During the last quarter of 2023 – I noticed a lot of people posting about J’den Residences, a highly anticipated project in Jurong.
It drew a lot of media attention because thousands of potential buyers tried their luck at balloting for only 300+ units.
First of all, I must say it is really a very attractive project backed with very compelling transformation story.
I guess by now, these people would have heard about the Jurong transformation story which was also shared by PM Lee himself during the National Day Rally.
Personally, the news of J’den’s new launch in the Jurong East area brought back a lot of memories for me.
I was reminded of J-Gateway’s new launch back in 2013.
Back then, I was a very youngish relatively new agent who was surprised at how high the new launch pricing was for an area in Jurong.
If you read this 10-year old article above, you would find out all the reasons to justify the record launch price back then.
It was basically backed by the 2008 Jurong Masterplan – which really helped to move the units back then.
In fact, 736 units out of the 738-unit complex was taken up within just 1 day.
Now with the benefits of hindsight and 10-year passing of time – we can check and analyze on whether J-Gateway with an average entry price of $1450 psf was worth it.
Looking at my research, I can safely say that the “transformation story” and the “Jurong Masterplan” was priced in which resulted in a relatively high entry price.
When A New Launch Looks “Good” and a “No-Brainer” – You Can Expect High Entry Prices
J-Gateway was the fastest-selling development of 2013 – despite selling at $1600 psf.
Let’s take a look at how the owners of J-Gateway profited:
Today in 2023, owners who bought in 2013 made a profit of up to $559k – with the top 20 profitable units making upwards of $350k.
Over a 10-year period, the annualized returns is about 3%. It is a good performance especially if you consider it performed higher than the inflation rate of 2% (back then).
Now, let’s look at the performance of another development that was also launched for sale in 2013.
D’Nest was considered much less exciting than J-Gateway in 2013.
It is located at the heart of Pasir Ris with no sexy transformation story.
For those D’nest owners who purchased a unit in 2013 – they also made as much as $818k.
The top 20 most profitable transactions made profits starting from $373K.
For most of these owners who exited from their D’Nest purchase after 10-years – they deserve a pat on their back.
Because for D’Nest 2013 buyers – they made similar profits of a much-hyped development like J-Gateway but with a much, much lower entry price.
Low Entry Price as a Form of Safety and Protection
It is critical to understand the entry price of a very “boring development” might actually have a safer entry price – which could provide good profits in time.
D’Nest average entry price was about $976psf while J Gateway was at $1493psf.
Imagine with much less outlay of capital – the profits are similar to a blockbuster development?
Of course there are more factors that could influence your decisions such as amenities, layout, aesthetics.
But for this discussion, let’s explore on how we can gauge whether the entry price is “right” or not.
Weighing How “Right” Is the Entry Price of New Launches In RCR Areas
Looking back at the prices of 2013 new launches, it really looks “cheap” now.
But if we look forward, everything seems so expensive now.
So making comparisons of past and future is really no easy task. And if we are asked to predict prices in the future – that is even more challenging.
That’s why we are going to focus on a few reference points as we determine how “right” is an entry price.
They are:
- Recent land sales from GLS or en-bloc
- Comparison with prices of various new launches across various locations
- Comparison with prices of surrounding comparable projects
The Average PSF Prices of New Launches In 2023
Based on this chart below, here is the information we can extract:
- CCR – average PSF is approximately $3200 PSF
- RCR – average PSF is approximately $2500 PSF
- OCR – average PSF is approximately $2000 PSF
(although the chart for OCR indicates higher, we take the previous quarter figure of about $2500 because the spike is due to the launch of J’den.)
For this analysis, I am going to compare the following new launches:
- The Landmark (RCR)
- Grand Dunman (RCR)
- The Reserve Residences (RCR)
- J’den (OCR)
#1: The Landmark
- Landmark (99 year tenure)
- 2 bed 2 bath, 678sqft, level #24
- $1,910,888
- $2818 psf
For the Landmark, its location is very nearby to SGH and not far off from Tanjong Pagar. This means it has a high tenant pool to choose from.
