A review on whether or not Normanton Park is suitable for families, real estate investors or both. This review is done by researching with URA’s Master Plan 2019 for this particular district and location as well as using real estate investing formulas. Find out if this new launch is right for you
|Expected TOP||January 2023|
|Address (Multiple)||Normanton Park|
|Number of Units||1862|
|Bedroom(s) Type||1 – 5 Bedrooms Available|
|Best for||Family or Investment|
|Worst Case Scenario Pricing (PSF)|
See Calculation Below
|Average Case Scenario Pricing||Contact Me|
|URA Masterplan 2019 for District 5 and Normanton Park||Greater Southern Waterfront|
Always remember the market value of property is highly dependant on the rent you can ask for. If you are in a property where people are willing to pay a higher rent for as compared to another similar property in the vicinity, even if you are not renting out, your property value will naturally be higher.
Also, We will be using Dover Parkview, another leasehold condominium which TOPed in 1997. This development will be used as a comparison for the calculations.
Are there any points to take note of that might affect the valuation of Normanton Park? Here are a few
- The reputation of the developer Kingsford Huray Development Pte Ltd is not really the best. I would see what their agent representative will say about how they are going to prove to their potential buyers why this project will be different this time.
- There are no condos surrounding Normanton Park which I can take a better reference from unlike Clavon and Parc Clematis. The nearest was Dover Parkview which is 1km away (point to point distance taken from Google Map)
- Dover Parkview is quite old (23 years since TOP in 1997)
The next section will be on the calculations using Real Estate investing formulas. If you are interested to know more about Normanton Park and more specifically on your preferred unit type, feel free to contact me here. A free report will be sent to you once we meet up to discuss your needs, wants and requirements.
If you are interested to see how the calculations are done for investing, you can read further below
This is a quick overview on Normanton Park and how you would apply real estate investing research, principles and calculations before buying a unit in Normanton Park for real estate investment purposes.
The unit we will be analysing will be for a 2 bedroom Unit, preferably Mid floor (14th floor) and also be comparing it with Dover Parkview which is 1 km away.
This is not a review to tell you how awesome this development is, I will be doing this on a separate page of my website, under the listing section, and I’m sure that by now there are many other websites that are covering it and also not to mention the real estate agents that are stationed at the Normanton Park’s show flat who will have that information readily available for you to look through.
Also I will only be comparing only one unit from Dover Parkview, which is not the usual practice. For clients interested in Normanton Park Condo, I will usually compare 2 additional units or developments or based on which other development my clients want me to do the research on.
Kingsford Huray Development Pte Ltd is a real estate developer which was incorporated in 2011. Their other notable projects in Singapore have been Kingsford Hillview Peak, a 512-unit condominium at Hillview Avenue and Kingsford Waterbay, a residential development at Upper Serangoon View comprising a 1,165-unit condominium, retail shops and a childcare centre.
In addition to properties in Singapore, It also has projects done in China and Australia.
|Developers Involved||Kingsford Huray Development Pte Ltd|
|No of Residential Developments in Singapore (Uncompleted)||1|
|No of Previous Residential Developments in Singapore (Completed)||3|
|No of Overseas Developments||9|
Kingsford Huray Development Pte Ltd bought over the former Normanton Park (same name) for SGD 830.1 Million which works out to be around SGD 969 PSF.
Comparison between Normanton Park and Dover Parkview
|Development||Dover Parkview||Normanton Park|
|Tenure||99 Leasehold||99 Leasehold|
|Number of Units||686||1862|
Calculation of Growth Rate (For Dover Parkview and General)
My research shows the transaction record for the following 2 bedroom unit at 32 Dover Rise (#14-XX), 936 sq ft at Dover Parkview was as follows
Transacting at 17 April 1996 – 769 psf
Transacting at 12 November 2020 – 1099 psf
Time Period: 294 Months (To be rounded down for calculation purposes)
The annual growth rate for Dover Parkview would be estimated to be around 1.46%. Naturally, the more units you use, the more data you have and the more accurate you will get and. And as mentioned, I usually use 3 other units surrounding the unit I’m planning to buy to have a better estimate of the growth rate in that area.
The annual growth rate for West Region based on SRX Property Index from November 2010 to November 2020 is 3.74%
Let’s just take this at face value. There are many ways we can discuss if we meet why the growth rate should be higher or lower.
Real Estate Investing Formulas used
Before we begin, note that these formulas are usually used for properties which are already existing, similar in age and size. Normanton Park will only be completed in 2023, will be 26 years newer, and have more number of units than Dover Parkview by then. See more in the conclusion section.
Gross Rent Multiplier
for Dover Parkview for a 2-bedrooms unit is as follows
GRM = Sales Price / (Annual Rent of Unit)
= 1,029,000 /(2300 x 12)
= 37.2826 (Rounded to 4 decimal space)
With the following assumptions taken
Sales Price of 1,029,000 SGD taken for the unit #14-XX 2 bedrooms unit which was sold on 12 November 2020
Assumption of the monthly rent of 2300 SGD based on the worst-case scenario (No stats given for the floor level, lowest was 2300 SGD/ Month on 1st July 2020 and highest was 3500 SGD/Month on 1 April 2020).
