Singapore is widely acknowledged as an economic powerhouse and one of the worlds leading financial centres. Many global companies have their regional headquarters here. The country has an educated and technically qualified workforce, making it the first choice for startups and for established firms that need skilled workers.
All these factors have contributed to boosting the nations real estate prices. Although the last few years have seen gradually declining property values, Singapore remains an attractive destination for real estate investments.
Even though Singapore is a small country, property values in its different areas can vary widely. Which locations are considered the best for an individual investor or a first-time home buyer? Of course, the answer to this question depends upon your budget. But it is a good idea to keep several of the following points in mind when taking a decision.
- Is it close to an MRT station? Proximity to Singapores transport network can be a great advantage. It cuts down your transit time and property located near a station is more likely to appreciate in value.
- Does it have easy access to shopping and other facilities?
- Are there any good schools in the neighbourhood? This could be an important factor for families with school-going children.
Let us consider some specific types of property.
HDB flats
About 80% of Singapores population live in flats developed by the Housing and Development Board. The total number of flats in the country exceeds one million. These are spread over 23 towns and three estates. Some of the best HDB properties can be found in the areas listed below.
Bukit Panjang Located in the Central Northwestern part of Singapore, the area has access to excellent transportation facilities and a number of well-known schools. There are several shopping centres in the vicinity, including the famous Bukit Panjang Plaza.
The median sale price for a flat here is in the region of S$1.1 million. Average monthly rentals are S$2,100.
Bedok One of the greatest advantages of living in Bedok is that you are surrounded by landscaped parks and sports complexes.
Residents of Bedok New Town are close to many high-quality educational institutions as well as several well-equipped healthcare facilities.
Property rates are fairly high. The median sale price for a flat is in excess of S$1 million, while monthly rentals average S$2,800.
Sengkang The area was formerly occupied by fishing villages and rubber and pepper plantations. Today there are about 60,000 HDB flats here. The area houses the Compass Point Shopping Centre and residents also have access to the famous Sengkang Sculpture Park and a large sports complex.
Property values here are high the median cost of an HDB flat is S$900,000 and average rents are in the region of S$2,400.
Sentosa Cove properties
Surrounded by the sea, Sentosa Cove is a residential destination for the ultra-rich. Many of the homes here have their own swimming pools and tennis courts.
Prices can vary widely. Capital values range from S$15 million to a stiff S$36 million or even more. Rents are equally high. You may have to pay about S$25,000 for a five-bedroom house.
Although long-term prospects for real estate in Sentosa Cove are excellent, the recent past has seen some distress sales. According to a news report last year, a property in Turquoise, which houses condominiums with a lease tenure of 99 years, was sold at a massive loss. It had been purchased at a rate of S$2,623 per square foot in 2007. The sale value in January 2016? Just S$1,500 psf.
But prices in Sentosa Cove can vary widely depending upon the type of property and the amenities that it offers. Late last year, a seafront bungalow in Sentosa Cove sold for S$28 million. That works out to S$2,923 psf for the 9,580 square foot property.
If you are buying property here, it is advisable to check the occupancy rates in the development that you are considering. Many of the units in the private estates in Sentosa Cove are sparsely occupied. High vacancy rates can keep prices suppressed. It is advisable to buy a unit that is located in a development that has a low vacancy rate.
Good Class Bungalows
These residences are only for those Singaporeans who have access to vast sums of money. There are about 2,500 Good Class Bungalows (GCBs) in the country. They are located in 39 areas specifically earmarked by the Singapore governments Urban Redevelopment Authority (URA).
A strict set of guidelines is enforced regarding GCBs. For instance, the minimum plot size cannot be less than 1400 square metres. The total number of GCBs is likely to remain at the current level. Why is that? The simple reason is that land is a scarce commodity in Singapore and the URA will probably not allot any land for new GCBs.
However, some more GCBs may come up by subdividing an existing GCB plot. But this can be done only if the existing plot is of a minimum size of 2800 square metres. This will ensure that the two new plots will be at least 1400 metres each.
How expensive are GCBs? The price is in the range of S$30 million, but can vary widely depending upon the size of the property and the facilities that it has.
Points to consider when buying property
Buying real estate can be complicated. You need to devote a great deal of time to the exercise and use professional help. A reliable property broker and sound legal advice are essential.
A basic precaution that you must take is to ask about the prices of property in the surrounding area. What is the value of the neighbours house? If the price of the next-door flat is not readily available, enquire about the flats in the same block. Their values should be in the same range as the property that you are considering.
It is also advisable to check URAs master plan for the area. This will give you a fair idea of the amenities that you can expect to see in the neighbourhood in the future. Studying the URA master plan is one of the best ways to estimate the projected value of the property that you intend to buy.