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Newsletter Nov 2023

By Kelvin Sin | | 22 November 2023

1. Market

2. New Projects

3. Land Sales & Enbloc

4. HDB

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1.1 Easing Residential Property Rents in October

Decreased Demand and Increased Supply: Residential property rents in Singapore are projected to continue their downward trend, influenced by a decrease in demand and an increase in the number of homes being completed. This shift was evident in the third quarter, marking a period of adjustment in the rental market. Rental Demand Decline: There was a significant 10.4% drop in rental demand in Q3, as measured by the number of enquiries on PropertyGuru's platform. Rising Rental Supply: Concurrently, the overall supply of rental properties increased by 11.3%. Sector-Specific Trends: Landed Properties: The biggest decrease in asking rents was observed in the landed property segment, with a 7.6% reduction. Non-Landed Properties: These saw a smaller, yet notable, 4% decrease in asking rents. Regional Observations: Areas such as Eunos/Paya Lebar and Orchard Road experienced around a 6% drop in median asking rents in October, signaling a shift in landlords' strategies in response to changing demand. Public Housing Market: Despite a 14.7% fall in rental demand for public housing, asking rents for HDB flats rose by 3.5%. This suggests a migration of tenants from private to more affordable public housing. Future Outlook: The non-landed private property market appears to have reached its peak, with asking rents dropping by 4% in Q3. A significant number of new private homes, around 9,000 units, were completed in Q3 2023, the highest since Q2 2016. An estimated 20,400 private homes are expected to be completed in 2023, with 8,959 more in 2024, likely leading to softer asking rents due to increased supply and easing demand. This period marks a significant shift in Singapore's residential rental market, with declining rents indicating a rebalancing of supply and demand dynamics. As the market adapts to post-pandemic conditions and an influx of new properties, renters may find more options and potentially better deals in the coming months.

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2.1 Watten House 57% Sold at an average of $3,230 psf

UOL Group and Singapore Land Group (SingLand) have hit a home run with their latest venture, Watten House, located in the prestigious district 11 on Shelford Road. The joint venture partners saw an outstanding start with 102 out of 180 units, that’s a whopping 57%, sold on the very first day of its private preview on November 18. This response is a significant indicator of the project's appeal and potential. An impressive 96% of the buyers are Singaporeans and permanent residents, a mix of investors and owner-occupiers. The quick sale of three of the eight penthouses further highlights the project's appeal to high-end buyers. Luxurious and Strategic Location: Watten House is a luxury project sprawling over a 220,241 square foot site. Its strategic location in a predominantly Good Class Bungalow area, close to renowned schools and lifestyle amenities, adds to its allure. Freehold condos in the prime district have been fetching an average price of $3,230 per square foot. Considering the location and amenities, this pricing has been a key attraction for buyers. The project's design, described as a palatial home with an Asian touch, has been another draw. The elegant proportions and vernacular roofs have appealed to buyers looking for luxury with a cultural essence. Following the private preview, UOL plans to close the show flats and sales gallery, with the public launch scheduled for next year.

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2.2 J'den 88% Sold at an average price of $2,451 psf

J’den, a 368-unit project, outshone expectations by selling 323 units (88%) on its launch day, achieving an average price of $2,451 per square foot. This impressive feat is attributed to J’den’s unparalleled location in Jurong Gateway, the commercial hub of the Jurong Lake District (JLD), and its promise as the tallest mixed-use development in the area. J’den, a redevelopment of the former JCube mall, is poised to become a significant landmark in JLD. Its connectivity to Jurong East MRT Interchange Station and the upcoming Jurong East Integrated Transport Hub underscores its strategic importance and potential for future growth. The buyer demographic at J’den primarily included Singaporeans and permanent residents, with a notable proportion of younger buyers under 40. The project's location, along with its potential for capital appreciation, was key in attracting a mix of owner-occupiers and investors.

