How to Spot an Undervalued Property (Condo)

You will need lots of effort and a little luck to spot an undervalued property because such rare deals will usually be quickly taken off the market by discerning investors. Below are 3 tips to help you spot an undervalued property in Singapore

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     Table of Content

  • Post-Launch New Condo
  • New Launch Vs Resale Condo Gap
  • Buy Early into GLS Vicinity

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📌 1. Post-Launch New Condo

  • Newly launched condos always get all the attention and hype because of all the publiciity
  • However, you may get some real bargains if you look deep into post-launch new condos.
  • After the official launch is over, many show flats will remain open to sell the remaining units.
  • When sales are slower than expected in these post-launch new condos, developers will introduce promotions to bring in the crowd.   
  • You have to be on the constant lookout for these “Time Sensitive” promotions.
  • Some promotions may seem like marketing gimmicks but there will also be good deals.
  • For example, developer’s “One-Price-Promotion” for all available units in the same stack is an enticing offer to me
  • The first movers who grabbed the highest floor will have gotten a bargain over the lower floor buyers.
  • Post-launch condos near their ABSD deadline are also another source of undervalued properties.
  • See my list of new launch condo with ABSD Deadlines,“ABSD Deadline for Developers: How you can Benefit from these Remaining Unsold Units”
ABSD deadline for developer

📌 2. New Launch Vs Resale Condo Gap

  • As the costs of land increase, new launch prices are expected to rise in tandem.
  • When there are more new launches in your area with record setting prices, it will bring up the average per square foot (PSF) prices
  • When the price gap between the New and Resale condo widens, buyers will shift their attention to the resale market.
  • Savvy buyers will be among the first to spot the gap and enter the secondar market early.
  • Take for example the recent land sales for an Executive Condo (EC) Site in Tengah.
  • The expected launch prices are estimated to be between $1,190 to $1,250 psf.
  • EC prices are supposed to be much cheaper (as much as up to 20%) than a private condo.
  • As such, this Tengah New EC will likely set the new baseline for future private condos nearby
undervalued property

📌 3. Buy Early into GLS Vicinity

  • There is another less-known way to spot an undervalued property way ahead of others.
  • Besides tracking the price gap between new vs resale Condo, you can also monitor the Government Land Sales (GLS) programme
  • Every six months, the Urban Redevelopment Authority (URA) announces a list of land sites for sale, known as the GLS Programme.
  • Every potential private home buyer should pay attention whenever URA announces the successful tender of these sites on the GLS list
  • After every successful tender, the developer will take at least 1 year to plan their project
  • Many property portal sites will also try to estimate the estimated launch prices based on the winning bid by the developers.
  • These estimated prices are good references for future prices in the vicinity when the project is ready for launch in 1-2 years.
  • When you notice a significant price gap between this future new launch and nearby resale condos, you may want to consider buying early into that area.
  • You will see a surge in demand for nearby resale condos after every successful new launch.
  • Why not have an unfair advantage and get a head start?
  • The above works for en bloc sites as well

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Dennis Lim

Dennis has more than a decade of experience investing in real estate. Like many fellow Singaporeans, he grew up in a HDB flat with dreams to live in a condominium. Through careful financial planning & hardwork, this became a reality when he was 30. He now owns 3 private properties in Singapore and has helped hundreds of Singaporeans to achieve their goal of upgrading their homes in land-scarce Singapore.

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