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The Big Read in short: Why soaring prices have not deterred buyers of new condos

SINGAPORE — Although Anthony and his family of six are now living in a freehold condominium around Holland area, he is planning to buy a second private property.

The Big Read in short: Why soaring prices have not deterred buyers of new condos
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Each week, TODAY’s long-running Big Read series delves into the trends and issues that matter. This week, we look at how demand for newly-launched condominiums have stayed strong despite property cooling measures as well as soaring prices and mortgage rates. This is a shortened version of the full feature, which can be found here.

  • Prices for new condominiums have been soaring in recent months, with the increase over the past decade outstripping wage growth 
  • Yet newly-launched units are seeing "robust" demand from buyers, with some developments selling over half of the available units over a weekend
  • What is striking is that this is happening amid economic uncertainties and the latest round of property cooling measures by the Government 
  • Real estate experts told TODAY that confidence in Singapore's market and a fear of being outpriced in the future are driving some to buy condominiums
  • However they warned that buyers need to know that property purchases come with risks, and also gave some suggestions on how to cool the market

SINGAPORE — Although Anthony and his family of six are now living in a freehold condominium around Holland area, he is planning to buy a second private property.

He is eyeing a new three-bedroom unit at The Reserve Residences condominium development in Beauty World, with sizes ranging from 883 to 1,378 sq ft.

“I’m buying it for living-in. But also on the side, if there’s appreciation, why not?” said the 50-year-old, who spoke to TODAY at the 99-year leasehold project's sales showroom recently.

Anthony, who works in the IT industry and declined to give his full name, said that he does not intend to let go of his existing property even after buying a second condominium.

He is not deterred by the fact that he will have to fork out hundreds of thousands of dollars in tax due to raised additional buyer stamp duty (ABSD), following the latest round of property cooling measures rolled out in late April.

A person who buys a second property will now have to pay 20 per cent in ABSD.

So if that property is S$2 million, which is about the indicative starting price of the unit Anthony is eyeing, this will mean having to pay a S$400,000 tax. 

Anthony is among the many buyers who are prepared to pay more for newly-launched condominium units despite their ever-rising sale prices, high mortgage rates and a slowing economy. 

With the jury still out on whether the market for new condominiums is frothy or fundamentally strong, TODAY takes a closer look at what fuels the demand for such properties and what are the possible implications.


While the latest cooling measures are targeted at foreign and investor buyers, who comprise about 10 per cent of the private residential property market, the Government has over the last 12 years or so introduced many rounds of measures targeting general buyers in a bid to ensure that the property market remains sound and does not run ahead of economic fundamentals. 

This was done through the tightening of loan rules, raising of ABSD as well as seller duty duties, which was aimed at discouraging speculation. 

However, prices for new condominium units have continued to climb, especially in non-central areas, outstripping household income growth. 

The URA divides areas in Singapore into 28 districts grouped in three regions: the core central region (CCR) such as Orchard Road and River Valley where most premium private properties are located; the less premium rest of central region (RCR) which includes Toa Payoh, Katong and Buona Vista; and the suburban or outside central region (OCR) where mass market condominiums are typically found.

For new launch condominiums specifically, data from property portal 99-SRX revealed that the price increase per square foot (psf) has been uneven across the three regions — though they all have outstripped median wage growth.

The average psf prices for CCR units have jumped by 41 per cent from S$2,142.29 in 2013 to S$3,020.99 in 2023.

Prices for RCR units have skyrocketed by almost 80 per cent from S$1,494.70 to S$2,681.62 psf over the same period.

OCR prices have soared almost 69 per cent from S$1,068.90 to S$1,805.79 psf, also over the same period.

Meanwhile, according to the Singapore Department of Statistics, median household income over a similar period had grown by 33 per cent from S$7,566 in 2012 to S$10,099 in 2022.

According to figures by URA and real estate agency Orange Tee and Tie, the median prices of new condominiums in the first quarter of this year is S$2,586 psf, up 30.5 per cent from the S$1,981 psf in the first quarter of 2022.

Industry players and experts attribute the rising launch prices to a slew of factors including escalating costs of land, construction and labour.


