Keep it together: New condo clusters bring benefits for developers and homebuyers

Concerted development of new projects in the same precinct offers efficiencies in urban planning and support for prices

[SINGAPORE] In recent years, the practice of clustering new projects within the same neighbourhoods has been growing in prominence. For instance, Tengah and Lentor Hills Estate have seen a staggered rollout of fresh private housing developments, in line with the Urban Redevelopment Authority’s broader master plan for precinct renewal or development.

In the months ahead, we can expect to see similar residential clusters taking shape in Zion Road, River Valley, one-north and Marina Bay.

Parallels can be drawn with the concept of “agglomeration”, in which businesses cluster to yield synergistic benefits.

From an urban-planning perspective, concentrating new home launches in the same neighbourhoods enhances planning efficiency, resulting in more effective resource allocation when developing new precincts.

This benefit is crucial, as investing in infrastructure for new precincts is a significant undertaking that should not be taken lightly. By strategically clustering new homes in the same area, the government can ensure that any infrastructure investments are focused on meeting the needs of a larger community.

Efficient approach

The concept of clustering new home launches is not a new one – Pasir Ris, Punggol, Sengkang and Tampines were built up this way, which is possibly the fastest and most efficient approach to developing a new township, whether as an independent entity or as an extension to an existing town.

Between 2008 and 2014, there were five new condo launches Pasir Ris Grove, which added over 4,100 new homes to the vicinity. All five projects were collectively developed by the Hong Leong group’s Hong Realty arm.

Likewise, between 2010 and 2017, five residential sites along Tampines Street 86 / Tampines Avenue 1 were awarded under the Government Land Sales (GLS) Programme to different developers. These five sites jointly yielded some 3,400 units. More recently, five sites, with room for approximately 3,600 units, were sold to drive the development of the Punggol New Town.

The “cluster effect” is particularly pronounced in Lentor Hills Estate, which has had six launches, with another coming in 2026. Despite initial concerns about a potential supply glut in the new neighbourhood and an untested area, each successive launch met with firm demand, evident in healthy take-up rates and higher home prices.

While the acquisition of plots in clusters is often seen as a strategic move for developers and the government, the concerted development also brings about tangible benefits for buyers.

Buyers get to explore all various projects and make well-informed decisions

One significant benefit is that buyers can “shop” at all the projects at around the same time. This means they will be able to make an informed decision before committing to a home purchase. They can compare features, layouts and prices more effectively, and this transparency and ease of comparison can lead to better decision-making. It also reduces the pressure of having to make quick decisions based on limited information, as buyers have a comprehensive view of projects launched nearby.

New amenities and infrastructure support the growing community

The clustering of new homes often acts as a catalyst for urban rejuvenation, prompting the introduction of new amenities and infrastructure to meet the needs of incoming residents. For example, Our Tampines Hub was opened in 2017 to serve existing residents of Tampines; Our Residents’ Hub @ Lentor Estate debuted last December – ahead of the influx of future dwellers.

In Pasir Ris, a new sports and hawker centre was added in the 2010s, alongside the announcement of the new Cross-Island Line with an interchange at Pasir Ris. Upcoming precincts like Tengah are also expected to benefit from new initiatives and infrastructure developments. Sustained price growth in the cluster

In most cases, the clustering of new home launches results in new home prices trending higher with each subsequent launch. This pattern is reinforced by developers pricing latter launches higher because of rising land and construction costs. The maturing of the estate, with the addition of more amenities and transport nodes, can also push prices up.

Since their respective debuts, condominiums in Punggol have delivered a compound annualised return of between 2.5 and 4.4 per cent, based on median transacted price per square foot (psf). Even though there are price differences across the projects, price trends have generally moved in parallel, reflecting a broadly similar pace of appreciation over time. Where new homes are launched at comparable price points in the same area, it reduces the likelihood of any owner selling at a loss. This pricing alignment can help maintain market confidence and support steady price appreciation across the precinct.

With a sizable number of homes in a well-planned precinct, homeowners can also expect consistent market activity and a continuous influx of potential buyers. Competition drives developers to enhance their product offerings With similar locational attributes, developers will compete to offer compelling and unique projects that stand out. These projects are also often better positioned with higher-quality finishes, a more diverse mix of unit sizes and layouts, and innovative designs aimed at different homebuyer segments.

In an environment where intense competition for the same pool of buyers and price sensitivity both exist, developers strive to outdo each other and homebuyers benefit. This is evident in Lentor Hills Estate. In particular, Guocoland is behind four of the six sites awarded there in the last 30 months. With each launch, Guocoland was able to better anticipate the needs of its buyers. From unit layouts to unit sizes, each development was tailored to suit the needs of different buyers. There have been diverse unit configurations. Lentor Modern, launched in September 2022, offers flexible spaces with adaptable layouts and larger living spaces. Lentor Hills Residences features dual-key units for investors seeking rental income. Hillock Green and Lentoria have larger, more efficient floor plans with squarish layouts. In conclusion, while some buyers may be hesitant about areas with multiple new launches, clear advantages exist. New clusters are coming up in the River Valley and Media Circle precincts, and could well be new spots to watch.