5 Points : Singapore’s Property Market vs. Stock Market: Which is the Better Investment Option?
Investing is an important aspect of personal finance and can be a valuable way to grow wealth over time. However,...
Read More
TLDR
When it comes to investing in real estate in Singapore, traditional beliefs may not always hold true in today’s rapidly transforming market. Property agents now rely on digital platforms like Facebook and PropertyGuru rather than classified ads. While owning a freehold property may be beneficial for long-term investments, newer 99-year leasehold properties could be smarter choices for mid-term gains. Being near an MRT station isn’t always the best option, as other factors like entry cost and specific product choice play crucial roles. Additionally, the belief that the next-door resale condo is a bargain may not always hold true, as seen in the comparison between J-Gateway and Caspian properties. The property market is ever-changing, challenging long-held rules and expectations. To navigate this dynamic market, staying flexible and open-minded is key. Gain more clarity on property investments by scheduling a financial assessment session.
When it comes to investing in real estate in Singapore, there are several so-called “rules” that seem to dictate certain choices. These “rules” have been around for ages, based on certain “beliefs” that have been passed down or shared through word of mouth.
Do These “Guidelines” Still Hold Weight in the Present?
In this era of rapid transformation, what worked before is no longer successful. Ten years ago, property agents could rely on classifieds ads to generate buying inquiries, but now they have to take their listings to the digital realm of platforms like Facebook and PropertyGuru in order to get the most exposure. The Classifieds section has become a shadow of its former self. Ultimately, it has become outdated and superfluous.
Are You On The Cutting Edge…Or Stuck In The Past?
As I challenge some long-held beliefs cherished by some, how will you react? It is natural to be averse to change, yet here I am offering readers of this blog 3 property investment beliefs that may be past their prime.
Investment Belief #1: Owning a Freehold Property in Singapore is a Far Superior Investment than Leasehold
Have you ever asked yourself if Singapore freehold properties are better than leasehold? Well, I hear you cry as you ponder this debate – but, trust me, I walk the ground daily, witness transactions and have exclusive data unavailable to the general public.
Take Bartley Ridge as an example: a 99-year leasehold condo that saw multiple transactions in 2018. So is the belief in freehold investments outdated? Absolutely not – it is still highly relevant!
Bartley Ridge (Leasehold) : 2018 Transactions
Bartley Ridge psf Pricing Trendline
Let us take a look at Oasis Gardens – a freehold development nearby– and make a comparison.
Oasis Gardens (Freehold) – PSF Trendline
The PSF pricing for this freehold development has decreased, leading to fewer transactions taking place as owners purchased at higher prices and are unwilling to sell at lower prices. The trendline is evident, with a slight decrease and a lack of significant movement. If you’re seeking a property investment for the long-term, a freehold property may be the most beneficial option; however, for a mid-term period (3-8 years), a new 99-year leasehold property may be the smarter selection.
Investment Belief #2: Buying Near MRT Is Better
It’s often said that choosing a spot close to an MRT station is a wise move, and I have to agree – in many cases, being in the vicinity of public transport has its advantages. Nevertheless, I’ve come across instances where this is not necessarily the case.
The Quartz (near MRT) vs Riversails
Below are the Riversails’s most recent transactions:
Riversail 2018 Transactions (Further away from MRT)
Riversales psf Trendline
Let’s take a look at the Quartz PSF trendline.
Take note the Quartz is located nearby Buangkok MRT station.
The Quartz PSF Trendline (Near MRT station)
Living close to a MRT station may not always be the best and safest option when it comes to investing. Location alone is not a surefire way to guarantee success – there are other factors that must be taken into account, such as the entry cost of the investment and which specific product to buy (when there are a variety of options in the same area).
Investment Belief #3: The Next Door Resale Condo is a Bargain!
I recently had the pleasure of connecting with a couple who were curious about the current state of the property resale market, so let’s take a peek at the resale property price index!
2013 was the pinnacle of sky-high prices, with J Gateway launched that June, boasting an average PSF of a staggering $1650. I couldn’t believe it – it was just too expensive. The timing was unfortunate too, coming right before the 2013 cooling measures. J Gateway was released and sold at the most exorbitant rate. Fast forward to the present day, let’s take a peek at J-Gateway’s most recent transactions.
J-Gateway Most Recent 2018 Transactions
It is astonishing to witness the phenomenal sales rate of J-Gateway units, with prices soaring up to as much as $19XX per square foot! Even more impressive, some buyers have reported incredible returns of up to $200K in profits!
J Gateway PSF Trendline
If we compare the launch of J Gateway with that of Caspian’s, we can see the clear appreciation in J Gateway’s prices over the last five years. Caspian, being the resale option, became a popular choice for people looking to buy a property in the west. Let’s take a closer look at Caspian’s PSF trendline.
Caspian PSF Trendline
If you had purchased Caspian back in 2013, when it was available for $11XX PSF, compared to J-Gateway’s launch price of $14XX to $16XX PSF, you could have already been collecting a generous rental income of $1500 a month, and making a profit of $54K after three years! This is much lesser than the potential 6-figure profits that could have been gained from J-Gateway, which is still under construction.
