Commentary 8 Reasons Why Amo Residence Sold 98% Of Its 372 Units During Launch
- Ryan J
- July 25, 2022
- 11 min read
AMO Residence launched last Saturday, and if you want a unit… well, you’re probably out of luck. All but seven of its 372 units sold over the weekend (98% sold), and the whole development may be sold out by the time you read this. Even more incredibly, one of the penthouses was sold for more than $6 million, or at about $2,400 psf. This is one of the best launch performances we’ve seen since around 2021; and it’s surprising given that – earlier before the launch – some had speculated the price was too steep for Ang Mo Kio.
While 372 units are quite small, to begin with, nearly selling out in one weekend in this climate is impressive. So why did it sell out so fast?
Table Of Contents
- About AMO Residence
- Why did AMO Residence do so well?
- 1. Quantum relative to recent cooling measures
- 2. Oversubscription for Kebun Baru Edge
- 3. The newest private development in the area for some time
- 4. Pricing
- 5. Excellent proximity to key schools
- 6. Smallest units are at least two-bedders
- 7. Good family area with a lot of greenery
- 8. Small development size, coupled with full facilities
About AMO Residence
Location: 21 Ang Mo Kio Rise (District 20)
Developer: United Venture Development (2021) Pte. Ltd. (UOL Group/Singapore Land Group/Kheng Leong Group)
Number of units: 372
Pricing: From $1,890 psf to around $2,400 psf
AMO Residence is close to Mayflower MRT (Thomson-East Coast Line), at around a nine-minute walk. Another key highlight is that six schools are within the one-kilometre Home-School Distance (HSD):
CHIJ St. Nicholas (530 metres)
Ang Mo Kio Primary (750 metres)
Ai Tong (930 metres)
Mayflower Secondary (290 metres)
Bishan Park Secondary (410 metres)
Pierce Secondary (460 metres)
We have a full review of AMO Residence on Stacked.
New Launch ReviewsAmo Residence Review: Rare Ang Mo Kio New Launch With Landed/Park Views And Full Facilities For 372 Unitsby Matt K
Why did AMO Residence do so well?
- Quantum relative to recent cooling measures
- Oversubscription for Kebun Baru Edge
- The newest private development in the area for some time
- Excellent proximity to key schools
- The smallest units are at least two-bedders
- Good family area with a lot of greenery
- Small development size, coupled with full facilities
1. Quantum relative to recent cooling measures
While some may have considered AMO Residence expensive at first glance, this wouldn’t hold up once you start making price comparisons. We’ll go further into that below. For now, let’s consider the quantum, relative to the new Total Debt Servicing Ratio (TDSR) restrictions.
One of the cheaper two-bedder units at AMO Residence, is about $1.26 million. Assuming you take a full bank loan with 75 per cent financing, for 25 years, this would come to about $4,731 per month at 3.5 per cent interest.
(Note: the actual interest rate is likely to be much lower; we use 3.5 per cent because this is the rate that banks use to calculate TDSR).
In the December 2021 cooling measures, the TDSR limit was lowered to 55 per cent. This means that, at repayments of around $4,731 per month, AMO could be affordable coupled with a combined income of just around $8,601 per month.
Bear in mind that this assumes they are using the full 75 per cent loan; those who have more saved up in their CPF will need to borrow less, and pay an even lower rate.
The median monthly income in Singapore is about $4,680 per month. This makes a two-bedder at AMO plausible for some younger couples (although they may need some help with the cash component of the down payment).
Among HDB upgraders, who have sale proceeds from their flat, the sweet spot is usually between $1.6 million to $1.8 million. AMO Residence is well within their reach.
2. Oversubscription for Kebun Baru Edge
During the August 2020 BTO launch, one of the most oversubscribed areas was Kebun Baru Edge. This is just around a five-minute walk from where AMO Residence is today. At the time, there were 1,180 applicants vying for just 140 new flats.
Agents on the ground told us that a number of inquiries came from this batch; and while AMO Residence may have been pricier, the quantum was not off-putting to them. This is because resale flats in the area – such as Kebun Baru Court – also have prices ranging from $740,000 to $1.15 million in 2022 so far.
|Town||3 Room||4 Room||5 Room||Executive|
|Ang Mo Kio||$358,000||$495,000||$768,000||$936,500|
|Choa Chu Kang||$395,000||$480,000||$570,500||$700,000|
It wasn’t hard to persuade buyers that, for a little bit more, they may as well buy a condo.
Besides this, do note that Ang Mo Kio is one of the biggest areas by population size. With around 162,280 residents, this is the eighth largest neighbourhood in Singapore, and the third-largest in the North-East region. At a time when housing is in short supply, demand is bound to be strong here.
3. The newest private development in the area for some time
There hasn’t been a new condo launched in this area for over eight years. Apart from Thomson Grand (built 2015) and The Panorama (built 2017), this is the only other condo that’s so conveniently close to Mayflower MRT.
However, AMO Residence is more exclusive than The Panorama (which has 698 units), and has better facilities than Thomson Grand (there is, for instance, no tennis court at Thomson Grand).
Coupled with its age advantage, AMO started with a strong edge against its nearby alternatives.
From a wider perspective, there have been fewer launches in Singapore to date in 2022 (see point 2 about lower supply). In the whole of 2021, for instance, there were about 31 launches; it’s in stark contrast to 2019, when we saw 60 new launches.
2022 is expected to see even fewer launches than last year. There haven’t been any mega new launches this year, the last of which was Normanton Park in January 2021. This is a factor in driving up demand for new launches.
