Singapore is the safe haven for property investments. Singapore Property Launches is one of the biggest property platforms of new launch condos in Singapore, many new launches by renowned developers can be found on their website. These new launches give people insight into different properties in Singapore like studio units, freehold condos, and their prices. But to buy a property, even a cheap condo, needs a lot of research, paperwork, and formalities. These tedious procedures can sometimes be very time-consuming.
New and Cheap Condo Launches:
Property developers organize cheap condo launches so that people and investors can either buy these units for their own stay or for property investment purposes. Every new condo launch brings many opportunities for buyers. Nowadays, people in Singapore show more interest in buying condos as their prices are low compared to executive condos and luxury condos. You can easily find a cheap rental condo for around $1, 000, 000. Cheap Condos in Singapore are in the main front of selling down, as these are away from the center and affordable. But during the pandemic, a recession in the number of cheap condo launches has been seen.
A Comparative Overview of Price Droppings in the History of new launch condos in Singapore:
Many times in history, Singaporeans have seen a drop in prices. Here are the comparative droppings of prices in the last years.
- Pan electric crisis in 1980.
- The biggest dropdown of Singapore property history 1997-2000, Asian financial crisis.
- Due to SARS, the economic crisis happened and caused a 2.1% downfall in property prices in 2003.
- In 2008, due to US liquidity in the dropdown market, a major economic crisis happened.
- High interest rates in 2012 forced the Government to plunge in and add cooling effects which lowered the prices till 2017.
- Now, in 2020, COVID will be the reason for the Government to take cooling measures for the property market.
Factors that Affect Property Prices in Singapore in General:
Apart from the Covid pandemic, which has started last year (2020), many other factors affect the prices of property in Singapore:
- Political stability
- Competitive businesses environment
- Safety of country
- Economical conditions of the average public
These are all the fundamentals of Singapore that decide in which direction property pricing will flow.
Reasons for the Price Droppings:
In Singapore’s real estate, there is a period of high prices. Due to any crisis, as discussed above, the Government always jumps in to cool down the costs for the public. There are many reasons behind this step price dropping of new launch condo in Singapore. Some of them are as follows:
Covid crisis in new launch condos in Singapore:
The Covid crisis has affected Singapore’s property market value under this turbulence. People working in different sectors have been affected differently. Some have gone in more losses than others. It all depends on the affordability rate. Last year, the Singapore government introduced a cooling effect in Singapore property launches to become easier for potential buyers to rent a unit. The real estate market has faced a 7% decline in rates since February 2020.
Different areas different rates:
Different areas in Singapore have different rates. Buyers also have different priorities. Some want to buy property in central areas like Orchard and Bukit Timah area. Others want to live in less dense areas away from downtown. Condos away from the city outside the central area of Singapore are relatively cheap in price; that’s why many times buyers prefer them.
In central regions of Singapore, prices decreased by 13.70% from February to July last year. In new condo launches, it is also observed that people now tend to buy property away from Central areas and move towards cheap neighborhoods like
- Cecil and Marina
- Raffles place
These areas come in Postal district 1.
About a 12% price drop per square ft is observed in these places. Different areas seem to have other price droppings.
Price Cooling Mechanisms of the Government:
$100 billion investment from the Government has saved both jobs and real-estate business. The Government of Singapore is always keen to control property prices so people can show interest in Singapore property launches. Here are some property-related formalities that are adjusted in price droppings.
- Total debt servicing ratio (TDSR)
- Additional buyers stamp duty (ABSD)
- Lowering loan to value ratio (LTV)
Liquidity and Financial Decrease:
The main reason behind decreasing prices of new and cheap condo launches is liquidity in the market. If there would be fewer investments and speculations, then prices will automatically flow downside.
Avoid Incurring Costs:
Many developers also tend to keep new condo prices low to cover the investments they have made. They want to avoid incurring costs. But some other developers don’t want to sell their property at low rates. It depends on the planning and market position of the different developers.
Side Effects for Buyers and Sellers:
- In the short run, these drop-in prices attract more buyers but cause loss for developers and launching parties.
- Buyers also remain underconfident either to buy the property or not. Because anyone who is going to invest always wants to have long-term financial benefits of the property.
- Buyers must have bad price drops, but such uncertainties in pricing can shake their decisions.
- Price recession keeps the buyer in a dilemma.
Property investors in Singapore have two major types:
- Local buyer and
- Foreigner buyer.
In many new launch condos in Singapore, a great percentage is of foreign buyers. In Wallich residences, for example, about 70% of buyers are foreigners. But cooling programs affect them directly because it increases additional buyer stamp duty (ABSD) (Insert link: https://www.iras.gov.sg/irashome/Other-Taxes/Stamp-Duty-for-Property/Working-out-your-Stamp-Duty/Buying-or-Acquiring-Property/What-is-the-Duty-that-I-Need-to-Pay-as-a-Buyer-or-Transferee-of-Residential-Property/Additional-Buyer-s-Stamp-Duty–ABSD-/) for foreign buyers. It makes them recessive to buy a new property and affects Singapore’s real estate.
Focus On New Launch Condo in Singapore
In particular, buyers and investors have paid on new launch condo in Singapore more attention to new condos in areas like District 7 of late. This is where prices are rising to beat out Orchard, and we’ve seen low quantum offerings like Midtown Bay and The M.
Besides this, there are fears of a weakening rental market in the aftermath of Covid-19. Apart from travel restrictions, there are the usual fears that a global downturn will see companies cut housing allowances, and bring in fewer expatriates.
The fundamental issue could be the mix of little units, in a less urbanized region like Bukit Batok. Purchasers who pick this kind of area will in general forfeit comfort for space; however with every one of the little units got into one square, they might feel like they’re getting not one or the other. Another justification for a lot higher introductory cost is that is a freehold property; yet at its young age (it was finished in 2016), the freehold status doesn’t have a sufficient effect on the resale cost at this point.
Units are likewise tiny in contrast with the remainder of the quick decision to book new launch condo in Singapore, so at the underlying asking costs it was a seriously intense ask as the individuals who could bear the cost of such costs would presumably incline toward greater living spaces.
The Singapore government introduces new rules timely to control sky soaring prices of property. It affects all type of properties like
- Landed Property
- Executive condos.
This step of the Government helps ordinary people buy property, but for sellers, it becomes difficult to sell their property at a loss. It affects the whole market value. Many times it shakes the confidence of buyers to make decisions for long-term benefit. But in the end, these all strategies are for the short term. Prices again become stable after some time. With that, buying cheap condo launches in Singapore is very likely to be beneficial in the long run.