Are Singapore’s mass market condo projects still attractive?

Entry on the Private Housing Market

Many home buyers start their search by looking in the mass-market segment or Outside Central Region. Prices for private homes in suburban areas are generally more affordable than in city fringe or central locations.

The average unit price in 2023 for private homes that are not landed in the OCR is S$2,145 (psf). This includes the primary market as well as the resale.

There is a large price difference between properties located in the OCR compared to the Rest of Central Region.

Families looking to exchange their HDB flat for private property can also take advantage of the OCR segment.

From 2019 to the year 2023, 45 per cent of OCR private non-landed home sales were made by buyers with HDB addresses.

On the basis of caveats submitted, this is compared to 32% in the RCR and 17% in the CCR for the same period.

Prices of suburban condos are rising strongly due to new launch benchmarks. However, they will slow down in 2024.

Ownership and living in a condominium unit are a symbol of upward mobility, and a part of building up capital. Many people have indeed made this leap.

While most Singaporeans live in public housing, more and more families have moved into private condos since the 1990s.

Singapore Department of Statistics figures show that there will be 237.500 households living in apartments and condos in 2022. This represents a 70 per cent increase from the 139.900 household population in 2012.

With higher prices, are OCR condos more affordable now?

In the last few year, OCR private non-landed homes prices have increased. The sub-market’s price index rose by 13.7 percent in 2023 following a growth of 9.3 percent in 2022.

Price-sensitive buyers of mass-market houses are likely to become more vocal if prices keep rising. OCR could see a slow rise in prices – perhaps 3 to 5% – through 2024.

In the primary markets, the average price for several OCR new launch products crossed the S$2,000 mark per sq. ft. mark last year.

J’den Jurong East has achieved a new average price benchmark of more than S$2,400 since it entered the market in November. Its brisk sale helped increase OCR home values in the fourth-quarter of 2023.

Will the launch price of OCR rocket in 2024 as a result?

Most projects lack the attributes that made J’den such a popular project.

In the near-term, prices for new OCR launches will average between S$2,000 and S$2,100 psf.

What can S$2million buy you in the OCR

On the basis of the number of OCR home sales up to S$2million, we can conclude that OCR is still within reach for most households. A total of 66 % of OCR private non-landed new home sales in 2023 fell below S$2,000,000. The proportion of OCR resale homes that are priced below S$2 million is even higher.

In the OCR, 62% of new non-landed properties sold below $2 million were smaller units between 600 sq ft and 800 sq. ft.

A total of 21.8 per cent of OCR homes priced below S$2 Million were sold in District 19, which includes Serangoon Garden, Hougang, and Punggol. A total of 21.8 percent of OCR homes sold below S$2million were located in District 19.

The districts with the greatest differences between the price of new units and those for resale in 2023 were 17, 22 and 26, respectively. In the case District 17, new sales were few, with just four transactions made at The Shorefront.

The LakeGarden Residences (District 22, Jurong) and J’den set the benchmark for the massive 70 per cent difference in price. In the Lentor region, new launches opened a 62 percent average unit price gap compared with resale prices in District 26, while new launches in the Lentor were a 70 per cent price gap.


Resale versus New Launches

Resales offer lower prices for those with limited budgets, but also want larger apartments. If they want to buy older properties, they will have to be prepared for a possible slower capital gain.

You may want to take into account a declining rent and the state of your building. Buying on the resale markets also means you will have to compete with other home owners who may be paying less than the developer for their property.

New launches are preferred by some buyers despite their higher price. New launches not only offer the potential for higher capital gains, but they also come with modern facilities, smart home and wellness options, a new 99-year-lease, a year-long defects liability, and a brand-new lease.

More than 1,100 OCR units were still available in the market on Feb. 1. Of those, about 45% are three bedroom units while 26% are four bedroom. In addition, several OCR project will enter the market by 2024. They include Lentoria Mansions, Sora Yuan Ching Roads, a mixed developments at Tampines Avenue 11 and the Champions Way.

OCR-owned private homes continue to be popular among the masses due to their affordable prices and wide range of options. These homes have become the cornerstones of the private home sector.

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