Are Prices At Its Peak?

Half a year has flown by and the market has been aggressive post-lockdown. Prices has shot up for all sectors in real estate and the headlines have been optimistic. This is further buoyed by how Singapore has been relatively successful in managing the situation. 

So where do we go from here? Are we at a all time high and is the market due for a correction?

MARKET TRENDS

BACK TO THE FUNDAMENTALS

A question we often get these days are – Will prices dip when I want to buy a new place? Or will it continue to rise?

That’s when we return to the Real Estate Fundamentals:

1. LOCAL POPULATION

  • Our current population has grown over the years and continues to grow.
  • Increased Income for the average Singaporean has led to more Singaporeans moving into Private Properties.

2. FOREIGN POPULATION

As 75% of the population gets vaccinated, number of Expats entering Singapore will increase later this year, increasing the pool of tenants. With limited supply, rental prices will rise, protecting the current surge in prices.

“We see this (expatriate inflows) being accelerated as other countries in Asia and South-east Asia also ramp up their respective vaccination programmes and related initiatives to curb the spread of the virus. This will further result in Singapore to be not only a risk free work location but also a preferred lifestyle location with easy access to the Asean region.”

3. LOCAL LAND SUPPLY

With limited land resources, Singapore real estate is a scarcity. There is limited land supply from the government, though they have released a couple more plots recently. Land bid prices has also been very competitive, with many land prices hitting record highs.

Source: EdgeProp

Source: EdgeProp

DID YOU KNOW?

There is a piece of land, next to the MRT, sold to Allgreen at $840.86 psf ppr in 2019. It is launching this year and the lease will begin as of 2021!

4. COOLING MEASURES

There are many cooling measures in place. In spite of these, the property prices has been going strong in the last decades, due to the attractiveness of Singapore as a location for International Businesses as well as Expats. 

With all the above factors in play, as long as Singapore continues to manage the Covid situation well, there is a high chance that prices will continue to surge forward. Word of caution: Prices in some neighbourhoods will surge forward more than others. 

Knowing all these, what can I do?

In the current climate we are in, do assess your needs, your dreams and your goals carefully. 

If you are a home owner, check out the  prices in the next location – does it rise faster than where you are now? Is it time for you to make a move now or later?

If you are a home buyer, looking for a home and need your own space, anytime is a good time to buy as it is a need. 

If you are a home buyer, hoping to achieve a balance of finding that dream home and getting capital gain, now would be a good time to analyze which property clusters may suit your needs while having positive catalysts for price growth.

DEEP DIVE

Integrated Condo V.S. Non-Integrated

Is it worth the premium price?

The talk of the town is a new launch known as Pasir Ris 8, an Integrated Condominium. Located next to the MRT, this will be the newest addition to a total of 14 Integrated Condominiums in the whole of Singapore.

Is it truly worth the premium price? 

We did some digging and share our findings!

Let’s Look at the REAL Numbers.

In total, there are only 14 Completed Integrated Developments. In this analysis, we pick out a few of them to understand the price difference at launch and the subsequent sale price in 2021.

No. 1 – Watertown @ Punggol

Watertown and A Treasure Trove were both launched in 2011 / 2012. 

Both are 99 years, Watertown has 992 units and A Treasure Trove has 882 units, so they are very comparable to each other. 

Integrated Condo

Launch Average Price:

Watertown – $1000 to $1150 psf 
A Treasure Trove – $800 to $900 psf. 

V.S.

Non-Integrated

Current Average Sale Price:
Watertown – $1300 to $1400 psf
A Treasure Trove – $1100 to $1200 psf.

No. 2 – Park Place Residences @ Paya Lebar

The fascinating thing about Park Place Residences is how it is located in an area with mainly freehold condominiums and still manage to hold it’s premium ground over the years.

Launch Average Price:
$1700 to $1800 psf

Current Average Sale Price:
$1800 to $2000 psf

No. 3 – Northpark @ Yishun

Launch Average Price:
$1200 to $1400 psf

Current Average Sale Price:
$1500 to $1700 psf

We further compared to Freehold projects in the area away from the MRT, mixed developments or even projects near good schools launched in the same year. For  the in-depth report, contact us at 9327 6888.

At a glance, the numbers for the Integrated Condominium does look very promising with majority of the owners earning a pretty penny after holding for 5 to 10 years. 

As usual, our word of caution, the unit, the facing and the entry price does matter, so do not buy blindly without understanding the property and its fullest potential.

SOLD AT RECORD PRICES

ONE JERVOIS

29 March 2021 -#07 – 1701sqf – $3,300,000

Last Done:
22 March 2021 – #04 – 1701sqf – $3,200,000

MANDARIN GARDENS

4 Jan 2021 -#16 – 2034sqf – $2,201,000

Last Done:
23 Sept 2020 – #18 – 2034sqf – $1,970,000

445 HOUGANG

9 June 2021 -#04 to 06 – 4 Room – $503,888

Last Done:
9 June 2021 – #04 to #06 – 4 Room – $415,000
9 Jan 2021 – #10 to 12 – 4 Room – $443,000

Tap here to see more! 👇

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