Your search results

Why There’s No Perfect Time to Enter the Market

Posted by Jayson Ang on December 18, 2022

| 0

TLDR

When it comes to property transactions, understanding the factors influencing rising prices is crucial. The pandemic has driven up construction costs significantly, while the Government Land Sale (GLS) programme and Land Betterment Charge (LBC) contribute to higher property prices. Despite these challenges, the G.R.O.W Method offers a strategy for wealth creation through property investment. Stay informed about market trends and opportunities to make informed decisions in the real estate market.

It’s a common belief that the good things in life are worth waiting for. Unfortunately, this isn’t the case with housing. If you’ve kept up with the news, you already know that home prices have been steadily increasing. The URA’s latest report reveals that from Q2 to Q3 of 2022, private home prices rose by 3.8%, and from the start of 2022 to the end of it, the increase was 8.2%.

OUTSIDE CENTRAL REGION (OCR) : New Benchmark Prices

Evidently, private homes in the Outside Core Region (OCR) have excelled in the last quarter with a remarkable 7.5% surge in growth. This tremendous increase was first catalyzed by the launch of AMO Residences in July; an astounding 98% (362 units) of the units were sold on launch day alone, at an impressive median price of $2,113 psf.

The amazing results from the quarter were further bolstered by two successful launches in September – Sky Eden@Bedok and Lentor Modern. Both achieved a high rate of uptake, with 76.6% (or 121 units) of Sky Eden@Bedok being sold at a median price of $2,118 psf and a stunning 84.6% (or 512 units) of Lentor Modern selling at a median price of $2,108 psf.

The three successful launches resulted in an average OCR price-per-square-foot of above $2,000, indicating a widespread acceptance of the concept that paying over $2,000 psf for an OCR project is the new normal. Now, let us explore what factors are contributing to the rise in property prices.

PANDEMIC COSTING EFFECT

The pandemic has caused construction costs to skyrocket, reaching record-high levels in 2022. The construction industry is grappling with higher material costs, a manpower shortage, and inflation, leading to a staggering 30% increase in costs since 2019. There is no doubt that these are the biggest challenges they have ever faced.

The pandemic brought disruption to supply chains, taking its toll on the sector, as these chains raced to fulfill the backlogged demand. To make matters worse, the Russia-Ukraine conflict drove prices of raw materials and crude oil through the roof – the latter being an essential part of the construction industry due to its reliance on crude for shipping and the production of construction materials. Costs have escalated dramatically in the last few years with the pandemic, and now, war.

GOVERNMENT LAND SALE COST

Twice a year, in March and September, the Government Land Sale (GLS) programme offers up a list of land parcels that are ripe for development. Prospective developers are invited to submit their bids for the land parcels via an open tender.

Developers engage in a fierce bidding war for land parcels, determined to secure the perfect space for their projects. This can lead to higher prices for the project, as more bids mean a higher cost of land. It is evident from the graphs that land prices are growing steadily, and this is a cost passed on to homebuyers.

DEVELOPMENT CHARGE < LAND BETTERMENT CHARGE LBC

Developers must pay the Singapore Land Authority (SLA) a newly-minted Land Betterment Charge (previously known as a Development Charge) in order to gain permission for projects that increase the value of land. In the case of residential developments, a condominium is a great example of where this levy applies, as it alters the plot ratio to allow more homes to be built.

LBC rates vary according to the type of development and its location – divided into 118 geographical sectors. Similarly to GLS sites, the changes to LBC charges are usually announced in March and September. As you can see from the table, the September changes saw some major increases – the largest increase for non-landed residential projects.

As we adjust to life in a post-pandemic world, certain industries such as shipping and construction are striving to regain their former efficiency. Though they’re making progress towards normalcy, it’s certain that the costs of operations will increase and be a lingering concern. To make matters worse, the ongoing Ukraine-Russian conflict has had a profound effect on global commodities such as crude oil, a necessity for countless facets of our lives. Even more disconcerting is the possibility of inflation emerging in the face of all this.

No doubt, property prices will continue to go up in the near future – making it impossible to pick the right time to buy a house. But there are ways to make the most of the situation! The G.R.O.W Method (GROW) is a tried-and-true method to create wealth and has helped countless people. It outlines an easy-to-follow plan for how to use property to secure your financial future.

Find Out More when my next GROW Method Workshop is happening

Explore >> https://jaysonang.com/explore/

Disclaimer:

While every reasonable care is taken to ensure the accuracy of information printed or presented here, no responsibility can be accepted for any loss or inconvenience caused by any error or omission. The ideas, suggestions, general principles, examples and other information presented here are for reference and educational purposes only.

This information contained herein is not in any way intended to provide investment, regulatory or legal advice or recommendations to buy, sell or lease properties or any form of property investment. PropNex shall have no liability for any loss or expense whatsoever, relating to any decisions made by the audience.

