Is Penrose Condo A Good Property Investment?
Updated: 6 days ago
Just received the latest news that new home sales for the month of June are the highest in 7 years! The private residential market is recovering at a faster pace, after posing a surprising rebound in the month of May.
Before we go into a deep analysis of the upcoming new launch - Penrose condo at District 14, let's take a look at the pulse of the real estate market in Singapore now.
Developer Monthly Sales Analysis For June
According to the URA, new home sales increased 104.9% from 487 units in May to 998 units in June. This is higher than the 75.8% month-on-month (m-o-m) increase in May (see below table).
Including executive condominiums (EC), sales jumped 102.2% from 510 units to 1,031 units over the same period, surpassing the 74.1% m-o-m increase in May. The 998 new homes transacted in June this year was the highest monthly sales for June since 2013 (1,806 units excluding ECs).
What are the reasons for the stronger take-up rates?
Firstly, the partial lifting of the Circuit Breaker measures signaled that the spread of the Covid-19 virus was coming under control. This led to the gradual recovery of public confidence.
Secondly, investment sentiments were improving after the stock market meltdown in March. The Straits Times index had since recovered 17%.
Thirdly, there was a huge pent-up demand from home buyers that had built up during the 2 months partial lockdown in April and May.
Foreign Buyers Investing in Singapore's Properties
Foreign buyers returned after the Circuit Breaker period. According to URA Realis data on 15 July 2020, the number of non-landed homes bought by foreigners increased substantially last month.
Non-permanent residents bought 49 non-landed private homes in June, a steep increase from the 14 units transacted in May, as well as the 7 units in April. This is also higher than the 33 units sold in June last year.
Singapore permanent residents bought a total of 120 units of non-landed homes in June. This is a surge from the 56 units in May. It is also higher than the 86 units sold in June last year.
Why are foreigners still investing in properties in Singapore amidst this Covid-19 pandemic?
Singapore is a safe-haven for foreigners to park their money due to our stable political environment, trust in our legal system, quality of finishing in properties as well as the investment potential of the properties here.
As the banks' interest rates continue to remain low, and ample liquidity flows into the asset market due to the quantitative easing programs launched around the world, we expect more foreigners to purchase properties in Singapore in the coming months.
With the encouraging numbers, let us now dive into Penrose condo in District 14 to see if this project is a good investment.
About Penrose Condo
Location : 20 - 30 Sims Drive
Site Area : Approx 174,600sqf
Developer : Hong Leong Holdings, Intrepid Investments & City Developments Ltd
Tenure : 99 years
Expected TOP : Estimated 2024
No. of Blocks : 5 blocks
Blocks Height : 18 storeys
Total units : 566
1 bedroom 474 - 517sqf 57 units
1 bedroom + study 560 - 570sqf 2 units
2 bedroom 646sqf 69 units
2 bedroom premium 700 - 710sqf 68 units
2 bedroom + study 797 - 807sqf 34 units
3 bedroom 936 - 980sqf 105 units
3 bedroom premium 1044 - 1098sqf 123 units
3 bedroom + study 1173 - 1184sqf 54 units
4 bedroom 1389 - 1399sqf 54 units
Penrose condo is located in the city-fringe RCR region. It is conveniently located within 6 minutes walk to Aljunied MRT station.
For those who drive, Penrose condo is well connected to the various highways like Pan Island Expressway (PIE) and Kallang-Paya Lebar Expressway (KPE). It takes only 15mins to reach the Central Business District (CBD) and Orchard Road shopping belt.
The condo is surrounded by educational institutions. It is located within 1 to 2km from primary schools like Geylang Methodist, Cedar Primary, Canossa Catholic, Bendemeer Primary and Kong Hwa Primary.
Proximity to primary schools will appeal to young families with school-going children. Under the Ministry of Education (MOE) Primary 1 registration guidelines, proximity to the school gives the child priority to register for a spot in the school.
