News > Condo price surge after a new project launch in the surrounding area? Here’s what our data suggest

Condo price surge after a new project launch in the surrounding area? Here’s what our data suggest

22 June 2023

As there is a new condo project being constructed in your area, you might wonder whether this can help increase the value of your house, or the properties in the vicinity. While it it a common belief that these new launches’ high price can create a knock-on effect on the price of older condos, this topic is rarely looked into closely in a data-driven manner. As such, in this report, REA Team wants to examine whether such effect exists and extract any useful insights to empower your property decisions.

Case background and Objective

To evaluate the effects of new launch projects and the resale market in the surrounding area, we analysed the pricing and transaction volume dynamics before and after the launch of a new project.

Methodology

Our study focuses on Terra Hill and Sceneca Residence, two medium-sized condo projects that were launched in 2023 Q1. We extracted a dataset of 2,148 resale condo transactions within a 2-kilometre radius of the two new launches, covering the period from January 2021 to May 2023.

Terra Hill

Terra Hill in District 5 (source: terrahillresidence.com.sg)

Sceneca Residence

Sceneca Residence in District 16 (source: esingaporeproperty.sg)

Our main findings

After analysing the data of the condo transactions within 2km radius from these 2 projects, we observed:

An increase in resale condo transactions in the surrounding areas of these 2 projects following the launch
No significant changes in price per square feet (psf) after the launch date

Analysis: The Terra Hill in D5

From Jan 2021 to May 2023, there were 1,610 resale condo transactions in D5 with 439 transactions undertaken within 2km of Terra Hill. By visualising the trends of price psf and transaction volume before and after the launch of Terra Hill (data in the two charts below), we observed that:

The average price psf within 2km around Terra Hill demonstrated an upward trend following the launch of Terra Hill; increasing from S$1,540 psf in February to S$1,909 psf (24%) in May.
The transaction volume in 2km vicinity of Terra Hill witnessed a significant increase from 7 to 22 transactions in March. The average volume in the 3-month period following the launch of Terra Hill was also higher compared to that before the launch.

Analysis: Sceneca Residence in D16

From Jan 2021 to May 2023, there were 1,919 resale condo transactions in D16 with 1,709 transactions undertaken within 2km of Sceneca Residence (not all are in D16). By visualising the trend of price psf and transaction volume before and after the launch of Sceneca Residence (data in the charts below), we observed that:

The average price psf in the 2km vicinity of Sceneca Residence increased in February and March. However, considering the fluctuations of psf over the years, the rise observed after the launch of Sceneca is not considered significant enough.
Notably, the number of transactions 2km around Sceneca Residence increased from 35 in January to 73 in March, representing a 108% surge. This is deemed as a significant movement compared to the slight fluctuations of transaction volumes around this area in the past years.

Last thoughts

While there are no conclusive insights on the impact of the 2 new launches on the psf of the surrounding condos, it is noteworthy that there IS an upward trend in the transaction volume in the area after the launch. These findings suggest that while new launches may not always lead to substantial price increases, they can generate increased market activity and demand in the short term.

Additionally, these findings highlight an intriguing trend in the real estate market, where the psf growth of units within a 2km vicinity to Terra Hill after its launch has shown a remarkable increase of 24% compared to the modest 4% growth seen across the entire D5 district. In contrast, the disparity in psf growth between the surrounding area of Sceneca Residence and the wider D16 district was relatively minimal, standing at 11% and 13% respectively. This discrepancy in growth rates raises an interesting topic worthy of discussion and further analysis.

Download the full report (PDF) here: The Impact of Nearby New Launches to Property Price.pdf

To know more about our data-driven real estate solutions, contact us here.

Continue to read our other data insights articles:

The impact of the latest cooling measure on new launch & The relationship between take up rate and launch price

The impact of proximity to MRT stations for smart investments on real estate decisions

The effects of cooling measures on foreign investors in Singapore

The impact of proximity to reputable schools for smart investments on real estate decisions