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.

5 Things to Know About Singapore’s Urban Redevelopment and Landscape Changes

Jayson Ang – March 11, 2024

As one of the world's most densely populated cities, Singapore has undergone significant urban redevelopment over the past few decades...

All Blog Posts Buying Tips

Downsizing From A Spacious 4-Bedroom Condo To A Cozy 2-Bedder: How I Chose A Condo Over A HDB

Jayson Ang – April 28, 2023

TLDR Mdm Sim's decision to trade her four-bedroom house for a two-bedroom condo is explored, highlighting the benefits of right-sizing....

Mandarin Top 5

Top 5 Must-Do Experiences in Singapore for First Timers

Jayson Ang – January 18, 2025

Singapore, a vibrant city-state known for its diverse culture and rich history, offers an array of unique experiences for first-time...

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 Opinion Selling Tips

Why Selling Your Own HDB Flat May Be More Challenging Than You Anticipate: 7 Hidden Challenges to Prepare For

Jayson Ang – January 29, 2025

TLDR Selling your flat can be a daunting task, not because of the paperwork but due to challenges in marketing...

All Blog Posts Opinion

How Will Singapore’s Development Influence The Real Estate Markets In Bedok, Changi, Pasir Ris, And Tampines : 2023

Jayson Ang – April 5, 2023

TLDR You will find detailed insights into upcoming housing developments in the East of Singapore, specifically in areas like Bayshore,...

All Blog Posts Buying Tips

Are You Considering Paying Off Your Mortgage Loan Ahead of Time? Is It the Right Financial Move?

Jayson Ang – May 11, 2023

TLDR When considering mortgage options in Singapore, it's essential to understand the differences between HDB loans and bank loans. HDB...

Mandarin Top 5

5 Things to Know About the Singapore Property Tax System

Jayson Ang – June 18, 2023

5 Things to Know About the Singapore Property Tax System Here are 5 things you need to know about the...

Mandarin Top 5

Top 5 : Factors Influence Real Estate Investors’ Decisions when Investing in Singapore Condos?

Jayson Ang – December 11, 2024

Singapore's real estate market has always been an attractive investment option for both local and foreign investors. The city-state's stable...

Mandarin Top 5

From Garden City to Smart Nation: Singapore’s Top 5 Goals Building a Sustainable and Livable City

Jayson Ang – February 20, 2024

Singapore is a small island city-state with a population of over 5 million people. Its urban landscape is constantly evolving,...

Mandarin Top 5

Top 5 Best Alternative Music Venues in Singapore

Jayson Ang – September 20, 2024

Singapore, a vibrant and bustling city-state, is known for its diverse culture and thriving arts scene. The city's love for...

All Buying Tips

Integrated Developments: Do They Live Up to the Hype? Check Out These Five Factors

Jayson Ang – March 3, 2024

TLDR Integrated developments in Singapore offer a one-stop solution for residents by combining residential, commercial, and transport elements in one...

Mandarin Top 5

5 Reasons : Why Singapore’s Rental Market Is Still Lucrative For Property Investors

Jayson Ang – June 8, 2024

Singapore's property market has always been an attractive investment option due to its stability and potential for high returns. While...

All Blog Posts Buying Tips

Will Your HDB Flat Provide For Your Retirement?

Jayson Ang – July 11, 2023

TLDR Singapore's property market presents challenges with high prices, particularly in private housing, while public housing remains relatively more affordable....