Last 20 years of Real Estate price trends.

1️⃣ All Freehold Landed

2️⃣ All Reale Condo

3️⃣ All New Condo 

Many buyers adopting a wait-and-see approach in today's real estate market, hoping to take advantage of potential price drops in both old and new condos due to the uncertainty and high-interest rate environment.

However, I believe that this may not be happening soon and one of the indicator is to look at the recent land sale pricing by developers.

It is not a rocket science formula to understand, all you need is to comparing the before and after land sale pricing. 

Please refer to the chart Chart below👇

Above chart show infomation and calculation of a Goverment land sale or a Collective sale from the developers and the estimated breakeven price in RED , after factoring in the development building costs including  construction cost, marketing cost, financing cost,  legal fee and many others....

1️⃣In 2010, D22 Lakefront, a condo just beside lakeside MRT, land was sold with estimated breakeven cost at $954 psf, with average launching price at $900 psf to $1200 psf in end of 2010.
✅ Profit margin between 10% to 25%

2️⃣In 2013, D22 Lakeville, opposite Lakeside MRT, land was sold with estimated breakeven cost at $1136 psf, a 19% higher after a 2.5 years compare to Lakefront despite its slightly further away from MRT. Average launching price at $1200 psf to $1400 psf in 2014. 
✅ Profit margin between 10% to 20%

Lakefront   Residences 

Case study:

Mr. Alvin, at that time, he was considering to purchase a 3-bedroom compact condo in Jurong West with an average unit size of 1000 sqft for his family of four.

When Lakefront Residences was launched in 2010, a 3-bedder compact unit on the 3rd level with a size of 990 sqft was available for sale. The price was $934 per square foot or $925,000 according to the price chart above.

He decided not to make the purchase due to the rapidly increasing price at that time, as he believed that proceeding with the purchase would result in overpaying for that property.

Lakeville

In 2014,  Lakeville was launched. At that time, a 3-bedroom compact unit on level 3 with the same size of 990 sqft was selling at $1210 PSF, or $1.211m. This was $286,898 more than the similar-sized unit at Lakefront Residences back in 2010.

If you had been following the real estate market closely, there were a few rounds of cooling meausres were implemented by the government from 2010 to 2013 to cool down the hot property market.

With no surprise,  again Mr. Alvin choose not to take any action and was advised by many relatives and friends that the cooling measures would put enough pressure on developers to reduce their prices further.

He was hoping to get a good discount if he were to continue waiting.

Lakeside Appartment

You may have heard about the last collective sales in 2022 at Lakeside Apartment,  after factoring in the development building costs including  construction cost, marketing cost, financing cost,  legal fee and many others....

the estimated developer breakeven price will be $2002 and the expected selling price will be between $2000 and $2202 per square foot with a 10% developer profit margin. This property is not even close from Lakeside MRT station.

Finally the project was launch this year, The Lakegarden Residences,

a 3-bedroom plus study/store, level 3 unit of 1098 sqft size, with selling price at   $2,179,800 or 1985 psf.

That is $1051 psf higher than Lakefront Residences in 2010, and $775 psf higher than Lakeville in 2014. If we were to take the same size of 990 Sqft for the purpose of calculation, that will equivalent to $700k to $1m in price different.

In fact, this situation is not just the present Jurong area, it also happened in many other districts include Marine Parade below.

Below Example of D15 Marine Parade, known as Amber 45, a Freehold Development land sales breakeven price at $1630 psf in 2017 Jan.

( Fully Sold) 

Comparing to another land sale D15 Marine Parade a year later, known as Liv@ MB, a 99 Development land sale with breakeven price at $1889 psf in 2018 march.

Now can you see the consequences if you trying to 

Time the Market?

The best time to start was yesterday, the next BEST time is Now! 

Well the next Question will be, why would developer pay a much higher price?

Chart 1

Chart 2

chart 3

Chart 4

What we can see from above chart 1️⃣,  the current unsold stock excluding EC, has a balance of 14,154 units as of 2021 Q4.

Please refer to chart 2️⃣, just in 2021 alone, there were already 13,027 new condos sold, or 11,503 units sold averagely yearly between 2011 to 2020.

Chart 3️⃣ show the construction material cost increase Reach  a 40-year high. 

Chart 4️⃣: Singapore is known for its transparency, political stability, and ease of doing business—factors for many  looking for in an investment destination.

So now, can you see the reason why?

it is simply due to the demand and supply of housing, the rising price of Raw materials cost, and Not forgetting the Stability and transparency of the Singapore Government that what Rich and Famous are looking at.

  Now can you see the consequences of

" WAIT to BUY"

To me, time will never be a concern when buying an asset property to build up your capital saving fund or for retirement. 

All you need is to, 

✅ Understand the fundamentals of the real estate market like Government Master plans/long-term plans direction.

✅ Demand & Supply logic by looking at the facts and Data's 

( Zoom's profit fell by 50%) 

✅✅ Get your financial number right in the 1st place, understand the process of how can you still be SAFE to move forward in this environment using our TDSR plus and our Risk Assessment financial calculation   to  reduce your risks.

✅✅✅Knowing what are the essential aributies that help properties to appreciate In value regardless of Bull or Bear market with our

9-point checklist, 6CS framework that we have developed over the years to determine if a property or project is safe to buy with the lowest Risk.

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