What Determines Singapore Property Prices?
● Macro-location affects property prices because some regions in Singapore like the Central districts are more attractive than others.
● Micro-location is about how far your property is from amenities like MRT and shopping centre. This can affect pricing substantially.
● Age determines property prices in Singapore, with older housing having less growth potential.
Whether you are a Singaporean, PR or foreigner, it is very important to understand what determines property prices in Singapore. This allows you to accurately judge whether you are getting your money’s worth.
The first thing that affects property prices is location. Even though Singapore is not very big, I categorise location into macro-location and micro-location. Macro-location is about the big picture. The middle (District 9,10 and 11) is more expensive because it is where the city is. Another expensive area is southwards near Sentosa. The coastal areas - West Coast and East Coast - are also expensive, especially with the “beachfront” mind-set of many Singaporeans. Putting this into numbers, property prices in the central districts can be anywhere between S$3000 - S$3800 psf.
Micro-location explains why two units in Toa Payoh (or any area) can differ substantially in pricing. The location of amenities near your property can greatly influence pricing. A 3-minute difference in distance from your property to the MRT can result in massive differences in pricing (upwards of S$10,000). LRTs are more similar to MRTs than bus stops in their effect on pricing; they only help a little bit in pricing. Another amenity is the shopping centre. For example, the NEX shopping centre in Serangoon caused property prices in the Serangoon and Lorong Chuan areas to skyrocket.
Many readers and viewers ask: Why is this property more expensive than the other even though it is further away from the MRT? The reason is simple - age. Leasehold in Singapore is substantially shorter than other countries like Japan or the United Kingdom. Thus, it is important to determine if your property still has growth potential.