Executive condominium launches are fewer and farther in between when compared to private new launches. Sometimes, ECs whether new or already fully privatised fall through the cracks of buyer’s search process. There can be hidden opportunities in this EC segment that may fit the bill when it comes to what you are looking for in your property journey.
Inspired by the beauty of Copenhagen, Copen Grand EC offers a take on luxury in the Tengah neighbourhood in the west. With much more affordable prices as compared to private new launches in the market and accompanied by huge growth prospects, things are looking good in the Copen Grand EC.
In this heated up new launch market, we have seen AMO Residence and Lentor Modern do phenomenally well despite increasingly worrisome macroeconomic conditions. Will Copen Grand EC stand to do just as well or better? Stay tuned to find out more as we review this new EC launch.
Details on Copen Grand Executive Condominium
The Copen Grand EC is located in Tengah. This area is marked by the PIE, KJE, Bukit Batok Road, and Brickland Road. Copen Grand is located centrally in this Tengah estate. So noise concerns from the expressways will not be a problem.
Taking a closer look at the Tengah estate thus far, Copen Grand will be a luxury positioned EC in this neighbourhood. It is flanked by new BTO flats in the neighbourhood. This new estate in the west would start to have its first BTO TOPs around 2023 all the way into 2025.
Thankfully, the estimated TOP for Copen Grand will be sometime in 2027 and possibly 2026. This might line up closely with the completion of the nearby Jurong Region Line stations: Tengah & Hong Kah. Copen Grand EC is estimated to be around a 5 minutes walk to Tengah & Hong Kah stations. Tengah Plantation will be an added station around the same distance away but is set to complete a year later in 2028.
Now, focusing on the details of the Copen Grand EC itself, it offers 12 blocks yielding a total of 639 units. Each block is 14 storeys in height. The layout for this launch varies from 2+Study to 5 Bedrooms, with a stronger focus on 2 and 3-bedroom layouts. The floor area for the units will range from 807 – 1,561 sqft.
As pure speculation at the moment, we are expecting the price range to go from $1,2xx to $1,4xx psf. The estimated breakeven price for the development is approximately $1,0xx to $1,1xx psf. Adding the conventional 20 to 30% profit margin on this will give us our estimated price range of $1,2xx to $1,4xx psf. Again this is just speculation based on the information we currently have. The official price release date will be on 19 October 2022.
You might want to mark down these important dates on your calendar if you are interested in this EC launch. The preview dates are from 7 to 17 October. The balloting day will be on 21 October and the booking day will be on 22 October. Register your interest with us now to avoid disappointment.
What are the Benefits Copen Grand offers in our Review?
In this section of our review, we will cover the main benefits of this launch and why it is appealing to new buyers in the market. Apart from the key factors of affordability, and growth opportunities, it is also a great development in its own right. Here are our thoughts on the project.
1. Great alternative to private new launches (entry price)
In terms of price, Copen Grand EC provides a much better entry price compared to other new launches in the market right now. Private new launches have skyrocketed in terms of prices and are now at very heated levels.
Just as an example, OCR projects such as AMO Residence (which almost sold out on its launch weekend) have an estimated average psf of $2,100. This is over 61.5% more expensive than the average estimated psf ($1,300) of EC options like Copen Grand and North Gaia. The launch price is a lot more affordable and provides a better opportunity for growth over time.
2. Right-sizing unit mix
EC launches are a lot rarer compared to its private counterparts. It provides a great affordable entry into the condominium and apartments segment. In terms of value, it is right there. Because of its sporadic launches, people often miss out on EC options in their property choice.
In the case of Copen Grand EC, there is a strong focus on 3 Bedroom options for buyers. This approach to right-sizing is great as families in Singapore are getting smaller over time. 3 Bedroom options will be around two-thirds of all the available units. Close to a third of the units will be able to give larger families comfortable living space in Copen Grand EC as well.
Based on the unit size distribution, Copen Grand is great for new family units and gives them a comfortable living space that is the right size. Larger options also give 3-Generation families to live comfortably in Tengah.
3. Progressive payment is advantageous in high-interest rate environment
Going back to the issue of price and affordability again, the combined fact of it being an EC and a new launch helps immensely on the issue of cash flow and affordability. This comes in as an urgently needed alternative to sky-high property prices in an increasingly high-interest rate environment.
With the Fed not intending to get their feet off the pedal on the interest rate hikes, it will not be surprising to see mortgage interest rates go to around 4 to 5% in 2023. The new launch status of Copen Grand will help cash flow through the progressive payment scheme.