For more information, please refer to https://beta.moe.gov.sg/primary/p1-registration.
Higher educational institutions like Nexus International School and James Cook University are also nearby. This will appeal to foreigners who are looking to buy or rent a unit nearby.
Penrose Condo is close to many commercial hubs. It is only one MRT station away from Paya Lebar Quarter, 5 MRT stations away from the CBD, and 6 MRT stations away from Changi Business Park. There will be plenty of demand for rental units in Penrose Condo.
We do not have the full details of the facilities in Penrose condo at the moment. I will review here once we receive the information.
The developers bought the land from Government Land Sale at a price of $383.5mil. This works out to be $732 psf per plot ratio. According to EdgeProp, the breakeven price for Penrose Condo is $1,264psf.
We do not have any indicative prices from the developers at the moment as they will normally release pricing only on launch day.
However, let us look at the prices of the new launches nearby, as well as the resale properties around Penrose. This will help us evaluate if Penrose condo is a good buy when developers release their price.
The comparable new launches in District 14 are The Antares and Parc Esta. Both are 99 years leasehold property.
The Antares is located next to Mattar MRT station and has a total of 265 units, whereas Parc Esta is located opposite Eunos MRT station and is a massive 1399 units condo.
From the chart below, we can see the average price of units sold in Parc Esta for the past 12 months is $1,692, and The Antares is $1,750. Parc Esta is one of the top-selling projects in Singapore for the past few months as the location and pricing are attractive.
I breakdown the prices further to find out the average transacted prices for the past 12 months by 1 bedroom, 2 bedroom, 3 bedroom and above types.
From the chart below, we can see the average transacted price for 1 bedroom units in Parc Esta is $1,834psf as compared to $1,761psf for The Antares.
The average transacted price for 2 bedrooms unit in Parc Esta is $1,701psf as compared to $1,752 for The Antares.
From the chart below, we can see that for 3 bedrooms and above units, the average transacted price (PSF) for Parc Esta is $1,634psf vs The Antares at $1,671psf.
The immediate neighbor for Penrose Condo is Sims Urban Oasis, which was completed in 2017. Other nearby comparable condos include Tre Residences located near to Aljunied MRT station and Park Place Residences next to Paya Lebar MRT.
The average price for units transacted in Sims Urban Oasis is $1,578psf. This is for a 3 years old condominium. The average price for Tre Residences is $1,715psf, whereas Park Place Residences transact at an average of $1,744psf. Do note that Park Place Residences is a mixed development and thus there is a premium that buyers are willing to pay.
Penrose condo is one of the rare bigger residential site located in the city fringe area. The connectivity to various public transport and expressway, as well as the proximity to good schools will appeal to many homeowners.
Also, Penrose condo is near to many commercial hubs like Paya Lebar Quarter, CBD and Changi Business Park. This means that there will be rental demand for the units. Investors will be interested in the limited 1 and 2 bedders.
Lastly, the developers managed to bid the plot at a relatively low price. They will thus be able to price the units competitively. This will be a huge draw to buyers as it means more room for price increase in the future.
If you would like to explore investing in a unit here, or need professional views on which unit is the best for investment or own-stay, I will be most willing to share my views.
Hope to see you soon!
About The Author
Vivian is a highly experienced real estate agent who has been in the industry for 18 years.
Over the years, she has transacted numerous property deals including HDB and private properties. She is well-versed in policies and regulations involving the sale and purchase of residential properties. She has also handled many transactions involving complicated situations like contra, divorce, administration/probate cases, and decoupling / part-share purchase.
Vivian is also a mother to 2 boys. Being a real estate mom allows her to spend more time with her children as they were growing up. Both boys are avid footballers representing their schools and clubs. She loves watching their games and hardly misses a game whenever they play.
Vivian is an active real estate salesperson and team leader. Call her at 98577714 for your real estate matters, or if you are looking to join the real estate industry.