03/06/2022
[๐ข๐น๐ฑ ๐ฃ๐ฟ๐ถ๐ฐ๐ฒ ๐ง๐ฎ๐ด ๐๐ ๐ก๐ฒ๐ ๐ฃ๐ฟ๐ถ๐ฐ๐ฒ ๐ง๐ฎ๐ด?]
While you are on the search for your ideal house in Singapore, have you been recently hearing the phrase "Old Price Tag vs New Price Tag"?
Well, the popularity of the phrase came about due to the significantly increased land cost incurred by the property developers over the past years; when they purchased land through the Government Land Sales (GLS) or Collective Sales (CS) exercises.
Let's break that down.
From the developer's general perspective:
Profit = Sale Proceed - Land Cost - Construction Cost - Marketing & Operation Cost
It is in the nature of any profit-driven businesses (i.e. property developers) to pass on the cost hike to the consumers; while maintaining their profit margin (which on avg. for developers that's approx. 10-20%). The increase in land cost is therefore naturally felt by us, the purchasers, as a higher purchase price!
The "Old Price Tag" refers to the pricing of the existing projects and resale properties in the market, prior to the launch of 2 projects that will prominently kick start the "New Price Tag", namely:
1) AMO Residences at Ang Mo Kio (Land cost $1,118 psf ppr); &
2) Lentor Modern at Lentor Central (Land cost $1,204 psf ppr)
The developers of the above 2 projects have incurred a huge increase in land cost and will likely translate to a record high launch price, expected to be >$2,000psf within their locality.
To put it into perspective; this is definitely out of the norm given that AMK's non-residential property is currently still charting between $730psf - $1,500psf, and well demanded CCR and RCR projects even nearer to the city are also still selling at near $2,100 - $2,500psf.
This hence gave rise to the expectation that prices of property will generally shift upwards across the board forming the "New Price Tag", which may then persist in coming days.
Guess what? It seems that the most recent land sales at Duman Road and Pine Grove have further driven the point.
News Source:
The Dunman Road site saw just two bids, with SingHaiyi Group's bid of $,1350 psf ppr coming out top.