Check out where to score the best home buys in Singapore

With private home prices jumping 3.1% in February, homebuyers should lock in their purchases before property values rise further.

As home prices extend their steep climb with the property market setting itself for a full recovery following a four-year slump, analysts caution Singapore homebuyers to lock in their purchases on prime residential locations before prices rise any further and the market runs out of good deals to offer.

This comes as private home prices rose 3.1% in February to post the quickest growth rate not seen since 2010 as developers aggressively raise their asking price in response to the quick market takeup.

With the development of the URA Masterplan which includes the establishment of the Jurong Innovation District, High Speed Rail and Jurong Region MRT Line, the West has received ample interest from homebuyers and is set to be a thriving employment centre marked by commercial and industrial hubs, PropNex Realty CEO Ismail Gafoor told Singapore Business Review.

“We believe that there is a large pent-up demand in the areas of Thomson and Shunfu due to the lack of new launches in the past two years. Amongst which, the Shunfu Ville en bloc project by developer Qingjian Realty is a much anticipated launch given its proximity to Marymount MRT and upcoming Upper Thomson MRT Station. There is also a wide array of facilities in the area for residents, including the new 50 hectare Thomson Nature Park which will be completed by end 2018,” Gafoor explained. 

District 15 was by far the most popular district amongst buyers after registering 2,385 transactions in Q1 followed by district 19 (2,213 caveats) and district 3 (2,075 caveats).

“The high transaction volume in District 15 is mainly driven by the new launch of Seaside Residences. The other projects such as Amber Skye, Fulcrum, and Marine Blue saw healthy take up rate of between 50 to 70 units from 2017,” said OrangeTee head of research Christine Sun.

As the price of non-landed homes in CCR and OCR rose sharply by 5% and 3.8% respectively, homebuyers might want to look at landed properties as a freehold property costs below $1,300 psf due to overall quantum of price brought about by the Total Debt Servicing Ratio.

“Today would be an opportune time to consider upgrading to a landed property, as the prices today per square foot is truly a bargain,” according to Gafoor. 

Also read: Home vacancy rates breach 8% as owners hope to cash in on sale frenzy

Up-and coming decentralised areas such as Punggol in District 19 is another location Singaporeans can consider, added PropertyGuru Group chief business officer Lewis Ng.

Expats and families, on the other hand, should look to Districts 11 and 15 due to its strategic proximity to CBDs, schools and lifestyle amenities, he added.

Also read: Why foreign home buyers prefer Singapore over prime cities' property markets

However, for buyers short on cash, ECs are always a friendlier alternative since they come with grants and smaller capital outlay. The latest EC is Rivercove Residences in Sengkang which just opened for e-application, according to Ng.

In fact, demand for mass market homes in OCR accounted for almost 50% of total transaction volume in Q1 as buyers snapped up good deals and developers correspondingly raised prices as seen in the project launches for Kingsford Waterbay in Hougang; Grandeur Park Residences near Tanah Merah MRT and The Clement Canopy near the West Coast, Colliers noted. 

It may be the best time to lock in on home purchases especially for the pubilc housing segment as home values experienced it highest decline (-0.8%) in Q1 in the past nine quarters since 2016.

“With the positive sentiment in residential market as well as huge number of en bloc sales in 2017 and 2018, we predict a greater demand for HDB resale properties with some en bloc owners considering resale flats in the second half of the year. There is a likelihood that HDB prices may well experience a muted growth of up to 1 per cent in 2018,” Gafoor added.

Luxury homes stage comeback
However, for buyers with cash to burn, the prime residential segment in Singapore is also a good buy as analysts note that the luxury segment offers better prospects of an upside in prices following a price slump since June 2013.

“Singapore’s prime residential market has appeared to be more attractive relative to other global cities. It is still in the early stages of recovery while the prime residential markets of Hong Kong, Sydney, Melbourne and Tokyo are nearer the top end of their market cycles or peaking while the prime London market is in decline,” JLL noted in its URA flash report.

Buying interest has been robust in the luxury segment as prices have plunged by 10.8% since the last peak in 2013 Q1 to 2017 Q2 and have only started to gain in more recent quarters.

Transactions of prime properties have also increased significantly, from 1,859 units in 2015 to 4,585 in 2017. From Jan 2018 to 20 Mar 2018, there have been 664 transactions, fewer than the 729 in 2017 Q1, but higher in value at $2.1 billion. Transaction value of prime properties was $1.9 billion in 2017 Q1, ERA Realty Network key executive officer Eugene Lim noted.

"Prices of new luxury condos have risen quite significantly by about 20% over the first two months of 2018. Some projects like New Futura, Gramercy Park, The Nassim, Martin Modern and Highline Residences have raised their asking prices, driving up the overall transaction price. Price of many resale luxury homes have also risen y-o-y, possibly because of lesser homes being put up for sale as more owners wait-out for an enbloc opportunity," explained Sun.   

Against all the right conditions fueling its positive trajectory, Singapore’s property scene is set for a full-scale recovery with prices set to rise by at least 5% this year. 

“Pent-up demand is a major factor [in the price surge] as many locals are turning from investing in overseas properties to local properties due to higher stability of our property market and buying restrictions in other countries like Australia. Locals who had been on the sidelines as well as foreigners are slowly streaming back into the market as the market has bottomed and prices would likely rise in the coming months,” added Sun.