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 The Cost Of Constructing A Landed Property In Singapore?

Jayson Ang – February 24, 2025

TLDR Building a landed property in Singapore can be a costly endeavor, with prices ranging from $300 to $500 per...

Mandarin Top 5

5 Factors : Why Now Is The Perfect Time To Invest In Singapore Property

Jayson Ang – May 12, 2024

Investing in property is an excellent way to build wealth and secure a stable source of passive income. If you...

Mandarin Top 5

Top 5 : Tips To Plan Your Retirement in Property Investments in Singapore

Jayson Ang – February 17, 2025

Planning for retirement is a crucial aspect of financial management, and property investment has emerged as a popular strategy for...

All Blog Posts Buying Tips

Subscribe to Jayson Ang’s Singapore Property Newsletter

Jayson Ang – December 27, 2022

TLDR Jayson Ang's Singapore Property Newsletter offers valuable insights on real estate investments, market trends, and expert advice. The newsletters...

All Buying Tips Opinion

Buy a $1M Resale HDB or a $1M Resale Condo?

Jayson Ang – August 19, 2023

TLDR When comparing a million-dollar HDB flat to a private property of the same value, the HDB flat offers more...

All Buying Tips

Single, Over 35, and Searching for a Home? Here’s Your Guide to Choosing Between an HDB and a Condo!

Jayson Ang – January 21, 2025

At the age of 35, a single Singaporean starts a significant year, highlighted by the long-awaited chance to buy their...

Mandarin Top 5

5 Pros of Buying a New Development

Jayson Ang – March 3, 2024

Deciding whether to buy a new development or a resale property can be a challenge. In the next few video...

All Buying Tips

Thinking About Investing In An Old Landed Property In Singapore? 7 Crucial Tips To Keep In Mind Before You Make Your Move

Jayson Ang – April 8, 2024

TLDR Older properties come with unique challenges due to outdated design elements, potential roofing issues, odd land shapes, basement drawbacks,...

All Buying Tips

What Is Cash Over Valuation in HDB (COV)

Jayson Ang – November 8, 2023

TLDR Cash Over Valuation (COV) in HDB resale flats occurs when the purchase price exceeds HDB's valuation. COV cannot be...

Mandarin Top 5

5 Reasons : Why Investing In Singapore Property Is The Best Decision I Ever Made

Jayson Ang – May 10, 2024

Investing in property is a great way to build wealth and secure a stable source of passive income. When it...

All Blog Posts Buying Tips

5 Must-Know Questions Before Investing in Real Estate

Jayson Ang – June 15, 2023

TLDR When considering whether to buy a new development or a resale property, it can be challenging. In the blog...

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 Reasons Why Singapore Loves Investing in Properties

Jayson Ang – March 28, 2024

Property investing is a popular and lucrative option in Singapore due to several reasons. Firstly, Singapore's stable and growing economy...

Mandarin Top 5

Top 5 Factors : Singapore Real Estate Investing vs Stocks and Bonds: Which is Better?

Jayson Ang – October 23, 2024

Investing is an essential aspect of wealth creation and financial planning. With a plethora of investment options available, it can...

All Buying Tips

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

Jayson Ang – July 30, 2023

TLDR When bidding farewell to your rented property, ensure the safe return of your security deposit by: Regular Aircon Servicing:...

All Reports

Increase in ABSD April 2023

Jayson Ang – April 27, 2023

TLDR The impending rise in ABSD (Additional Buyer's Stamp Duty) is expected to suppress investment demand, allowing local homebuyers to...

All Blog Posts Opinion

Are We Truly Headed For A Slowdown? How Will This Affect Property Prices?

Jayson Ang – December 9, 2022

TLDR The pandemic-induced recession has surprisingly boosted property prices in Singapore, defying conventional economic trends. Factors like cost-push inflation, limited...