With not one but two New Launches taking place over the weekend, we are given the opportunity to analyse the landscape of the residential primary market for private property. Join Nicholas Mak as he goes over how the new launch weekends of the Grand Dunman and Pinetree Hill went.
by Nicholas Mak
Introduction
Two major condominium developments were launched for sale this weekend: Grand Dunman and Pinetree Hill. The 1008-unit Grand Dunman is located at Dunman Road, about 200 metres east of the Dakota MRT Station, while the 520-unit Pinetree Hill is situated at Pine Grove, near Ulu Pandan Road. Both developments are 99-year leasehold properties.
Different Rate of Sales
In the first weekend of the launch, the developers of Grand Dunman reportedly sold 550 units or 54.6% of the 1008 units in this project, while about 150 units or 28.8% of the 520 units in Pinetree Hill were sold.
Despite being almost double the size of Pinetree Hill, more than half of the units in Grand Dunman exchanged hands.
Furthermore, Grand Dunman is the third major condominium project in the East Coast area to be launched in the past three months. The other two earlier project launches were Tembusu Grand in April and The Continuum in May 2023. Hence, Grand Dunman is expected to face some competition from the earlier launches.
Over at the Pine Grove neighbourhood, UOL, the developer of Pinetree Hill, stated in their media release that Pinetree Hill is the first major residential project to be launched in the Mount Sinai area in the past 14 years. In other words, there is little competition from new residential projects facing Pinetree Hill.
So, how is it that a condominium development in a more competitive market managed to achieve a higher rate of sales compared to another condominium in a less crowded market?
Back to Basics
Public transportation
Firstly, owning a private car is a very expensive undertaking in Singapore, especially with the skyrocketing prices of COE (Certificate of Entitlement). Hence, having easy accessibility to a public transportation node such as a MRT station is highly desirable for both owner-occupiers, investors and tenants.
Although it has been a landlord’s market with housing rental rates having risen sharply in the past two years, the rental market would have normalized, and rental rates would have softened by the time the condominiums that were launched this year would be completed in about three years from now.
Therefore, landlords would need to compete for tenants in the near future and offering rental accommodations near a MRT station would be advantageous.
In addition, many tenants rely on public transportation as they do not own cars. Therefore, they would prefer to rent accommodations near MRT stations.
Grand Dunman is located about 200 metres from the Dakota MRT station, while Pinetree Hill is located about 1.3 km from Clementi MRT station.
Retail amenities
Secondly, although Pinetree Hill is surrounded by other private residential properties, giving the future residents the feeling of being in an exclusive private housing estate, there are very limited retail amenities and F&B outlets within comfortable walking distance from this new development.
By contrast, Grand Dunman is located near the popular Old Airport Road hawker centre and the retail amenities nearby. In the age when it is common for both spouses to work full-time and some families do not cook at home regularly, living near affordable food outlets such as a hawker centre is preferred.
Demand catchment
There is a large catchment of potential buyers surrounding Grand Dunman, compared to Pinetree Hill. There is a large landed housing estate to the east and south of Grand Dunman, where some owners of these landed homes could plan to move to a new private condominium as they retire, or their adult children may want to buy a home near their parents in the landed housing estate.
There is a HDB housing estate to the west of Grand Dunman, which can be a source of HDB upgrading demand.
Buyers are becoming more selective
Lastly, the difference in the sales of these two new launches also reflects that property buyers are becoming more selective.
Thirteen private residential projects with a total of 5,959 units have been launched so far this year and there are several more projects slated to be launched in the coming months.
In addition, the government is trying to curb home-buying demand, especially from investors, with cooling measures and crackdown on creative methods to circumvent the loan restrictions such as the “99-to-1 percent scheme”. As a result, the average property investor would only be able to invest in fewer properties than before.
Therefore, faced with more housing choices, many homebuyers would become more selective.
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