At MortgageWise, we try to provide our clients with some updates on the residential property market and help make sense URA released statistics in a more meaningful and personal way, rather than forming conclusions based on a broad-based index per se. Properties are not created equal and some will rise or fall more than the rest.
With this purpose in mind, we have created our own basket of condos which we deemed iconic enough and also with sufficient units or volume to be representative of prices in a particular precinct that is smaller than a whole Central Region or Outside Central Region as defined by URA. This would then allow those looking to buy Singapore condo to see the actual variation in prices over time for particular condo which hopefully give a closer indication of actual price performance in the area. We have defined 5 investment zones namely – prime Orchard Road, traditional district 9 River Valley which encompass Robertson Quay, Novena medical tourism, CBD Marina Bay area and lastly Sentosa Cove/Keppel Bay marina lifestyle living.
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However our illustration is nothing more than simple averages of all transactions done over 6-month periods and hence in certain cases the reading may be skewed so do take it with a pinch of salt. We also highlight the highest rental achieved in the period of study.
– Source of data : URA website
– Condos selected are those with high no of units (for liquidity)
Some quick conclusions drawn on rental prices based of our own basket of condos :
- In keeping with URA official statistics, there is still a general downtrend in rentals in the 6-month period from April to September 2015 with mass market condos registering more severe drop at average -3% dip when compared with the -0.5% average dip for condos across all 5 investment zones in our basket. The situation is set to get worse for mass market rentals with huge oversupply looming in next few years, coupled with the trend we see in our next point.
- Interestingly there seems to be a contrasting performance for bigger 4-bedder units within the investment zones and those in mass market which coincides with what we always know – in a rental down cycle tenants especially those with families will move back from more outskirt areas to prime areas taking advantage of the softer rents. We see that in most of our investment zone condos, the 4-bedders actually registered growth instead of declines for example in Rivergate, Park Infinia and The Sail. The only one that seems to buck this trend is The Oceanfront but that could largely be due to the novelty factor of staying in Sentosa Cove wearing off over the years. The reverse is also true when you look at the performance of bigger 4-bedders in mass market condos where the fall is the steepest amongst the various room types even though the supply is always the smallest in any given condo.
- In the luxury segment of Orchard Road, the trend is definitely still going south however from what we understand on the ground there seems to be bottoming out for luxury rentals. The same cannot be said for selling however which we will take a look at sale prices when we review the property market performance for 2015 2nd half in a later article.
At MortgageWise.sg, we seek to provide thought leadership in the area of mortgage planning in Singapore, taking deep dive into developments and news on mortgages & helping clients track interest rate movements. We do not just go for one-time business with clients but rather choose to build long trusting relationships by giving truly independent advice to the extent of losing the deal. We strive to become the first-choice mortgage partner for homeowners in Singapore and the creditable distributor of home loan Singapore.