With the introduction of the Covid-19 pandemic, we have adapted to the concept of working from home. Work from home has become an essential factor for workers sourcing jobs in Singapore.
According to a recent study from Straits Times, 1,000 employees were interviewed during the survey. We learned that about 80 percent of the 1,000 employees expressed their concerns that having flexible working hours is important to them and 2 out of 5 workers would not accept a job if they cannot work from home in Singapore.
Now you may be asking. Why am I talking about the work-from-home statistics? How any of that is related to real estate in Singapore? Well, working from home has changed people’s behaviors toward buying a property in Singapore. This applies to all residential properties such as Housing Development Board (‘HDB’) Flats, Condominiums (‘Condo’), Apartments, or even Landed properties in Singapore.
Space or size is the Keyword! Do you feel the same? That no pandemic has ever made us feel so self-aware and conscious of space or size when buying a property now in Singapore other than Covid-19?
Recently, I felt this change of behavior from the majority of my clients, who are searching to buy a property in Singapore. This inspires me to write this article of my thoughts here as you are reading so I will highlight two considerations to help out buyers who are also within this scope of influence and I hope that it can help you out in your home search moving forward.
Urban Redevelopment Authority (‘URA’) October 2018 Intervention
Before the URA’s intervention to enforce a minimum shoebox size of 85 or 100 square meters (‘sqm’) in relation to determining a developer’s maximum number of dwelling units within a project in Oct 2018, developers were free to build shoebox size units smaller than the new launches of 1 Bedroom we are seeing today. On the other hand, developers too were allowed to build bigger size units comprising 2 to 5 bedrooms or more.
Since URA’s implementation of the above rules and regulations for developers, the sizes of 1 to 5 bedrooms were balanced out to accommodate the maximum number of dwelling units. If you were in the developer’s position today. What would you do?
How do I maximize my sales to profit margins?
Will it be efficient to provide a bigger size or space of 3 Bedrooms or above to remain a similar stance of building sizes?
If I do that approach, it means that lesser units will be comprised within the project due to the maximum gross floor area or GFA. Will it make sense?
What is the profile of the buyers in the location of my project?
a. Does a 1 bedroom unit layout make sense to build in Yishun? Or does it sound more logical to build 1 bedroom closer to the city or city fringe such as Tanjong Pagar?
Put yourself in the developer’s position. In spite of this change in Oct 2018, units’ sizes were smaller compared to before and this led to more reachable affordability to the mass market. It is safe to say this regulation will stay for a long time to accommodate the rising population goals in Singapore.
Logical Investment versus Emotional Values – Price Sensitivity
Moving forward in our present market with the ongoing rise of inflation and property prices. It is not easy to find a new launch condo with 2 bedrooms below $1.5 million from now in Q3 2022. The behavior of buyers is leaning towards the emotional barrier of space at home and it could impair a couple’s or person’s decision when making a purchase, especially when buying into a quantum play of alternative investment like real estate.
If your maximum purchase price is $1.5 million, and you are out there looking for a 2 or 3 bedroom or higher, above 900 sqft. Then you should ask yourself, what is the trade-off you are sacrificing for an emotional purchase due to restrictive price sensitivity?
Advice to home buyers
Always ask yourself questions to determine your objective and be firm in your decisions. (Unfortunately, the present market does not wait and is tough for indecisive buyers)
For example, space can be an essential priority for you.
What if your maximum purchase price is limiting your home purchase but you still hope that your property is able to stand a better chance of growth when you start selling in the future?
Will you consider an older 99 years leasehold condo, immediate move-in, 900 sqft with good feel and space compared to a newer 99 years leasehold condo, 700 sqft 2 bedrooms, 4 years build-up time but nevertheless commands a higher potential to grow in value due to its fresh lease, new furnishings, and location?
There are many ways to buy real estate or property in Singapore. It is not limited to just residential properties. Throughout my 7 years in this industry, I realized that everybody’s objectives are different to suit their needs. Needless to say, I helped countless individuals and families in their sales and purchase objective.
Do not hesitate to contact me using the WhatsApp Floating Button on the right of your screen. It will be my pleasure to provide you with direction and focus using my own crafted Personalized & Systematic 5-step Advisory Process, the ‘Risk Management, and Empowerment Approach’.
Your next move
Do not take this the wrong way, I do not mean that new condos or developments in Singapore are the only potential way to make safeguard your property asset. Even buying into a new condo, requires prudence and due diligence on our part and yours.
Additionally, there is still manageable growth in the resale market subjective to the respective projects and we can find out more after setting your goals to buy real estate in Singapore. I love to share more on my opinions and help you convert your objectives into a holistic real estate portfolio.
Conclusion
There are many ways to buy real estate or property in Singapore. It is not limited to just residential properties. Throughout my 7 years in this industry, I realized that everybody’s objectives are different to suit their needs. Needless to say, I helped countless individuals and families in their sales and purchase objective.
Do not hesitate to contact me using the WhatsApp Floating Button on the right of your screen. It will be my pleasure to provide you with direction and focus using my own crafted Personalized & Systematic 5-step Advisory Process, the ‘Risk Management, and Empowerment Approach’.