More than two-thirds 2021 launch condos will be en block redevelopments. This means that we’ll see most of the en block redevelopments left from the 2017-2018 collective sale fever launching. Tenure-wise, slightly over half (55%) will be freehold, or 999-year leasehold as opposed to 99 year leasehold.
The difference in launches this year and last year is the sheer size of the projects being brought to market. We won’t see any mega-projects (800 units or more) being launched this year except for Normanton Park new launch. The largest projects that will be launched are not over 600 units.
With all of this in mind, 2021 will be a significant year for buyers. The arrival of smaller-to-medium-sized condo projects including a few boutique offerings with fewer than 100 units. Many of these projects could provide a sweet spot for investors and owners, as they offer both exclusivity and a variety of amenities that make condominiums attractive to both investors as well as owners.
Are you interested in leasehold condos or ECs?
Six new launches have been made in the first two months 2021. Two of these are executive condominiums (ECs). The current property market is highly price sensitive. Given the poor economic outlook for this year, buyers are likely to have small pockets and thin wallets.
We predict that in 2020, leasehold condos close to key amenities will be the most successful in terms of percentage sales. Properties that are “rare” and offer “bangforyourbuck b>. Wing Tai’s centrally located leasehold project, The M, sold 70% of its units at an average of $2,450/square foot (psf).
But there is a caveat. The caveat? The absence of Chinese buyers is already causing jitters in the prime district luxury condo market.
According to Urban Redevelopment Authority figures, 2020 will see a rise in condo sales to over 30,000 units. The supply glut of condos that have just been launched is a problem for developers, but good news to buyers. Buyers who are looking for privately owned, newly launched condos will have plenty of options if they decide to enter the market in 2020.
New launch Executive Condominiums are an exception. This is a rare product category that is highly sought-after by Singaporean buyers. The four ECs slated to launch in 2020 will sell like hotcakes due to the possibility of obtaining generous CPF grants, the promise that property values will appreciate five to ten more years down the line, and the fact we haven’t seen this many new ECs for so long. On average, 64% of Parc Canberra EC units were sold by Hoi Hup at $1,080. Normanton Park has half of its inventory sold and you may check out whats left at Normanton Park balance units page.
Developers may hold off on launches (again).
We saw some projects delayed in 2019, which included some that made it onto our 2020 list. Developers delayed launching their projects for a variety of reasons. First, due to the large number of projects in 2019, approvals for some projects (given through the URA) took longer.
It is also true that developers are more cautious and take longer to position and design their projects due to intense competition in the market. This is especially true for certain districts like prime district 9 and 21 which have many upcoming projects.
In order to avoid rushing into new projects with multiple launches, some developers opt for a wait-and see approach. They prefer to look at the pricing and product of their competitors before making a decision.
We could see projects being moved to 2020 or 2021 in 2020. These delays may be encouraged further by the government’s 6 Feb announcement which could allow listed developers who have a “substantial relationship to Singapore” to be exempt from the QC scheme. Developers’ launch plans may be impacted by the Covid-19 pandemic, and the closing of sales galleries between 7 April and 1 June.
The QC reprieve could allow some developers more time and a larger window to launch their projects. This is especially true for luxury prime districts projects that are most likely to be affected by coronavirus-induced repercussions. Developers might be slower to launch projects in areas with high numbers of new launches. This is continuing the wait-and see trend.
What will the trend in 2021 for new launches property prices look like?
It is unlikely that the price of new condos for launch will drop in 2020 despite abundant supply.
Despite Covid-19, there are signs that the property market will continue its strong performance. The URA Property Price Index has seen an increase in the last year. Agents and buyers agree that new launches are priced at a discount compared to their value when they’re completed a few years later (i.e. It is very likely that new homes will appreciate in value if they are purchased now.
Buyers are encouraged to get into the market sooner than they might otherwise by the low prevailing home loan interest rate. This is despite a declining trend in recent months due to an uncertain global economy. Prospective buyers might find 2020 a good time to strike while the iron is hot. Overall prices will continue to trend slightly upward, at least for new launches.