Top 5 Reasons : Why is Supply so tight for Singapore Property?
Singapore's property market has been experiencing a tight supply in recent years, leading to increased demand and rising property prices....
Read More
Is The Condo Dream Getting Increasingly Harder To Achieve For Singaporeans?
TLDR
Condominium prices in Singapore have nearly doubled over the past 15 years, with new launches now averaging around $2,390 psf. A typical 1,000 sq ft three-bedroom condo costs about $2.39 million, aligning with the income growth of the top 20% earners who mostly buy such properties. While prices feel high compared to 2009, affordability has remained relatively stable when accounting for income increases. New launch condos have grown more expensive compared to resale units, which may offer better value despite renovation costs. The housing market reflects limited land and population growth, making condos aspirational but still attainable for the higher-income segment. Buyers and sellers should consider their individual circumstances and market data for decisions. Expert advice can help navigate this complex market effectively.
For many Singaporeans, owning a condominium has long represented a significant life aspiration, often considered the pinnacle among traditional material achievements. Given Singapore’s limited land, growing population, and economic progress, the steady rise in housing prices, particularly for condominiums, comes as no surprise. Recently, a new freehold condominium in District 15 reportedly sold for over $3,000 per square foot (psf). While District 15 has gained popularity and the development boasts an excellent location with amenities, such a price point prompts questions about affordability.
While $3,000 psf might seem an outlier today, it could hint at future price trajectories. According to Stacked Homes, new condo prices averaged $2,390 psf in September 2024. This implies a typical 1,000-square-foot, brand-new three-bedroom condominium unit would cost approximately $2.39 million. At first glance, this price appears far from affordable for the average Singaporean.
Indeed, it largely is. Singapore’s housing system sees about 80% of its population residing in public HDB flats, with the remaining 20% in private properties, including condominiums, apartments, and landed homes. Consequently, condominium prices tend to align with the income levels of Singapore’s top 20% earners—the demographic most likely to purchase such properties, especially new launches. Therefore, it’s logical that condo prices have risen in tandem with income growth in this segment over the past two decades.
Property Price Growth Over the Last 15 Years
The Urban Redevelopment Authority’s (URA) Property Price Index (PPI), which tracks residential property prices (including non-landed properties), stood at 197.5 in Q3 2024. With Q1 2009 as its base year, this indicates a roughly 98% increase in condominium prices over the past 15 years, essentially doubling.
This data often leads to two common observations:
- For Existing Condo Owners: If you purchased a condominium around 2009, your unit’s value might not have appreciated by the full 98%. For example, an $800,000 unit then might now be worth $1.4 million—a significant 75% appreciation, but short of the index’s figure.
- For New Condo Buyers: Today’s buyers might lament the “good old days” when a new three-bedroom condo cost around $800,000, contrasting it with today’s $1.8 million price tag for a similar unit (a 125% increase).
This discrepancy arises because the PPI reflects overall private non-landed residential property prices, encompassing both new launches and the resale market. Stacked Homes data reveals a significant widening of the price gap between new launches and resale condominiums over the last decade. In 2013-2014, new launch condos over 1,200 sq. ft. were only 6%-17% more expensive than resale units. By 2023-2024, this gap had expanded to 34%-53%.
This explains why existing condo owners might see substantial, yet not as dramatic, appreciation as the growth in new launch prices. For aspiring condo owners, resale condos might offer better value, although potential renovation costs must be factored in, as they can offset initial savings.
Income Growth vs. Property Price Growth
To assess affordability, it’s crucial to compare property price increases with income growth. Using data from data.gov.sg, the monthly household income from work per household member (excluding employer CPF contributions) for the 80th percentile increased by approximately 90% from $3,153 in 2009 to $6,008 in 2023.
Comparing this with the PPI, which rose about 94.1% from 2009 to Q4 2023, reveals a strong correlation. The rise in property prices has largely kept pace with the income growth of the top 20% earners.
