When you are looking to secure a property, there are two key factors that you can use to help determine if a property has a good entry price.
- First-mover Advantage
- Exit Plan
Let’s make use of Tembusu Grand as a case study to determine these two key factors.
As you can see from the map below, Tembusu Grand sits right in the middle of THREE other plots of land that have yet to be sold under the Government Land Sale (GLS) programme.
Owners of Tembusu Grand will enjoy a first-mover advantage when moving in. As gathered from historical data that land plots from GLS have been increasing in value with each exercise over the years.
1.First-mover advantage
Let’s take a look at similar examples of first-mover advantage.
For the West Coast Vale GLS, we can see evidence of a rise in the price of land cost through the years.
Let's see, how has this helped the residents of Parc Riviera?
Due to the rise in land costs over the years and the subsequent project launches (e.g. Twin View and Whistler Grand), it has helped to bump up the prices of Parc Riviera (launched in 2016). Some homeowners even made close to $400,000 in profit!
Let’s take a look at another example, Dairy Farm.
Similar to the West Coast GLS, we can also see the rise in land cost for the different developments (e.g. Tree House, Foresque Residences and Eco Sanctuary). How has that helped first-movers like the ones who bought Tree House?
We can see owners of the Tree House enjoying huge profits, with ones as staggering as $780,000!
Hence, take a step back and look at Tembusu Grand. Is there a potential upside from the three plots of land that have yet to be sold? Taking reference from past data, yes. There is a first-mover advantage to be gained as its land cost is the lowest among upcoming new launches within the same area.
2. exit plan
Next up, let’s take a look at an exit plan that would help determine if Tembusu Grand is a good project to enter.
Firstly, let’s compare Tembusu Grand to other 99-year leasehold launches that will be coming out this year in the vicinity. Grand Dunman is estimated to launch in the last two quarters of the year, and you can tell that the land cost for Grand Dunman is higher as compared to Tembusu Grand.
So we can safely assume that the selling price for Grand Dunman will be higher or at least the same as Tembusu Grand. But what Tembusu Grand has that Grand Dunman doesn’t, is the unsold plots of land beside the development (Tembusu Grand) – which makes Tembusu Grand a great location for the first-mover advantage as explained above.
Next, let’s see how Tembusu Grand will fare against a freehold launch in the vicinity. The Continuum is a freehold development that was launched on 21st April 2023. As you can see, the land cost for The Continuum is significantly higher than Tembusu Grand.
So it goes without saying that the launch price for The Continuum would be higher than Tembusu Grand, but it’s no surprise given that The Continuum is a freehold property – and freehold properties usually come with a premium.
Therefore, safely assuming that the future capital gain for Tembusu Grand and The Continuum is the same, the only difference is that Tembusu Grand would require a lower capital outlay as opposed to The Continuum.
In addition, we can also see that other leasehold properties in the area have had staggering capital gains, for example, Seaside Residences and The Shore.
What's the next project with a good entry price?
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