Although HDB loans are not available for ECs, the lower quantum for ECs compared to private condominiums will offer an advantageous alternative in this tough macro market. Using an example, the average size of a 3 Bedroom unit will be around 1,006 square feet. This is approximately a quantum of $1,307,800. This is a great quantum and value play in the market for the middle class of Singaporeans.
The estimated loan at 75% LTV will come to around $980,850. This is before factoring in any grants that may be applicable at the point of purchase, which range from $5,000 to $30,000. Using this example, this will be how the progressive payment looks like. The assumptions for the loan are that the interest rate sits at 3% and it has a 30 year tenure. For ease of calculation, the monthly loan repayment amount does not include the repaid capital and interest over time. In other words, it is a conservative estimate of the monthly loan repayment amount.
4. Second highest growth area in OCR (D22)
This might be the most exciting part of why Copen Grand EC is attractive. District 22 is the second highest growth area among the OCR districts, sitting at a CAGR of 6.9%. This is great news for those who intend to sell their properties in this area.
Based on the speed of the growth, we can see that it is correlated with the new launches of BTO as well. Many projects have been launched in both District 27 and District 22. Moving forward, we may see continued growth and strength in these locations.
5. Large BTO estate surrounding — Potential upgrader audience
As mentioned above, the large BTO estate surrounding Copen Grand makes up a large portion of the potential HDB upgrader audience in the area. Looking forward to the future, 10 years from Copen Grand’s launch, we will see it completely privatised.
There is much value to be reaped from holding till TOP or privatisation for first-hand owners of Copen Grand EC. This length of time will allow the Tengah estate to completely develop in terms of the Jurong Region Line and the amenities in the form of food options and new schools, and medical facilities in the area.
As it matures as an estate, the value of the properties in the area (particularly private property) will rise. This provides a great opportunity for capital gains in the future. Adding to this fact is the strong demand on the side of HDB BTOs.
Looking at the subscriptions for the Tengah BTOs in February 2022, we see an oversubscription to the flats in this area. The growing popularity and population of this estate would also mean the likelihood of it developing more amenities as it has the populace to support new businesses and infrastructure in the area.
6. Nearby Jurong Region Line stations completed by 2027-2028
The Jurong Region Line is something that all Tengah residents will benefit from. The estimated completion of the entire line is around 2029, approximately 2-3 years after the TOP of Copen Grand. There will be a total of 24 stations completed in 3 phases.
The Jurong Region Line will connect Choa Chu Kang, Boon Lay, and Jurong East interchanges. It will connect the heartlands of the west to major business hubs, educational institutions, and commercial outlets in the area.
More importantly, the nearby stations Tengah, Hong Kah will be completed in 2027. Tengah Plantation will be completed in 2028. These nearby stations located around Copen Grand are approximately a 5-minute walk from the EC.
7. Distant from Central Region but more commercial and recreational development for Jurong Lake District in Long Term Plan
While the Tengah estate is distant from the central business district, there is much in store from the URA master plan and long-term plan for the area. The focus of this estate will be on greenery and sustainability. There will also be more commercial and recreational development in District 22 as a whole.
More importantly, the green and sustainability focus of Tengah estate will be important. Many new estates across Singapore face the problem of having too much concrete, creating a problem of heat. With Singapore being summer all year round, the greenery in Tengah will offer much needed reprieve from the heat. Hopefully, keeping temperatures comfortably cool in the area.
8. Great positioning against morning and afternoon sun.
The units in Copen Grand EC are north and south-facing. This minimises the problems from the morning and afternoon sun. These arrangements of the blocks seem to have the sun in mind and will put buyers at ease as the world continues to heat up due to climate change.
9. Cross-room Ventilation Design
Another important feature of the EC that stood out for us is the specific attention to green features. In particular, the cross-room ventilation system stood out for us. This is often an understated feature for comfort. Often, what makes a viewing experience comfortable for buyers is the ventilation of the space.
Copen Grand EC focuses on this ventilation issue and makes conscious design steps to make sure that residents will have not only a luxurious experience but a comfortable one.
As a whole, Copen Grand EC offers much to new buyers to the market. Even though the macroeconomic environment is not ideal for property owners, Copen Grand is able to do much for buyers that few new properties can. It is within an affordable price for the Singaporean middle class, it provides avenues to deal with the rising interest rates, and most importantly it has great prospects for growth and capital appreciation.
