Your search results

Singapore Property Price Set to Explode Upwards in 2024?

Posted by Jayson Ang on March 10, 2023

| 0

TLDR

Understanding the factors influencing property prices in Singapore for 2024 can help in making informed decisions. Despite high rental rates and rising mortgage rates, property prices have continued to climb. The government’s cooling measures have segregated the HDB and private property markets, affecting property valuations. Sellers holding multiple properties are driving the market, while limited options for downgrading to HDB contribute to the high property prices. The market dynamics suggest that buying or selling now depends on individual circumstances, and strategic real estate advice can guide through the process effectively.

As we move into 2024, there is a theory that property prices in Singapore will not drop but instead continue to rise higher and higher. This theory is backed by several situations that have emerged over the past three years.

Despite the interest rate remaining at an elevated level and possibly rising further, we have seen no signs of property prices falling. In fact, property prices have been climbing higher despite the low transaction volume. This signifies that not many are willing to sell off their property at a lower price, and buyers can still afford to buy.

Firstly, we are facing very high rental rates in the market right now, and owners of properties are getting extremely high rental yield. Mortgage rates have been on the rise since January 2022, and three months solar rates have reached 3.029 percent, putting off many home buyers. The rising home interest rate has made home loans much more expensive to service, so buyers feel that it is too expensive to service the loan or are no longer eligible to borrow the same amount of money, causing the number of qualified buyers in the market to drop. This has led to a drop in property transaction volume. With lesser buyers now in the market, one would expect property prices to drop. However, the theory suggests otherwise.

One reason why property prices can continue to rise into the future without dropping at all is that the high rental rates in the market can actually cause property prices to go up. High rental rates must be priced into the property, and since rental rates are very high, it has to be priced into the property as well. With this, rental rates are even higher, and investors are getting high return on their rental properties. There is no urgency to sell their properties, as they are getting a net positive monthly return. The only situation they will consider selling the property is if the rental is being priced into the price of the property.

Private property owners who want to downgrade to an HDB will find that it is no longer an option as part of the recent cooling measure announced by the government. Home sellers can no longer sell their prime property and subsequently buy an HDB unless they are above 55 years old. If they want to do so, they have to wait out a 15-month period, which means that they have to rent a property for 15 months at least, causing rental prices to go up, and this can also cause property prices to go up again. Even if they are 55 years old and above, they can only buy an HDB four rooms and below immediately. This has segregated the HDB and the private property market very clearly, which can cause property prices to remain high.

Today, people who are selling their private property are not likely selling to downgrade to an HDB, but it is more likely that they are either upgrading or downgrading to another private property. If they choose to downgrade, they have to find a place to rent, causing greater demand for rental properties, thereby driving private property prices up. If they choose to buy another condominium, it is kind of zero sum, as when they sell, they buy, and this can also cause property prices to go up.

In conclusion, sellers who are in the market right now are probably people who own multiple properties because they have holding power. They are not scared of price drops or, in other words, are just savvy enough to price in the rental if they even want to sell the property. Rising rental demand causes rising property prices. With interest rates at an all-time high, TDSR at 55, and a high 25% down payment requirement, private property sellers find it hard to downgrade to an HDB.

Should You Buy, Sell or Wait?

If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?

It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.

I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.

I can help you by:

Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.

You May Also Like …

Mandarin Top 5

Building A World-Class Nation: Top 5 Facts About Singapore’s Developed Infrastructure

Jayson Ang – July 23, 2023 –

Building A World-Class Nation: Top 5 Facts About Singapore's Developed Infrastructure Singapore is known for its high standard of living,...

Mandarin Top 5

Top 5 Overlooked Features that Buyers are Looking for in Singapore Property

Jayson Ang – May 17, 2023 –

The top 5 overlooked features that buyers are looking for in the Singapore real estate market. These are the overlooked...

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 Opinion

Why Can’t Everyone Have Homes In Good Locations?

Jayson Ang – March 9, 2024 –

TLDR In a nutshell, the Singapore property market is undergoing significant changes, with the introduction of a new housing classification...

Mandarin Top 5

Top 5 Scenic Drives in Singapore

Jayson Ang – June 4, 2024 –

Singapore, a small yet bustling city-state, is well-known for its impressive skyline, diverse culture, and delicious food. However, not many...

All Buying Tips Opinion

Singapore Homes Prices Falling? Is This The Beginning Of A New Trend?”

Jayson Ang – December 30, 2023 –

TLDR The Singapore property market has seen a slight dip in private home prices after a significant increase over the...

Mandarin Top 5

Top 5 Reasons : Is It Still Worth It For A Foreigner To Invest In Singapore

Jayson Ang – January 24, 2025 –

Singapore, a small yet prosperous city-state in Southeast Asia, has long been an attractive destination for foreign investors. Its strategic...

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,...

Mandarin Top 5

Top 5 Factors : Why Not All Properties Appreciate Steadily

Jayson Ang – January 20, 2025 –

Real estate has long been considered a lucrative investment option, with the potential for significant returns. However, not all properties...

All Buying Tips Opinion

What Is The Best Location To Purchase A House To Ensure Your Child Has The Highest Probability Of Attending A Well-Renowned Primary School?

Jayson Ang – October 25, 2023 –

TLDR Parents often seek homes within 1km of desired primary schools to increase enrollment chances. Consider oversubscription rates and population...

Mandarin Top 5

Top 5 Historical Landmarks in Singapore

Jayson Ang – April 24, 2024 –

Singapore, a bustling cosmopolitan city-state, is known for its rich history and diverse cultural heritage. This small yet vibrant nation...

All Blog Posts Buying Tips

What Happens To Your Housing Loan Once You Sell Your House?

Jayson Ang – July 5, 2023 –

TLDR When selling your home in Singapore, ensure you pay off your outstanding home loan, refund any CPF monies used,...

Mandarin Top 5

Top 5 : Why Ultra-Rich Foreigners Will Still Buy Property In Singapore

Jayson Ang – March 1, 2025 –

Singapore, a small island nation in Southeast Asia, has been steadily gaining recognition as a hotspot for the ultra-wealthy to...

All Buying Tips Opinion

Here Are 6 Interesting Facts About The Minimum Occupation Period (MOP) That Not Many People Know About In Singapore

Jayson Ang – May 1, 2024 –

TLDR When it comes to understanding the Minimum Occupation Period (MOP) set by the Housing Development Board (HDB) in Singapore,...

Mandarin Top 5

Top 5 Factors : Location More Important Than Freehold Status?

Jayson Ang – March 3, 2025 –

When it comes to purchasing a property, there are numerous factors that potential buyers need to consider. While the debate...

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...