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.

Top 5 Factors : Why Investing In A Property With A Good View Can Be A Profitable Move In Singapore

Jayson Ang – August 1, 2024

Investing in a property with a good view in Singapore can be a profitable move for several reasons. Here are...

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 Street Food Markets in Singapore

Jayson Ang – September 8, 2024

Singapore, a melting pot of diverse cultures, offers an incredible array of street food that tantalizes the taste buds of...

All Opinion

Reasons Why En-Bloc Sales Are Expected to Remain Slow in 2025

Jayson Ang – February 6, 2025

TLDR From 2014 to 2024, the en-bloc market has faced challenges due to fluctuating cooling measures and a shift from...

Mandarin Top 5

Top 5 Benefits Of Singapore’s Cooling Measures For Home Buyers

Jayson Ang – April 11, 2025

Singapore's real estate market has experienced rapid growth in recent years, leading to concerns about affordability and sustainability. In response,...

All Opinion Selling Tips

6 Factors Making Singaporean Properties Difficult to Sell (Even in a Strong Market)

Jayson Ang – June 2, 2026

TLDR Properties in Singapore may linger on the market due to several key factors. Small boutique developments face price volatility,...

Buying Tips Mandarin Top 5

5 Things to do When You Go For A Property Viewing In Singapore

Jayson Ang – June 6, 2023

5 Things to do When You Go For A Property Viewing In Singapore Here are 5 things to keep in...

Mandarin Top 5

Top 5 Best Scenic Drives in Singapore

Jayson Ang – October 19, 2024

Singapore, a bustling city-state known for its modern architecture and vibrant culture, also offers some of the most picturesque driving...

All Buying Tips

Strategies for Overcoming ABSD and Acquiring Multiple Properties in 2023 (Revised)

Jayson Ang – August 15, 2023

TLDR When it comes to navigating the Additional Buyers Stamp Duty (ABSD) in Singapore, there are legal strategies available to...

All Buying Tips

Rising Interest Rates : A Cause for Concern?

Jayson Ang – December 7, 2022

TLDR In 2021, the real estate market saw a surge in demand due to low interest rates and supply chain...

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...

Buying Tips Mandarin Top 5

Investment 101: The Top 5 Best Long-Term Values In Singapore’s Property Market

Jayson Ang – July 10, 2023

Investment 101: The Top 5 Best Long-Term Values In Singapore's Property Market When it comes to purchasing property in Singapore,...

All Blog Posts Buying Tips

Unveiling the Secrets: How Foreigners Can Buy Property in Singapore – 6 Essential Steps to Follow

Jayson Ang – December 19, 2024

TLDR Foreign investors find Singapore attractive due to its stable governance and transparent business practices. Foreigners, including Permanent Residents (PRs),...