Location and Infrastructure
Cost factors affecting home prices vary significantly, including distance to major expressways or MRT stations and nearby facilities like convenient facilities being built nearby such as business hubs, parks and recreational areas; potential relocation of famous schools near to the property; as well as any zoning regulations nearby that could influence it. Properties boasting such positive features can often garner the highest prices since they are highly sought-after among both buyers looking for their dream home as well as those seeking lease opportunities for their house.
The Continuum was built through an exciting collaboration with Hoi Hup Realty and Sunway and established in Singapore in 1983. Since that time, their property developer team has developed extensive expertise in various real estate fields. Over the last four years they have also actively acquired properties through government land sales as well as through an en bloc exercise.
Hoi Hup Realty have completed several developments prior to The Continuum Condo. They include Waterford Residence, The Continuum Showflat, Sophia Hills at Mount Sophia, Whitley Residences and Terra Hill at Pasir Panjang.
State and Condition of the Property
An older property will tend to cost less, since restoration work often must be performed to bring it back into its original condition. Conversely, homes which have undergone extensive upgrades or renovation projects typically command higher prices.
Lease
Singapore’s residential real estate is predominantly leasehold. Depending on the length of a lease agreement, its value could fluctuate – properties nearing expiry might see significant decrease in value; freehold properties tend to appreciate more over time but typically come at a greater cost.
Interest Rates
In general, lower mortgage interest rates lead to reduced monthly mortgage payments for home buyers. Singapore has seen record low mortgage interest rates over the past decade; however, their impact may soon fade as they follow those seen in United States’ interest rates.
With unemployment levels decreasing and the US economy experiencing periods of moderate recovery, interest rates in Singapore may also experience moderate increases. To prevent over-leveraging, Singapore government has implemented lower loan-to-value limits and introduced Total Servicing Ratio measures; rising rates has also lead buyers to switch away from SIBOR loans towards Fixed Rate Home Loan (FHDR) loans.
Government Policies
Government policies have an enormous effect on property prices. One example is the cooling measures introduced by Singapore in 2018 in response to Chinese developer expansion into Singapore’s real estate market and subsequent distortion of prices, making it difficult for first time homebuyers to secure homes. As a result, an Additional Buyer Stamp Duty of 30% was implemented as an intervention tool by government to calm the market.
Economic Climate
The condition of the economy impacts property markets through its impact on buyers’ ability to pay for housing. Following 2008’s Global Financial Crisis, most economies experienced tremendous property value depreciation resulting in decreased demand and costs associated with real estate acquisition during recessionary times.
Prices of “Comparables” Units Nearby
Comparable properties are those being sold near the one you intend to buy and can have an effect on its cost. Valuers tend to look at recent sales of properties with similar characteristics when valuing yours; short and foreclosure sales could reduce its value significantly.
Timing is of utmost importance when investing in real estate. To optimize profits, one must choose their buying and selling choices carefully while following fluctuations within property cycles.
Recovery
Market prices typically decline when demand is generally low and indicators that show they’ll soon stop falling can be seen, such as an uptick in viewings for properties or decrease in vacancy rate. When demand does pick up again it typically indicates recovery will soon follow suit and prices should stabilize or even experience growth again.
However, given the challenges involved in setting this phase in motion, those betting that an economic recovery is imminent should purchase properties to reap huge profits during its expansion phase.
Expansion
The “Boom” phase typically occurs when an economy booms and jobs are created quickly, leading to higher rents and decreasing vacancy rates – in turn leading investors to become more optimistic when purchasing real estate investments.
Demand for housing rises sharply and prices increase rapidly, providing developers with an opportunity to rehabilitate and renovate older properties before selling them off on the market, in order to take advantage of a rise in property values and make profit off rising property values.
Peak
Property prices tend to increase quickly during expansion periods; they will eventually level off. Once this occurs, experts consider that this period to have passed and advise that owners who do not plan on keeping their properties for an extended period consider selling at this stage.
Peak Phase can be identified through several indicators. They include:
- A rise in property prices for several quarters
- A rise in property transactions
- Housing becomes less affordable
- Implementation of cooling measures
- Significant construction activity
- High levels of borrowing
- Recession
Property prices generally decline during Recession due to oversupply, cooling measures, or property owners selling their properties as prices continue to decrease further. Owners withdraw from the market as they fear their prices will further depreciate and start withdrawing their properties from sale, leading to further price drops and property owners opting to withdraw and sell rather than risk seeing further reductions.
Trough
Though the Trough may represent the lowest point in property cycles, investors who exhibit keen observation could find substantial rewards by taking risks during this downturn in property investment.
Due to its difficulty of defining, some experts may argue that property cycles don’t exist; however, property values have been observed increasing or decreasing over time in waves; certain areas experience strong increases while in others there may be slow increases or even declines.
