Is it a good time to buy property in Singapore ?

Who is this article for ?

Skipping the cheesy introduction paragraph and getting straight to the point.

This article speaks to you if you are …

• Looking to upgrade your property and is considering if now is a good time to re-enter the market 
• Looking to purchase a 2nd investment property and wonder if you can get a better deal if you time your entry
• Looking to purchase your first property and is concern that you are buying in on a market high

Takeaway to be expected 

Expect to walk away with the following head knowledge committing 10 mins to reading this article.

• An intuitive and logical understanding of Singapore’s real estate cycles and forces that sustain its growth
• A framework of discerning when is the best time to enter what sub asset class within SG private property
• A example of how framework can further utilise to time entry into specific condo developments 

The Singapore real estate market cycles 

Laying it upfront, the only reason why you are concerned about the Singapore real estate price trend or market cycles is for the following reasons.

• You are hoping to buy on a low and maximise profit by selling on a high
• You are looking to avoid buying on a high and potentially making losses if market dip

Let’s examine the Singapore real estate price trend with the 2 pointers listed above in mind.

Since 2013, price has been constantly on an up trend.

Unlike other property markets like London, San Francisco, New York or even Bali. The Singapore real estate market does not feature distinct dips and peaks, it displayed a stable and continuous uptrend, since 2013.

The Singapore real estate market is largely unaffected by external market forces.

Using the 2019 to 2022 pandemic as an example, local real estate prices remain stable and flat, without any dips even during the most intense onslaught of the pandemic in 2019.

Property owners simply held on to their properties. In fact Singapore property prices feature its steepest rebound from 2021 to 2023, marking one of the most profitable era for property owners in the 2020s.

Forces impacting Singapore property prices

Singapore property market being semi regulated in nature. Its prices are driven by the following unique local forces.

• Flow of money from HDB upgraders unlocking their gains from HDB to purchase private condos.
• Condo upgraders unlock their gains by selling their property to HDB upgraders and upgrading to pricier condos with bigger square footage or better location.
• Government regulations, cooling measures. 
• Government land sale prices to developers pushing cost price of condo development upwards 

In short, the property price growth in Singapore is mainly sustained by a demand from local Singapore citizens and PR purchasing property for their own stay.

Investors and foreign buyers purchasing with an intent of speculation form a minority segment.

Hence you would expect prices to remain stable with the absence of major dips. Putting it bluntly, you will hardly see anyone around you putting their homes on a fire sale during any economic challenges, they will simply hold on to it.

Back to the Question

Addressing this head on at a high level, drawing upon the pointers shared above. Given that the property prices in Singapore have been moving on a constant uptrend, with the absence of dips for value buys. 

Time in the market matters more than timing the market.

It makes little sense to stay by the sideline waiting for an opportunity to enter. In fact, if you are buying with the dual intent of home stay and investment, you may put yourself in a disadvantageous position if your target property price moves upwards beyond your affordability limits. 

Visualise the following scenario …

• Prices of a OCR 3 Bedroom Condo in Punggol, cost $1.2 mil in 2020.
• Prices of the same OCR 3 Bedroom Condo appreciated to $1.5mil in 2024.
• Having stayed by the bylines, you will need to ensure your cash savings and income grew adequately to cover the $300k price increment.

Generally, it will only make sense to stay by the sideline, if you are able to put your capital in another investment asset that can offer a higher risk – reward ratio than real estate. I.e generate more than $300 to $400k capital gain in 4 to 5 years. 

Quick Intro – Decoupling Expertise

Before you commit the next 5 mins reading this article. 

We are Decoupling Expertise, a boutique real estate investing consultancy that focuses solely on helping our readers research, shortlist and purchase investment properties. 

Specialisation is key for us, and we are known for writing extremely long form articles that seek to provide value upfront.

There is a case for timing entry into different property types in Singapore

Let’s rehash our earlier point before progressing forward. 

We mentioned in the earlier section that there isn’t much benefit in timing your entry into the property market. I.e you should not hold back on your property purchase in anticipation of a dip in prices. 

In this section, we like to establish the point that there is a case for timing your entry into different sub asset classes within the property market. I.e. you should be assessing what is the best time to buy into different sub asset classes. 

Keeping within the confines of private condos, sub-asset classes include the following. 

Segmentation by age / tenure

• New launch property – condo that has yet to be constructed. You are the first owner purchasing it directly from a developer. 
• TOP property – new launch that has just been constructed, ready for immediate occupancy. You are usually the 2nd owners owning the property. 
• Resale property – all private condos that do not fall into the TOP property and New launch property category

Segmentation by geographical location

• CCR – core central region
• RCR – rest of central region
• OCR – outer core region

What do we meant by timing entry into sub asset classes

To put it simply within the sub asset categories of new launch condo, sub sale or TOP condo and resale condo, each of these sub asset classes has their mini price trend and cycles. 

Generally it all flows within an uptrend movement, but it moves in sequence, one after the other. 

1. New launch condos being the newest and most desirable normally pushes the benchmark prices upwards. 
2. This results in the second most desirable asset class TOP condos to follow suit on a lagging uptrend following its new launch counterparts.
3. This is then followed by the lagging price increase for resale condos that sets higher prices by leaning against new benchmark prices set by its new launch and TOP condo counterparts. 

The idea of timing is to observe the right time to enter each of these asset classes. For example, buying into a resale condo when it is way cheaper than a comparable new launch condo and riding its price uptrend till its price gap edge closer to that of the new launch. 

Another example, would be to avoid purchasing new launches when its prices are way higher than both its TOP and resale counterparts, to avoid shouldering the risk of testing market acceptance with its new benchmark prices. 

