From South Beach Residences in the Core Central Region to Jadescape in the Rest of Central Region, developers are stepping up property previews as the Hungry Ghost Month draws to a close. This is an opportunity for developers to step out of the July property cooling measures.

With the end of the Hungry Ghost Month on Sept 9, developers are using the window of opportunity to roll out new projects before year-end. This means homebuyers will have a wide range of condominiums across all market segments to choose from.

“The Hungry Ghost Month is not really a deterrent,” says Alice Tan, director of residential project marketing at Knight Frank Singapore. “The biggest spectre in the residential market is the property cooling measures.”

City Developments and its joint venture partner IOI Group will hold the VIP preview of South Beach Residences on the weekend of Sept 8 and 9. The 190-unit project spans the 23rd to 45th storeys of a 45-storey tower, with the 634-room JW Marriott Hotel taking up the lower half of the building.

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Located on Beach Road, the luxury hotel and residential tower is part of an integrated development that includes a Grade-A office tower and retail and F&B outlets and is directly connected to the underground Esplanade MRT station as well as to Suntec City convention and exhibition centre via an overhead bridge.

Units at South Beach Residences are a mix of two- to four-bedroom apartments ranging from 936 to 2,616 sq ft. There are also six penthouses of 3,897 to 6,728 sq ft. Prices will be above $3,000 psf, according to market sources.

The prices have been moderated from the indicative price of $4,000 psf that was floated around for the past two years. “In terms of pricing strategy, it could be like CDL’s New Futura, which debuted at an average price of $3,200 psf for the first phase, while the second phase was launched at an average price of $3,500 psf,” says Dominic Lee, head of the luxury team at PropNex Realty. The 124-unit, freehold New Futura, located on Leonie Hill Road in prime District 9, is more than 75% sold so far.

‘Resilience at the top end’

A fortnight ago, Bukit Sembawang Estates held the preview for 8 St Thomas. The 250-unit freehold project located off River Valley Road in prime District 9 is completed. According to market sources, the developer had initially set the selling price in the $3,400-to-$3,500 psf range, but adjusted it in the wake of the property cooling measures that took effect on July 6.

When the project was showcased in Hong Kong and Singapore on the weekend of Aug 25 and 26, more than 20 units were sold at an average price of above $3,000 psf. 8 St Thomas has a mix of one- to four-bedroom units, with prices starting at $1.42 million for a 441 sq ft one-bedder; $1.76 million for a 549 sq ft two-bedroom unit; and $3.38 million for a 1,141 sq ft, three-bedroom unit.

The most popular units were the one- and two-bedroom ones, especially the deluxe two-bedroom units with views of Marina Bay. These units start from 807 sq ft and are priced above $2.5 million, according to CBRE, the sole marketing agent for the project.

“Sales were encouraging for a luxury development post-cooling measures,” notes PropNex’s Lee. This bodes well for the preview of South Beach Residences.

The 20% additional buyer’s stamp duty (ABSD) that foreign buyers of properties in Singapore now have to pay is still lower than the 30% stamp duty that foreigners in Hong Kong are subject to, notes Tan Siew May, CBRE senior director of residential projects. More than 30% of the buyers at 8 St Thomas were from Hong Kong, with the rest from Singapore, she adds.

“The sales demonstrate a resilience at the top end of the market in the CCR [Core Central Region],” says Ong Choon Fah, CEO of Edmund Tie & Co (ET&Co). She adds that the same situation is seen at other luxury condos such as New Futura, where there were still units sold after the property cooling measures were introduced. “Once you have several high-net-worth individuals buying into a new project, it will attract others there too, and soon there will be a community of such residents,” she points out.

How big is the pool of first-time buyers?

For new projects in the Rest of Central Region (RCR) and Outside Central Region (OCR), the main target audience will be first-time homebuyers. “The question is: How big is the pool of first-time homebuyers?” says Knight Frank’s Tan. “The pool of first-time homebuyers is shrinking. As long as current homeowners continue to hold on to their existing properties, they will not be considered first-time homebuyers.”

The latest property cooling measures have imposed a higher ABSD and lower loan-to-value (LTV) ratio on multiple-property owners. First-time homebuyers, however, are price-sensitive. “It all boils down to absolute prices,” adds Tan.

Another much-anticipated preview on the weekend of Sept 8 and 9 is Qingjian Realty’s JadeScape, a redevelopment of the former Shunfu Ville privatised HUDC estate. Qingjian says the average selling price of the 1,206-unit residential development will be $1,700 psf. The project is located off Marymount and Thomson Roads and a three-minute walk from the Marymount MRT station.

Starting prices indicated by property agents are $838,000 ($1,590 psf) for a one-bedroom unit of 527 sq ft; $988,000 ($1,529 psf) for a two-bedroom unit of 646 to 775 sq ft; and $1.38 million ($1,535 psf) for a three-bedroom unit of 904 to 1,152 sq ft. There are also four- and five-bedroom units of 1,259 sq ft to 2,099 sq ft; as well as two penthouses of 4,230 sq ft each.

If not for the property cooling measures, JadeScape could have been priced closer to $1,900 psf, says Ismail Gafoor, CEO of PropNex Realty. “The average land prices in RCR that were sold in 2H2017 — both in collective sales and government land sales [GLS] tenders — were in the $1,000 to $1,200 psf per plot ratio [ppr] range,” he says. “If the cooling measures had not been imposed, assuming construction cost of $500 psf and break-even [price] in the $1,600 to $1,700 psf range, you have to look at selling prices of $1,900 to $2,000 psf.”

