PSF Plummets 49% in Sentosa
Property is all about location, location, location.
Therefore, what’s happening at the national level is not necessarily what’s happening in your neighbourhood.
For example, you can’t say that since the SRX Property Price index is down 6.2% from its peak in January 2014, the price of your home is down 6.2%.
Frequently-reported price indices like that of SRX Property and URA measure price changes of residential housing at the national level using sophisticated statistical methodology. They are great for measuring the overall performance of a large market segment like HDB flats or private apartments.
Also, the indices are good indicators of the general mood of the market. When the market is moving upwards, generally people are optimistic and, as a result, bidding up the price index.
When the market is moving down, homeowners are generally pessimistic and reluctant to put their homes on the market. Meanwhile, buyers are looking for bargains.
For example, according to SRX Property the highest average price-per-square foot (PSF) for private, resale apartments, was $ 1,113 in December 2012. Since then the average PSF has declined 6.2% to $1,044.
In contrast, apartments in the Southern Islands planning region, which includes Sentosa, have seen their area’s average PSF plummet 49.1%, from a peak of $2,757 to $1,404 psf.
Meanwhile, the average PSF in River Valley has dropped 39.1%, from a peak of $1,937 to $1,180 psf.
If you own a home in River Valley, does this mean your PSF has declined 39.1%?
No. It just means the average PSF has dropped. Within River Valley, at the street and unit level, some homes have done worse while others have done better.
If you are a buyer or investor, knowing this – that the average PSF in River Valley has dropped significantly - might prompt you to start sniffing around the area for bargains.
Geylang, on the other hand, is one area where bargains will be hard to come by. The average PSF is at a peak (for the region) of $1,211.
Does this mean you shouldn’t be looking in Geylang? No and yes.
No if you think Geylang has peaked.
Yes if you believe there is upside potential for the particular apartment building and unit you are considering in Geylang (or other planning regions). You can make this determination by working with your real estate agent to evaluate price trends at the neighbourhood and street levels and obtain an X-Value for each unit.
Posted on 29 Apr 2015
Source: SRX