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.

What is Your Next Step in the Property Market?

Jayson Ang – December 7, 2022

When you flip open the papers or turn on the news nowadays, the common buzzwords are "INFLATION", " INTEREST RATE...

Mandarin Top 5

5 Reasons Why It’s A Great Time To Buy Property In Singapore In 2024

Jayson Ang – February 24, 2024

Singapore's property market is known for its stability, high demand and strong returns. With a growing population, low unemployment rates,...

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...

All Buying Tips

Buying a Mega Development Condo? Here are 5 Overlooked Issues You Should Know

Jayson Ang – April 20, 2024

TLDR In the world of mega-developments, living in a large condo with over 700 units can bring challenges like ongoing...

Mandarin Top 5

5 Impacts Of The Singapore Government’s Cooling Measures On Property Investing

Jayson Ang – May 30, 2024

The Singapore government has implemented several cooling measures over the years to regulate the property market and prevent it from...

All Blog Posts Buying Tips

Beware! Spot These Warning Signs Before Making a Home Purchase!

Jayson Ang – December 21, 2022

TLDR When purchasing a property in Singapore, it is crucial to thoroughly assess various aspects of the home to avoid...

All Buying Tips

Transforming Your Home Loan Situation with Rate Cuts

Jayson Ang – September 6, 2024

TLDR When comparing fixed and floating mortgage rates, the present fixed rate of 3% is favorable, but predictions hint at...

All Blog Posts Buying Tips

What to Do Before Exercising Option to Purchase?

Jayson Ang – July 19, 2023

TLDR Home buyers are advised to thoroughly research property values using online tools, secure an ideal home loan package early...

Mandarin Top 5

Top 5 Reasons : Why Investing in Singapore’s Property Market Is a Smart Move for Millennials – Expert Analysis!

Jayson Ang – October 13, 2024

In recent years, Singapore has emerged as a global financial hub and a prime destination for property investments. The city-state's...

All Buying Tips Selling Tips

Could It Be Wise to Sell Your Property After Just 3 to 4 Years?

Jayson Ang – February 5, 2024

TLDR In this blog post, the writer delves into the Singapore property market, particularly focusing on the effectiveness of quick...

All Blog Posts Buying Tips Opinion

Freehold Properties vs Leasehold Properties: Which is Better?

Jayson Ang – June 26, 2023

TLDR When it comes to property investments in Singapore, understanding the differences between leasehold and freehold properties is crucial. This...

All Buying Tips Opinion

7 Essential Considerations to Keep in Mind When Assessing a Floor Plan for a New Condominium Development

Jayson Ang – March 6, 2024

TLDR When selecting a property unit, carefully examine the floor plan beyond aesthetics. Consider non-living spaces like ledges and void...

Mandarin Top 5

Top 5 Reasons : Why Developers Seem Hesitant To Commit To New Projects In Singapore

Jayson Ang – December 1, 2024

Singapore, a thriving global city-state, has long been known for its robust economy and attractive real estate market. However, in...

Mandarin Top 5

Top 5 Best Instagrammable Spots in Singapore

Jayson Ang – November 7, 2024

Singapore, a vibrant and modern city-state, is known for its stunning architecture, lush green spaces, and colorful streets. With its...

All Buying Tips

Understanding Property Investment in Singapore: Residential vs. Commercial Properties

Jayson Ang – March 26, 2026

TLDR Singapore’s real estate market offers distinct differences between residential and commercial properties. Residential properties typically have longer leases (up...