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Market Watcher Series Issue 1

New Price trends Emerging in the City Fringe
Prices are surging in the city fringe areas - Despite the impact of the Omicron variant and property cooling measures, the median price of new city fringe condos excluding executive condominiums (EC) rose steeply by 8.7 per cent from S$1,814 psf in 2020 to S$1,972 psf in 2021. In the first four months of this year, median prices increased further to S$2,086 psf. 

Prices are moving briskly due to a spike in pricier transactions. In 2021, as many as 2,568 new condos in the city fringe or rest of central region (RCR) were transacted above S$2,000 psf. Of this number, 844 units were sold for more than S$2,500 psf to S$3,000 psf, jumping from 21 units in 2018 and 358 units in 2019. 165 units were transacted above S$3,000 psf last year. 

In the first 4 months of this year, 206 new condominiums were sold for more than S$2,500 psf. 20 new condos were transacted above S$3,000 psf at Rivière, CanningHill Piers, and Sky Everton. 


New price benchmark may be forming - 5 years ago, 93.3 per cent (3,142 of 3,369 units) of the new condos in RCR were transacted between S$1,000 psf to S$2,000 psf. Price bands have since shifted upwards. 80.9 per cent (4,283 of 5,295 units) of new condos were sold for at least S$1,500 psf to S2,500 psf last year. Pricier transactions above S$2,500 psf ballooned to 19.1 per cent (1,009 units) in 2021 from 0.4 per cent (14 units) in 2017.

More city fringe condos were sold at similar price levels asluxury condos – As prices continue to rise, some premium city fringe condos were sold around the same price level as condos in the core central region (CCR). From January 2021 to April 2022, 543 new condos in RCR were sold above S$2,800 psf. During that period, 963 new condos and 311 resale condos in CCR were sold at the same price level. The price overlap indicates that some buyers were willing to pay top-dollar for selected city fringe condos, similar to luxury condos, for their unique attributes, distinctive designs and unrivalled locations.






Outlook 

New price benchmarks may emerge when several new developments are launched around the same price at a specific location. Before the pandemic, many new city fringe condos at Queenstown, Potong Pasir, and Eunos were launched at an average price of around S$1,800 psf. Currently prices have moved higher. For instance, Piccadilly Grand at Northumberland Road was recently launched at an average price of S$2,150 psf while Liv@MB has hit S$2,387 psf in May 2022. Currently, Thomson View condominium is up for collective sales and developers’ interests are expected to be strong given the lack of supply and the site’s good location. We expect the launch price for this condo and other upcoming launches in RCR to start from S$2,200 psf.

Summary
 ▪ Prices of new condos are rising in RCR; 844 units were sold above S$2,500 psf in 2021. 

▪ 165 transactions in 2021 and 20 transactions in Jan-Apr 2022 were above S$3,000 psf. 

▪ More city fringe condos are sold at similar price levels as luxury condos. 

▪ Prices of new city fringe condos may surpass S$2,200 psf for upcoming launches. 













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