Despite selling at its highest peak prices in 2013, J-Gateway property investments would still have yielded higher profits than any other form of investment in the end. There is a vast difference in the gains and appreciation between the two.
Conclusion
Gaining a better understanding of Singapore’s property market can be a tricky endeavor, and none of us have a perfect grasp of it. Nonetheless, as we gain more knowledge and insights, it is important to be able to be flexible and open-minded, having the humility to accept when we’re wrong.
You might be thinking that I’m being biased in favor of the newer properties, but what I have said is not without reason. Everyday I’m witness to the improved performance of newer properties versus their older counterparts – the evidence is all around.
No matter my bias, the evidence that slowly erodes all the “rules” we’ve made is undeniable. While these rules are not entirely wrong and should be used as a general guideline, if you’re hoping to make a property investment and exit at its peak, these so-called rules may not be quite so applicable.
Despite the introduction of the TDSR cooling measures on 29 June 2013 – the day prior to the launch of J-Gateway – Singaporeans have defied the unwritten rule of “never enter the property market at the peak price” and pushed J-Gateway to record highs in 2018, showing just how much their buying habits have changed over the years.
Are you feeling uncertain about the preference of newer properties in the market? It’s become apparent that there is much less interest in older properties, meaning they become a second choice rather than a sought-after option. This goes to show how the property market is ever-changing and rarely follows the rules or expectations.
Worried that your own biases are impacting your view of the property market?
Allow me to assist you – schedule a thorough financial assessment session with me to gain more clarity on the property market.
You May Also Like …
Evaluating Property Investments: Pros and Cons to Keep in Mind
TLDR: Key Takeaways from the Blog Post Singapore's real estate market offers both pros and cons for investors. The advantages...
Read More
6 Secrets Foreign Investors Are Rarely Told About Singapore’s Real Estate Market
TLDR The Singapore property market presents unique characteristics that foreign buyers should consider. From the high rate of homeownership to...
Read More
Top 5 Reasons Why Singapore’s Property Market Is A Haven For High Net Worth Investors
Singapore's property market has long been a magnet for high net worth investors, both local and international. The city-state's strategic...
Read More
What If Sellers Back Out of a Deal?
TLDR When a seller unexpectedly withdraws from a property transaction before a contract is signed, they are legally allowed to...
Read More
6 Must-Know Factors to Consider When Purchasing a Resale HDB in 2023
TLDR When buying a resale flat in Singapore, make sure to walk around the neighborhood to assess actual distances, check...
Read More
5 Resources That Can Help You Find Your Dream Home In Singapore
It's 五新房产, Finding your dream home can be a daunting task, but with the right resources, it can be a...
Read More
The 5 Most Common Mistakes First-Time Buyers Make (And How to Avoid Them)
The 5 Most Common Mistakes First-Time Buyers Make (And How to Avoid Them) Here are the 5 most common mistakes...
Read More
A Milestone for Singles: New HDB Rule Prioritizes Proximity to Parents
TLDR The upcoming Family Care Scheme (FCS), launching mid-2025 in Singapore, prioritizes singles applying for BTO flats near their parents,...
Read More
Five Pitfalls of Selling a Home for the First Time
TLDR When selling your first home, avoid holding out for a better offer as it may backfire. Let your agent...
Read More
Top 5 Factors : Buying Resale vs New Launch Property in Singapore: Which is Better?
The decision to invest in a property in Singapore can be both exciting and daunting, especially when faced with the...
Read More
5 Reasons Why Your House Isn’t Selling – and How to Overcome Them!
TLDR When trying to sell your home, ensure it is competitively priced based on its unique features and the current...
Read More
5 Things to Know About the Singapore Property Tax System
5 Things to Know About the Singapore Property Tax System Here are 5 things you need to know about the...
Read More
Looking To Buy An Older HDB Flat? Here’s What You Need To Know Before You Sign On The Dotted Line!
TLDR When considering purchasing an older flat, ensure to thoroughly inspect wet areas for leaks, check balcony conditions, watch out...
Read More
Singapore Private Residential Market Outlook 2023
TLDR The Singapore residential property market has shown resilience in 2022, with price growth in both private housing and HDB...
Read More
Top 5 : Reasons why Freehold Properties Cost More in Singapore
Freehold properties, a term often heard in the real estate market, are properties that are "free from hold" of any...
Read More
Top 5 Factors : Singapore Real Estate Investing vs Stocks and Bonds: Which is Better?
Investing is an essential aspect of wealth creation and financial planning. With a plethora of investment options available, it can...
Read More
ANALYSIS: Unveiling the HDB Towns with the Steepest and Lowest Price Surges!
TLDR The real estate market for HDB flats in Singapore has witnessed significant growth, with prices reaching new highs. The...
Read More
Why Aren’t Spacious, Wallet-Friendly Homes Our Reality Yet?
TLDR The article discusses the current housing market in Singapore, focusing on the challenges faced by individuals like Sherlyn Tan...
Read More
UNCOVERING the Secret to Profitable Small Boutique Condos!
TLDR Boutique condos, with fewer than 100 units, are known for price fluctuations due to infrequent transactions and higher upkeep...
Read More
