider their budgets and purchasing intentions.
With some developers turning to innovative ways such as promotional discounts, maintenance fee rebates, and lucky draws to boost sales for certain projects, buyers with sufficient budgets may be able to get a good deal. However, considering that the government has extended the ABSD deadline for all developers by 6 months due to the COVID-19 pandemic, a major fire sale by developers is unlikely.
Table 3: Condominiums Expected to be Completed in 2022
| Project Name | Address | Launch Date | Est. Completion Date | Total Units |
|---|---|---|---|---|
| 10 Evelyn | 10 Evelyn Road | October 2018 | Q2 2022 | 56 |
| Cuscaden Reserve | 8 Cuscaden Road | September 2019 | Q4 2022 | 192 |
The leasehold project Cuscaden Reserve is surrounded by freehold developments, which may affect its sales. However, the condominium project may appeal to savvy investors looking to venture into the prime District 10. Cuscaden Reserve’s average selling price is $3,817 psf; lower than the uncompleted freehold project Park Nova ($4,930 psf) in the Tomlinson Road area.
Conclusion
- Tight supply has led to increased demand in the residential rental market, pushing up rental prices and volumes.
- Buyers can consider purchasing units that are about to receive their Temporary Occupation Permit. Owner-occupiers can avoid looking for interim housing, while investors can take advantage of the active rental market.
- There are many projects with high sales rates in the Rest of Central Region and Outside Central Region, so interested buyers will have to choose from limited and less ideal units.
- If buyers are considering condominium projects with lower sales rates or few remaining units, they might be able to get a good deal from the developer, but they should not expect a fire sale.
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