Agree that the EC launch price is very high. However this genius looks like he didn’t do his research into Copen Grand. MAS warning should not be ignored, indeed there are risks involved, but as he mentioned, he don’t believe Singaporeans are stupid. So he looks to me like he’s trying to make sense why people buying into ECs at these prices.
The land bid price for Copen Grand was around $603 psf. The nearest area currently for comparison is the plot for Lakeside Apartments where the land bid price was $1077 psf (source:
https://www.edgeprop.sg/amp/property-news/lakeside-apartments-jurong-west-en-bloc-sale-240-mil). Sure they may launch as condo but factoring in the material and labour cost plus the premium developers are going to charge it’s going to be way higher than the average $1.3k psf paid for Copen Grand.
Inflation is going to stay for more than a couple of years, developers aren’t going to be selling for a loss. Inflation means material, labour costs are all going to be more expensive. Near term there may be lowered demand due to MAS warning but land appreciation over the long term will still be there. When new private condos launch in the Tengah area, that’s when the value of the project will start to unlock. Copen Grand is in the middle and within walking distance of all 3 MRTs which are going to be operational in 2027, and is close to the west side industrial estates.
What may seem expensive at this point may seem cheap maybe 10-15 years down the road. Just like how MacDonald’s ice cream cones were just 50 cents 15 years ago and are now $1. With Covid many households became flushed with cash if they bought into the stock market during the 2020 flash crash and with the incredible recovery during the Trump years. Some may also be reaching the 16k income ceiling for ECs and cannot wait out to purchase after 3-6 months.
Plus many ah tiongs are entering the Singapore property market, with more to come. They are flushed with cash so of course when the floodgates open they chiong in. (Source:
https://www.ft.com/content/a0c11e3e-ab72-4b4b-a55c-557191e53938) These ah tiongs get their citizenship easily.
So will new condos be priced lower than $1.3k psf in Tengah? Highly unlikely.
The “record” 1679 sqf penthouse had a lower psf of $1.2k. Buyers looking for larger units in size-restrained Singapore. Landed downgraders make up a huge proportion of this group. With private condos launching at average 2k psf, EC is the next best alternative for HDB upgraders. TOP is in 2026-2027, by then inflation would more or less have come down, and banks usually offer one free conversion for loans.
Would the government introduce curbs for ECs or raise the income ceiling? Already there is discontentment arising saying “why are Singaporeans paying tax to subsidise these rich people”, so why would they increase the income ceiling again if that would cost them politically? Maybe through adjusting the banks’ rates but they have to carefully navigate this since it would also mean existing homeowners would be impacted.
! Talk theory is easy, know how to do is another thing