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 …
5 Singapore’s Best Property Investments for 2023: Where to Find Growth and Income
The Singapore property market has long been a sought-after investment destination, with its stable economy and growing population making it...
Read More
The Uncomfortable Truth About Homeownership and Relationships in Singapore
TLDR Property ownership and prenuptial agreements are key for married couples in Singapore. Joint ownership (either joint tenancy or tenancy-in-common)...
Read More
Freehold Properties vs Leasehold Properties: Which is Better?
TLDR When it comes to property investments in Singapore, understanding the differences between leasehold and freehold properties is crucial. This...
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
Calculating Your Property’s Annual Value in Singapore 2024: A Simple Guide!
TLDR Understanding your property's annual value is crucial for determining property taxes in Singapore. The annual value is based on...
Read More
Breaking Through the Stalemate of En Bloc Sales
TLDR The Singapore property market faces challenges with the ongoing en bloc stalemate. Lower success rates, higher development risks, and...
Read More
Top 5 Places to Learn About Singapore’s History
Singapore, a thriving metropolis with a rich history and diverse cultural heritage, offers numerous opportunities for visitors and locals alike...
Read More
Beware! Spot These Warning Signs Before Making a Home Purchase!
TLDR When purchasing a property in Singapore, it is crucial to thoroughly assess various aspects of the home to avoid...
Read More
5 Singapore Property Trends to Watch in 2023: Expert Weigh In
5 Singapore Property Trends to Watch in 2023: Expert Weigh In Top 5 Singapore Property Trends to Watch in 2023...
Read More
5 Clear Signals That Often Precede Property Price Moves in Singapore
TLDR Property price movements in Singapore often follow clear signals rather than random fluctuations. Key indicators include new launches crossing...
Read More
Reach Your Goal of Owning a Flat Before You Turn 35 : Money-Saving Strategies
TLDR Jayson Ang provides valuable insights on money-saving strategies to achieve the goal of owning a flat before turning 35...
Read More
Find Your Dream Home: Top 5 Property Investments for Families in Singapore
As one of the most prosperous countries in the world, Singapore is an attractive destination for families looking to invest...
Read More
5 Biggest Mistakes I Made When Starting Out In Singapore Property Investing
Investing in Singapore property can be an excellent way to generate passive income and build long-term wealth. However, like any...
Read More
6 Reasons to Think Twice Before Hiring a Friend or Family Member as Your Agent
TLDR In Singapore, hiring a friend or family member as your property agent can be risky. Disclosing sensitive financial details...
Read More
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
The Top 5 Myths About Buying Property in Singapore – Debunked!
The Top 5 Myths About Buying Property in Singapore – Debunked! Here are the top 5 myths about buying property...
Read More
Top 5 : Common Characteristics Of Singapore Condos That Make Them An Attractive Investment Opportunity For Foreign Buyers
Singapore, a thriving hub of business and commerce in Southeast Asia, has become an attractive destination for foreign investors looking...
Read More
Building A World-Class Nation: Top 5 Facts About Singapore’s Developed Infrastructure
Building A World-Class Nation: Top 5 Facts About Singapore's Developed Infrastructure Singapore is known for its high standard of living,...
Read More
5 Reasons Why Timing the Singapore Property Market is a Risk You Shouldn’t Take
5 Reasons Why Timing the Singapore Property Market is a Risk You Shouldn't Take Entering the Singapore property market can...
Read More