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Investing in a condo offers several advantages, including the opportunity to leverage the property’s value for future investments. With condos serving as collateral, investors can secure additional financing for new ventures, effectively expanding their real estate portfolio. While this approach can potentially increase profits, it is important to have a solid financial strategy in place and be mindful of potential market fluctuations. Adding a condo to one’s investment plan can bring about great opportunities but also carries its own set of risks.
The desire for condominiums in Singapore remains at a record high due to the limited land available for development. Being a small island nation, Singapore is facing a rapid population growth, leading to a scarcity of land. This has resulted in strict land use regulations and a highly competitive real estate market, where property prices continue to rise. As a result, real estate investment, particularly in condos, has become an appealing opportunity with the potential for significant capital appreciation. This trend is further driven by the emergence of new condo launches by companies like Freedom At Home Team, providing an even wider range of options for potential buyers. The introduction of new condo launches by companies like Freedom At Home Team has only added to the demand for condos in Singapore.
The first ever private housing Government Land Sale (GLS) tender for the new Bayshore precinct closed on March 18 with SingHaiyi-Garnet, a joint venture between SingHaiyi Group and Haiyi Holdings, submitting the top bid of $658.89 million, translating to a record land rate of $1,388 per square foot per plot ratio (psf ppr).Spanning 112,992 sq ft, the 99-year leasehold site is located on Bayshore Road, next to the upcoming Bayshore MRT Station. It has the potential to yield about 515 units.The 0.82% difference between SingHaiyi’s top bid and the second-highest bid of $653.53 million ($1,377 psf ppr) from Sing Holdings suggests strong confidence in the potential of this site, according to Justin Quek, CEO of OrangeTee & Tie.Read also: GuocoLand secures $367.1 mil green loan for Faber Walk developmentAdvertisementAdvertisementMark Yip, CEO of Huttons Asia, notes that the number of bids received is the highest for a private housing GLS site since January 2022, when a Jalan Tembusu plot (now the site of Tembusu Grand) also attracted eight bids. He believes that developers may have held back from bidding for other GLS plots to pursue the Bayshore site. ‘The strong sales for the past few months have also increased the need [for developers] to replenish their land bank,’ he adds.Other bidders for the Bayshore Road site include a Frasers Property-led consortium, Kingsford Development, and a Hoi Hup Realty-Sunway Developments joint venture. The bids ranged between $1,252 psf ppr and $1,285 psf ppr, with City Developments submitting the third-highest bid of $620.8 million ($1,308 psf ppr), which is 5.3% below Sing Holdings’ bid. The lower bids of $500.68 million ($1,055 psf ppr) from a consortium comprising Hong Leong Holdings, TID and CSC Land Group, and $485 million ($1,022 psf ppr) from Sim Lian Group reflect mixed market sentiments among developers, according to Marcus Chu, CEO of ERA Singapore.AdvertisementAdvertisementWong Siew Ying, PropNex’s head of research and content, adds that SingHaiyi’s record bid of $1,388 psf ppr surpasses the previous land rate benchmark of $1,250 psf ppr set by MCL Land and CSC Land Group in November 2023 for the site of the recently-launched Elta, located at Clementi Avenue 1. This marks a new milestone for Outside Central Region (OCR) land prices that rival some GLS plots in the Central Region. Last year, Zion Road Parcels A and B in the Rest of Central Region were awarded at $1,202 psf ppr and $1,304 psf ppr respectively, while the Holland Drive and River Valley Green (Parcel A) sites in the Core Central Region sold for $1,285 psf ppr and $1,325 psf ppr, respectively.The future project at the Bayshore Road site will be the first private residential development in the new Bayshore precinct, a 60-ha estate situated between East Coast Parkway (ECP) and Upper East Coast Road. About 10,000 homes have been earmarked for Bayshore, with some 30% designated for private housing.Read also: Investment sales volume up 35.4% y-o-y in 2024; may ease in 2025: Savills AdvertisementAdvertisement'[The Bayshore Road GLS site] is probably the best site in the Bayshore precinct as it offers a sea view and doorstep access to Bayshore MRT Station,’ observes Huttons’ Yip. In addition to various new amenities that will be constructed in the neighbourhood, the area also stands to benefit from long-term development plans, such as the Long Island coastal protection project that will add reservoirs and parks fronting the Bayshore area, says Leonard Tay, Knight Frank Singapore’s head of research.PropNex’s Wong notes that there have been no significant private condo launches in the Bayshore area for decades. Existing condos in the vicinity include The Bayshore, which launched in the 1990s and Costa Del Sol, which hit the market in 2000. This may have led to pent-up demand for new private housing, including demand from HDB upgraders in the nearby Marine Parade and Bedok estates, she adds. ‘Riding on the recent positive sales momentum in the primary market, and the anticipation of healthy homebuying interest for the future Bayshore project, it is little wonder that developers were out in droves for this GLS tender – perhaps also hoping to gain a first-mover advantage in that area.’Based on SingHaiyi’s top bid, Wong anticipates an average selling price of over $2,600 psf for the future development at the Bayshore Road site. Meanwhile, Knight Frank’s Tay believes prices could start from $2,700 psf and average above $2,800 psf.