Income Capitalisation Method (Modified)
Using the Income Capitalisation Method Formula, the Cap Rate for Dover Parkview is calculated as follows
Cap rate = Annual Net Operating Income / Market Value
= (Rent Income – Property Tax – Property Insurance – Annual Maintenance Fees – expected Maintenance and Repair – Vacancies Loss) / Market Value
= (27,600 – 2760 – 120 – (300 * 12) – (2 * 2300)) / 1,029,000
Assuming the following
- Expected Maintenance and Repair is 0
- Maintenance Fee for Dover Parkview is assumed to be 300 SGD
Calculation for Normanton Park using Cap Rate and Gross Rent Multiplier
Using Gross Rent Multiplier for Normanton Park
For the assumption of rent for Normanton Park,
Normanton Park 2 Bedroom unit is 893 sqft for their 2 bedroom premium units.
Using 893/963 x 2300 = 2194.34 SGD (Worst Case Scenario)
Using the GRM of 37.2826 to find the sales price for Normanton Park
Sales Price = 37.2826 * (2194.34 * 12)
= 981,728 SGD (Rounded to whole number)
Using Income Capitalisation Method for Normanton Park
Market Value for Normanton Park = Net Operating Income / Cap Rate
= (Rent Income – Property Tax – Property Insurance – Annual Maintenance Fees – expected Maintenance and Repair – Vacancies Loss)
= (26,332 – 2633 – 120 – (300*12) – 4388.68) / 0.0161
= 971,095 SGD (Rounded to whole number)
Where the following assumptions are made
- Maintenance Fee is 300 SGD (Assumed)
- Expected Maintenance and Repair to be 0
Using the Time Value of Money Formula
Using the Time Value of Money Formula and using the worst-case scenario growth rate percentage of 1.46% and the 26-year difference between Normanton Park and Dover Parkview, the price per square feet we should be looking to pay for a 2 bedroom Premium 836 sqft mid-floor would be $1,597.85 PSF.
Do note that the formulas we are using are originally used for existing properties which are similar in age and with rental prices already available. We know that this is not the case as Normanton Park will only be ready in 2023.
In addition, we need to also consider the following points
- Normanton Park will be 26 years newer (2023 – 1997) than Dover Parkview.
- The estimated rent we are using is of the worst-case scenario at 2194.34 SGD. What do you estimate the rent will be in 2023 for this area with the knowledge of the URA Master Plan 2019.
- Dover Parkview average rent is already transacting at an average of 2900 SGD for the year 2020.
- Normanton Park will be using smart home technology 26 years newer than Dover Parkview
- Buying a unit at Dover Parkview instead would require renovation cost which can cost upwards of 30,000 SGD to 50,000 SGD and equipment/ appliance cost of 4,000 SGD to 9,000 SGD. If you will be taking the lower end of the renovation cost and equipment cost of buying a unit at Dover Parkview, this is easily an additional 30K SGD worth of renovation cost you will be saving if you buy a unit from Normanton Park.
Congratulations! If you’ve read to this point, you are probably really looking at buying a unit at Normanton Park.
This is just a brief thought process on how I would go through with clients who are interested in buying a unit in Normanton Park.
If you are looking at buying a 2 bedroom premium unit in Normanton Park, I’ve already done for you 33% of the work. You can find out and do the same calculations for 2 other developments or units which are close to Normanton Park with similar facilities to get a more accurate Gross Rent Multiplier and Cap Rate for Normanton Park.
If you are looking at buying a Studio, 1-bedroom, 2-bedrooms (other layouts), 3-Bedrooms unit, 4-bedrooms or 5 bedrooms unit, the psf for the worst-case scenario might change. I’ve calculated for new launches where their 3 or 4 bedrooms made money for their owners but not for the 1 or 2 bedrooms. Send me a WhatsApp message or a quick email via the contact form below and let me calculate for you to see if it’s the case for this new launch.
There are several advantages when I represent you in buying a new launch
- NO COMMISSION REQUIRED. Probably the biggest advantage. If I sell this development, the developer pays me the commission, not you.
- A Free Real estate investing report with calculations on your preferred unit will be done for you upon meetup. Not only will you have all the necessary information, I will also pass you all the floor plans, the images, the pricing and launch price discounts (if any).
- If you are looking to buy a unit for investment, I will research the best unit type this condo has to offer to provide you with the maximum returns from your investment money.
- If you are looking to buy for home living, I will research and let you know the best floor level and direction facing to get to maximise your sales price. I will study these units and provide you with the highest chance of increasing the future capital appreciation potential of your unit
- My obligation is only to you. You can look for me for advice for anything real estate related, any time and any day. I don’t work for Normanton Park. I have no obligation to sell this development for them and therefore, I have no need to pressure you to buy this unit. If you want to buy, buy, otherwise, we move on and will look out for another unit that is more suited for your needs.
- I am part of a team that is very strong in financial calculations. If you are really looking to buy, my team will find different ways and different means to make sure you will be able to afford it. Throw us questions and problems you are currently facing and which your previous agents are unable to answer, let us impress you with what we can do to get you your preferred unit
Buying a condominium (especially for a new launch) for anyone is most probably one of the biggest ticket purchase in their lifetime
Think of me as your friendly and knowledgeable real estate investor friend who’s doing you a favour to make sure the purchase of your new condo is really something worthwhile to purchase or at the very least, something that won’t lose you money in the future.
What are you waiting for? Let’s start!
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