By Sky Tang
Updated 15th December 2020.
Occasionally, there are pockets of opportunity that pops up in certain condominiums in Singapore. This could be due to tax changes, significant developments occurring or other changes in the macro environment.
This results in massively unfair advantages appearing for some condos, and its time for my clients and avid supporters to take first advantage! After all, both DBS, the largest mortgage lender in Singapore and Morgan Stanley, a high net worth investment bank, both predict prices in Singapore to DOUBLE by 2030. This list attempts to find those that will double before that.
*This list will change time to time due to shift in unit mix, price changes or if a much more compelling project presents itself.
Unit availability: 2+study, 3br, 3+study and 4br
Size: 1335 sq feet onwards
Rates: $2,741 psf onwards
Homerun Potential: 4.5/5
Nouvel 18 is a ultra-luxury product by CDL, Singapore's premier developer. Designed by Pritzker Prize Winner Jean Nouvel, and interior deisgn by Atelier Akebuchi Pte Ltd, its belongs within the exclusive Ardmore enclave. Using only top quality materials, its amenities include sky gardens, pools, gym and a tennis court. With breathtaking views of the area and facilities exclusive to only 156 units, Nouvel 18 is luxury amplified.
Further, being an ultra luxury product, external factors have been considered too. Nouvel 18 is within a few minutes stroll to the world famous Orchard Road belt, enjoys the exclusivity of the Ardmore enclave, and is within 2km of prestigious schools such as ACS (Junior) and SCGS (Primary). So no question about its fundamentals exist.
But of course, this isn't the only ultra-luxury property in Singapore, so how did Nouvel 18 make this list? That's because Nouvel 18 is now selling at an almost 30% discount from its peak of $3867 psf, and stands a very reasonable chance to get back to that level.
How this happened is that CDL had to buyout its co-developer Wingtai first, before it could start selling the units. Shortly after, Covid 19 struck and CDL was stuck. In 2019, luxury properties were climbing to an all time high, and was set to climb even further in 2020. CDL began selling and easily achieved prices in the mid to high $3000+ range, as buyers need not wait to stay or rent out the units. However, COVID 19 struck and buyers quickly pulled out of the luxury market.
To exacerbate this problem, Nouvel 18 did not qualify for governmental relief. As Nouvel 18 had been completed since 2014, CDL has been incurring QC charges from the government to the tune of $38m a year since 2016. So, while other fellow luxury projects from Haus on Handy to One Draycott received a one year extension on building obligations and taxes, Nouvel 18 received nothing. This is adding severely to the strain on CDL's finances. and hence they are dangling a 20% + 6% discount right now while their rivals are offering no such discounts whatsoever.
Further, the fundamentals of Singapore's luxury market are still strong whilst our alternatives have weakened. Politically, Singapore is stable. Its people are also one of the few that speaks both English and Chinese fluently. Comparatively, we cannot say the same for other major cities. During the last major economic downturn in 2008, international buyers fled to metropolises such as London, Hong Kong, New York and Singapore. With the turmoil of Brexit, the uncertain political status in Hong Kong, and USA, this places Singapore in a very favoured position. Hence, this explains why most other luxury offerings see no need to offer any discounts yet.
To expand on macro fundamentals, Singapore is growing high-growth industries (IT, Robotics) with low taxes that consistently attract top Billionaires here. Just next to Nouvel 18, Eduardo Saverin (Facebook) bought a penthouse at Sculptura Ardmore while Sun Bingyu (Alibaba) bought his penthouse at nearby Le Nouvel Ardmore. Other notables include James Dyson (Dyson) as well.
Lastly, interest rates are ridiculously low in Singapore. At fixed rates as low as 1.2% per annum, property here is very affordable. High net worth buyers could easily enter this market and not hurt their pocket, and when prices recover they can refinance at that same low rate and finance their portfolios even more.
With travel restrictions expected to be reduced significantly with the release of the COVID19 vaccines this month, buyers can visit Nouvel 18 in the flesh and commit easily. The pocket of opportunity here is very small, so jump quickly!
Unit availability: 1br, 2br, 3br
Size: 409 sq feet onwards
Rates: $2,519 psf onwards
Homerun Potential: 4/5
There are many things that make me positive about Guoco Midtown, but not least the vision, design, execution, history and most importantly, commitment of the developer. And it helps that other wealthy investors, both corporate and individuals, have committed to Guoco's vision as well. If you move now, you'd enjoy a massive early mover advantage over other buyers, especially since travel restrictions will also be removed soon with the advent of COVID 19 vaccines.
To start, Guoco Midtown is a massive integrated project located within the Greater Southern Waterfront belt. Although not the first, it is easily the most coordinated project to date and one of the biggest. When Midtown succeeds, it will be the first true success of many integrated projects that the Singaporean Government envisioned for the entire district. So there will be a clear distinct first mover advantage here.
