Assessing the potential rental yield is a crucial aspect to consider when investing in a condominium. Rental yield, which is the annual income from rent as a percentage of the property’s purchase price, plays a significant role in determining the profitability of the investment. In Singapore, the rental yield for condos can vary greatly depending on the location of the property, its condition, and the demand in the market. Properties situated near business districts or educational institutions typically yield higher rental returns due to the high demand for rental units in these areas. To gain a better understanding of the rental potential of a specific condo, it is essential to conduct thorough market research and seek advice from trusted real estate agents. Additionally, keeping an eye on new condo launches can also provide valuable insights into the rental market and potential yields for investors.
According to the Dec 16 URA data, the number of new private homes (excluding ECs) sold by developers in November was 2,557, a significant increase of 246.5% compared to the 738 units sold in October. This also represents a 226% jump from the 787 units sold in November 2023.
“This surge marks the highest monthly developer sales since March 2013, when 2,793 units (excluding ECs) were sold,” says Christine Sun, chief researcher and strategist at OrangeTee Group.
Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors Inc (SRI), adds that this is the first time in nearly eight years that new home sales have exceeded the 2,000-unit threshold in a single month.
The surge in November’s developer sales can be attributed to an “unprecedented” number of project launches during the month, says Lee Sze Teck, senior director of data analytics at Huttons Asia. Five private residential projects were launched in November, including Chuan Park, Emerald of Katong, Nava Grove, The Collective at One Sophia, and Union Square Residences. Together, these projects added 916, 846, 552, 367, and 366 units respectively to the market.
The number of new homes launched in November was 2,871 units, a sharp increase of 438% compared to the previous month, and a 196% increase from the same period last year. In addition, the 504-unit Novo Place EC also kicked off sales in November. Including ECs, the total number of new homes sold in November reached 2,891 units, a significant increase of 277% MoM and 226% YoY.
Year-to-date, developers have sold an estimated 6,344 units, slightly higher than the 6,317 units sold in the first 11 months of 2023. This is in line with the 6,627 units launched for sale by developers in the same period. In comparison, developers launched 7,515 units in the first 11 months of last year.
Top-selling projects in November include Emerald of Katong, Chuan Park, and Nava Grove. Emerald of Katong, a 99-year leasehold development by Sim Lian Group in District 15, sold 840 units (99%) at a median price of $2,627 psf. This makes it the best-selling project by number of units and percentage in 2024, according to Lee.
Chuan Park, a 99-year leasehold development by Kingsford Group located on Lorong Chua in the Outside Central Region (OCR), came in second with the sale of 721 units (79%) at a median price of $2,586 psf. Nava Grove, a 99-year leasehold development in District 21 by MCL Land and Sinarmas Land, sold 382 units (69%) at a median price of $2,445 psf.
According to Sun, buyers were attracted to these projects due to their attractive designs and offerings, particularly those looking to live near the East Coast. The current low interest rates also incentivized buyers to invest in these city-fringe projects.
Overall, the strong sales performance of new launches in November was driven by pent-up demand and improved buyer sentiment following interest rate cuts in September. Sun adds that many buyers were eager to take advantage of attractive deals as several prominent projects were launched simultaneously.
Huttons’ Lee also notes that buying momentum has been increasing since the last quarter, with projects such as 8@BT and Norwood Grand recording a strong take-up. The wider market also saw a boost in demand as buyers who missed out on their desired units in a particular project turned to other new or existing projects.
In November, EdgeProp Singapore reported that the launch of Emerald of Katong had a ripple effect on neighbouring projects in District 15, with developments such as Tembusu Grand and The Continuum experiencing an increase in demand.
Looking ahead, the market is expected to slow down in December due to the school holidays and the festive season. Lee predicts that the lack of launches planned for December will result in new private home sales falling to around 200 to 250 units. This will bring the full-year developer sales to about 6,500 units, slightly higher than in 2023. Prices are also expected to moderate, with Lee estimating a 5% growth rate for the year, down from 6.8% in 2023.
Moving into the new year, SRI’s Sandrasegeran expects buying activity to pick up again in January 2025 with the launch of The Orie by City Developments in Lorong 1 Toa Payoh. The last new launch in the area was Gem Residences in 2016, and this extended gap is likely to generate pent-up demand, leading to continued buyer enthusiasm for this well-established estate, says Sandrasegeran.
Other projects expected to be launched in 1Q2025 include Bagnall Haus, Aurea, and Aurelle of Tampines EC. Sun expects the recent surge in sales to be a temporary phenomenon, with demand being subdued throughout 2024 due to the lack of significant private project launches. Lee, on the other hand, says he is cautiously optimistic about a better performance in the new sales market in 2025, projecting sales to rebound to 7,000 to 8,000 units with a price growth of 4% to 7%.