Focus on concept, realistic pricing

However, Qingjian purchased Shunfu Ville en bloc in May 2016, which, in hindsight, was the start of the collec- tive sale wave. The Hong Kong-listed property group paid $638 million ($747 psf ppr) for the site. The land rate is therefore below the average transacted price for many of the other sites sold last year.

At an average price of $1,700 psf, Qingjian should be able to “clear a good number of units” at JadeScape, reckons Alan Cheong, senior director of research and consultancy. There has not been a new launch in the Marymount- Thomson area since the debut of Thomson Impressions in October 2015. The 288-unit residential project on Sin Ming Avenue is fully sold and was recently completed. “I think buyers in the vicinity are charged up after three years without a new launch, so JadeScape should be well received,” Cheong adds.

Beyond pricing, developers are also focused on their concept and product differentiation. “Homebuyers are more discerning,” says ET&Co’s Ong. “They are looking for value: Prices have to be realistic and the concept has to be compelling. Increasingly, people want to know who the developer behind the project is.”

Developers are therefore emphasising aspects such as eco-friendly features, smart home systems, unique communal facilities and waterfront views, says Christine Li, Cushman & Wakefield (C&W) senior director of research and consultancy. “Nonetheless, pricing will still be the main consideration for homebuyers, owing to the lower LTV ratio and increase in ABSD.”

Qingjian is providing smart home features, such as facial recognition technology at the lift lobbies, energy- saving air-conditioning and water heater units that recycle waste heat as well as a smart integrated dishwasher. With the customised hiLife application, homeowners at JadeScape can pay their maintenance fees, book condo facilities and unlock the main door using their mobile devices.

Qingjian is also offering 63 one-bedroom units customised for senior living with features such as pull-down hydraulic racks in the kitchen, slip-resistant flooring and support bars. Homeowners can also tap services such as health screening, 24/7 medical services and participate in social activities. The units are called “The Gold Standard” and come with smart control panels designed for ease of use. “These units cater for multigenerational families, and are ideal for those who want to live close to their parents but not too close, so that they can have their private space,” says Yen Chong, deputy general manager of Qingjian.

‘Preserving margins’

The prices paid for many of the land parcels acquired in 2017 were based on a projected selling price of $1,300 psf and above for new projects in the OCR; $1,700 psf and above for projects in the RCR; and upwards of $3,000 psf for projects in the CCR. “While there is still some uncertainty over the true strength of the market after the recent cooling measures, these price levels for new launches are likely to be sustained — in the absence of a significant fall in demand — as developers will be looking to preserve their margins,” notes C&W’s Li.

Besides JadeScape, there are three other new projects that will be rolled out before the end of the year that are also redevelopments of en bloc sites purchased last year: the 215- unit Mayfair Gardens (en bloc of the condo with the same name on Rifle Range Road, off Dunearn Road); the 1,399-unit Parc Esta (former Eunosville); and the 2,225-unit Treasure at Tampines (former Tampines Court). Including JadeScape, these projects will yield more than 5,000 residential units, estimates Knight Frank’s Tan. “These were the collective sale sites sold in the May-to-November 2017 period and are now entering the market a year to 15 months on,” she says.

In the past, 70% to 80% of the new launches annually were derived from GLS sites, says Savills’ Cheong. This year and next, about 70% to 80% of new launches will be redevelopments on collective sale sites, he adds. “Collective sale sites have been the main source of new supply in the private residential market this year, while GLS sites have been pulled back to about 2,000 new units per annum.”

With the latest round of cooling measures, collective sales are likely to dry up, says Cheong, as developers are now hit with a 5% non-remittable ABSD that has to be paid upfront and an increase in ABSD from 15% to 25%. The remainder of the collective sale sites purchased in 1H2018 are likely to be launched only towards mid-2019, he reckons. Meanwhile, the GLS sites sold in 2H2018 are likely to be ready for launch by 2H2019 or early 2020. “Therefore, the market will return to normalcy then, with new launches on GLS sites outnumbering collective sale sites,” Cheong explains.

Getting projects launched

Besides JadeScape and South Beach Residences, September will also mark the preview of Oxley Holdings’ Mayfair Gardens in the Dunearn area in prime District 21 and Amara Holdings’ 10 Evelyn on Evelyn Road in prime District 11. Mayfair Gardens is located within a few minutes’ walk of the King Albert Park MRT station and 10 Evelyn is near the Novena MRT station. “It’s the only new launch in prime District 11 this year so far,” says Laurence Tan, division director of ERA Realty. The indicative price of the freehold, boutique 10 Evelyn is $2,500 to $2,800 psf.

Developers want to “get their new projects off the shelves as soon as they can”, says PropNex’s Ismail. “The earlier they get them out, the greater the possibility of being ranked among the choices of homebuyers. The longer they wait, the more likely other developers will lure potential homebuyers to their projects. So, every developer is trying to get the necessary approvals to bring their product to market as soon as possible.”

In the first seven months of 2018, developers sold an estimated 5,671 new homes, says Tay Huey Ying, JLL Singapore head of research and consultancy. She expects new home sales for 2018 to ring in at 8,000 to 9,000 units — lower than the 10,566 units sold in 2017. In 2019, new home sales are expected to be “supply-led”, she adds. In the light of the large number of projects in the pipeline for launch, and resistance to the new ABSD rates possibly waning next year, “there is potential for new home sales in 2019 to exceed 2018’s level, subject to competitive pricing”, she reckons.

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