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
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 …
Singapore Homebuyers: Finding Hidden Value in ‘Undesirable’ Property Traits
TLDR Many perceived drawbacks in Singapore’s property market—such as mortgage lock-ins, leasehold status, west-facing units, nearby construction, inefficient spaces, and...
Read More
5 Reasons : Why Investing In Singapore Property Is The Best Decision I Ever Made
Investing in property is a great way to build wealth and secure a stable source of passive income. When it...
Read More
The Unconventional Wisdom: Why Choosing a Home You Love Over Pure Profit May Be Singapore’s Smartest Move
TLDR In Singapore’s property market, prioritizing a home you genuinely love over chasing maximum profit may be the smarter long-term...
Read More
Decoding the HDB Classification: The New Prime, Plus & Standard – What It Means for Singaporeans
TLDR The National Day Rally 2023 introduced a new classification for HDB flats, replacing the old 'mature versus non-mature estates'...
Read More
Is Singapore’s Property Market on the Verge of a Crash? Understanding the 5 Factors at Play
The Singapore property market has long been an attractive option for both local and international investors. However, as with any...
Read More
I Wouldn’t Rely Too Heavily On Discounts Related To ABSD This Year
TLDR The ABSD discount arises when developers approach their five-year deadline to sell 90% of units, facing a 40% penalty...
Read More
6 Unexpected Property Warning Signs That Can Be Negative for Some, But Beneficial for Others
TLDR When considering property preferences, what may appear as a disadvantage to some buyers could be a unique opportunity for...
Read More
Top 5 Tips : How to Choose the Best Property Agent in Singapore – Insider Tips and Strategies!
Choosing the right property agent in Singapore can be a daunting task, especially with the plethora of options available. A...
Read More
Top 5 Tips : How Investors Protect Themselves From Risk And Capitalize On Emerging Opportunities In Singapore’s Real Estate Landscape
The real estate landscape in Singapore has always been a lucrative investment opportunity for both local and international investors. However,...
Read More
Top 5 Reasons : Is It Still Worth It For A Foreigner To Invest In Singapore
Singapore, a small yet prosperous city-state in Southeast Asia, has long been an attractive destination for foreign investors. Its strategic...
Read More
Top 5 : Places to See Singapore’s Skyline at Night
Singapore, a bustling metropolis known for its stunning skyline, offers an array of vantage points to witness the city's architectural...
Read More
5 Tips To Spot Winning Investment Properties In Singapore
Investing in real estate is an exciting and potentially lucrative venture. In Singapore, a thriving property market attracts both local...
Read More
Top 5 : Best Hidden Beaches in Singapore
Singapore, a bustling city-state known for its modern architecture and vibrant culture, is also home to some of the most...
Read More
What Is The Best Location To Purchase A House To Ensure Your Child Has The Highest Probability Of Attending A Well-Renowned Primary School?
TLDR Parents often seek homes within 1km of desired primary schools to increase enrollment chances. Consider oversubscription rates and population...
Read More
Surprising Prediction: Will Singapore Property Prices Drop in 2024?
TLDR When considering the current real estate market in Singapore, it's crucial to understand the impact of factors such as...
Read More
44 Exciting New Condo Launches in 2024 Starting at $1,402!
Alright, let's talk about 2024. We're not expecting the same kind of shortages we've seen after COVID-19. Some folks are...
Read More
HDB Loan Vs Bank Loan: Pros & Cons
TLDR When deciding between an HDB loan or a bank loan for purchasing a property in Singapore, consider key factors...
Read More
The Lifecycle of an HDB Flat: Essential Stages for Owners and Buyers
TLDR HDB flats in Singapore, home to 80% of residents, begin as state land acquired at fair market value. The...
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
