Why Are New Launch Condos In Singapore Selling Like Hotcakes Again?

I’m told that US politics is badly affected by the “echo chamber,” but perhaps our property market is as well. 

The echo chamber effect happens when algorithms match you up to people with similar views and concerns, so you end up with a circle of people all affirming each other. And this creates an impression that the opinions expressed are in the minority, when the reality on the ground may differ. As 2024 drags itself to a confused, flailing end, I can’t help but feel our property market is in the same situation.

Even a casual glance at TikTok, Reddit, Instagram, Facebook, etc. suggests a literal horde of Singaporeans saying housing is unaffordable. If you so much as mention “resale flat”, a dozen screaming people jump in to argue about which body parts you need to sell for a home these days. Even the government seems fully engaged in fighting this: every lift lobby I go to, there’s an ad telling me how affordable BTO flats are.

But let’s look at the reality on the ground:

As of last quarter, HDB resale prices rose a further 2.5 per cent, with over half the 8,433 resale flat transactions reaching the $600,000 mark. Even though million-dollar flats make up a very small percentage of the market, it’s hard not to notice that it has also hit 328 transactions, exceeding the first two quarters of this year. 

Meanwhile, in the private property market, take a look at Chuan Park sales: 76 per cent of the units sold over the launch weekend, with average prices reaching $2,500+ psf. And yet just in 2022, forums and social media discussions decried new launch prices at $2,100 psf as absurd. Check out the disbelief and shock online. 

As I write this, we are still awaiting the results from this weekend, where we will see how the other new launches like Emerald of Katong and Nava Grove fare next. Judging by the record number of cheques for Emerald of Katong (3,629, and let’s not forget over 500 VIP and agent cheques), we may be looking at another huge sales number – if the developers don’t go too crazy with raising their prices. 

This may be a wider issue with social media itself, as seen in politics and entertainment (i.e., those predictions about which games or movies are going to fail or succeed). But it’s increasingly hard to deny the disconnect in the property market. 

I’ve heard three theories about this, which I think may be credible:

Let’s not ignore the fact that the Fed rate cuts and lower interest rates would certainly have had an effect. But another is that after a few months of a seemingly soft market, it is more likely that buyers have finally accepted that these will be the new pricing levels. The market often takes time to react, and we’ve seen this happen time and time again.

When prices first start to rise, there’s usually a period of hesitation. Buyers hold off, hoping for a correction or looking for signs that the trend might reverse. However, as the months roll by and prices hold steady (or even climb further) it becomes clear that these aren’t anomalies but the new norm. At this point, buyers who were previously on the sidelines start to re-enter the market, either out of necessity or fear of missing out (FOMO).

The next is that some people want to appear smart and prudent with their money.  There are quite a few (I won’t point fingers) who once posted something along the lines of “Sinkies are stupid and materialistic, that’s why they buy expensive condos.” Then around five years later, many of them are asking how to upgrade. 

Mind you, I’m not accusing everyone of this. But there may be more of them than we think, which leads to misleading impressions of the “public opinion” on social media.

The third is a force invisible on social media: the ones who support and push younger Singaporeans to buy prime location flats, or upgrade to condos. 

I’m referring to older Singaporeans in their 60s or 70s, who came from the days when astronomical property appreciation created multi-millionaires. Many condo (or DBSS flat) purchases have happened because older folks pushed money into the hands of their offspring, telling them to buy a bigger and better home for security. 

We’re not just seeing an intergenerational transfer of wealth: we’re seeing a transfer of wealth from a generation with a real estate hang-up. Personal experiences often trump any theories, charts, or even empirical evidence. Often, no amount of discussion about today’s property prices, cooling measures, changing market situation, etc. helps to dissuade the views of this earlier generation. 

So we end up with a younger crowd who vent their frustrations about home prices online. But behind the scenes, they’re pushed to buy anyway, and possibly given the financial support to do so. 

This does make the wisdom of “waiting it out” rather questionable

Being online may give you the impression that prices are all super-unsustainable, and we’re headed for a big crash any day. And while I can’t say that’s impossible, the reality on the ground keeps suggesting the opposite: 

Singaporeans are continuing to buy. And holding off on a transaction, just to be contrarian, is likely to result in paying a higher price later. As much as this statement serves your realtor/seller, the reality today does seem to lean in its direction. 

Meanwhile in other property news…

• Where can you find the cheapest 4-room flats in a central area? Click the link to find out.
• Landed properties from just $1.84 million? Yes, we found those too; but they’re leasehold mind you.
• Brush up on what to know before you go BTO hunting next year. 
• Clementi is the new Orchard, according to a lie I just made up. But seriously, it is a hotspot for education and convenience, and these are the projects that best take advantage of that.
• Cheapest condos by bedroom sizes: let’s go! Here’s a quick tip on where to start looking. 

Weekly Sales Roundup (04 November – 10 November)

Top 5 Most Expensive New Sales (By Project)

Top 5 Cheapest New Sales (By Project)

Top 5 Most Expensive Resale

Top 5 Cheapest Resale

Top 5 Biggest Winners

Top 5 Biggest Losers

Transaction Breakdown

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