Singapore’s real estate market has long been an alluring landscape for investors, and at the heart of this captivating realm lies the Core Central Region (CCR). Despite recent comparisons showing slightly slower growth than RCR and OCR, CCR remains a compelling destination for discerning investors. In a recent conversation with a client, we discovered intriguing hidden opportunities within this enigmatic region.
In this article, we will delve into the data and trends that support CCR’s investment potential and discuss the factors that can influence the decision to choose between resale and new launch condos.
Understanding the Price Gap
One of the key metrics used in assessing the investment potential of CCR properties is the price gap analysis.
By comparing the average price per square foot (PSF) trends for resale condos in CCR, Rest of Central Region (RCR), and Outside Central Region (OCR) over a 15-year period, valuable insights can be gained.
Resale Market
Over the years, resale private condos of CCR and RCR have shown an average price difference of 39.11%, while CCR and OCR have exhibited a more substantial average price difference of 66.79%. However, the recent rise in property prices, largely driven by local demand due to border control, has caused RCR and OCR prices to surge faster than CCR. Consequently, the price gap has narrowed to 28.69% and 57.01% between CCR, RCR, and OCR, respectively.
Primary Market
The price gap between CCR and RCR is notably more substantial in the primary market, which comprises new launches. The price difference is 19.50%, which is lower than the 15-year average of 38.73%. Similarly, when comparing CCR to OCR, the 15-year average price gap is 62.88%, whereas the current narrowing gap is 39.78%. These figures indicate that there might be significant potential for investment gains in the primary market, especially in new launch properties within the Core Central Region.
Opportunity in CCR
Given the trend of prices in RCR and OCR closing the gap to CCR, there is a potential opportunity for investors in CCR. As the prices of RCR and OCR properties approach those in CCR, buyers will likely shift their focus to the latter, subsequently driving up prices. Therefore, it is reasonable to expect that prices in CCR will move closer to their fair value, making it an appealing investment prospect.
Resale vs. New Launch
For those considering investing in CCR, another critical aspect to address is the choice between resale and new launch condos. Analyzing the price gap for both segments can offer valuable insights.
When weighing the choices between resale and new launch properties in CCR, it appears that resale options provide slightly better value in comparison to new launches.
Factors to Consider
While the price gap analysis highlights the investment opportunities in CCR, individual preferences and requirements must be considered before deciding.
- Urgency: If you need immediate occupancy, resale condos might be the better choice, as new launch projects may have longer completion timelines.
- Preference: Understanding whether you prefer the allure of brand-new properties or the unique charm of older resale condos can guide your decision-making.
- Investment Horizon: Consider whether you plan to hold the property for a short-term period (less than five years) or a more extended duration. This factor can influence the suitability of resale or new launch condos.
Conclusion
The Core Central Region of Singapore continues to present promising investment opportunities in the real estate market. Through a comprehensive analysis of the price gap and consideration of individual preferences and investment goals, clients can make well-informed decisions on whether to invest in resale or new launch condos. As always, it is essential to seek professional advice and conduct thorough research before venturing into any investment opportunity. With the right approach, investing in CCR properties can be a rewarding and potentially lucrative venture.