Affordability Over Time
This comparison suggests that, despite the feeling of high prices, the overall affordability of a condominium unit in 2024 is statistically comparable to what it was in 2009. While absolute prices were lower in 2009, so too were household incomes. The market has adjusted, with property prices rising in tandem with the income levels of the segment that typically acquires them. Therefore, the “condo dream” remains aspirational, but statistically, it hasn’t necessarily become more difficult to achieve, given the corresponding income growth within the target demographic.
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 …
Exploring Singapore: The Top 5 Surprising Facts You Never Knew
Singapore, a city-state in Southeast Asia, is known for its rich cultural heritage, diverse population, and vibrant food scene. This...
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
Superstitions in the Real Estate Market : How Does it Impact Resale Value?
TLDR When navigating the Singapore property market, it's crucial to consider various superstitious beliefs that can impact your decisions. From...
Read More
5 Reasons : Why Investing In Conservation Shophouses In Singapore Can Be A Unique Opportunity
Conservation shophouses are a unique and valuable investment opportunity in Singapore. These historic buildings are a key part of the...
Read More
Purchasing Older HDB Resale Flats: Key Considerations When the Flat Outlives You
TLDR HDB flats have a 99-year lease, and key housing schemes require the lease to cover the youngest owner until...
Read More
4 Simple Strategies to Help Future Homeowners Save Money
TLDR When it comes to being a new homeowner, it's essential to prioritize regular maintenance to avoid costly repairs down...
Read More
What is Your Next Step in the Property Market?
When you flip open the papers or turn on the news nowadays, the common buzzwords are "INFLATION", " INTEREST RATE...
Read More
Top 5 Tips for First-Time Chinese Buyers Looking to Invest in Singapore Today
Top 5 Tips for First-Time Chinese Buyers Looking to Invest in Singapore Today Here are the top 5 tips for...
Read More
Top 5 Most Common Red Flags To Watch Out For When Investing In Singapore Property
Investing in Singapore property has long been considered a lucrative and stable way to build wealth. However, like any investment,...
Read More
Discover Singapore: 5 Must-See Attractions for a Culture Lovers’ Paradise
Singapore, a bustling metropolis in Southeast Asia, is a melting pot of cultures and traditions that offers a unique blend...
Read More
Why Can’t More People Own Private Property?
TLDR The blog post discusses the aspirations of individuals like Siti and Mr. Tan regarding property ownership in Singapore. Siti...
Read More
Singapore Property Swapper
https://www.youtube.com/watch?v=B1NTnjxDPy4 Jayson Ang, also known as the Singapore Property Swapper, is a certified Propnex agent and top 1% producer who...
Read More
Top 5 Cocktail Bars in Singapore for a Night Out
Singapore, the vibrant city-state known for its impressive skyline and diverse culture, is also home to an exceptional cocktail scene....
Read More
The Top 5 Impact Of Singapore’s Ageing Population On The Property Market And Investment Opportunities
Singapore's ageing population is having a significant impact on the property market and investment opportunities. The top five effects include:...
Read More
Strategic Patience: Why Some Singaporeans Might Benefit From Delaying Home Ownership, Even With Enhanced Grants
TLDR The Fresh Start Housing Scheme in Singapore now offers up to $75,000 in grants for eligible families buying shorter-lease,...
Read More
Top 5 Questions to Ask : Is Singapore Property Investment for Me?
Singapore has long been a popular destination for property investors, both local and international. The city-state's stable economy, strong infrastructure,...
Read More
Top 5 Reasons : Why Do Singaporeans Still Flood The Property Market?
Singapore, a thriving city-state with a robust economy and a strong demand for real estate, has always been an attractive...
Read More
Does Sell 1 Buy 2 Strategy Still Works Today in 2024?
TLDR When considering the "Sell One By Two" property investment strategy, keep in mind that it involves selling your previous...
Read More
Top 5 : Dangerous Ideas Singapore Property Investors Have
Investing in property, particularly in a thriving market like Singapore, can be an enticing prospect. However, it's not without its...
Read More