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Why The Commodore is a development you should look out for? Written September 2021

Many eyes are on the Canberra region, with the numerous developments and projects landing feet into the area. Another attractive project has emerged recently - you guessed it, The Commodore has been revealed to be the next upcoming project to be launched within District 27.

OCR performance: Above and Beyond

The Commodore is situated in District 27 in the OCR (Outside Central Region), and many might be interested to know how do OCR projects perform:

From the analysis above, it is clear that OCR was one of the best performing regions, with a stellar 42.99% increase in prices. Then what about District 27 within the OCR?

We can see that District 27 has been the highest performing district, with an impressive growth of 94.65%, and upcoming projects stand to benefit the most as it still draws a very strong demand.

Limited supply and strong demand

When analysing the potential of a project, we also look at the stocks of new homes in the region. This is so that we can compare the demand and supply to draw a conclusion of whether there is a healthy demand for the region.

From the table above, you see that there are only 5,676 new homes supplied as of 2Q2021. Yet, the average quarterly demand in 2021 continues to be 1,088 each quarter. Since there are no more stocks coming in, for the time being, we can tell that to keep up with the demand, the current supply can only last for another 15 - 16 months! An insufficient supply against the strong demand is a clear indication that the region is still rapidly growing and attracting a lot of investors and interested homebuyers.

Attractive Entry Price

Furthermore, we want to bring to your attention how the entry price of The Commodore units is attractive and relatively low. From the table above, The Commodore’s one bedroom units start at 700,000+, which is a very rare price today. Compared to the other units in the OCR that range from $900,000+ to $1,000,000+, it is approximately 30% less in price! Along with its limited number of units, we can tell that The Commodore will be a huge hit among the interested homebuyers.

Low Land Cost

Here you can see that the land cost for The Commodore is only at $644 psf ppr, which is one of the lowest among the upcoming OCR projects.

From the table, we see The Commodore being much lower than Tanah Merah Kechil Link at $930 psf ppr, or even Ang Mo Kio Avenue 1 at $1,118 psf ppr. In fact, it is even lower than an EC along Tampines Street 62, which was priced at $659 psf ppr.

It will be almost impossible to see this type of prices again, with the upcoming Lentor Central project in the nearby District 26 being priced at $1,204. That is almost 200% more than The Commodore, which is located in the well-performing district 27.

Prices are likely to head north - if you are able to secure a choice unit in The Commodore, it will likely be the most attractive deal in the region. It is definitely a good opportunity for you to consider.

Location analysis: MRT Station Effects

One highlight of The Commodore’s location would be its proximity to the Canberra MRT station. With just a short distance of approximately 250m, it will take about 9 minutes or so to reach the MRT station. Many would understand that the perks of staying near Canberra station would be the ability to get better price growth and higher rental. As the area flourish with new developments and amenities, The Commodore will be one of the first to benefit.

We can showcase an example on how condominiums perform within 500m and outside 500m of MRT stations. You can see from the analysis above that those within MRT stations were able to see strong growth at 14.5%, a higher appreciation growth and a stronger demand in the market. This is significantly higher than the 8.4% seen in the projects that are more than 500m away from MRT stations.

Next, we can also see how the proximity to MRT stations also commands better rentals. Afterall, transportation is a key factor in our everyday lives - this is equally so for the tenants when considering which units to rent. We can see that the projects near MRT stations were able to command much higher rentals, overtaking those that are further by approximately 20 - 40% in psf pm.

Location analysis: BTOs Enclave

The Commodore also has another key point to benefit from. Being situated in the flourishing new Canberra Town means that it is near to the hot spot for BTO unit development, with over 1,400 BTO units planned in addition to the existing BTOs at Canberra. In the last 7 years, there are close to 5,800 new BTO units within the region.

What does this mean? With a huge pool of BTO units, it means that there will be numerous young couples looking to upgrade their homes once their BTO hits the Minimum Occupation Period (MOP). Naturally, they will look at the nearby resale condo units, which makes them much more likely to be interested in The Commodore. Hence it is common to see that towns with high HDB transaction volume will see spillover effects on nearby resale condominiums.

As seen above, the potential pool of upgraders actually add up to a whopping 9,519 households. Many will reach MOP by 2025, just enough time to consider The Commodore that will TOP in 2026.

Location Analysis Case study: High Park Residence (TOP: 2019)

To illustrate this better, we look at the case study of High Park Residences. High Park Residences was scheduled for TOP in 2019, where nearby HDBs were all reaching their MOP soon. From the image below, you can see that the HDBs included Fernvale Palms, Punggol Spring, Fernvale Crest and more, that were all reaching their MOP between 2017 - 2018.

As such, we saw next that High Park Residences had a 33.67% increase in avg psf over the years of 2018 to September 2021, driven by the high demand from the area. Most of them came from HDB MOP flats, and were indeed homebuyers that were interested in upgrading their living space from HDB to private units.

Location analysis: North Region Transformation

Another key reason why The Commodore is a project to look out for, would be the transformation that is set to take place in the North Region. With flourishing developments in the works, it means that The Commodore will have a strong exit strategy.

The transformation of the North area has been a long developing plan, where the Woodlands Regional Centre is in the works to become the largest economic hub in Singapore’s North Region. We can expect new spaces for business, industry, research & development to be introduced over the next 15 years across the 100 hectares of developable land.

Along with the Woodlands Health Campus and Bukit Canberra, it's exciting to imagine how much the prices of The Commodore would grow overtime. An HDB upgrader’s dream with impeccable locations and potential, we are sure The Commodore is definitely one that you should look out for.

Still unsure and have questions on the property? If you would like property guidance that is tailored to your needs and preferences, reach out to our team of agents that is well equipped with the latest property news and updates.

The above is written by Kaeden Ong. To know more, contact him at +65 9048 0660.

The information provided is for generation information purposes only and does not have regard to specific investment objectives, financial situation and the particular needs of any recipient hereof. No information here should be used as legal, taxation or investment advice.

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