We had an interesting discussion topic on buying OCR RCR or CCR properties recently; property price has been rising over across the board.
More on OCR, RCR, and CCR here.
Interestingly, the property prices in the OCR and RCR are increasing faster than in CCR, and the gap is closing. Hence if you are a buyer today, where will you look to buy, OCR, RCR, or CCR?
On CCR Properties
We’ve discussed this in our previous post too.
In the past, CCR private non-landed properties are known as Singapore’s prime region, where buyers find the most luxurious or pricey properties. However, over the past years, the trend has been changing where the RCR and OCR non-landed private property prices have been rising and are rapidly narrowing the gap with their CCR counterparts.
A friend of mine bought a non-landed private 3bdrm at 2,100psf in Jan 2022 in district 3, and today this price tag can be found at AMK and Lentor Modern. Similarly, a non-landed unit in RCR was around 2.47mil, while the median price for a new CCR counterpart was around 2.23mil.
In August 2022, CCR non-landed homes account for nearly half of all new home sales. The last time CCR properties managed to account for such a high proportion of sales was in 2017. Hence what would be the better choice of the unit in the end? Let’s understand some of the factors that are affecting the buyers.
Decentralize to Centralise
Decades back when “central” are being mentioned, most will understand that it was convenient to be near the Central Business District. However, the success of town planning enables each neighborhood to become its enclave. Malls, supermarkets, food, etc… can be found easily now without traveling to Orchard for shopping. However, when RCR and OCR prices narrow closer to CCR properties, buyers may start to explore the future potential that CCR non-landed properties may have on growth and investment options.
More CCR Development
As announced, Marina South will be a mixed-use, high-density residential with 9,000 new homes. It will be an urban estate with highly connected walkways with grocers, barbers, and clinics at the street levels, while residential units are on the higher levels.
Marina Bay includes Straits View, Marina South, and the Central subzone where Marina One is located, with many other developments to be released. This is now one of Singapore’s most interesting growth areas with immense potential. Singapore is entering its next infrastructure growth phase; the window of opportunity has arrived for investors who would like to be part of this growth plan. This will certainly lead CCR prices to rise in the future.
High Net Worth Buyers
Most foreigners are familiar with the name Orchard Road as this is a tourist spot in Singapore. It’s much easier for them to understand the location where they are buying in. Contrast this to Modern Lentor, which foreign buyers probably know nothing about. Geopolitical instabilities outside are causing foreign investors to look at Singapore, which Singapore is generally conducive and peaceful. China’s real estate crisis also encourages Chinese buyers to look at Singapore properties. A Chinese buyer purchases 20 units at Canninghill Piers (CCR).
In conclusion, many upcoming developments at Singapore South could signal that the next potential growth area could be in CCR. OCR may continue to grow, but can they continue to grow like the past 2 decades?
At the time of writing this article, interest rates will likely rise and stay up for a while until inflation is lowered. Upgraders may now find it a little stretch with higher-interest mortgage loans and may slow down their buying spree due to rising borrowing costs. Rising inflation may also affect spending power and hence likely to make buyers think thrice before buying.