Introducing Top 5 Power Property Tips

Jayson Ang – May 14, 2023

Hello, everyone! We are excited to welcome you to our blog posts! On this blog, we will be sharing daily...

All Blog Posts Buying Tips

6 Essential Tips for Singaporean New Homebuyers

Jayson Ang – March 29, 2023

TLDR Best practices for first-time homebuyers, the key points include setting clear and detailed goals, planning a realistic housing budget,...

Mandarin Top 5

Top 5 Hawker Centres in Singapore for Local Food

Jayson Ang – February 24, 2024

Singapore, a melting pot of diverse cultures and rich culinary heritage, is home to some of the most delectable local...

Buying Tips Mandarin Top 5

Why Chinese Investors Should Not Be Deterred by ABSD: 5 Reasons

Jayson Ang – June 26, 2023

Why Chinese Investors Should Not Be Deterred by ABSD: 5 Reasons Here are the top 5 reasons why Chinese investors...

All Buying Tips

3 Exciting Residential Sites Coming Soon!

Jayson Ang – June 20, 2024

TLDR The Lion City is undergoing rejuvenation with upcoming developments in coveted areas like Clementi and sites near MRT stations....

Mandarin Top 5

Building A World-Class Nation: Top 5 Facts About Singapore’s Developed Infrastructure

Jayson Ang – July 23, 2023

Building A World-Class Nation: Top 5 Facts About Singapore's Developed Infrastructure Singapore is known for its high standard of living,...

All Blog Posts

Singapore Private Residential Market Outlook 2023

Jayson Ang – January 8, 2023

TLDR The Singapore residential property market has shown resilience in 2022, with price growth in both private housing and HDB...

All Blog Posts Opinion

Case Study : With Income Of $180K per Annum, Which Options Should I Choose?

Jayson Ang – February 28, 2023

TLDR When making property decisions in Singapore, it's crucial to consider various factors like affordability, loan-to-value ratios, and CPF requirements....

Mandarin Top 5

Top 5 : Most Profitable Neighborhoods To Invest In For Singapore Property Investment 2025

Jayson Ang – April 30, 2025

As the global economy continues to recover, the real estate market in Singapore remains a promising investment opportunity for savvy...

All Blog Posts Buying Tips

When Is The Best Time To Buy A New Launch?

Jayson Ang – January 13, 2023

TLDR When it comes to new property launches, timing is crucial. Early buyers often secure the best prices due to...

All Blog Posts Buying Tips

What’s The Difference Between An Offer To Purchase And An Option To Purchase?

Jayson Ang – May 29, 2023

TLDR Understanding the crucial difference between an Offer to Purchase and an Option to Purchase (OTP) is vital when buying...

Mandarin Top 5

Top 5 Reasons : Why Penthouses In Singapore Are Popular With Crazy Rich Asians

Jayson Ang – October 7, 2024

Singapore, a city-state known for its stunning skyline and luxurious lifestyle, has become a popular destination for the ultra-wealthy. Among...

All Blog Posts Opinion

Singapore Property Bubble Ahead? My Friends Share My Market Predictions

Jayson Ang – March 12, 2023

TLDR The author delves into various opinions on the Singapore property market for the year 2023. Experts have differing views...

All Opinion

Singapore’s Property Market: Will the Newly Proposed 2023 Cooling Measures, Including a 60% Foreigner ABSD, Make Waves or Mere Ripples?

Jayson Ang – April 27, 2023

TLDR The recent surge in Additional Buyer's Stamp Duty (ABSD) rates in Singapore targets mainly foreigners and entities, with rates...

All Blog Posts Buying Tips Opinion

7 Lesser-Known ‘Minor’ Condo Problems That Could Lead to Major Issues Down the Line

Jayson Ang – October 11, 2024

TLDR When choosing a condo, it's crucial to look beyond MRT station proximity, developer reputation, and price. Overlooked details can...

All Buying Tips Opinion

HDB’s Policy Shift for Young Couples: Progressive Step or Cause for Concern?

Jayson Ang – June 27, 2025

TLDR Starting July 2025, HDB will let young couples—where at least one partner is a full-time student or NSF—defer income...

Buying Tips Mandarin Top 5

Don’t Get Scammed: The Top 5 Red Flags To Watch Out For In Singapore’s Property Market

Jayson Ang – July 14, 2023

Don't Get Scammed: The Top 5 Red Flags To Watch Out For In Singapore's Property Market When it comes to...

All Blog Posts Buying Tips

Learn How To Negotiate For The Best Price When Purchasing a Resale HDB Flat

Jayson Ang – February 17, 2023

Navigating the complexities of purchasing a resale HDB flat requires honing negotiation skills and market awareness. Understanding property valuations, seller...