High residential property prices in Singapore should not discourage savvy real estate buyers.
Residential property prices in Singapore have consistently been among the highest in the world, and this trend is expected to continue in 2023. According to a report by Knight Frank, Singapore has the second most expensive prime residential property market in the world, behind only Hong Kong.
What are the reasons for the high residential property prices in Singapore? What should home buyers take note off?
When comparing property prices in Singapore to other major cities around the world, it is important to note that the city-state has a small land area and a high population density. This has led to a scarcity of land and a high demand for housing, which in turn has driven up property prices. Additionally, Singapore has a strong economy and a stable political environment, which also contributes to the high property prices.
One of the main comparisons for Singapore is to the city of Hong Kong. Both cities are known for their high property prices and their status as major financial centers. However, Hong Kong’s property market is even more expensive than Singapore’s, with prime residential property prices being on average 60% higher. This can be attributed to the even more limited land supply in Hong Kong and the ongoing political turmoil in the city.
Another major city that is often compared to Singapore is London. The UK capital is also a major financial center and has a strong economy, but property prices in London are significantly lower than in Singapore. According to a report by Savills, the average price of a prime property in London is around 45% lower than in Singapore. This can be attributed to the larger land area and lower population density in London, as well as the recent Brexit uncertainty and stamp duty increase that dampened the UK property market.
New York is another major city that is often compared to Singapore in terms of property prices. According to a report by Zillow, the median home value in New York City is around 45% lower than in Singapore. This can be attributed to the larger land area and lower population density in New York, as well as the recent economic downturn and the COVID-19 pandemic.
How do the other Asian cities compare with Singapore’s high residential property prices?
In comparison to other Asian cities, property prices in Singapore are relatively high. For example, in Bangkok, property prices are around 70% lower than in Singapore, while in Jakarta, they are around 80% lower. This can be attributed to the lower GDP per capita and lower demand for housing in these cities.
Singapore has consistently been one of the most expensive cities in the world in terms of residential property prices, and this trend is expected to continue in 2023. The high property prices in Singapore can be attributed to the limited land supply, high population density, strong economy, and stable political environment. When compared to other major cities around the world, Singapore’s property market is more expensive than London, New York, Bangkok and Jakarta, but less expensive than Hong Kong.
High residential property prices should not deter savvy real estate investors who use the right strategy
One strategy is to save up for a large down payment to reduce the amount of interest that needs to be paid on the mortgage. This will also help to lower the monthly mortgage payments, making the property more affordable.
Another strategy is to take advantage of government schemes and incentives, such as the Central Provident Fund (CPF) Housing Grant, which can provide additional funds for the down payment or for the purchase of a resale flat.
It is also important to research different types of properties and areas in Singapore to find the best deals and to consider the long-term potential for appreciation.
Engaging a mortgage broker is a good strategy for those that want to invest in Singapore where high residential property prices is the norm
Engaging a mortgage broker can be a good idea as they can help you to find the best mortgage rates and terms, as well as guide you through the process of applying for a mortgage. They can also help you to compare different mortgage products and lenders and to find the best option for your needs. However, it is always recommended to do your own research and compare the fees, charges and interest rate provided by the broker.
Most importantly, it is important to have a realistic budget, and to understand the additional costs associated with buying a property, such as stamp duty, legal fees, and maintenance costs. Having a realistic budget will help you to make a more informed decision when buying a property, and to avoid any financial difficulties in the future.