Pasir Ris 8 is a fully integrated development in Pasir Ris Central that was launched over the weekend on 24 July 2021 to huge fanfare, with close to 85% of the 487 units sold just within one day. Developer Allgreen Properties raised the price for Pasir Ris 8 integrated condo project six times through the day with a 700 sq ft two-bedroom unit going for as high as $1.5 million, which translates to $2,100 psf, for this OCR mass market project. This is probably the first time mass market condo in the OCR sold for more than $2,000 psf and it may be a prelude of psf prices of mass market new launches next year. This will inadvertently make RCR city fringe new condo projects look attractive, e.g. The Landmark, Irwell Hill Residences, One Pearl Bank, Avenue South Residences, Sky Everton, The Reef, etc.
The Singapore residential property market is currently running hot fuelled by economic growth, high household income, low interest rates and expected economic growth for 2021 with Singapore's GDP expected to hit more than 6% this year as reported on MTI website on 11 Aug 2021.
The Ministry of Trade and Industry (MTI) on 11 Aug 2021 upgraded Singapore's GDP growth forecast for 2021 to “6.0 to 7.0 per cent”, from “4.0 to 6.0 per cent”.
Even as Singapore's borders are closed to foreigners, the ultra-rich foreign investors are buying into luxury properties worldwide, including Singapore where home prices jumped by a record 4.1% in the first half as the rich seeks a safe country for their investments especially tycoons in Asia who prefers Singapore over Hong Kong especially when the country is currently embroiled in political turmoil.
Currently, during this pandemic, foreigners contribute to less than 10% of all property transactions in Singapore due to the border closures. This percentage may likely increase when borders reopen.
Next year's mass market condo projects in the OCR are expected to hover around $2,000 psf due to their high GLS bidding costs and higher construction costs. Owners of potential enbloc projects are also looking to sell at higher prices to potential developers as they hope to benefit from the current sellers market. If developers were to pay a higher price for the enbloc developments, they will have to eventually price their upcoming condo projects at a much higher price. It's a vicious cycle. Therefore, Kiwi expects that by end of 2022 next year, mass market new condo buyers will be accustomed to seeing $2,000 psf for OCR new condo prices.
"If buyers next year are not able to accept $2,000 psf pricing for mass market new condos, I believe they may snap up resale properties especially for buyers who desire a condo located in a matured estate near MRT, eateries & amenities like Esparina Residences, and for young couples who may not want to wait years for their property."