Firstly, my belief in Guoco stems from their history. They simply are willing and able to hold prices and fill up spaces. Guoco's first such integrated project was Guoco Tower at Tanjong Pagar MRT, also located in the Greater Southern Waterfront district. Guoco Tower is a mix of offices, mall and Singapore's most expensive residences, Wallich Residences. A quick walkabout and enquiry with Guoco's leasing staff showed that more than 90% of the units are occupied for the shops and offices, and crowds everywhere. The residential portion, Wallich Residences, has its lowest point around $3000 psf since its 2013 inception, with the exception of ONE unit. The very same applies to Midtown, with prices never dipping below $2500 psf, even with COVID. This is a far cry from many other developers, who slash prices as and when they need to protect their bottom lines first.
This shows two things. The developer is more committed than the buyer. And as the buyer, you are enjoying some great insurance for free on your investment.
Secondly, Guoco's vision for Midtown predates COVID 19, yet fits in with this post-pandemic era so well. Its noted that COVID 19 did not start or stop trends, it merely accelerated their path. Guoco Midtown sells you the apartment, yet have an additional block where you could hotdesk as your office, making work from home a breeze. Midtown's sheer size provides a full facility condo, with sheltered paths to MRT and multiple shopping options. This gives its residents a truly integrated feel of how such a project should be.
Thirdly, the commitment of Guocoland is truly unparalleled. A chat with Guocoland's CEO in November 2020 also gave us a glimpse that Guoco wants Midtown to be considered a district of its own, a self sufficient town. Midtown has to be their flagship project and nothing can go wrong. So when the Government unexpectedly released a new plot of land adjacent to the original Midtown, Guoco pounced on it and expanded the project rather than risk having another development that may not fit in with their vision. That's a few hundred million dollars commitment. This once again proves that not only Guoco has the vision and execution, they are putting money where their mouth is.
Lastly, its comforting that many other investors, big and small, are also committing to Guoco's vision. Shaw Towers, run by the charity Shaw Foundation and adjacent to Midtown, is redeveloping to capitalise on Guoco's development. Nearby South Beach Residences have seen an upsurge in demand in anticipation of more amenities from Midtown, whilst Suntec City opposite has just finish its revamp. Even at the rear of Midtown, where conserved shophouses exist, private investors have been eager to buy them at record prices in anticipation of the crowds Midtown will bring.
Right now Midtown is launched in phases, so do move quickly to get into the first two phases, before paying more for the final one.
(Singaporeans and PR Only)
Unit availability: 3br, 4br
Size: 947 sq feet onwards
Rates: $919 psf onwards
Town: Choa Chu Kang
Homerun Potential: 5/5
There is an embarrassment of factors here that make The Rainforest an absolute homerun. The best part of all is that the sellers here have not realised it yet and most of my clients and readers do not live in the west, so capitalise on this! However, do note that this opportunity is available for Singaporeans and PR only, with just at least ONE PR needed and a $250k downpayment. This is a nice investment alternative over the two more expensive options above.
The main factors here are a very good combination of improvement in transport and new workplaces, coupled with the distance to the MRT and amenities that already exist. Plus, the market will expand significantly when the Rainforest becomes 10 years old, where foreigners can buy this condo as well. Sizes here are comfortable too and facilities are new, hence it is fairly ready to ride the upcoming wave.
Firstly, The Rainforest is located within a 5 minute walk to Choa Chu Kang MRT, with a bus interchange and Lot One Shopping Mall (a large landmark mall in the area). That, with 9 primary schools, tick off the basic necessity boxes.
More importantly, is what will happen soon. There is a new MRT line, the Jurong Region Line, that has Choa Chu Kang as its interchange. Interchanges tend to lead to a 10-15% increment in value of properties around the area historically. Even better is that the Jurong Region Line links the fastest growing industries in Singapore together on this line. Industries include Artificial Intelligence, Robotics and Food Processing. The main hub would be at Jurong East, which is slated to be another stop on this new MRT Line. It doesn't hurt to have the High Speed Rail restarting and the Jurong Lake Gardens undergoing a total makeover by 2023.
The new MRT further links to National Technological University, and this line is expected to complete by 2028. The new port at Tuas would also be linked to this line via Boon Lay, and currently the Tuas port is only operating at 40%, as the move from Pasir Panjang is still ongoing. Hence, when the move is completed, more jobs and people will move further to the west.
However, the west is a huge area, so why Choa Chu Kang? That's because there's a massive lack of supply in the West and Choa Chu Kang is still underpriced. Firstly, there is no available land nor will there be until the new Tengah town is up. When that happens prices will be driven up everywhere else along the expected Jurong Region Line. This is already seen in Bukit Batok where the previous sleepy Le Quest was sold out once the new MRT line was announced. Le Quest was sold at $1400 psf with no mall nor mrt now. Rainforest has both and yet is priced $400 - $500 psf less than it.
Secondly, history further proves how underpriced Rainforest is. Since the inception of Executive Condominiums almost 30 years ago, they have appreciated an average of 53% more on their 10 year mark from their 5 years price. This calculation was done with every single EC ever in Singapore. With Rainforest having that new MRT line and major developments along this line, the potential could very well exceed the historical 53%.
Don't wait! Come down today and take a look at the development yourself to understand first hand!