Record setting property prices in Singapore

Ascendant Assets Pte Ltd
Fit to Post Property

By Getty Goh for Ascendant Assets Pte Ltd

On 10 Apr 2013, news came out that Wing Tai Holdings Chairman Cheng Wai Keung was offering to sell his 85,000 sq ft (7900sq m) bungalow for as much as S$300million. It was reported that if that deal went through, it would set the record as the most expensive Singapore residential property ever sold.

Naturally, this made us wonder how many of such outrageously priced transactions were there. My team also thought that it would be interesting to find out what the record-breaking prices for non-landed properties were as well. After a quick search, our findings are as follows…

The most expensive landed property transaction goes to…

Based on the transaction data from URA, we found that since 1995, as many as 999 detached landed properties were sold for more than $10,000,000. However, the top 5 most expensive landed property transactions that crossed hands are shown in Figure 1.

Figure 1: Most expensive landed properties transactions

Source: URA and Ascendant Assets Pte Ltd

Looking at the table above, it does not come as a surprise that all of the developments were Good Class Bungalow (GCB). Based on URA, GCBs need to have a minimum plot size of 1,400 sqm. It is important to note that foreigners and PRs are not allowed to buy landed properties that are more than 1,400sqm. In other words, wealthy Singaporeans made these purchases. As land is a scarce resource in Singapore, there is a limited number of GCBs available. Hence, it does not come as a surprise that GCB owners are able to command premium prices for their assets.

The most expensive non-landed property transaction goes to…

Based on the transaction data from URA, there were 574 non-landed properties that were sold for more than $10,000,000 and the top 5 most expensive non-landed properties are shown in Figure 2.

Figure 2: Most expensive non-landed properties transactions

Source: URA and Ascendant Assets Pte Ltd

Based on the table, we can see that with exception of the Boulevard Residence, the rest are all condominiums. Not surprisingly, all these are freehold projects and are located within Singapore’s prime location of districts 9 and 10.

Conclusion

Looking at how high the record setting prices are, I believe it is hard for many of us to fathom why anyone would pay so much for a property. However, in an article published by Boston Consulting Group in Jun 2012, it was reported that the number of Singapore households with investable assets of more than US$1milion (or S$1.26 million) rose 14 percent to 188,000 in 2011. Based on this figure, it means that one in six households is a millionaire. The 'ultra-high-net-worth' households, defined as households with over US$100 million (S$129 million) in private financial wealth, also grew with 10 in every 100,000 households being in that category.

Mark Twain, a famous American author once said, “Buy land, they ain’t making it anymore”. Those who had the foresight to invest in Singapore properties in the 1970s and 1980s, when they were still comparatively affordable, would be sitting on gold mines right now. For those who missed the Singapore property boat, perhaps some of the developing countries overseas could be the next gold mines that Singapore property investors are looking for.

Getty Goh has a Masters in Real Estate and a Bachelors in Building from the National University of Singapore. He conducts frequent talks on the topic of property investing. To sign up for his next sharing, please visit www.BuyByeProperty.com. For those who wish to know more about what are some of the factors that would impact the profitability of a development, please drop him an email to find out more.