What are things buyers should be aware of for the Copen Grand EC Site?
Nonetheless, no property is perfect in Singapore. There are a few concerns that new buyers must know before making a purchase decision for Copen Grand EC, or any new property decisions for that matter of fact.
1. High-interest rate, potential recession
The US Fed has recently raised interest rates again on 21 September 2022. For the third consecutive time, interest rates have risen by 0.75%. Moving into 2023, interest rates are expected to sit between 4 to 5%. Here in Singapore, we may be beginning to see the impacts of these foreign interest rate hikes.
Singapore is keeping in line with monetary tightening and it is very likely that Singapore will have a higher interest rate environment moving forward. Interest rates in Singapore may sit at 3 to 4% for a prolonged period of time to fight local inflation as well.
A potential recession is also on the table if inflationary pressures persist and companies’ earnings are hurt by the high-interest rate environment. Some businesses have already been put on a hiring freeze. Others are already starting to retrench workers.
Depending on the industry, job security may or may not be an issue for some buyers. Regardless, Singapore’s labour market is considered very strong with high employment rates still in effect. The government will likely provide strong support in this area, especially when it concerns the livelihoods of Singaporean workers.
2. Make sure sufficient savings, good cash flow management
As a prudent course of action, buyers should make sure that they have sufficient emergency funds for a potential recession or job loss. The typical amount is usually around 6 months of expenses or income.
Good cash flow management in terms of controlling the fixed expenses you have each month and on discretionary spending (like holidays) will help you make sure you can meet your debt obligations even in bad times.
These good financial habits will help you avoid a world of pain when the economy turns sour.
3. Lack of popular schools in the immediate area
Another key point in this new estate is the lack of popular schools in the immediate area. But there are quite a few options within the 3km radius of Copen Grand EC. Some examples are Shuqun Primary School, Jurong Primary School, and Yuhua Primary School. Bukit Batok Secondary School, Jurongville Secondary School, Dunearn Secondary School, Swiss Cottage Secondary School are also in the area.
4. Eligibility concerns & Resale Levy
A major caveat when it comes to buying Executive Condominiums is that not everyone can buy them. There are eligibility criteria to keep in mind when applying for ECs. Copen Grand included. Here are some basic ones to keep in mind:
- Monthly household income not exceeding $16,000
- Disposed of any private property 30 months before EC application
- Resale levy applicable if you have bought subsidised housing before
- Not eligible to apply if you have bought subsidised housing twice unless you are listed as an essential occupier to buy an EC unit from a property developer.
Subsidised housing under this criteria refers to any flats bought from HDB, or resale flats bought with help from CPF housing grants. Falling into this category also includes DBSS, EC, SERS, HUDC.
In the event that you have purchased subsidised housing once in the past, resale levy is applicable. Here are more details on what is due in the resale levy, courtesy of HDB.
5. Newer Residential Estate might have fewer amenities — but URA Long Term Plan promises more mixed use properties and integration
An issue that worries purchasers of flats in new estates is that newer residential estates have fewer amenities. That may be true in the early stages of development for the estate. The Tengah estate will gradually develop from 2023 to 2025.
Copen Grand EC will TOP around the intermediate stages of development for the Tengah estate. With the Jurong Region Line’s completion in 2029, the area will have more amenities over time. A decade into the development of Tengah estate (approximately 2035), we might finally see the promised developments from URA’s Long Term Plan.
More cycling and walking footpaths, greenery, and amenities in the form of F&B, and other family friendly amenities will pop up over time. This will also help increase the value of properties in the Tengah estate over the course of the decade.
Final Verdict on Copen Grand EC Review
Executive Condominiums usually fall through the cracks when people are scanning for a new property. Partially due to the requirements set out by HDB and perhaps it is also being overshadowed by the marketing done by private new launches.
Nonetheless, in this new EC launch, Copen Grand EC looks to offer buyers a great alternative to other options in the market that may be a safer and more beneficial move for the long run. With protective features against the macro headwinds and great growth potential among other OCR options.
The preview dates for Copen Grand EC are 7 to 17 October 2022, its price release date will be on 19 October. Most importantly, the balloting day will be on 21 October and the booking day will be on 22 October.
If you wish to discuss more on how these pros and cons fit into your own personal property journey, contact us here to have a special 1-on-1 consultation with our experts to make sure that this decision aligns with your interests and long-term goals.
Here is a summary of our review on the Copen Grand EC Launch.