Despite the soaring prices, new launch developments have seen strong interest among prospective buyers, experts noted.

Blossoms by the Park, a 99-year leasehold condominium near Buona Vista, sold 75 per cent of its 275 units at an average price of S$2,423 psf when it launched on April 28, just two days after the latest round of cooling measures. 

The latest condominium to launch is the 732-unit The Reserve Residences on Saturday (May 27), the one which buyer Anthony is eyeing.

In a press statement on Saturday night, developer Far East Organization said that it has sold 486 units of 587 released, at an average price of S$2,450 psf.

This represents 83 per cent of the units launched and 66 per cent of all the units in the project slated for completion in 2028.

Dr Lee Nai Jia, head of real estate data intelligence, digital and software solutions at PropertyGuru Group, said: “The response rate (to new launches) has been robust, despite the introduction of new cooling measures, increased interest rates, and an environment of rising prices amid external uncertainties.”

Many factors contribute to the positive response towards these new condominium launches, said the experts.

These may include intangible factors such as being a first owner as well as the knock-on effect from a buoyant public housing market.

Another factor is being able to pay for a new condominium unit using a progressive payment scheme, which breaks down the payment requirements into phases based on the percentage of the development completed.

This makes it more attractive amid the current high interest rate environment.

Other factors include buyers’ confidence in the Singapore property market and their fear of being further priced out in the future.

“Fear of missing out is a major contributory factor as anxious buyers rush to market in anticipation of further cooling measures,” said Mr Devadas Krishnadas, director at consultancy firm Future Moves.

In response to TODAY's queries, the Ministry of National Development (MND) said that there are two main drivers for the strong housing demand in Singapore.

The first is from local owner-occupation demand, which has been "especially strong", particularly with an increase in nuclear families, singles and seniors who prefer to live on their own, said MND.

"Secondly, there has been a renewed interest from both local and foreign investors in the residential property market, as we emerge from the pandemic."

Prospective homebuyers throng the sales showroom of the Reserve Residences condominium development on May 21, 2023. Despite soaring prices, new launches have seen strong interest among prospective buyers, experts noted.


While industry players and analysts broadly agreed on the long-term upward trend of property prices here, some cautioned that the current bull market might not last forever.

After all, the market has seen slumps in the past which typically occurred on the heels of a recession. 

For instance, many who bought private properties in the early to mid-1990s at rising prices then saw the value of their units drop or stay depressed for up to about a decade due to the Asian Financial Crisis in 1997, the September 11 terrorist attacks in 2001 and the severe acute respiratory syndrome outbreak in 2003. 

Mr Devadas from Future Moves said that the private housing market is currently showing “signs of irrational price action that cannot be explained simply by supply and demand dynamics”.

Real estate economist from the National University of Singapore Sing Tien Foo and some other experts said it is generally hard to predict when a market is bubbling and about to burst.

“But prices have certainly reached a very high level, where continuous growth at the same rates will further inflate the bubble phenomenon,” said Professor Sing.

Mr Christopher Gee, a senior research fellow and head of the governance and economy department at the Institute of Policy Studies, questioned the belief by some in making guaranteed money from the housing market in general.

“For (prices) to keep rising for no other reason apart from the fact that people believe it's going to go up, that's speculation. And we shouldn't have that as a kind of normative assumption in our society,” he added.

Regardless of their views of the current market, all industry experts cautioned prospective buyers that all investments come with risks.

And the property market is no exception.

Mr Luqman Hakim, chief data and analytics officer at said: “While the market is expected to increase in price and hence investment returns in the long term, not all properties are profitable. 

“Beware of schemes that are overly optimistic on returns in real estate investments,” he said.

Mr Alan Cheong, executive director for research and consultancy at Savills Singapore, posed three questions to those aspiring to buy a private property with the intention to invest.

He said: “Given the rapid pace of structural unemployment, do you think you will still have a job in five years’ time? Can you take the hassle of managing a tenant, especially nasty ones? Is this asset class the only way to invest in?”

An earlier version of this article said that Singapore’s median household income in 2012 was S$7,556. This is incorrect. It should be S$7,566. We are sorry for the error.

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