Are there investment opportunities now despite the rising interest rates?

All investments are subjected to risks. If it sounds too good to be true, it probably is. So what is the safest bet in this current real estate market?

First, let us understand how Singapore is being categorized. There are 3 regions; Outside of Central Region (OCR), Rest of Central Region (RCR), and Core of Central Region (CCR). In layman term:

• CCR refers to places such as city, downtown core and Sentosa where high-end luxury properties can be found.

• RCR refers to central areas that are not part of CCR

• OCR refers to places outside of central, which takes up about 3/4 of the entire Singapore.

Understanding the price gap between each region

From 2021 till today, the prices of new projects in each region has increased by 27% (OCR), 14.7% (RCR), and 3.5% (CCR).

Narrowing price gap of RCR and CCR

In the past ten years (2012 to 2021), the median price per sq ft gap between CCR and RCR non-landed new homes is around 42.7%. However, this price gap started narrowing in April 2022 to 25.7%. The gap further closed in August to 14.9%.

Median Price of CCR, RCR, & OCR

With the increase in price per sq ft in the RCR since Jun 2022, the median price paid for a new nonlanded home has exceeded that in the CCR. As of Aug 2022, buyers paid $2.472 million for a new nonlanded home in the RCR, 10.8% more than the CCR.

For buyers with a budget of up to $2.472 million, the CCR also has 3-bedroom options for them to choose from.

This has definitely caught the eyes of some buyers who are looking for opportunities to trade up to a better location with the same budget.

So where is this Window of Opportunity that everyone is looking for?

A rare window has opened in the CCR where buyers can buy a similar-sized home with the same budget for a RCR home.

In today’s market, affordability is all about the purchase price. Afterall, buyers borrow up to 75% of the purchase price, not the price per sq ft.

Homes in the CCR may not be as pricey as one thinks. With prices in the RCR and OCR closing the gap with the CCR, it is a matter of time before homes in the CCR are repriced upwards.

Currently the median price gap between CCR and RCR homes has narrowed to 14.9% from the 10-year average of 42.7%. If the price gap between CCR and RCR homes returns to 40%, it means the median price for CCR homes will potentially increase to $3,400 psf from the current price level of $2,801 psf. This is an upside of more than 20%.

Does this mean that any CCR projects are money making opportunities?

With so many new projects out there in the market, are you confident enough to make the best choice? Proptimise is not just an option, we are the best option. So don't just sit idly by, join the action today and let us do the work for you.