Sell High Buy High : Will This Still Make You a Profit?
TL;DR Summary: Timing of Property Sale: Selling high and buying high may seem counterintuitive, but understanding market dynamics can...
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TLDR
When deciding on buying or selling property in Bayshore, consider the recent developments and potential future growth. With a surge in property prices over the past two decades, especially in condos like Bayshore Park, Costa Del Sol, The Bayshore, and The Summit, the area shows promising investment opportunities. The upcoming Bayshore estate, along with long-term projects like “Long Island,” hint at a facelift for the East Coast. With strong demand and modernization efforts, prices are expected to continue appreciating. Developers are eyeing the region for new projects, indicating potential for higher property values. Residents with comfortable incomes may find the $2 million residential property within reach, suggesting a robust market. Consider consulting a real estate expert for strategic advice tailored to your unique situation to navigate the evolving property landscape effectively.
In 2023, amidst a whirlwind of property renewal projects, one plan that seized the attention of many was Bayshore’s masterplan. Nestled next to East Coast Park beach, this project has sparked quite a buzz.
The government unveiled in October that the refreshed Bayshore estate will feature around 10,000 residences, with 7,000 units earmarked for public housing and the remaining 3,000 units designed as private homes.
The 60-hectare Bayshore estate sits in a prime location that could potentially offer residents clear, unobstructed views of the sea. With two upcoming MRT stations (Bayshore and Bedok South on the Thomson-East Coast Line) in its vicinity, the estate boasts superb access and connectivity. Future dwellers will have new facilities at their doorstep, not to mention the existing leisure options at East Coast Park beach.
For those with their hearts set on a seaside lifestyle, Bayshore’s masterplan is a breath of fresh air. There’s been a bit of a dry spell with new private residential debuts, as well as public housing initiatives in the area. Most of the existing structures nearby are dated condo projects and old HDB flats.
The last new launch condo project in the district was Seaside Residences back in 2017, which sold out by October 2021. Bedok South Horizon, launched in November 2016, was the latest HDB build-to-order (BTO) project in the vicinity.
What Lies Ahead?
Heads up, folks in Bayshore who’ve been itching for fresh housing options! The year 2024 is gonna be a game-changer. The HDB is all set to roll out the first duo of BTO projects in Bayshore – probably under the Plus flat model. Plus, there’s a private residential site that’s made its way to the Reserve List of the government land sales programme for the first half of 2024.
Now, if we take a peek a little further, the East Coast of Singapore could be in for a serious facelift. The authorities have plans to kick off studies for a long-term project involving some major reclamation work along the coastline. Dubbed “Long Island”, this 800-ha reclaimed chunk of land will not only protect against rising sea levels but also dish out new housing and fun recreational spots.
When you add it all up, it seems pretty clear that properties along the East Coast could see some real growth potential. But let’s not get ahead of ourselves – how has Bayshore’s property market been faring till now? PropNex Picks has gone ahead and analyzed four condo developments within the Bayshore planning subzone, handpicked because of their closeness to the new Bayshore estate, substantial development size, and the number of resale deals in the past year (2022 – Oct 2023). It’s time to see how home values have stood their ground.
Source: PropNex Research, OneMap
Here are some details about the Bayshore condo projects:
Bayshore Park
Bayshore Park, which was finished up in 1986, is a condo that’s got a leasehold of 99 years and is made up of 1,083 units. If we look at the numbers from 2023 until the end of November, the average price per square foot for a resale unit was around $1,280. That’s based on the 19 units that changed hands during that period. Now, going back to 2003, we can see that the prices at Bayshore Park have really taken off. In fact, the average cost per unit has shot up by about 209% (check out Chart 1 for the details). And those aren’t just random figures – they’re based on official records that have been filed.
