ONE BERNAM PRICE
One Bernam Price – City Of The Future
Located in Central Singapore, One Bernam Condo is a highly anticipated development as it will be one of the pioneer projects under the Central Business District Incentive Scheme introduced by URA in 2019. Under the Masterplan, the Central Business District will no longer be a business-only zone in the future as it will undergo a massive transformation to be a vibrant place where residents and communities can live, work and play. Through the scheme, owners and developers of existing older office buildings are granted incentives to redevelop these existing properties into mixed-use developments that can consist of a mix of residential, commercial, hotels, and other lifestyle use.
For instance, developers can enjoy an increase of up to 25% in gross plot ratio if they invest in developing hotels or commercial and residential projects in the Anson Road and Cecil Street precinct. The future development of the Central area is going to be very exciting and transformation will only intensify from now on. In view of the future potential due to the transformation, land prices in the area are expected to increase and this will inevitably lend positive support to the One Bernam Price.
Potential Growth In One Bernam Price
The rare site at Bernam Street was launched for tender in May 2019 and the tender closed with the highest bid from Hao Yuan Investments at $440.9 million. This translates to a land cost of $1,463 pst per plot ratio (psf ppr) for the 41,400 square feet site. Based on EdgeProp analysis the breakeven for the One Bernam Price is estimated to be close to $2,200 psf.
This puts the development in an advantageous position compared to older development in the vicinity. Based on EdgeProp, the average price for Skysuites@Anson (completed in 2014) is $2,394 psf and Marina One Residences (completed in 2017) is around $2,45 psf. With older development transacting at above $2,300 and $2,400 psf, the One Bernam Price is expected to be very attractive for investors and home buyers.
Being a visionary means an investor will need to able to see what others are unable to see. It will also mean taking calculated risks and taking the first move before everybody else. One of the renowned examples is the launch of The Sail @ Marina Bay in 2004. The development was priced below $1,000 psf at launch and the market has not seen such high prices at that time. However, with the redevelopment of the Marina Bay area, prices soared above $2,000 psf in the 2007 and 2008 time frame. With the massive redevelopment plans in store for the Central area, the One Bernam Price may enjoy the potential upside.
Increasing Land Prices In Central Singapore
To better understand the impact of the property market on the One Bernam Price, we need to go back to 2018. Due to the rapid increase of property prices from the 3rd quarter of 2017 to the 1st half of 2018, the government stepped in to implement cooling measures that include the increasing of Additional Buyer Stamp Duty (ABSD) and the tightening of loan-to-value (LTV) limits on residential property purchase. Following the cooling measures since 5 July 2018, the demand for housing saw a slowdown, and to regulate the supply of new homes in the market, the government responded in December 2018 by reducing the number of government land plots for sale. As such this also gave support to the land prices in 2019.
Land prices in Singapore are growing at a steady rate and especially in the prime districts such as the Central area.
The last time a residential site went on sale in the vicinity was at Enggor Street in 2007. Two residential sites with the commercial first story at Enggor Street were transacted at $7,719 psm per GFA and $9,167 psm per GFA. 12 years later, the One Bernam site plan which is only one street away from Enggor Street, transacted at $15,745 psm per GFA in September 2019. As land plots are limited in Singapore, especially in the Central area, land prices will continue to increase. As such, future property prices in the city will be above the present One Bernam Price. It is no wonder that the property market in Singapore continues to show resilience despite the Covid-19 pandemic in 2020.
Resilient Property Market
The flash data released by URA on 1st April 2021 shows the overall private residential property prices have increased by 2.9% from 4th quarter 2020 to 1st quarter 2021. Landed property prices saw a big jump by 5.6% while non-landed property prices saw a sharp increase of 6.1% in the Rest of the Central Region (RCR). Prices in Core Central Region (RCR) remain flat with a slight decrease of 0.3% compared to previous quarters which saw a 3.2% increase from 3rd quarter 2021 to 4th quarter 2020. However, these flash results have not included the volume of new units transacted at the end of March 2021 with a recent new launch in the Downtown planning area.
Despite the economic crisis, the property takeup rate remains robust in the CCR and prices are on the rise. In view of the strong consumer confidence in the property market and the attractiveness of the One Bernam Price, this new development will appeal to both local and foreign investors who are looking to invest in a high-growth area in Singapore.
One of the reasons for the increasing property prices is attributable to the depleting of inventory of uncompleted or unsold new homes in the market. One year ago at the onset of the pandemic, consumers were concerned there would be an oversupply of new homes thus expected prices to plunge. However, one year on, the robust sales after the circuit breaker have gradually reduced the stocks on hand.
Based on the market analyst, as of the 4th quarter of 2020, there are about 24,296 uncompleted, unsold units in the inventory. With a run rate of about 9,000 to 10,000 new homes being sold annually, the current inventory may only last till mid-2023. Unless en-bloc activities start to ramp up this year or there is more government land being released, the market could face a shortage of supply in 2023. If this happens, prices would potentially be pushed higher than the prices today. Similarly, investors enter the market today may potentially see the One Bernam Price grow beyond its launch level in the next few years.
The fundamentals for the Core Central Region remain very strong especially with added support from foreign investors. With the continued strong performance from quarter to quarter, investors should take advantage of the One Bernam Price and not delay their entry into the CCR market.
One Bernam Unit Mix offers 5 main types of configurations ranging from 1-bedroom to 3-bedroom units and penthouses to meet the needs of home buyers and investors.