{"id":49891,"date":"2022-03-25T15:52:11","date_gmt":"2022-03-25T07:52:11","guid":{"rendered":"https:\/\/www.99.co\/singapore\/insider\/?p=49891"},"modified":"2023-08-04T17:46:07","modified_gmt":"2023-08-04T09:46:07","slug":"sold-out-condos-resale","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/sold-out-condos-resale\/","title":{"rendered":"Do new launch condos with fast take-up rates perform just as well in the resale market?"},"content":{"rendered":"
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Oftentimes, we read about new launch condos with take-up rates of 90 to 100% of total units sold within the first week or two of launch – if not within a day or two. There are many reasons for their popularity: lower quantum, location, developer cred, attractive psf pricing, lifestyle promise, etc.<\/p>\n

However, we also know that a large proportion of these condos comprises one- and two-bedroom apartments, which make them ideal for property investors looking to purchase a 2nd or 3rd property for higher rental yield. It’s probably a slam dunk if the project is near a major transportation hub, amenities, business parks and offices.<\/p>\n

Most tenants aren’t bothered if the project is near a cemetery or prison complex, as long as there’s no noise, pollution or disruptions to their lifestyles.<\/p>\n

So it would be great to revisit some of these past launches and see how their “sold-out” units performed in the rental and resale market since then.<\/p>\n

The Inflora<\/h2>\n

\"\"<\/a><\/p>\n

Tripartite Developers’ The Inflora<\/a> sold nearly two-thirds (at least 250) of its 396 units on the first day of launch in October 2013.<\/p>\n

Located at Flora Drive, Pasir Ris, the 99-year leasehold project was developed by a consortium that included Hong Leong Holdings, City Developments and TID (JV between Hong Leong and Japanese developer Mitsui Fudosan). It TOPed in 2017.<\/p>\n

The first-day sale was a welcome relief to marketing agents then.<\/p>\n

One reason for the concern was that The Inflora was located near Changi Prison Complex, which might make marketability a challenge to some buyers. However, landlords know this wouldn’t be a problem for short- to mid-term tenants, especially those working at SATS Maintenance and Inflight Catering Centre (which have offices nearby) and Changi Airport.<\/p>\n

What’s of greater concern was this: MAS had just introduced the Total Debt Servicing Ratio (TDSR)<\/a> on 29 June 2013. Set at a threshold of 60% then, the TDSR would have given prospective homebuyers pause as it may affect their ability to secure a home loan (if they have many other debts to service).<\/p>\n

But based on the turnout, that didn’t seem to be the case.<\/p>\n

With all 128 one-bedroom and 136 two-bedroom units selling out on Day 1, one reason was that the psf prices were attractive. For instance, a 474 sqft one-bedder was going for S$455,500 (S$960 psf). Contrast that with D’nest<\/a>, another 99-year leasehold condo in Pasir Ris, which was selling its 484 sqft one-bedder at around S$1,041 psf that same period.<\/p>\n

\"The<\/a><\/p>\n

If we look at how well the one- and two-bedroom “sold out” units at The Inflora have performed after nine years, the average psf price for one-bedroom units has done well, rising 23.16% from S$1,005 psf to S$1,238 psf. Even during COVID in 2020 and 2021, one-bedders stayed above the S$1,000 psf mark, registering its most recent lowest at S$1,114 in 2019.<\/p>\n

For the two-bedroom units, the story’s different. The average psf price has increased by a much lower 5.10% from S$948 to now S$996. For investors, it doesn’t look like a good time to sell their 2-bedders anytime yet, so what can they do?<\/p>\n

If we look at the past rental transaction trends of both room types at The Inflora, the average rental prices of 2-bedders at The Inflora have surged 24.30% since 2016 – outpacing one-bedders.<\/p>\n

This could mean that demand for 2-bedroom apartments for rent are higher compared to 1-bedders but there is a much lower supply (judging by the volume) between the two unit types. So if you’re a 2-bedroom owner at The Inflora, it’s probably better to rent it out.<\/p>\n

\"The<\/a>–<\/p>\n

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Properties for sale at The Inflora<\/h4><\/div>\n
See all listings<\/a><\/span><\/div>\n <\/div>\n
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\n \"The\n <\/div>\n
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The Inflora<\/div>\n
55 Flora Dr \u00b7 D17<\/div>\n
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\n \"bedroom\"\n 1<\/span>\n <\/div>\n
\n \"bathroom\"\n 1<\/span>\n <\/div>\n
\n 463 sqft<\/span>\n <\/div>\n <\/div>\n
S$ 699,000<\/div>\n <\/div>\n
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