Your Property Agent Says: Eight Factors That Determine A Property’s Value

By Aaron De Silva / EdgeProp | November 28, 2017 2:30 PM SGT
If there’s one topic that never fails to get Singaporeans talking, it’s the subject of property prices. More so in the last few months because of the buzz surrounding en bloc sales. Recent reports have also hinted at a possible 5% rise in property prices in the next 2 years, with activity picking up in the luxury sector.
Now, if you’re a property owner looking to take advantage of this upcycle by offloading your property, what factors would affect its price? Similarly, if you’re on the prowl for your next piece of real estate – whether it’s a starter home or an investment property – what aspects of a property would influence its value?
We spoke to three real estate agents to find out their thoughts on this.
1. Fixed attributes
“Location is still an important factor,” says Georgette Lee, Assistant Marketing Manager of Huttons Asia Pte Ltd. “Buyers still look for properties near MRTs and amenities such as schools.”
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Georgette Lee
Hiroshi Oh, Senior Marketing Director of Huttons Asia Pte Ltd, adds that “(Properties in) proximity to MRTs and other forms of transport, as well as supermarkets etc are more favourable.” In some cases, a property’s favourable location can even trump its tenure.
“A recent client bought a 99-year leasehold condo at a premium price over a neighbouring freehold one, the main factor being its proximity to an MRT station,” says Darryl Tan, who heads Knight Frank’s Realty Insight Team. “That fixed attribute of the MRT station was all it took for this home to sell at a premium.”
In recent years, Lee says that major infrastructure plans have had an increasing influence on property prices. The High-Speed Rail terminus in Jurong East, announced in July 2016, boosted the profile of a town that had already been elevated by a 2008 government initiative to transform Jurong into a Regional Centre.
News of the upcoming terminus was heavily publicised across various media. “All that chatter drove prices up,” she says, referring to properties in the Jurong Lake District.
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Height: According to Oh, units on higher floors generally command a premium, especially if views from those units clear neighbouring buildings. In new condos, there’s a price difference of “$5,000 per floor, on average”.
For Lee, who’s currently marketing Parc Botannia in Sengkang, prices of one-bedroom units increase by around $3,000 per floor, while two-bedroom units surge by about $5,000. The price variation, however, is ultimately dependent on the developer’s strategy.
At Kingsford Waterbay in Hougang, for example, the difference is only $1,000 per floor. “All things being equal, it’s faster to sell a higher floor unit,” says Lee, pointing to the fact that her own four-room HDB flat in Sembawang, located on the second-highest floor of the building, sold within two weekends about a decade ago.
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Image source: kingsfordwaterbaycondos.com
View/Orientation: In most cases, high floors command better and/or unblocked views. “Some homes sell for $150,000 or more than an identical unit on the same floor for its preferred views,” says Tan. Meanwhile, Oh recently encountered a seller in the Newton area whose 20th floor, 1,700 sq. ft. apartment had an unblocked view of Marina Bay Sands (MBS). The asking price was $2.8 million.
By contrast, another owner in the same development, whose 10th floor apartment faced the same direction but did not have a view of MBS, asked for $2.4 million – a difference of $400,000, or $40,000, per floor.
Views are highly subjective, however, and are ultimately a matter of personal preference. Some buyers prefer green views and would not have an issue with a unit on a lower floor with views of the treeline, for example. The same goes for orientation. Some buyers do not mind if a property overlooks a place of worship, hospital or expressway, says Oh. Yet others would shun the property for the exact same reason.
Age: This has a bigger impact on HDB flats. According to Lee, flats with less than 60 years left on their leases tend to sell for less because of CPF restrictions. On the flip side, newer flats that are sold around completion of the MOP (Minimum Occupation Period) sell at higher prices. This is because of the perception that a newer flat would have fixtures in better condition.
Layout: Regular-shaped, regular-sized layouts are preferred as they allow occupants to maximise the usable space. Such configurations make it easier to arrange furniture, says Oh. However, there are exceptions. He recently sold a 1,600 sq. ft. apartment in River Valley despite its unusual layout, which he describes as having “pentagonal and trapezoidal shapes”, with “a lot of space devoted to walkways and corridors”. Perhaps the buyers saw this as a unique feature of the property.
Your unit's layout and view are two factors determining your property's price, says Oh.
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2. Variable attributes
Condition: This concerns how well-kept a property is. The better the condition, the higher the price it can command. More importantly (if you’re a seller), “Buyers will not negotiate as hard,” says Oh, who recently sold a third-floor, four-room HDB flat in Bukit Panjang at close to the $320,000 asking price. The flat had freshly painted walls and brand new air-con units, and closed at $310,000.
In sharp contrast, an unkempt three-room flat in Lavender had its price depressed by $80,000 when Oh brokered the deal in 2010. “The floor tiles had popped up, the kitchen backsplash tiles had fallen off, the bedroom doors had rotted away, the aluminium toilet doors were rusted, and there were wires dangling everywhere. It was the worst flat I had ever seen! The buyer did not even want to step into the unit.”
Renovation: It’s advisable not to go overboard when renovating a property. The simpler the renovation, the more likely a buyer will respond. “Having less custom-designed fixtures, such as feature walls, makes it easier for buyers to move in,” Lee explains.
A recent client – 50something, female, with family in tow – was so turned off by online images of a garishly designed five-room DBSS (Design, Build and Sell Scheme) flat that she didn’t even want to view the actual unit. The flat had red walls and red cabinets.
In general, Lee says that nicely renovated properties will not command a significant price hike. “With buyers now being more savvy, they will compare recently transacted prices in the area. They will respond to reasonable (asking) prices.”
Staging: “Look a million if you want to sell for a million,” says Tan. “Money begets money so spending a little to get more seems fair. This may mean redoing the grouting in your bathrooms, painting sections of your walls to freshen up the home and fixing cracked planks on your balcony decking etc.”
Tan once advised a client – the owner of a private house – to declutter her home as well as touch up the paintwork. Her decades-old walls had paint cracks that looked like the walls might have structural issues. But she wouldn’t budge. “Nine months into the sale process and countless viewings later, no progress was made. After some coaxing, she final agreed to take the home off the market for a fortnight, clear it out and apply a fresh coat of paint. The very weekend after that, two competing offers came in, and it sold, literally to the dollar of how much we had valued the home for.”