Costa Del Sol
In the time stretch from January to late November 2023, Costa Del Sol had a decent run. They managed to shift 21 properties on the second-hand market, with each square foot commanding an average price of $1,684. Talk about a glow-up – back in 2003, the average rate for a new or sub-sale unit was just $886 per square foot. Fast forward twenty years, and it’s rocketed up by a whopping 90%! Costa Del Sol isn’t just any old property development either. Finished back in 2004, this 99-year leasehold project boasts a hefty 906 units. Not too shabby!
The Bayshore
The Bayshore, with its 1,038 units, is a property held on a lease of 99 years. This project wrapped up construction in 1999, and by the end of November 2023, 40 of its properties were resold. The Urban Redevelopment Authority’s Realis caveats point out that in 2023, The Bayshore saw an average resale price per square foot (psf) of $1,277. That’s a whopping 152% hike in the average unit price from 2003 when it was just $506 psf.
The Summit
Over at The Summit, a classy condo project boasting 242 freehold units, five resale deals were sealed from January through November 2023. The average cost per square foot (psf) for these transactions stood at a cool $1,548, according to official records. When compared to the price back in 2003, which was a mere $525 psf, we see a whopper of a surge – an increase of 195% in the unit price at The Summit in 2023.
Over the past twenty years and even during the COVID-19 pandemic, the prices of homes in Bayshore have consistently been on the rise. This indicates that these properties are always in demand and their value appreciates well over time as the neighborhood slowly modernizes. The improvement of public transportation, like the gradual introduction of the Thomson-East Coast Line and a new station coming up in Bayshore, might be contributing to keeping the property prices robust.
We’ve done some number crunching on these four developments and the details are laid out in Table 1. Most homes resold from January 2022 through November 2023 turned a profit and were owned for a good chunk of time – over a decade, specifically 11 to 17 years. The yearly returns for all four projects varied between 3.8% and 5% with a typical profit of somewhere between $396,000 and more than $920,000.
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What Are Potential Prices Of New Homes In Bayshore?
In the absence of a magical fortune-telling globe or a knack for hopping through time, it’s impossible to predict with total confidence how real estate prices will fluctuate. We can only make educated guesses based on past trends. According to data from URA Realis caveats, by the end of November 2023, the average cost per square foot of new private homes in the Bedok Planning Area – where Bayshore is positioned – was tagged at $2,092.
Meanwhile, Seaside Residences, one of the freshest developments in the same area, sported an average resale price of $2,166 per square foot in the same year. Given all the buzz around the anticipated Bayshore estate, it isn’t far-fetched to expect home prices there to climb higher than current rates.
When staking their claims on land and deciding how much to charge for units, developers consider the financial capacity of folks living in the vicinity. This could lead to a steady stream of potential buyers keen to upgrade.
Let’s say a buyer has set their sights on a property worth $2 million. If they’re counting on a loan covering 75% of the property’s value (the Loan-to-Value or LTV limit), spread over a 30-year loan term at a 4% interest rate, they’d need a minimum monthly household income of just above $13,000. This is in line with the Total Debt Servicing Ratio (TDSR) framework, which mandates that the monthly mortgage repayment shouldn’t exceed 55% of the borrower’s monthly household earnings.
A look at the income figures for residents in the Bedok Planning Area reveals that over 35% of households are earning more than $13,000 each month (refer chart 5). Therefore, a $2 million residential property, based on today’s loan conditions, is within their financial reach. This also points to the strong buying power of families living in Bedok, some of whom might be eyeing a fresh start in the upcoming Bayshore estate.
So, think about it this way. Some folks who own homes in Bayshore might be thinking about selling their property. Why? Well, they’ve seen some sweet capital gains over the years and could use that moolah to snag a new pad in the upcoming Bayshore town. Long story short, this fresh waterfront spot’s gonna be buzzing once the first housing projects kick off. If you’re keen on getting a leg up in the new Bayshore scene, have a chat with a PropNex agent. Start shaping your plans today, you won’t regret it!
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.
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