How to Find Undervalued Properties with Big Discounts from the Last Peak of HISTORICAL HIGH?
Undervalued properties are the unicorns of the property market. Why?
Well, hear this! A client came to me today looking to buy a brand new property.
I asked him, “What type of property are you looking for?”
“A brand new house big enough to accommodate my 3 children, my wife, and myself.”
“The house should be in a good area and a friendly neighbourhood. And since my kids are going to college soon, nearby colleges are a must.”
“They love to chill at the pool also. So, a pool or a terrace garden for my morning walk would be nice.”
“And hey, if I decide to sell it in the future, I should be able to make a good profit margin.”
“Oooh! ooh! Can you find me something that also has a great rental yield? After all, I am an expat here. If I decide to go home or buy another house, a backup investment won’t hurt,” the client explained.
He basically needs a luxurious house with premium amenities in an excellent strategic location. The house must also be reasonably priced, high demand with low risk. That way, he is sure to make a profit on his sale. And also mint money on the investment.
What he needs is an undervalued property that has all these features.
If undervalued properties are unicorns, this must be the Star Unicorn, right?
The good news is if you know how to analyze the market, you might get hold of your very own Star Unicorn!
How, you ask?
You have to find a house with a price that is lower than the last peak. Then, you can ensure that the price will definitely increase at the next peak.
And here I will reveal all the greenroom discussions of property experts, which help them derive these Star Unicorns. Aka undervalued properties whose price is lower than the last peak.
101 hunting of Star Unicorn undervalued properties
1. Check out the Singapore Property Index in 2021
2021-2021 has been the pandemic era. Amid the crisis, the global economies have suffered severely. Singapore is no different. In Spite of that, the Singapore property market was surprisingly resilient in 2020. You may even say bullish!
The average property price has grown by 62% since the last peak in 2007. It has grown to S$1,090 psf in 2021 from S$673 psf in 2007.
What is the current market position of the Singapore property market?
- 0.9% increase in the private residential property index in Quarter 3 of 2021 compared to the 0.8% increase in the previous quarter.
- This is the third consecutive year this sector is showing an upward trend.
- The high demand is causing the properties to sell fast and listings removed.
- Hence, the supply has declined by 28.9% in the final quarter of 2020.
- The supply may drop even more. Because now, people are more inclined to buy properties as the pandemic is under control and borders are reopening bringing more foreign buyers.
What is the Singapore market outlook in 2021?
- The uptrend pattern of property prices will continue.
- Year end sales will be unaffected by any seasonal dips over the years.
- Developers’ sales are to remain strong as more new launches are in queue.
- Buyers will continue to favour spacious units at a reasonable price.
- Currently, 4-5 bedroom houses with 1,000-3,000 sq ft have the highest demand.
- The highest demand of prices range between S$1 million to S$1.5 million.
If you have savings and income unaffected by the recession, this low interest vibrant property market is for you.
What type of properties is trending in 2021?
- Foreign buyers mostly eye brand new luxurious properties.
- While mass market and resale properties have also grown a local audience.
- HDB owners are planning to upgrade to private housing.
- This is giving rise to condominiums and private apartments.
- Even amid Covid, luxury projects, especially the bigger units are most in demand.
- With borders reopening, experts predict a higher demand for the luxury sector in the final quarter of 2021.
Is the increasing property price a sign of future cooling measures?
When price increases drastically, the Government always intervenes to cool off the overheated market. In other words, you may buy a property at S$1 million. And after cooling curbs, its price may actually drop in forthcoming years.
This is one of the biggest fears of property buyers!
But notice that previous cooling measures did not affect first time buyers. Investors and foreign buyers were targeted. They had to pay wealth tax in the form of Additional Buyer’s Stamp Duty (ABSD).
Besides, the price increase in 2021 is due to market demand and not speculation. So, the Government only wants to ensure that buyers have sufficient money to pay for their properties. That is why the more likely form of cooling measures this time will be the Loan to Value (LTV) limit.
The curb is only to ensure that new buyers don’t overleverage themselves. And in the process bite off more than they can chew. This is a safety net for developers to let the hot money flow in smoothly.
