Scarce land in Singapore

I do a fair bit of landed property sales and I always get sellers telling me that landed prices will always hold because land is scarce in Singapore. Moreover, I get people who are living in places like Serangoon Gardens telling me that the estate is full of eateries and amenities and thus should command a very high price. I thought about this "landed property is the most valuable form of residential real estate in Singapore" idea for a good few months. I was thinking whether this was true or not. I was driving around Orchard Road a couple of days ago and it finally struck me what sort of property I should aim for when (and not if) prices fall during the next property correction.

The most valuable land is the land in the central region of Singapore! ie. properties in and around Orchard Road.

Let me explain why it is much better to go for a condominium in Orchard Road rather than a landed property in a suburban area.

1) Location is always the key. There will always be a demand for properties in and around the heart of Singapore. Be it the central business district (CBD) or our nation's prime shopping belt. Compare this to a landed property in the far outskirts of Singapore like Loyang, Sembawang , Woodlands or Jurong. There are landed properties in these areas calling for prices of more than SGD$1,000 per square foot for land. This to me does not make any sense. Add up all the land in such areas and compare that to the very scarce amount of land in and around Orchard area. You will realise that properties in and around the heart of Singapore are much more valuable than perhaps a landed property in Loyang.

2) To the people living in places like Serangoon Gardens. Such an environment can be replicated. The shops, the eateries, the banks, the cafes, all these were planted in the estate. The intrinsic value of the property is still not about location. Getting to the CBD is still a chore thanks to the constant jam on the CTE expressway. Basically the environment is man made. I would say that the establishment of Orchard Road and Raffles Place is more organic. Where else to place the headquarters of banks, companies, our best eateries, top hotels, flagship stores but in the heart of our nation?

My point is that places like Orchard Road are valuable because they are in the heart of a bustling Singapore. The fastest growing economy in Asia. (Though this may change after the last round of economic data just released). Few in Singapore will find getting to a place like Orchard Road as inconvenient but the people staying in Jurong may find getting to places like Hougang rather out of the way and vice versa.

While this happens in "ulu" places like Loyang

http://singaporeseen.stomp.com.sg/stomp/3552/4124/199852

Let us answer the question of where is the most valuable property in Singapore. (Notice I did not mention the type of property.)

It is right at the heart of Singapore!

I would much rather own a 2-3 bedroom apartment in District 9 than to fork out in excess of SGD$2 million for a landed property in the outskirts of Singapore! (Note: You can find a 2-3 bedroom apartment for about the same price as a landed property in the suburban area of Singapore)

Now why then are people paying about $1,000 per square foot for leasehold properties in places like Hougang?

Weird...

If they are willing to buy as these prices, as a real estate agent, my clients are willing to sell...

Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com