Are the current prices of the new launches in the OCR truly exorbitant, as perceived by many individuals?
As evident from the provided data table, the prices of new property launches across all regions have witnessed a steady upward trend over the past 12 years. Focusing specifically on the OCR prices, in 2011, acquiring a new launch in this region would have cost around $1,000 per square foot (psf). However, presently, we observe prices surpassing the $2,000 psf milestone. This notable surge in OCR prices has raised concerns among individuals who are now questioning whether purchasing a property in the OCR has become excessively expensive, particularly when compared to the relatively narrow price difference between OCR and RCR (Rest of Central Region).
Taking a step back to 2016, the launch of Seaside Residences was marked by a price of approximately $1,400 psf, while resale projects in the same area were available at a range of $800 to $900 psf. Remarkably, at present, Seaside Residences has exceeded the $2,000 psf mark, further accentuating the escalating property prices in the OCR.
The examples of The Clementi Canopy and Grandeur Park Residences, both of which obtained their Temporary Occupation Permits (TOP) in 2019 and 2020, respectively, reveal that their prices have remained in the range of $1,800 to $2,000 per square foot (psf). Additionally, more recent launches like Parc Clematis and SengKang Grand Residences, currently at different stages in the real estate market (sub-sale and just TOP), are also being offered at an average price of $2,000 psf.
These instances underscore the significant impact of the demand for properties in the OCR market, which has effectively driven prices up to the $2,000 psf level it stands at today. The consistent trend of new launches in the OCR being priced at this level suggests a clear reflection of the prevailing market conditions and the willingness of buyers to invest in properties within this price range. It emphasizes that the OCR market has witnessed robust demand, which has ultimately shaped the pricing landscape for new property launches in the region.
The average price for new launches in the OCR stands at around $1,800 psf, while the resale market hovers within the $1,800 to $2,000 psf range, with some OCR resale properties even reaching as high as $2,400 psf.
The apparent disparity between the prices of OCR new launches and resale properties raises the question of why new launches are selling at relatively lower prices. This can be attributed to the prevailing market conditions, which include higher interest rates, cooling measures implemented by authorities, and an increase in the supply of Government Land Sales (GLS) units introduced to the market. As a response to these conditions, developers are offering attractive prices for their new OCR launches to entice potential buyers.
Considering the price movements in the OCR market over the past decade, it becomes evident that there have been lucrative opportunities for property investors. Looking back, one might wish they had purchased a property earlier to benefit from the price appreciation. Looking ahead, the question of where prices will head in the next five years arises. While it's challenging to predict with certainty, the OCR market's historical performance and the prevailing market factors suggest that there may still be opportunities for potential property investors in the region.
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