How did landed properties in Singapore fare in 2023? The 99 and 999 freehold, terrace semi-d, and detached scenes have witnessed about 1300 transactions so far. Not too shabby, considering a relatively sluggish first half of the year.
Transactions seem to have picked up for two reasons. Firstly, the standoff between sellers and buyers has cooled down, and buyers are now coming to terms with the new price tags. Secondly, with greater clarity of the interest rate environment, those buyers who were warming the benches are finally getting their skin in the game.
Transaction volume in 2024
Let’s get straight to the point: We're thinking 2023 will wrap up with about 1,400 transactions. Singapore’s economy is looking positive, with the Monetary Authority of Singapore forecasting a growth rate of 1 to 3%. Not exactly a direct link to landed property transactions, but it does paint an optimistic picture.
Of course, people are always waiting for the property market to nosedive. But, spoiler alert: It hardly ever does. Raama takes us on a trip down memory lane to 2008 when the market crashed because loans were handed out like candy. Now, though, we know who can handle the heat. With measures like TDSR, LTV, and ABSD in place, the market has become somewhat insulated from speculative buying.
Watch our comprehensive recap of the property market in 2023:
And don't even think about waiting for bank sales to score a deal. Recently, a company in a bit of a pickle was trying to unload their two GCBs, and the price per square foot for a relatively old GCB remained at a cool S$1,8000 psf – not far from the market rate at all. Clearly, even in a bank auction, landed properties in Singapore aren’t backing down one bit, and there are not many bargains to be had.
Even during the lull period now, at the tail end of 2023, property listings are getting a healthy dose of attention. Notably, younger buyers in their early 30s, armed with a million dollars in cash, are gearing up for their foray. But as much as they’re savvy, they remain price-sensitive, thanks to interest rates and mortgage stress tests.
Landed property prices in 2024
So, we're expecting transaction volumes to climb, but what about prices? Are they set to take a trip north?
The median price currently hovers around S$1,700 – a figure that stands firm for popular districts across Singapore. In these areas, older landed properties have no qualms fetching a solid S$2,000 per square foot (psf). Our forecast? Prices will stabilise for the first half of 2024.
Raama emphasized that prices began their ascent in 2018, continuing through early this year, and now we're cruising on the plateau. As buyers grow increasingly cautious, he predicts that we'll see prices maintaining, albeit remaining susceptible to geopolitical events like the ongoing wars and the impending arrival of a new Prime Minister next year.
He throws in a caveat that not all properties are cut from the same cloth, and I couldn't agree more. Different strokes for different folks, or in this case, different prices per square foot.
Now, let's break down the price trends by the type of landed property in the market. Personally, I expect 99-year-old leaseholds outside of prime districts to be priced at a modest S$1,500 psf, given that they’re often built-up. In prime areas, your eyes might widen at S$1,800 to S$1,900 psf.
Interterraces and semi-detached homes are likely to hit the S$2,000 psf and S$1,800 marks, respectively. Additionally, bungalows located outside prime locations will command a respectable S$1,600 psf.
Hold your horses; we haven't even touched on new builds. These cater to the modern-day buyer with en suite rooms, lifts, and layouts painstakingly maximised by architects. As these are built to withstand the test of time, at least for another decade, the expectation across the island is a minimum of S$2,500 psf, depending on the popularity of its districts. In very prime locales, don't even think about lowballing – we're talking nothing short of S$3,000 psf for the asking price.
But Raama's got a reality check for us. Fixating on cost per psf might blind you to value-for-money. Choosing solely based on affordability might lead you to units with a low psf but equally low value – a pitfall that an experienced realtor can help you avoid.
(Honestly, ask me how many real gems you'll find in a hundred listings, and I'll tell you it's less than a handful. Unsurprisingly, these listings will attract a swarm of interested buyers, and you’d have to brace yourself for some spirited bidding wars.)
Looking to buy a landed property in 2024?
As the old adage goes, luck is when preparation meets opportunity. Remaining attuned to the market necessitates a significant investment of time and effort. If you're fortunate enough to have the luxury of time, that's fantastic. However, if time is a luxury you lack, consider enlisting the expertise of a professional deeply immersed in the world of real estate.
We know for a fact that many of our viewers are poised for action with at least one condominium unit under their belt, and kudos to all of you for navigating the property landscape so successfully.
If you've been shopping for a landed property online, you may be aware of two options. One, you can reshape your portfolio until it allows you to enter a new segment. Two, you can jump at the opportunity and fork out an option fee before disposing of your property holdings – a process that demands meticulous planning. But there are myriad other ways of striking a deal, which we've actively explored for our clients.
A viewer contemplating a total property sale will have different needs from another who is entangled in restrictions. Every deal is different, and we aren’t shy to admit that our videos are by no means personalised. For those seeking tailored guidance, particularly in the form of portfolio reviews and strategic planning, consulting our team directly is the way to go. Our roster of professionals spans from bankers to builders and architects, ready to provide comprehensive support.
When you're on the cusp of investing $4 million in a home, the additional expenditure for professional advice might just be a wise investment in ensuring a sound decision-making process.
Get in touch with me, Harvey Chia, at 91999141.
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