Over the past few weeks, I have been monitoring landed property prices and transactions. With prices of private property hitting new peaks in 2018, there is a certain price expectations being played out by both sellers and buyers.
There is currently an uptrend on number of landed homes being sold as more and more of such homeowners take advantage of the rising market.
Possible Factors Contributing To Increase In Landed Home Transactions
The interest in landed property has always been present but with the prices of private condos hitting new peaks in terms of $PSF, there is now even greater interest to consider other segments of the private property market.
There is, at this moment, a bigger group of well-heeled buyers who are branching out to consider landed property instead of buying a typical private apartment.
Here I share some of the possible factors that are contributing to this interest in landed property.
Factor #1: Larger Built Up Areas Which Translates To Lower $PSF Prices
It is interesting to note that the average PSF prices of landed property in District 28 are in fact, slightly lower when compared to new launch condos within the same area.
In 2018, we are actually seeing that the average PSF of landed homes have dipped below the average PSF of non-landed private properties within District 28.
What does this mean? Landed properties are lower on a PSF basis – for this current period of time!
Landed homes can be considered as Value-For-Money proposition for some buyers out there.
Factor #2: Capital Appreciation That Is Superior Than Non-Landed Private Properties
This is another interesting trend that I observed.
Landed homes bought as early as 20 years ago made as high as S$930,000 (or even higher) profit when sold in 2017.
Based on the table above, this meant an annualised return of about 3.5%.
This translated to annual gains that was better than the typical rental yield.
(Plus you are also staying within the place!)
Factor #3: More Landed Homeowners Cashing Out For Retirement
From my observation, plenty of these landed property homeowners bought their properties during the peak earning years. This was some 20-30 years ago.
As the property market heads upwards, some are beginning to take action to cash out and move to a smaller home as they enter the next stage of their lives – retirement.
Some of them also have originally inherited these properties from their parents or the previous generation. With such properties – it allows them to right-size to a smaller home and use the remaining cash proceeds to fund their retirement.
Landed homes are considered a scarcity in Singapore. Freehold ones are especially priced at premium rates.
But with rising PSFs of even non-landed private properties, perhaps owning landed property might be the preferred choice – for the better lifestyle and potentially more lucrative capital appreciation.
Yes, the initial quantum remains high – but savvy buyers who are able to afford will step forward if they are able to see the value-for-money proposition.
If you are considering to sell your landed property – we now are facing a market of ready buyers who are interested to take action – thanks to rising prices of non-landed private properties which might have turned them off.
Looking to explore your options? I invite you to contact me for a no-obligation consultation session.