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2.3 Hillock Green 28% Sold at an average price of $2,108 psf

Hillock Green, a 474-unit development, saw a commendable sales performance with 131 units (28%) snapped up on the first day. Priced at an average of $2,108 per square foot, the project's success is a nod to its strategic positioning - its proximity to an MRT station and a mall played a significant role. Hillock Green, being the third project in Lentor Hills, faced competition due to the recent launches in the area. However, it still achieved healthy sales, indicating a sustained interest in the Lentor Hills estate. Earlier projects like Lentor Modern and Lentor Hills Residences have set the stage, with significant sales achievements, reflecting the area's growing appeal to buyers. At Hillock Green, the buyer mix included a balanced proportion of upgraders, first-time homebuyers, and investors. The project's allure stems from its serene residential setting and the long-term development plans for the Lentor precinct.

URA closed the tender for 3 sites at Lorong 1 Toa Payoh, Clementi Ave 1 & Pine Grove Parcel B today.

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3.1 (GLS) Toa Payoh Lor 1 Site

In a landmark move, a consortium composed of City Developments Ltd (CDL), Frasers Property, and Sekisui House has placed a formidable $968 million bid for a premier Government Land Sales (GLS) site located at Lorong 1 Toa Payoh. This strategic 1.57-hectare plot commands an impressive land rate of $1,360 per square foot per plot ratio, highlighting the site’s immense value and the developers’ confidence in its potential. For the first time, these industry powerhouses have pooled their resources, with CDL at the helm holding a 50% stake, while Frasers Property and Sekisui House each hold a 25% stake. This collaboration is set to bring a fresh vision to the district, which has not seen a GLS tender in eight years since the development of Gem Residences. Envisioning a vibrant future for Toa Payoh, the consortium has proposed an ambitious residential project featuring two 40-story towers, aiming to house approximately 800 units. This development is poised to rejuvenate the neighborhood and meet the strong demand for high-quality living spaces, as evidenced by the site’s proximity to Braddell MRT station and the robust activity in high-value HDB resales within the area. While some market analysts had anticipated a larger number of bids for such a prime location, it appears the substantial size and investment involved have narrowed the field of contenders. Nevertheless, the projected average selling price for this prospective project is estimated to be between $2,400 and $2,500 per square foot, signifying the high expectations and confidence in the value of this development. The bid for the Toa Payoh GLS site is a testament to the developers' belief in the estate's growth and the demand for upscale residential options. It also serves as a significant indicator of the market's resilience and the continuous appeal of well-situated properties.

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3.2 (GLS) Clementi Ave 1 Site

A joint-venture led by CSC Land Group and MCL Land has successfully tendered the highest offer for a coveted GLS site located at Clementi Avenue 1, with a commanding bid of $633.45 million. This offer stands at $1,250 per square foot per plot ratio over the 178,066 square foot area, surpassing the runner-up bid by a notable 4.03%. Amongst the sites recently tendered, Clementi Avenue 1 distinguished itself by drawing six competitive bids, the most amongst its contemporaries, indicating a robust interest in this area. Despite a market experiencing mixed sentiments, partly due to heightened interest rates and the introduction of new property cooling measures, the desire for private homes in the Clementi region remains undiminished. This is evidenced by the successful uptake of residences in recent developments such as KI Residences at Brookvale, Clavon, and Parc Clematis. This site represents the first sale along Clementi Avenue 1 since 2019, strategically ensconced between two fully sold condominiums, The Clement Canopy and Clavon, underscoring the location's appeal and potential. Clementi's allure is further enhanced by its strategic positioning near educational institutions, business hubs, and its suitability for HDB upgraders. Projected to house approximately 500 residential units, the site is poised to meet the needs of a diverse clientele, from families and international students to working professionals. With expected selling prices ranging from $2,300 to $2,500 per square foot, the development is anticipated to further invigorate the residential landscape of Clementi Avenue 1.

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3.3 (GLS) Pine Grove Parcel B Site