2. Know the 3 main regions of Singapore.
Once you finish studying the Singapore property index, delve into the regions. From here on, you have to slowly narrow down to the area where you can find your undervalued property of choice.
What are the 3 main regions of Singapore?
Core Central Region (CCR)
During the last peak in 2007, CCR outperformed the rest by a WIDE MARGIN OF 47%. But, in 2021, it is the MOST UNDERPERFORMED region. Having dropped by more than 20% compared to the rest.
- It included the traditionals prime areas of Singapore. It also occupies part of Downtown Core and Sentosa.
- Compared to other regions, it has the most high end luxurious homes.
- Many residential properties here are also freehold. Thus, giving buyers the benefit of owning them for generations to come.
Rest of Central Region (RCR)
RCR was among the UNDERPERFORMED regions during 2007 peak. But now, it is OUTBIDDING CCR together with OCR by more than 30%.
- This region is sandwiched between CCR and OCR.
- The price of houses here are mid tier level.
- It attracts the interests of various buyers.
- Investors, owners, young families and even empty nesters are all its target market.
- Owing to the rising demand, the price gap between RCR and CCR is closing fast.
- Increasing renewals, urban and infrastructure development add to the demand in this region.
Outside Central Region (OCR)
OCR was the underdog of 2007 peak. Having one of the unperformed regions. Today, it is giving tough competition to OCR with its new developments. Also, together with RCR, it is outperming the Central region by more than 30% as of this year.
- The region is three quarters the size of Singapore.
- It welcomes the budget checkers with the mass market condos.
- The price point in his region is lower, including those of Executive Condominiums (ECs).
- Private residential projects are also larger in this region. They consist of as high as 300 units or above.
- Developers are pulling all stops to lure buyers here.
- Thus giving tough competition to the RCR market.
- Large size and higher unit numbers of OCR projects allow developers to offer more facilities.
- The area with its new launches are appealing to young couples and millennial families.
Which region is more likely to have undervalued properties?
According to the URA flash report on Oct 1, 2021:
- Non landed private residential properties in CCR declined by 0.6%. This is compared to the 1.1% increase in the previous year.
- The same segment saw a 0.2% drop in OCR. This is compared to the 1.9% increase in the previous year.
- But in RCR, the non landed private residential properties’ price increased by 2.2%. This is compared to the 0.1% increase in the previous year.
As you can see, CCR has underperformed most compared to the other two regions. It is more likely to hold undervalued properties with lower prices than the last peak than the others. But before we draw any conclusion, let’s look at how the regions performed compared to the last highest peak in 2007.
Comparison of CCR, RCR and OCR from last peak till today.
Last peak years (2003-2009) – The HIGHEST PEAK in 2007
During the last bull run from 2003-2009, the Central Region (CCR) outperformed the Non-Central (RCR & OCR). That too by a large margin of 47%. The property index peak for the Central Region was 165. On the other hand, the Non-Central Regions only managed to peak up to 132. During that time, the Non-Central Regions were the underdogs.
After the last peak till today (2009-2021)
After the last peak in 2007, the regions took pretty bold turns. The Central Region’s property index dropped from 165 in 2007 to below 150 in 2021.
Since 2009, the Non-Central Regions outperformed the Central Regions by 20%. From 2009-2021, the gap has become wider. Now, the Non-Central Regions are outbidding the Central by more than 30%.
The statistic has been proven right once again by the URA Flash Report released in 2021. According to the report, non-landed residential properties have declined by 0.6% in 2020Q4 compared to previous year.
For OCR, the same segment saw a drop of 0.2%. OCR was the underdog, low performer during the last peak in 2007. Now, it has taken second place.
RCR, on the other hand, saw a 2.2% rise in non-landed residential properties. So, it is the most highly performed region.
So, today’s underdog is the Central Region aka CCR.
If you want to find your Star Unicorn then CCR is the KEY.
Which location in the CCR offers the best value buy now?
Let look examine Core Central Region (CCR)
The CCR region itself is very wide. How would you know where to look in CCR to find undervalued properties? What criteria should you be looking for your Star Unicorn?
It will be super difficult to fine comb the districts of each of these regions to find your ideal undervalued property. So, I have broken down CCR into 3 planning areas. The ones which have the most likelihood to hold your Star Unicorn undervalued property.