But to purchase a new launch condo when its price is close to a TOP condo or a resale condo, this gives you a margin of safety and also room for price appreciation.

Psf prices and price gaps as primary indicator to time entry

Further establishing the point, let’s explore the practical application of how price gaps between asset classes can help us determine whether it is a good time to buy into different asset classes. 

Overall SG – Price Gaps Analysis

Average PSF pricing of different sub asset classes

Price Gaps – New Launch vs TOP / Sub sale condo and Resale Condo

Referring to the table below, you can see that price gaps between new launches vs TOP and resale condos peaked in 2022. New launch condos are $671 psf more expensive than TOP condos and $997 psf more expensive than resale condos. 

Under such circumstances in 2022, it makes more sense to purchase TOP condos and resale condos that are significantly cheaper and ride its lagging upward price trend that lags behind the new launch condo’s price growth. 

Fast forwarding to 2024, you will see the prices of TOP condo and Resale condo pushing upwards, making 2024 new launch prices seem affordable again in comparison. 

This marks an opportunity to consider re-entering the new launch condo market in view of a potential new uptrend push in prices. 

Price Gaps – TOP Condo vs Resale Condo

Two pointers on price gaps for TOP condos, you can observe from the table above, TOP condos have been appreciating in prices narrowing the gap between its price differences against New Launch condos. 

Next the price gap between TOP condo and resale condo is widening in 2024, with TOP condo being priced at a $486 psf premium vs resale condo. 

This points to the sign of TOP condo being potentially priced at a premium and points to greater value in the New Launch and Resale Condo sub asset classes. 

Charting – Price Gap – New Launch vs TOP vs Resale – Overall Singapore

Outer Core Region OCR  – Price Gaps Analysis

Let’s break the broader price gap analysis into more granular geographical focus, we shall explore price gaps within the OCR region. 

Average PSF pricing of different sub asset classes in the OCR 

Price Gaps – New Launch vs TOP / Sub sale condo 

This further reinforces the point that new launch prices could be falling into the fair value purchase range, as you reference the price gaps between New Launch Condo vs TOP condo narrowing from its peak of $425 difference to a small $84 psf difference. 

Price Gaps – New Launch vs Resale Condo

The price gaps between New Launch condo and Resale Condo, tells a different story. It indicates that value still remains when buying into the resale condo market in the OCR. OCR resale condos are still priced $582 psf cheaper than its new launch counterpart. 

Price Gaps – Resale Condo vs TOP Condo

Similar picture of value still remaining in resale condo within the OCR region, versus a TOP condo, resale condo price gap is at its peak at $498 psf cheaper than TOP condos. 

On the flip side it indicates caution on buying into TOP condos within the OCR region.

Charting – Price Gap – New Launch vs TOP vs Resale – OCR

Rest of Central Region RCR  – Price Gaps Analysis

Average PSF pricing of different sub asset classes in the RCR

Price Gaps – New Launch vs Other Sub Asset Classes

Similar notion of new launch price gaps narrowing after its peak in 2022 and 2023, back to $352 psf gap vs TOP condo. 

But when compared with RCR resale condo, new launch prices may not be as attractive when compared to the significantly narrower price gap observed for OCR new launches. 

You can still see price gaps hovering within the $613 psf range for New Launch condo vs resale condo. But take this with a pinch of salt, as RCR resale condo could be of much older lineage than OCR condos, meaning that its square footage and resultant purchase quantum can still be higher despite it being priced at $600 psf lower than new launches.

Price Gaps – TOP Condo vs Resale Condo – RCR 

Charting – Price Gap – New Launch vs TOP vs Resale – RCR

Core Central Region CCR – Price Gaps Analysis

The CCR market, features its own little microcosm, with a different set of niche higher net worth buying audience. Its price gaps and price trends tend to move differently from that of behaviours exhibited for the OCR and RCR region. 

Average PSF pricing of different sub asset classes in the CCR 

Price Gaps – New Launch vs Other Sub Asset Classes

As mentioned, the price gap between New Launches vs other asset classes paints a very different picture. CCR new launches as a whole are still priced at significant premium vs both its resale and TOP counterparts. 

But from on-ground experience, if you pierce deeper under the high average $3,368 psf, there could be value in finding CCR new launches that are launching at $2,800 to $2,900 psf range. 

Price Gaps – TOP Condo vs Resale Condo – CCR 

Charting – Price Gap – New Launch vs TOP vs Resale – CCR

Key redevelopment event timeline – a secondary factor to consider for timing

A secondary factor that is worth overlaying on of the primary price gap analysis to help assess your timing for buying into a specific asset class or development is the consideration of when the intended price catalyst will be realised. 

A lot of new launch developments in the market are marketed with an investment thesis surrounding the URA transformation plan. Before buying into the thesis full heartedly, it helps to consider when will these transformation plans be realised vis a vis your intended holding time frame. 

Typically, property prices will appreciate the most in response to the greatest climb in buying demand, when the intended transformation or benefit of the transformation is close to being realised or have been realised. 

So buying in early to a property’s transformation plan that will only be realised in the 2040s, may not reap you the greatest capital appreciation if you plan to sell out in 2026.

For convenience, below is a list of key URA transformation plan and its timeline to realisation. 

Gaining a competitive edge when selecting condo in singapore

Only possible when head knowledge is executed effectively on ground. 

By ploughing through this 9 page article, you would have gained significant head knowledge on what kind of condo development you should be looking at. 

But the recipe to a successful real estate purchase is often the marrying of 2 components. Head knowledge and experienced on-ground execution. 

The next step to take will be to get someone to shortlist actual units that fit your budget, selection criteria and to take you through the groundwork of visiting all these units.