It’s quite a big factor, as the selection of new launch condos today is just not as vast as before.
Take, for instance, something like Clavon when it was launched. Just a month before, you could choose from places like Verdale (202 units), Twin VEW (30 units), and Parc Clematis (467 units), just to name a few. If we’re talking about supply of new launch units at that point in time, this was at more than 13,000 units.
Contrast this today, where the AMO Residence has little competition in terms of new launch supply. Recent new launches like LIV@MB, and Piccadilly Grand have also sold well, and at the same point there are about close to 6,000 units available to pick from (the majority seem to be from the CCR).
Here’s the average $PSF compared to all the other new launches with transactions in the past 6 months:
Amo Residence is the most expensive OCR new launch based on its average $PSF, which is close to where Parc Esta transacted.
As mentioned above, it’s all a question of supply right now. If you were to look at the supply of new launches in the OCR, most have already sold out. And if not already sold out, will not have a great selection of units left.
Likewise, if you were to compare with nearby resale developments, The Panorama and Thomson Grand it may seem overpriced as it costs 23% and 39% more respectively. And despite both developments being relatively similar in age, and offering similar unblocked views, Thomson Grand is much lower in terms of its average psf. This could be due to the unit sizes as, for example, The Panorama has 2 Bedrooms from 678 sq. ft. while Thomson Grand’s 2 Bedroom units start from 904 sq. ft. This is the same for the 3 Bedroom (990 sq. ft. vs 1,345 sq. ft.), 4 Bedroom (1,313 sq. ft. vs 1,679 sq. ft.) and so on.
But dig deeper, and you’d find that because the unit sizes at Amo Residence are quite similar to The Panorama (even though they’d be nearly 10 years apart), an average of 23% of a premium makes sense given the new launch premium and the additional 10 years lease. Plus, there are those who bought below the average $2,100 psf, which would then be even more of an attractive purchase.
5. Excellent proximity to key schools
We may say that all schools are good schools; but in reality, parents care about reputation. CHIJ St. Nicholas and Ai Tong are quite revered institutions; and being within the one-kilometre Home School Distance is vital (lest your children lose priority in the enrolment queue).
Note that this isn’t just appealing to families. More investment-minded buyers are also focused on school proximity, as this is a good support for future resale value. It can even mean rental income, as some parents are so emphatic to get into certain schools, they’re willing to rent and move to the address.
6. Smallest units are at least two-bedders
It was a good idea for the developers to skip the one-bedders, and make the smallest units at least 614 to 678 sq. ft. The larger two-bedders go up to 743 sq. ft., and have two bathrooms.
Due to the unit size, it’s still reasonably comfortable for young couples with a child (or perhaps two, if you really want the location more than anything else). Smaller shoebox units, while great for rental, are usually out of the question for even small families.
According to agents on the ground, these larger units are also preferable to landlords. Realtors told us landlords find these units easier to rent, as it’s possible for tenants to get a roommate (thus splitting the rent), or for them to rent to both families as well as singles (who may not mind paying a bit more for the added space).
Shoebox units can also be tougher to sell, as the dominant buyer demographic has become HDB upgraders; these are families with no use for one-bedders. This is also a factor for investors to consider, and we discuss it in detail here.
7. Good family area with a lot of greenery
Ang Mo Kio is a well-spaced-out district, that’s not overly dense. In fact, it has the fifth-biggest number of landed homes, behind Bedok, Bukit Timah, Hougang, and Serangoon.
Coming down to this specific project, AMO Residence overlooks the Bishan-Ang Mo Kio Park. This is the largest urban park in Singapore, spanning 62 hectares and including a river that stretches for three kilometres.
This provides a good view of the greenery, as well as a lot of park land for children to play in.
And with the support of landed homes in the area, Amo Residence can be further supported by families who want their kids to stay near them.
8. Small development size, coupled with full facilities
The developers made a wise decision to go with fewer units, and give over more room to common facilities. AMO Residence has a tennis court, full-sized 50m pool and several other smaller pools, with generous landscaped areas (there are outdoor exercise areas along with the gym) for the number of units. This is not very common among small developments, which usually compromise on facilities (the tennis court is always first to go).
At first, we assumed this would come with a significant drawback of high maintenance fees. There are, after all, fewer households to share the cost of lavish common areas.
|Unit Type||Size||No. of Units||Est Maintenance|
|2 Bedroom||614 – 678 sqft||92||$414|
|2 Bedroom Premium||743 sqft||92||$414|
|3 Bedroom||958 sqft||47||$414|
|3 Bedroom + Study||1,044 sqft||47||$414|
|3 Bedroom Premium + Study||1,141 / 1,367 sqft||24||$483|
|4 Bedroom||1,292 sqft||45||$483|
|5 Bedroom||1,475 sqft||22||$483|
It is a little higher (if you were to compare to bigger developments), but definitely not prohibitively so. For 372 units, this is a good trade-off for a much less dense development.
Overall, AMO Residence provides some key lessons we can take note of. These would be:
- We might be able to foresee higher demand in previously oversubscribed BTO areas, when a condo launches there shortly after (no guarantees of course)
- Keep an eye out for areas where there have been no new launches in a long time; the next launch there may see much higher demand than usual
- With tighter loan curbs in place, a quantum at or below the $1.6 million mark may be essential to move units (and we suspect the developers accepted rather thin margins for AMO Residence, to deliver on this)
For more up-and-coming hotspots, follow us on Stacked. We’ll also provide you with the most in-depth look at new and resale developments alike.