The 3 planning areas are broken down as follows:
- Southern Island – Sentosa – District 4
- CBD – Downtown Area – District 1, 2, 6, 7
- Downtown Core – Singapore River, Orchard, Novena, River Valley, Newton, Tanglin, Museum – District 9, 10, 11
The criteria chosen to hunt undervalued properties in these 3 planning areas are non landed residential properties. This includes all private apartments and condominiums.
3. Compare 3 planning areas to find your undervalued properties.
Last peak years (2003-2009)
Previously, the hot peak season (2003-2009) was the highest in 2007. Look at the average psf during that time. Southern Islands (Sentosa) outperformed the rest at an average price of S$2,250 psf.
Taking data from 2003-2012, we can see that the CBD (Downtown) was close to the Southern Island. It was the second highest performer. The average price being S$2,150 psf.
The last in the rank was Downtown Core. Its average price was S$1,700 psf. Hence, the most underperformed area during the last peak was Downtown Core.
After last peak till today (2009-2021)
Comparing the above chart to the last peak which represents its figures in average psf.
After the peak years, CBD, which was in second place, outbid Southern Island to take the first place. The average price in CBD increased from S$2,150 psf in 2007 to 2,350 psf. in 2021.
Downtown Core was the lowest performer in 2007. But, now, it is in second position. It’s average price increased from S$1,700 psf in 2007 to S$2,250 in 2021.
Southern Island (Sentosa), which was the highest performer in 2007 became the most undeformed area in 2021. The price of this area dropped from S$2,250 psf in 2007 to S$1,650 psf in 2021.
S$1,650 psf is even lower than the S$1,700 psf performed by Downtown Core last peak, which was the most underperformed area. Hence, Southern Island is the most underperformed area now, with prices lower than the last peak’s low price of S$1,700.
Now, let’s compare the regions by percentage of growth after the peak years.
In terms of growth, last time’s underperformer, Downtown Core, is now at the TOP. Downtown Core appreciated by 70% from 2009-2021. The CBD (Downtown) area is in second place by appreciating at 40%. And now, the most underperformed area in the Southern Island (Sentosa). Because this area has appreciated by less than 5%.
What do we see here?
Both in terms of average psf and growth, Southern Island (Sentosa) is the most underperformed area. Its average psf is lower than the last peak’s low! We are hunting undervalued properties whose price is less than the last peak. This exactly matches where the Southern Island (Sentosa) stands now.
During the last peak (2003-2010) if you bought a house in Downtown Core, the most underperforming area, your house would have appreciated the most today.
So, now, if you buy a house in Southern Island (Sentosa), the most underperforming area in 2021, it is most likely to be appreciated the most in the next peak. Even if it is not the highest performer in the next peak, its price won’t drop lower than what it is today. Hence, it ensures that you would acquire a property that guarantees capital appreciation in the future. This makes it the low risk and most profitable property investment for you.
4. Find the undervalued properties in each of the 3 planning areas.
Southern Island (Sentosa)
The most underperformed area with average psf lower than the last peak’s low!
Southern Island occupies District 4 – Sentosa. Home to exclusive homes, a few houses here have a direct sea view. Expats love the area for its ambiance and affluent amenities. They get to live in big mansions among the riches of the world. Besides, the marriage of green with the tranquil sea adds to the aesthetic of the place.
Sentosa is also well connected with a special tramline that links to the overall MRT system. It also boasts a vibrant life with posh restaurants and cafes. For entertainment, the island has a golf course and other entertainment for its prestigious residents. East Coast also boasts a series of housing complexes. They are located very near to the East Coast Park.
Undervalued properties in Southern Island (Sentosa) are available for sale by developers.
Here, I have the list of undervalued properties in Southern Island (Sentosa) available for sale.
Check out the pros and cons to decide which property is YOUR Star Unicorn.
Turquoise – Lowest psf
Pros:
- Starting from S$1,682 psf.
- Turquoise offers the best value in psf. Sentosa area’s last highest transaction was in October 2007 at S$2,772 psf. Now, you can buy luxury units here at an even lower price of S$1,682.
