New Launch Market in Q2 2023 to excite end-users and investors alike
by Wong Siew Ying
With a limited number of new launches in 2022, the market is eagerly anticipating the slate of fresh projects due to come on in 2023. The second quarter of 2023 should excite both owner-occupiers and investors, with some high-profile projects set to spark keen interest.
Q2 2023 showcase
Going by the estimated launch pipeline for Q2, there are selections across the three sub-markets, with more projects in the Rest of Central Region (RCR). These are Tembusu Grand, The Continuum, and The Reserve Residences and the Pine Grove (Parcel A) project. There will likely be two new launches in the Core Central Region (CCR) – Newport Residences and Skywaters Residences - and one in the Outside Central Region (OCR), being Lentor Hills Residences (see Table 1).
Most of the projects are located either close to an existing MRT station or near an upcoming one – presenting future residents with excellent connectivity to employment hubs, commercial offerings and attractions around Singapore.
Tembusu Grand, The Reserve Residences, Pine Grove (Parcel A) and Lentor Hills Residences are projects developed on 99-year leasehold government land sales sites, while The Continuum will be built on freehold sites in Thiam Siew Avenue that were sold in 2021.
In the heart of Tanjong Pagar lies an upcoming mixed-use project Skywaters Residences, a redevelopment of the former AXA Tower in 8 Shenton Way. The 63-storey development is set to be the tallest skyscraper in Singapore, and will comprise office and retail spaces, a hotel and luxury residential units. Meanwhile, Newport Residences (former Fuji Xerox Towers along Anson Road) is sited at the fringe of the central business district and near the future Greater Southern Waterfront development – likely to appeal to home buyers who wish to live in the city or enjoy potential rental upside in the years to come.
Tembusu Grand and The Continuum in the city fringe should also see healthy interest as there’s a limited supply of new private home launches in the area. These two projects will offer convenience to families with school-going kids as they are located close to many schools, including Tanjong Katong Girls’ School, Tanjong Katong Primary and Secondary, Chung Cheng High School, Kong Hwa School, Broadrick Secondary, and the Canadian International School.
The other RCR project is the mixed-use development The Reserve Residences in Jalan Anak Bukit, which will be a new icon in Beauty World – set to kickstart the urban rejuvenation of the precinct. In addition, there is also a chance for the Pine Grove (Parcel A) development to come on the market in Q2 2023.
In the OCR, Lentor Hills Residences should cater to the pent-up demand for mass market homes and looks to extend the positive response to new homes in the Lentor Hills estate, following the robust sales at Lentor Modern last year.
So far in Q1 2022, several projects have already been put on the market, such as Sceneca Residence in Tanah Merah, Terra Hill in Pasir Panjang, and The Botany at Dairy Farm – which have garnered healthy sales since their respectively launches (see Table 2). In March, another project Blossoms by the Park is expected to be rolled out as well.
Strong response for new launches
That the new launches attracted healthy response was not surprising. Given the depleted unsold new private home inventory on the market, many would-be buyers are on ‘stand-by’ to swoop down on fresh projects, particularly those who are after 1- and 2-bedrooms units, which tend to be the first to be sold out.
In recent years, home prices have recovered with well-located new launches touching bench mark pricing. Looking at URA Realis caveat data, the median unit price of non-landed new private homes sold in the CCR has recovered beyond the pre-pandemic levels, while that of RCR has reach a new high in the early months of 2023. Mass market home prices have also breached the $2,000-psf mark since Q3 2022 (see Chart 1).
PropNex anticipates new launch prices to remain firm this year as developers have already locked in high land prices, and are facing rising construction costs and elevated interest rates. In 2023, overall private home prices could rise by 5% to 6% - slowing from the 8.6% growth in 2022 and the 10.6% increase in 2021, as per the URA property price index.
Despite the firm prices, the healthy sales indicate that there is genuine underlying demand and ample liquidity in the system. In addition, buyers of new launches can also opt for the progressive payment scheme (PPS) which will see them paying lower mortgage payments initially, as the payments are pegged to the project achieving certain construction milestones. Amidst hopes of a slower pace of interest rates increase this year and into 2024, the PPS also offers buyers some measure of comfort to enter the market.
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March 15, 2023
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