Your search results

Singapore Property Price Set to Explode Upwards in 2024?

Posted by Jayson Ang on March 10, 2023

| 0

As we move into 2024, there is a theory that property prices in Singapore will not drop but instead continue to rise higher and higher. This theory is backed by several situations that have emerged over the past three years.

Despite the interest rate remaining at an elevated level and possibly rising further, we have seen no signs of property prices falling. In fact, property prices have been climbing higher despite the low transaction volume. This signifies that not many are willing to sell off their property at a lower price, and buyers can still afford to buy.

Firstly, we are facing very high rental rates in the market right now, and owners of properties are getting extremely high rental yield. Mortgage rates have been on the rise since January 2022, and three months solar rates have reached 3.029 percent, putting off many home buyers. The rising home interest rate has made home loans much more expensive to service, so buyers feel that it is too expensive to service the loan or are no longer eligible to borrow the same amount of money, causing the number of qualified buyers in the market to drop. This has led to a drop in property transaction volume. With lesser buyers now in the market, one would expect property prices to drop. However, the theory suggests otherwise.

One reason why property prices can continue to rise into the future without dropping at all is that the high rental rates in the market can actually cause property prices to go up. High rental rates must be priced into the property, and since rental rates are very high, it has to be priced into the property as well. With this, rental rates are even higher, and investors are getting high return on their rental properties. There is no urgency to sell their properties, as they are getting a net positive monthly return. The only situation they will consider selling the property is if the rental is being priced into the price of the property.

Private property owners who want to downgrade to an HDB will find that it is no longer an option as part of the recent cooling measure announced by the government. Home sellers can no longer sell their prime property and subsequently buy an HDB unless they are above 55 years old. If they want to do so, they have to wait out a 15-month period, which means that they have to rent a property for 15 months at least, causing rental prices to go up, and this can also cause property prices to go up again. Even if they are 55 years old and above, they can only buy an HDB four rooms and below immediately. This has segregated the HDB and the private property market very clearly, which can cause property prices to remain high.

Today, people who are selling their private property are not likely selling to downgrade to an HDB, but it is more likely that they are either upgrading or downgrading to another private property. If they choose to downgrade, they have to find a place to rent, causing greater demand for rental properties, thereby driving private property prices up. If they choose to buy another condominium, it is kind of zero sum, as when they sell, they buy, and this can also cause property prices to go up.

In conclusion, sellers who are in the market right now are probably people who own multiple properties because they have holding power. They are not scared of price drops or, in other words, are just savvy enough to price in the rental if they even want to sell the property. Rising rental demand causes rising property prices. With interest rates at an all-time high, TDSR at 55, and a high 25% down payment requirement, private property sellers find it hard to downgrade to an HDB.

Should You Buy, Sell or Wait?

If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?

It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.

I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.

I can help you by:

Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.

You May Also Like …

All Buying Tips Opinion

Dual-Key Condo: Analysing The Pros And Cons

Jayson Ang – November 16, 2023 –

Back in 2009, the dual-key condo unit was introduced to the market with the launch of Frasers Centrepoint Homes' Caspian....

Mandarin Top 5

5 Critical Mistakes to Avoid When Investing in Singapore Property: Insights and Advice from Experts

Jayson Ang – April 1, 2024 –

Investing in Singapore property can be a lucrative venture for investors, but it's important to avoid common mistakes that can...

All Opinion

Why Aren’t Spacious, Wallet-Friendly Homes Our Reality Yet?

Jayson Ang – April 17, 2024 –

TLDR The article discusses the current housing market in Singapore, focusing on the challenges faced by individuals like Sherlyn Tan...

All Blog Posts Buying Tips

Discover 7 New Condos Close to an MRT Station in 2023

Jayson Ang – January 25, 2023 –

Having a MRT station nearby can be a huge advantage for both homeowners and landlords. With fewer property launches expected...

All Buying Tips

Your Key to a Happy Retirement in Your HDB? Let’s Unveil The Mystery Behind the Lease Buyback Scheme!

Jayson Ang – March 30, 2024 –

TLDR The Lease Buyback Scheme (LBS) is gaining traction among older Singaporeans looking to boost their retirement income by selling...

All Blog Posts Buying Tips

Singapore Decoupling Guide

Jayson Ang – December 29, 2022 –

You and your partner have set out to find another home, and you're determined to keep away from the intimidating...

All Blog Posts Opinion

Invest During the Bearish & Exit During the Bullish

Jayson Ang – December 27, 2022 –

Time Truly Flies! As I Write This, We Have Already Passed 2022. Let's Take A Look At The Chart Below....

All Buying Tips

Can Your HDB Flat Safeguard Your Retirement?

Jayson Ang – December 7, 2022 –

Today we will take a look at the HDB market to find out what are your options as an HDB owner and...

All Blog Posts Buying Tips

Discover 11 Helpful Tips for Buying an Older Condo : A Comprehensive Guide for Buyers

Jayson Ang – March 2, 2023 –

By 2023, the high prices of newly launched properties at an average of $2,000 psf had priced out many aspiring...

All Buying Tips Opinion

Singapore Homes Prices Falling? Is This The Beginning Of A New Trend?”

Jayson Ang – December 30, 2023 –

After what seemed like forever since early 2020, the cost of private homes in Singapore finally took a small dip....

All Blog Posts Buying Tips

Uncover the Secrets of Buying Older Properties – What They Won’t Tell You!

Jayson Ang – December 30, 2022 –

The trend of newlywed couples scouting for apartments in hipster neighbourhoods continues to thrive, with younger Singaporeans joining in to...

All Buying Tips Opinion

2024 Will Be A Buyers Market

Jayson Ang – January 23, 2024 –

The Real Estate Game Never Stays Still, And 2023 Was No Different. It Was A Roller-Coaster Year, Filled With More...

All Blog Posts Buying Tips

What to Do Before Exercising Option to Purchase?

Jayson Ang – July 19, 2023 –

Securing an Option to Purchase (OTP) is a big milestone for any home buyer. Once the OTP has been issued...

All Buying Tips

How to Avoid Forfeiting Your Security Deposit: A Guide to Your Rental Property

Jayson Ang – July 30, 2023 –

Picture this: You're a tenant, and your lease is up. After months of relentless hunting, you've finally found a new...

Mandarin Top 5

Navigating Singapore’s Real Estate Market: The Truth Behind 5 Common Misconceptions

Jayson Ang – March 19, 2024 –

The real estate market in Singapore is known for its stability and attractiveness to investors both locally and internationally. However,...

All Blog Posts Buying Tips

What Happens To Your Housing Loan Once You Sell Your House?

Jayson Ang – July 5, 2023 –

If you're a first-time home seller, there could be things you're not familiar with. You might ask yourself, "What happens...

Mandarin Top 5

Top 5 Instagram-Worthy Spots in Singapore

Jayson Ang – February 21, 2024 –

Singapore, a beautiful city-state known for its stunning architecture, lush greenery, and vibrant culture, is a photographer's paradise. The island...