- Since the price is low, you have an excellent potential to sell the house at a greater price in future. The increasing demand for luxury houses will add to your future capital appreciation.
Cons:
- Amenities are a little drive away on the main island.
Marina Collection – Crazy Rich Asian Lifestyle
Pros:
- Starting from S$4.2 million.
- Located in Sentosa, just beside the prestigious Yacht Club, One Degree 15.
- Waterfront lifestyle by the yacht bay.
- Spectacular view overlooking the yacht bay.
- Premium neighbourhood.
- In Jan 2008, a similar size unit was sold at S$6.36 million (S$2,185 sq ft.) Now, this unit is offered at almost 50% discount, with exactly the same amenities and facilities.
Cons:
- It is a 99-year leasehold property. If you are looking for a freehold property, this may look like a hindsight. But 99 year is a decent time to stay full, wholesome years with your family.
- Amenities are a little drive away on the main island.
Seascape – Nautical themed luxury home
Pros:
- Built by the sea, it has a breathtaking backdrop.
- Inspired by Sentosa Cove’s nautical theme.
- Elegant bold exterior of the building reflects the grandeur of land and sea.
- Has huge balconies shaped as the hulls of ships.
- 24 hours security and amenities such as forest pool, sky pool and spa.
- Clubhouse to entertain the residents.
Cons:
- It is a 99-year leasehold property. If you are looking for a freehold property, this may look like a hindsight. But 99 year is a decent time to stay full, wholesome years with your family.
Southern Island (Sentosa) Underperformed Project Comparison in Historical Price 2007-2021
Turquoise could be your Star Unicorn. As it is the most undervalued property at a declining growth of 47%.
I went further to analyze the 3 undervalued properties in pursuit of finding the most undervalued property for you. From the chart above, you can see that Seascape is the least undervalued property at 31% declining growth. Marina Collection is the second undervalued property with a declining growth of 34%. Thus, making Turquoise the most undervalued property as its growth dropped the most at 47%. Comparing your needs to this project, it is up to you now, which undervalued property you prefer the most.
Want to see more listings in the Southern Island?
Central Business District (CBD)
CBD, which was the second performer during the last peak, outbid Southern Island to take the first place in 2021 as per average price psf.
CBD or Downtown is home to Singapore’s financial and business hub. This includes International businesses and leading financial institutions. It stretches from Raffles Place to Tanjong Pagar and Anson subzones. Thus, making a perfect living place for office goers and businessmen.
To make it more attractive to a larger group of buyers, URA is repositioning it with some new incentives. They are expecting to make it a 24/7 mixed use district. Mainly for those who want the right balance of work and play. Thus, making the district more friendly and publicly appealing for entertainment.
Inspired by URA, this area is increasingly becoming home to diverse property types. Old offices are converting to mixed developments. Residences and hotels are built to create a more vibrant lifestyle. Boasting excellent connectivity to adjacent developments, this area has a promising future.
The most popular districts in CBD are District 1, District 2, District 6 and District 7.
District 1 – Marina Bay
- Most exclusive and desirable location in Singapore.
- Has huge greenspace for public use.
- Renowned for Formula One Singapore Grand Prix. It is right at the street circuit adjacent to Marina Bay.
- Excellent commute via MRT lines for easy access.
District 2 – Tanjong Pagar
- If you like to be at the centre of action, this is your place.
- High income single professionals find it most attractive.
- Have been recently revamped with state of the art buildings.
- Have multiple residential options.
- Renowned for shop houses and condos with premium facilities.
District 6 – City Hall, Clarke Quay
- Has the best nightlife housing the best clubs, pubs and bars in Singapore.
- Highlights the rich architecture and historical landmarks of the country.
- Such as the Old Supreme Court, City Hall and the oldest port in Singapore.
- The district is bustling with people coming for both work and entertainment.
- Parkview Square, High Street Centre and Peninsula Shopping Centre are some of the attractions. That which pulls people to live in the district.
District 7 – (Bugis, Beach Road)
- District 7 is giving tough competition to District 9.
- The credit for which goes to the launch of South Beach Residences.
- Between 2015-2017, the area saw a significant rise in Grade A offices.
- A lot of new launches are taking place in the area.
