Unlike buying an equity investment which requires more or frequent involvement in managing, property is usually one that requires much less monitoring. However, anyone would agree it is a big ticket item that we should not take it lightly. So even though you have no plans to do anything that is related about property near term, it is important to know the pulse of the market so that we can help ourselves plan ahead and be ready when we are ready. It is like we don’t want to only start finding where is our textbook one week before our major exam.
If you own a property in Singapore, be it a private or a HDB, you are IN the market. I would personally think it is counter productive if we are to catch property news too frequently, but once in a while, certain key event is crucial for us to tilt our heads a little in put in some joyful attention. And Penrose, an upcoming luanch in Sims Drive, in my opinion, has such quality. Even if you are only interested in properties much further away from the East, it will be beneficial to just understand how would Penrose turn out. Don’t get me wrong, it isn’t because it is a very good investment opportunity, it is because of its timing and fundamentals which I will be sharing in this article.
I had to say this, I’m a real estate advisor and I can’t shake off the fact that naturally readers will feel element of bias-ness. It took me a while to decide to write this article. I eventually decided to go ahead as I adding value to the market takes precedence. And I sincerely promote a gentle disclaimer and recommended readers to exercise your own judgement with sufficient & right resources and advise.
Penrose, will be the second launch since Singapore’s Circuit Breaker. The first is Forett where many industry leaders will be studying how it turns out. It will help Penrose to be able to launch with a much firmer footing. Being in the industry for years, I have seen the inside works, and I would share that the media would continue to do its thing. Media is good for something else, but it isn’t helpful for property owners who want to truly understand the market. Every project’s media coverage will be positive because there bound to have people already or naturally want that project. How many percent sold or untaken has nothing to do with its ability to preserve value or well position for future growth. So, in short, ignore what the media says, invest the time to really understand what is it all about.
The developers are CDL & Hong Leong, reputable and branded developers which would adds in to the confidence of market watchers. It is important, really, because the project beside is Sims Urban Oasis by UOL, and the finishing is great. Penrose finishing has to be good as well if not, all the tenants would prefer Sims Urban Oasis in future.
A good size of 566 units will have in enough transaction volume in future resale market, which is an idea that is getting more popular these recent years as people find it hard to exit for small developments, and the fundamental reason will be bank valuation.
Ever since the last enbloc fever, prices for the three main segments has been pulled away unreasonably, which presents a small pocket of opportunity. The three main segments are the CCR, RCR, OCR, (please refer to photo for more info). Prices of CCR & OCR has increased, where left many mathematically inclined minds wondering why is it seems like RCR prices are not following as well.
Although there are generous supply of private residential properties in District 14, it does not seem the case in Sims Drive. It’s always an interesting debate on the difference of Sims area versus the Geylang area.
The land cost alone could be the main factors why it draws much attention. At $732psf ppr, arguably one of the most affordable ones we can find in today’s market. It would be even more appealing before circuit breaker, however, covid has caused many impact and one of it is the possible rise in cost of construction, which results in higher breakeven cost for the developers which will spill over to consumers. But nonetheless, Penrose does not “need” to call for too high a price, but ultimately it is a choice only controllable by its developers. The earlier launched The M in Middle Road start of the year have shown much success with its bold pricing strategy, should Penrose follow suit, it will make a small group of action takers really happy. But then again, it is ultimately back to the decision of its developer.
It is really tricky to determine how will the pricing strategy turns out, in my humble opinion, mainly because of two factors – covid and Parc Esta. I would think that how Forett performs will have an important psychological role to play for consumers and developers. Why Parc Esta adds into the trickiness? Are we potentially looking at a higher pricing as Penrose is launch later or a very competitive one due to current sentiments? Guessing game will continue until the day reveals.
So, what are the factors that makes Penrose imbued with future potential growth? Let’s simplify and just look at mainly two factors – MasterPlan and timing.
What about Eunos area, and Kallang transformation? These are topics for another day, for now, it is sufficient to know that all these transformation are within close proximity to affect the landscape of what we see today
Timing – HDB Upgraders
Have you look at how prices been push up in Punggol? It doesn’t quite make sense for its location. However, while there are many fundamentals that makes Punggol attractive to live in, it cannot be accomplished without affordability. Substantial eligible HDB upgraders are responsible of the success in Punggol. So back to Penrose, where and when will be HDB upgraders start to reach MOP – Minimum Occupation Period and start to scout for upgraded next accommodation?
Dakota New Cluster & Bidadari, there is no need for further words on how the prices you could imagine in these areas
Hope the above would give a good sense of what should we be looking at this year flowing to next few years. It really does not matter whether if you are looking to do anything regarding about property in near term. Chances are, Property forms a large part of our lives, and it is good to once in a while check out the market to have a good sensing on where we stands.
MomDadHomes always aims to be neutral and believe in helping people form your own opinion and analysis of the market, so that lives can be impacted in a positive way.