4 Reasons To Buy Property In Singapore’s Core Central Region
Is now the right time to invest in the residential property market?
After years of declining residential home prices, Singapore’s property market is finally starting to trend upwards. The popular Core Central Region have seen non-landed private residential property prices rise by 0.1% from the 2nd quarter to the 3rd quarter of 2017, according to the Urban Redevelopment Authority’s Private Residential Property Index. So, is now the right time for investors to think about purchasing property in the Core Central Region?
There are four main reasons why now is the right time to buy:
Limited supply of freehold property
There is limited freehold property across the island nation. Nowhere is this more prominent than in the Core Central Region, which includes District 9. If you are able to purchase a freehold property, expect the price gap over leasehold – which currently stands at 15-20% – to increase.
Lack of Land
The limited supply of land has led to high land bids that will affect future prices and the capital gains of property in the area. Due to the lack of land, en bloc purchases have been increasing. Development Sloane Court recently had a transaction price of S$1,616 (US$1,186) per plot ratio (ppr). According to Nicholas Mak – Executive Director of ZACD Group – a new condo could potentially take its place with an estimated selling price of more than S$2,500 (US$1,834) per square foot. Other projects such as Cuscaden Road had a transaction price of around S$1,826 (US$1,340) ppr. Furthermore, Cairnhill Mansion is asking S$2,101 (US$1,541) per square foot for an en bloc purchase and Kiak Kim Road (GLS) is asking for S$1,250 (US$917) per square foot, which equates to a selling price of S$2,400-2,500 (US$1,760 – US$1,834) per square foot. The bidding period for the latter runs until December 5, 2017, and will provide the winner with a 99-year lease for minimum S$689,353,000 (US$505,712,995).
Strong New Sales Completed Transactions
According to the Urban Redevelopment Authority, there were 729 unit sales transactions in Q1 of 2017, 1,171 in Q2, and 1,470 in Q3 in the Core Central Region. An increase from the previous 619 in Q4 of 2016. While the number of private homes sold in all of Singapore by developers in the first half of the year was 6,388. For home’s priced above S$5 million (US$3.6 million) the sales have been up every year since 2014 according to a report by List Sotheby’s International Realty. The buyers are coming from overseas as well. The report states that up to 50% of luxury properties are being purchased by Chinese nationals, Indonesians, and Malaysians.
Few TOP (Temporary Occupation Permit) Projects in District 9
There are very few new projects currently available and only a couple currently planned. Lloyd SixtyFive is one such project which recently completed. If you want to invest now, your options are limited, but the timing price wise could be right.