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’s Needed For Singapore To Lift Those Cooling Measures?

Jayson Ang – February 2, 2024

TLDR The blog post discusses the recent relaxation of real estate restrictions in Hong Kong, contrasting with Singapore's stricter regulations....

Mandarin Top 5

5 Top Reasons Why Chinese Love to Invest in Singapore Property Market Today

Jayson Ang – May 23, 2023

Here are the top 5 reasons why Chinese love to invest in Singapore's property market today. 1. Political stability: Singapore...

All Buying Tips Opinion Selling Tips

The COV Conundrum: Navigating Singapore’s Property Premium

Jayson Ang – October 24, 2025

TLDR Cash Over Valuation (COV) is the difference between a property's official valuation and the price a buyer is willing...

All Buying Tips Opinion

I Wouldn’t Rely Too Heavily On Discounts Related To ABSD This Year

Jayson Ang – February 28, 2025

TLDR The ABSD discount arises when developers approach their five-year deadline to sell 90% of units, facing a 40% penalty...

All Buying Tips Top List

Tips for Choosing the Home of Your Dreams

Jayson Ang – December 26, 2022

TLDR Decoding the Singapore property market can be challenging, but understanding key factors like property size, location, and lease tenure...

All Reports

Finding Your Dream Home In The Near Future. Exciting Upcoming Property Launches In The First Half Of 2024

Jayson Ang – December 25, 2023

TLDR The real estate sector in 2023 saw significant policy shifts affecting both private and public housing, with various changes...

Mandarin Top 5

Singapore’s Real Estate Market: The 5 Most Important Documents to Review Before Buying a Property

Jayson Ang – March 26, 2024

Singapore's real estate market is highly regulated and can be complex for those unfamiliar with the process. As a prospective...

Mandarin Top 5

Top 5 : Dangerous Ideas Singapore Property Investors Have

Jayson Ang – February 19, 2025

Investing in property, particularly in a thriving market like Singapore, can be an enticing prospect. However, it's not without its...

All Blog Posts Buying Tips Top List

The Top 10 Traits Of A Good Real Estate Agent

Jayson Ang – December 19, 2022

TLDR Jayson Ang, a reputable real estate agent in Singapore, offers extensive experience and a data-driven approach to guide clients...

All Buying Tips Opinion

Evaluating Property Investments: Pros and Cons to Keep in Mind

Jayson Ang – August 7, 2023

TLDR: Key Takeaways from the Blog Post Singapore's real estate market offers both pros and cons for investors. The advantages...

Mandarin Top 5

Top 5 : What I Wish I Had Known about Property

Jayson Ang – March 17, 2025

The world of real estate is a complex and dynamic field, filled with opportunities and challenges. It's a realm where...

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 Opinion

Unveiling the Truth: Why Freehold is Not Always the Optimal Choice for Property Investment

Jayson Ang – January 4, 2023

TLDR When it comes to investing in real estate in Singapore, traditional beliefs may not always hold true in today's...

All Blog Posts

Singapore Property Swapper

Jayson Ang – December 7, 2022

https://www.youtube.com/watch?v=B1NTnjxDPy4 Jayson Ang, also known as the Singapore Property Swapper, is a certified Propnex agent and top 1% producer who...

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...