Following measures introduced by the government intended to reign in the housing market, Singapore's housing prices have declined in recent months. For example, the HDB Resale Price index is 2 points lower than it was a year ago, while the prices private non-landed homes declined for the first time in 2018 in August. These might be encouraging figures for individuals that are excited to soon purchase their first home, but what other factors should these individuals take into account before preparing to buy a home?
PRICES HAVE ACTUALLY INCREASED IN CERTAIN NEIGHBORHOODS
First, while home prices have declined on average across the island, not all neighborhoods have become cheaper in the past year. For example, the median price of 4-room HDB flats in Clementi has increased by 21% compared to a year ago. Similarly, prices in Serangoon, Central and Geylang have increased by more than 5%. This highlights the need for prospective homeowners to carefully research prices in their desired neighborhoods, in order to be fully prepared and have sufficient savings to make a downpayment on a home.
On the other hand, individuals that are beginning their house hunting may be encouraged to know that prices in other neighborhoods have decreased significantly within the last year. For instance, the median prices of 4-room HDB flats declined by 13% in Kallang/Whampoa, while prices declined by 6% to 8% in Woodlands, Sembawang, Jurong West and Toa Payoh. These neighborhoods may entice individuals that are seeking to purchase a home at a more reasonable price.
While the average price of homes in Singapore has decreased, trends have varied between different neighborhoods in the country. For this reason, we strongly recommend that first-time homebuyers carefully research price trends in their desired neighborhoods before assuming that real estate prices must have decreased everywhere.