Have you ever felt that property prices are just too high, making you hesitate to buy or even suggest purchases to potential buyers? You’re not alone. But what if I told you there’s a trend, observed over the last 17 years, that could change your perspective on the real estate market? Let’s dive into this discovery together.
A Personal Journey Through Real Estate
Back in 2006, I stepped into the world of private residential real estate with two significant handicaps: no experience and no money. This made me view property prices as crazy high, a mountain I wasn’t prepared to climb. Fast forward through 19 years of networking with the top investors and diving deep into market trends, I’ve come to recognise a pattern that has repeated itself three times over the past 17 years: the prices of new launches consistently outpace those of the past, creating a staircase of increasing value.
The Surprising Trend of New Launch Prices
This trend became clear with the example of the condo Treasure at Tampines. In March 2019, amidst concerns of high prices and an oversupply of units, it launched at an average price of $1280 per square foot. Fast forward to December 2023, and the highest profit gained from a sale in this development was a huge $676,000, in less than four years. This case study is a testament to the upward trajectory of property values, despite initial market skepticism.
Understand the Reasons Behind Rising Prices
So, why do property prices continue to climb? It boils down to several factors: competitive land bidding reflecting current market values, increasing construction and labor costs, and the impact of increased GST rates. These elements combined ensure that new launches come with a higher price tag. Recognising this can help you understand the process and empower you to make more strategic decisions.
Make Smart Buying Decisions in a High-Price Market
Navigating a market where prices seem always high requires wisdom. It’s important not to overextend your financial commitments. Ensure you have a safety net of reserve funds before investing in a property that can enhance your net worth. This foresight can be your safeguard against unforeseen market fluctuations.
Considerations Beyond the Price Tag
Buying a home isn’t just about the investment; it’s about your life. Consider what matters most to you: the proximity to your children’s schools, your workplace, or maybe staying close to your parents. Future prospects, like the potential for property appreciation and the attracting of tenants, also play a critical role in your decision-making process.
Conclusion
Understanding the real estate market, with its seemingly endless rise of property prices, is crucial. By recognising the patterns and factors at play, you can approach the market with confidence, making informed decisions that look beyond the initial price tag to the long-term benefits and potential for significant gains.
