In my earlier article on property, I covered a summary of the J.P.Morgan report on how the direction of residential prices is likely to be like in the next 2 years. In the summary of the report, I highlighted that there could be a potential 10% drop in residential prices if things go south with an economic downtown.
While this potential drop could happen across the residential market, I believe that there are some new launches which MIGHT have a chance of offering better prices in the upcoming months and interested investors might want to take a closer look or pay closer attention to these projects. Of course, please bear in mind these are purely my speculations based on the current situation. What I'm doing here is to provide a list of new launches which I would like to personally pay closer attention to in the coming months for possible investing reasons.
So what's the criteria for this list of new launches?
These are typically projects which have their ABSD deadlines coming in the next 2 to 2.5 years, have a current unsold percentage of ~40% or more and have nearby projects which might provide a better value to price ratio.
In this article, I would like to cover three of them. They are namely Uptown@Farrer, Daintree Residences and One Draycott.
Firstly, let's take a look at Uptown@Farrer. Uptown@Farrer is a 116-units project by Low Keng Huat in District 8 with an ABSD deadline by July 2022. Currently, only 37 units have been sold. Its current unsold percentage stands at 68%.
If you took a look at the map and compared Uptown@Farrer against all the other nearby projects, you would notice that Uptown@Farrer is selling at a much higher price ($psf) as compared to the other projects namely The Citron Residences and Studios@Marne (the color comparison tells how expensive a particular project is. Refer to this post for more information).
The average $psf transacted for Uptown@Farrer is ~$1877. This is about 30% more expensive than The Citron Residences, and about 45% more expensive than Studios@Marine in terms of $psf. More importantly, these two projects are freehold while the Uptown@Farrer is a 99-year leasehold! Furthermore, The Citron Residences was only completed last year hence it is still fairly new and not an aged development. Even Studios@Marne do not have too much of a history as it was completed in 2009 (not too long ago).
With a cheaper $psf and a freehold status, these two projects might pose some challenges to the sales of Uptown@Farrer and subsequently on its asking price.
Let's take a look at the next example- Daintree Residences. Daintree Residences is a 327-units project by SP Setia in District 21 with an ABSD deadline by Oct 2022. Currently, 182 units have been sold with its unsold percentage standing at 44%. The initial sales for this project isn't too good until the recent months. From June onwards, this project has sold more than 70 units which results in a huge decline of its unsold percentage. Prior to June, its unsold percentage stands around ~68%.
When you compare Daintree Residences against all the other nearby projects, you will notice that Daintree Residences is selling at a premium even when compared to The Creek@Bukit which is a freehold project. The average $psf transacted for Daintree Residences is ~$1668. This is roughly ~4% more expensive than The Creek@Bukit which is just within a stone's throw away but has a freehold status. This would certainly makes The Creek@Bukit looks attractive.
If you were to compared it with High Oak Condominium which is another 99-years leasehold project within the vicinity, the average $psf transacted for Daintree Residences is almost 90% more than the average $psf transacted for High Oak Condominium. However, it is important to note that the High Oak Condominium has a bit of history as its lease starts from 1996. Thus, this might not be a direct comparison.
With Forett@Bukit Timah (another freehold project) launching within the vicinity of Daintree Residences, there is a possibility that the sales for Daintree Residences might be put under more pressure.
Now, the last example- One Draycott. One Draycott is a 64-units project by Selangor Dredging in District 10 with an ABSD deadline by Dec 2022. Currently, only 4 units have been sold with its unsold percentage standing at 94%.
Just next to One Draycott, you have J C Draycott (another freehold project). The average $psf transacted for One Draycott is $3246 . This is almost ~60% more expensive than the average $psf transacted for J C Draycott and could be a hefty premium to pay for for some investors given that both are of freehold status, though some might argue that J C Draycott is a rather aged development with its completion date in 1998.
If you are looking at a newer development, The Arc At Draycott just across the street is completed in 2010 and its average $psf transacted is still significantly cheaper than that of One Draycott with almost a $1000psf difference. Similarly, the Arc at Draycott is also of freehold status.
With good alternatives around One Draycott, there might be direct pressure on the sales of One Draycott and more so when the ABSD deadline draws near.
I would like to further reiterate that these are projects which I would merely pay more attention to in the coming months based on my own speculations and there is no guarantee the developers would be offering a better price eventually. Even if they do, such discounts might not be available to the general public as they are usually sold en-bloc to entities. Hence, do exercise your own judgement.
If you are wondering what map I have been using to do such comparison, please refer to this post. Patrons will be given access to the full and updated map with filter functionalities. If you are interested, please sign up here.
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