Commentary

6 Major Property Trends To Watch In The Singapore Property Market In 2022

  • January 8, 2022
  • 9 min read
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Ryan J

A seasoned content strategist with over 17 years in the real estate and financial journalism sectors, Ryan has built a reputation for transforming complex industry jargon into accessible knowledge. With a track record of writing and editing for leading financial platforms and publications, Ryan’s expertise has been recognised across various media outlets. His role as a former content editor for 99.co and a co-host for CNA 938’s Open House programme underscores his commitment to providing valuable insights into the property market.

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Yumiko
Yumiko
1 year ago

Hello, Ryan. My mane is yumiko. my husband and I are looking for a private condo for first purchase to live ourselves, but we have no clue for SG real-estate market…
We can’t find any good agents so far ….and We got impression that they are all just interesting to make quick money…… so I need some advice from you…. if you don’t mind.

My husband holds American Citizenship. We are currently renting a unit in The Cosmopolitan (freehold, 2008) which is just across from the Great World City and we love this condo very much. this condo has a lot of sunlight-in and efficient layout and high ceiling and open-concept living area ( 3 beds 1399sqft.)

FYI, We have to move out this unit in March 2023. If we decided to buy a condo, we have to resale in 5 to maximum 7 years and have to move back to our country.

I am wondering that if we buy the unit in The cosmopolitan 1399sqft here, in 5to 7 years could potentially lose money??? Since SG Government placed another restriction, market will be calm down….I am worry that if we buy this property this year, it may end up losing money in 5-7 years….. Also because it’s old condo. By the time we resale a unit, this condo will be very old….it maybe difficult to sell…..??? but so far this condo has great reviews and maintain quite well and great location.

Also another factor concerns for me…. I heard from an agent that 3 piece of empty lands will be on sell near future near the GWC MRT station. it means that another 3 new condo will be build in this area soon. But Right now, 3 condos are under construction near by. 2 condos will be finished in 2023 and other one will finished in 2026. All those new developments and future developments effects on old condos near by negatively in 5-7year ???

Do you have any suggestion?

Also I look at Echelon near redhill art, I like the layout but reviews are quite bad and 99years lease, 2016…..
soon there will be another condo develop in front of echelon….. but good location near MRT.

Another place I look at is Sail @marinabay. I like the space and many light coming in, but 99 years lease, 2008. It’s old and not good reviews….but it’s cheaper compared to River valley area suprisingly. I don’t know why its so cheap…. it’s in front of marina bay with good view from unit and larger sqft…. something is fishy…..

If we chose to buy one of those three, it would be risky to lose money or difficult to resale in 5-7 years???
Should we postpone buying some place?

Renting price is sky rocketing these days and not many renting place is available around here and probably it will continue to increase….. since GWC MRT is coming up behind this condo…. Do you think its worth to buy here and resale in 5-7 years later? It’s too risky?

I am quite lost….. would you give me some advice please…….

Thank you very much,

Best regards,

Yumiko

Stacked Homes
Admin
1 year ago
Reply to  Yumiko

Hey Yumiko! Apologies for taking some time to reply, we’ve been swarmed with a lot of enquiries and needed some time to collate our thoughts on your question too!

Thanks for sharing your concerns with us. The Singapore property market is really quite complicated which is also what makes it quite interesting! I’d like to share my thoughts on the pointers that you’ve mentioned here:

Regarding what your agent mentioned about the 3 plots: I’m not aware of any newer 3 plots of condos to be built soon. Perhaps your agent has some inside information but this is not something that we are aware of for now. That said, there are 3 vacant plots nearby Cosmopolitan now. 1 is classified as ‘Reserved’, and 2 are ‘Residential’. Are they going to be sold? This is not something that we know of as of yet. Typically they would need to be put up for tender, but as to when that is is not something we know for now. The reserved list of GLS sites is something that I would look at if I wanted to know where are the possible plots for developers to bid on, but this plot isn’t in there either I’m afraid we can’t be certain about what your agent has said here.

Now onto the impact of surrounding prices due to new entrants: Whether a condo would react negatively or positively to newer condos popping up around it is very subjected to its characteristics and its secondary demand. Supply is a strong factor, but if the new supply of units turns out to be inferior to the existing supply, then it’s likely that the existing supply would be seen more favourably. With regards to Cosmopolitan, at least for now, the recent sales transactions have shown that the development has remained a popular choice despite the appearance of The Avenir, Irwell Hill Residences, and Riviere. So what is it about the possibility of 3 newer condos appearing that would change this? In my opinion, Cosmopolitan will retain its position as a pretty popular 3BR choice in the vicinity due to its proximity to Great World City and Great World MRT – not forgetting that Cosmopolitan has managed to maintain their compound quite well!

So assuming you buy a 3BR unit at 3.3m today, based on 1.8% interest, 75% LTV, 20-year loan tenure, the resulting breakeven sale figure after 5 years should fall to around $3.62m – however, if you were to rent at an assumed rate of 6.8k/month over 5 years, that would cost you $408K.

The question today is this: If you buy a $3.3m condo and lock up essentially $1M of cash into the property, you are potentially saving $100k over the rental expense (assuming the price of property rises to $3.62m after 5 years).

Would the $1M cash be better used somewhere else to get a higher potential return, thus offsetting your rental expenses?

The decent support levels we have are from the current new launches around. For example, a 3BR in Riviere which was recently sold for 3.1m – would cost about $3.4m to breakeven, or $2,717 psf. This helps further lock in the 3BR quantum entry for the area.

While I don’t foresee the prices of Cosmopolitan or the condos around GWC to dip in prices, I am not too confident of the prices reaching a huge profitable price for you and your husband in such a short span, given the high appreciation it just underwent from 2016.

Developers are still constantly buying up land at prices that will end up costing consumers upwards of $2K in psf in the eastern/northern regions – the gap is very narrow between regions now thus there could still be a slight potential that central continues going up for a bit more.

In the event the prices do not meet your expectations – would you guys consider leaving this in Singapore as an investment property or do you guys definitely plan to sell the property upon leaving SG?

Overall, I think there are still a lot of IFs over here, and it’s not something that we can share in this comment due to the sheer amount of information required to distill everything down. E.g. your question on The Sail or Echelon is interesting and something worth discussing with you about. If you’d like to continue this conversation, I invite you to reach out to me at hello.com. Thank you.

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