Singapore residential property market trend for Oct 2019

Singapore Property Market Outlook and Trends for October 2019

As investors who are learning how and where to invest money in Singapore, it is important to constantly look at data which tells you the pulse of both the economy and major asset classes. One of the most important indicator to look at is the private property market. This is because private properties are often the one largest component of individual wealth. Hence knowing how private property prices are doing can help a lot in understanding if people feel wealthier and therefore will have a higher propensity to increase their consumption.

Further, property outlook lies at the core of one’s understanding of Reits. While many Reits such as Capitaland Mall Trust do not invest in retail, it is nonetheless good to be updated on what is happening in the local residential market. With the rationale explained. lets jump straight in.

Regions Max psf Min psf
CCR               3,611                 2,198
OCR               2,495                    715
RCR               2,818                 1,524

If you look at URA’s publicly available data, you will realise that they split the whole residential market into CCR, OCR and RCR. What do these mean?

CCR refers to the central region and consist of 22 areas including, Downtown Core, Orchard, Marina South, Newton, Outram, River Valley etc. The key take away is probably this; CCR is considered the more premium of the lot and thus u can see that the price that it commands per square foot is higher than the rest of the regions.

RCR on the other hand refers to the areas outside non core central region. It is often the location for mid tier housing and will include areas like Tiong Bahru, Bouna Vista, Telok Blangar, Katong, Ang Mo Kio and so on. Given that the location is less prime, it also means that price that developers can command is also much lower.

Last but not least is OCR which is the rest of Singapore that is not already covered by RCR and CCR

Regions Total Number of Units in Project Cumulative Units Launched to-date Launched but Unsold Additional Supply
CCR               5,282                 2,051               966           3,231
OCR             20,207               13,406            2,097           6,801
RCR             16,408               11,199            1,977           5,209
Grand Total             41,897               26,656            5,040         15,241

One important thing that the data will tell you is how much launched but unsold units there are in Singapore. This is important as it shows you the units that developers have not managed to sell in their show flats and other promotional activities. From the above, you can tell that OCR and RCR has the most number of launched but unsold units (~2000).

Further, they also have a good number of units that are built but not launched yet. If the launched but unsold units is significant, there is a high possibility that those units that have not be launched will not be absorbed by the market. All these matter because after the developers built the property, they have 5 years to sell it else they will have to pay Additional Seller Stamp Duty.

Regions Total Number of Units in Project Cumulative Units Launched to-date Launched but Unsold Additional Supply
CCR 13% 8% 19% 21%
OCR 48% 50% 42% 45%
RCR 39% 42% 39% 34%
Grand Total 100% 100% 100% 100%

If you take a closer look, you will realise that most of the supply is at OCR. In addition most of the additional supply that has yet to be launched is also in OCR. So if you are looking at buying a new property, it really helps to know which region that your property is situated in because that will very much determine both the valuation of the property as well as the potential rent that that the property can fetch.

Leave a Reply

Your email address will not be published. Required fields are marked *