Sinarmas Land in conjunction with MCL Land has emerged as the top bidder for the prestigious Pine Grove Parcel B Government Land Sales (GLS) site, tableing a competitive offer of $692.388 million. This figure represents an assertive $1,223 per square foot per plot ratio, outpacing the second-place bid by an impressive 23.8%. Marking Sinarmas Land's inaugural venture into Singapore’s residential development scene, this bid strategically undercuts the $1,318 psf ppr paid for the neighboring Parcel A, currently being developed by UOL and SingLand as Pinetree Hill. Despite attracting fewer bids than Parcel A—three as opposed to five—this move signals Sinarmas Land's commitment to establishing a footprint in the local market. Amidst a temperate market reception, potentially influenced by the market activity surrounding the recent Pinetree Hill launch, the 99-year leasehold Pine Grove Parcel B is poised to accommodate a new residential development comprising approximately 565 units. Projections estimate the average selling price for this new addition to hover between $2,300 to $2,400 psf. This investment decision reflects a broader developer preference for GLS sites, despite the availability of collective sale options in the area. Notably, Pine Grove Parcel B's bid was the most modest of the trio of sites closed for tender on the same day, underscoring a deliberate and strategic approach to the current real estate climate.


3.4 Villa Des Flores up for Collective Sale with $180 million Guide Price

Villa Des Flores, a Freehold development in District 11, has been listed for collective sale. The public tender for this prized property carries a guide price of $180 million. Built in 1985, Villa Des Flores comprises an exclusive ensemble of 13 townhouses and 28 apartment units. The townhouses range from 2,034 to 2,702 square feet, while the apartment units vary from 1,378 to 2,088 square feet. Occupying an elevated, cul-de-sac site of about 104,370 square feet, the development is zoned for two-storey mixed landed residential use. The guide price translates to an attractive $1,725 per square foot, considering the site's potential and location. Villa Des Flores presents potential for varied redevelopment options. It can be transformed into an array of bungalows, semi-detached houses, and terrace houses. There’s also the possibility of developing a condominium, subject to the existing gross floor area and regulatory approvals. Nestled in the Core Central Region and flanked by Whitley Road and Chancery Hill Road, the site is located within a serene landed housing enclave. This factor, combined with the area's exclusivity, enhances its appeal to developers, especially amidst the rising demand for landed homes. The listing gains context with recent transactions in District 11, such as the en bloc sale of Kew Lodge and the sale of three freehold bungalows at Chancery Hill Road and Dyson Road. These transactions underline the high value and demand for properties in this district. The tender process for Villa Des Flores is scheduled to close on January 16, 2024, at 3 pm.

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4.1 HDB Resale market rebounds in October

October saw a positive shift in Singapore's HDB resale market, with prices increasing by 0.5% and a significant 10.8% rise in sales volume, indicating a market rebound after a decline in September. Increased buyer interest in the central region, with fewer resale restrictions, contributed to the price hike. Upcoming stricter resale conditions for BTO units in prime locations, set to start in the second half of 2024, are also influencing buyer decisions. The completion of about 9,000 private homes in Q3 2023 led to more HDB owners selling their flats, driven by regulatory requirements for selling HDB flats within six months of completing a private property purchase. The luxury HDB segment saw a record with 41 flats sold for at least $1 million in October, surpassing 2022's full-year record. These high-value transactions primarily occurred in mature towns. Non-mature estates experienced a notable 0.8% price rise, driven by high demand for units near amenities. Executive flats saw the highest price increase due to limited supply, while five-room flats experienced a slight decline, impacted by recent cooling measures. Despite some moderation throughout 2023, the HDB resale market is expected to remain stable in Q4, supported by ongoing housing needs. This uptick in October reflects the resilience of Singapore's HDB resale market, adapting to regulatory changes and shifting buyer preferences.

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4.2 6,000 new homes to be built on Pearl's Hill, including HDB flats

In a landmark move, the Urban Redevelopment Authority (URA) is set to introduce Housing Board flats in Pearl's Hill, Chinatown, for the first time in over 40 years, as part of a major overhaul offering varied housing options in central locations. Pearl's Hill area will see about 6,000 new public and private homes, including both Build-to-Order (BTO) and rental flats, over the next decade, promising a unique hillside living experience in the city. Pearl's Hill features a mix of new BTO, rental flats, and condos, preserving historical sites like the former police barracks. The area will be car-lite with enhanced connectivity to parks and transport nodes. These developments signify a major shift in Singapore's urban landscape, focusing on sustainability and connectivity, and are part of broader efforts to introduce more housing in central regions, including Turf City and Mount Pleasant. These initiatives represent a transformative step in reshaping Singapore's central districts into more diverse, sustainable, and livable urban spaces, aligning with the city-state's long-term development goals.

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