The location also has a very high level of connectivity and is surrounded by at least 5 MRT stations.
#2: Grand Dunman
- Grand Dunman (99 year tenure)
- 2 bedroom, 667 sqft
- $1,872,000
- $2805 psf
Here are some of the recent transactions at Grand Dunman.
Grand Dunman is located next to Dakota MRT and is known to be nearby good schools and a short drive to the CBD.
It is located in the sought-after area of District 15.
#3: The Reserve Residences
- The Reserve Residences (99 year tenure)
- 2 bedroom, 667 sqft
- $1,917,309
- $2873 psf
Here are some of the recent transactions at Reserve Residences of units with similar sizes:
The Reserve Residences is located beside Beauty World MRT.
It is known for its location at Bukit Timah area.
#4: J’den Residences at Jurong
- J’den (99 year tenure)
- 2 bedroom, 818 sqft
- $2,310,000
- $2824 psf
The reason I picked J’den Residences to compare with is because it is considered as a blockbuster launch of 2023 – its units sold very quickly.
It also set a new benchmark price for OCR area.
Here are the recent transactions of units of similar sizes at J’den Residences:
J’den Residences – being the former Jcube – was highly anticipated as the last new launch was J Gateway back in 2013.
So I can guess this was just pent-up demand from people who are fans of Jurong area.
Some Thoughts on PSF Prices of 2023
It seems that buyers have already accepted $28xx PSF for 2-bedder units at locations such as:
- J’den at Jurong East
- The Reserve Residences at Beauty World
- Grand Dunman at Dakota
The Landmark at Pearl’s Hill Park is now asking for $2818 PSF.
To be fair, when the Landmark was first launched in 2020, it was priced at $22XX PSF.
It has gone through several price increases.
So now – is it safe to enter at $2818 PSF for a 2-bed, 2-bath, 678sqft unit?
The answer is it really depends on what is YOUR purpose of purchasing a new launch.
Is it for own-stay purposes or as an investment unit?
For The Landmark – the location is very attractive.
As an investment unit, this development is poised to capture some of the tenant pool for this area.
It is located at the fringes of the city with potential great views of the park.
Has the “potential” of this development been “priced in” by the developer?
As I study the entry prices of the various developments and what the developers paid for the land, I can get a sense of whether the developer is confident of the future prices of the property they built.
If you look at the URA masterplan, The Landmark is not just located right beside Singapore’s largest medical campus.
It is also very near to 2 white sites, which could potential add value to the project.
“White sites” areas used or intended to be used mainly for commercial, hotel, residential, sports & recreational and other compatible uses, or a combination of two or more of such uses as a mixed use development.
As the “white sites” are still in an unknown planning stage, I don’t think the developer has priced in or considered the potential of new amenities here.
This brings an interesting dimension to the future prices of The Landmark.
This will become part of the future Prime Location Housing (PLH) HDB plans.
Overall, it will boost up the supply of homes in the area.
But also consider this – PLH housing is subjected to 10 years of MOP and a partial clawback of the profits.
At the same time, PLH owners are not allowed to rent out the entire unit but only spare rooms.
For private property owners – there are no such restrictions.
Conclusion
My goal of this article is to show you the level of analysis and research I would do in a selecting the best property choice for you.
Again, your own choice might vary from others as all of us have our own personal preferences.
The fact of the matter is that we don’t have the luxury of unlimited funds and thus we only have 1 shot of making a good property choice.
So it is highly necessary that we take the time to explore all the options available and consider what are our goals in the long-term.
The above is just an analysis that I did for one of my clients who wanted my thoughts on these various new launches.
If you are also thinking of exploring of whether are there any good deals for you, feel free to send me your requirements or needs.
Have questions on your own property choices?
I invite you to contact me for a no-obligation discussion.
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