How The Singapore Property Market is Responding to Buyers’ Need For Personal Space
When buying a home, these three things are typically among the top priorities for owners—location, amenities, and resale value. The pandemic has shown that while these criteria retain their importance—albeit with different parameters—there’s one more criterion vying for the top spot, and that is personal space.
Thanks to work from home and safe distancing measures, our work, life, and play spaces have merged, and this set off the trend of buyers who stay with their parents, now wanting to purchase a studio or a one-bedroom apartment or even lease something similar for more privacy, says Jacqueline Wong, executive director of residential services at property management company Savills Singapore.
This goes to show that the merger is not as seamless indeed—rather there is a decisive need to prevent over-integration of the two. More Singaporeans are in the market looking for homes with larger square footage so that each member of the family to have their own private space for work or relaxation.
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And space is a premium in Singapore. With condominiums not being able to fulfill the need for square footage, landed properties are becoming an attractive prospect from a long-term investment potential as well.
“Generally many Singaporeans would prefer buying landed properties as a form of legacy. While many foreigners are looking to purchase landed properties, the residential landed market is restricted to Singaporeans or Permanent Residents who have obtained approval to buy a landed property such as a detached, semi-detached or terrace house,” adds Wong from Savills Singapore. Besides, the flexibility of the configuration of a landed property makes it easier for new buyers to do alterations and additions to suit their personal lifestyle.
Alvina Teh, business development director of Brand New Land, which specialises in bespoke landed homes, sees the affordability factor changing as a younger generation of self-made Singaporeans have been entering the landed property market.
And their needs have become a lot more specific in keeping with the pandemic induced new norm. “Buyers used to compare landed home prices in terms of per square feet (PSF) for land area, now they look at landed home prices in terms of PSF for Built Area as a comparison benchmark, reflecting the value buyers are placing on liveable space,” adds Teh.
“The rise in landed property transactions began in the second quarter of 2020, shortly after the government started the lockdown in the first quarter,” explains William Wong, CEO and founder of real estate company, Realstar Premier Group, who says that the momentum is continuing.
Singapore being one of the countries that has handled the pandemic well also saw many newly minted citizens looking to invest and settle here—a few blockbuster purchases that made the news are evidence of the fact. “For Good Class Bungalows (GCBs) above the $100 million price tag, we used to only have two to three prospective buyers a couple of years back. Right now, we would easily close to 10 prospective buyers looking at this range,” adds Wong of Realstar Premier Group.
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Healthy sales of mid to high-end condominiums and penthouses as well as low mortgage interest mortgage rate of 1.5 per cent and below—as against 2.1 to 2.2 per cent in 2019—alleviated debt burdens to a great extent and urged many Singaporeans to make a move towards realising their dream of owning landed property, says Clive Chng, associate director of Redbrick Mortgage Advisory.
Despite the Singapore property market taking a hit in the first two quarters of 2020, Chng says that there has been evidence of a gradual increase in the private property price index across the board.
While the demographics of new buyers may not have changed drastically in the past year, more people are looking at newer launches. These include empty nesters downgrading from private homes to public housing, and the younger homeowners moving into the private property market after completing their five-year minimum occupation period. Additionally, many buyers in the market for resale flats may not be able view their units due to the changing pandemic regulations.
“However, this has created a gap causing resale prices to look more appealing to buyers who are dollar sensitive,” says Chng. This has made resale properties look more valuable on a square-foot basis—a case of greater demand leading to higher property prices.”
All things considered, Singapore’s resilient economy shows more promise for the future of its property market.
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