- The place has a lot of underutilized land and buildings.
- They are leading to a growing number of en bloc collaborations.
Where can you find your undervalued properties in CBD?
CBD (Downtown) is the most underperforming segment after Southern Island. The 4 districts above are your best bet to find an undervalued property with a price less than the last peak. But you have to go through a sea of listings to get the right undervalued property.
To cut down your work, I have listed the 2 undervalued properties available for sale.
Undervalued properties in CBD (Downtown) available for sale by developers.
Here, I already have the list of undervalued properties in the CBD available for sale.
Check out the pros and cons to decide which property is YOUR Star Unicorn.
The Sail at Marina Bay – To set sail to luxurious living by the sea.
Pros:
- Starting at S$2.6 million.
- Excellent sea view and rich neighbourhood.
- High security and premium amenities.
- Includes sky lounge, pools, spa, gym, tennis court, etc.
- Live life among the elites in Marina Bay’s posh community.
- Marina Bay Sands Complex offers a great shopping experience.
- The Art Science Museum and the landmark architectures make great attractions.
- Marina Bay Sands Skypark, Singapore Flyer and Marina Bay Sands Casino are must insta worthy places.
- Close to banks, restaurants, hospitals, schools and universities catering to your daily needs.
- Directly connected to Raffles Place MRT. And Eastcoast parkway Expressway (ECP) for driving
Marina One Residences – Luscious Big Units
Pros:
- Grand space of 8,708 sq ft.
- Penthouse in premium district CBD.
- Breathtaking sea and marina view.
- Developed by M+S Pte Ltd. A joint venture of Investment Fund Khazanah Nasional and Singapore’s investment company, Temasek Holdings.
- Connected to Marina Coastal Expressway. Thus, opening citywide commute to Marina One residents.
- Integrated development with Grade A offices and MRT link right below the project.
- Therefore, high in demand since mixed developments are at rise.
- Greater chance of good rental yield due to Grade A offices in the building.
- Excellent commute systems via MRT can be a great selling point and rental benefit.
- Moreover, it offers excellent gastronomic and lifestyle options.
Cons:
- The area is in the heart of CBD. There are no nearby schools. So, families with growing children will have to commute farther to attend school.
CBD Underperformed Project Comparison in Historical Price 2007-2021
The Sail at Marina Bay’s growth is 26% lower than an average house’s growth in the area. Thus, making it your probable Star Unicorn in CBD.
Here, I have further analyzed the 2 undervalued properties in the 4 districts mentioned above.
This chart says that the overall CBD area has a growth of 33% from 2007-2021. Compared to that, Marina One is undoubtedly an undervalued property in the area. Because it has a growth of only 9%. Its growth is 24% lower than an average house in the CBD. But surprisingly, The Sail at Marina Bay beat even Marina One. With only 7% growth, it is the most undervalued property in CBD.
If you have to pick your Star Unicorn undervalued property, the two listings I proposed outbid the others in the area. But you have to pick your option fast as they are also in high demand among multiple buyers due to their unique undervalue benefit. Not to mention the foreign buyers who love the CBD area for its strategic location. As it is the financial and business hub of Singapore.
Want to see more listings in the CBD (Downtown) Area?
Downtown Core
The most undervalued area during the last peak is the highest performer in 2021 at 70% growth appreciation.
Downtown Core is the economic and cultural heart of Singapore. The area has many prime office spaces. And a comfortable space for the population to live in. This makes it a round-the-clock commercial district.
On its south side, adjacent to the existing city centre, you will find Marina Bay. The Marina Bay area has been revamped with world-class entertainment and infrastructure. The residents of the Downtown Core area residing on the south side can enjoy these perks as it is close by.
Plus, the Downtown Core area itself has rejuvenated to offer the perfect work-life balance among its residents.
The most popular districts in the Downtown Core Area are District 9, District 10 and District 11.
District 9 – Orchard Road
- The heart of shopping entertainment in Singapore.
- Comprises major stores, boutiques and hotels.
- Known as the commercial hub of the city.
- Boasts prime residential housing.
- Consists of sky high condos and luxurious living.
District 10 – Holland Village
- The bohemian area is an absolute favourite of expats.
- Populated with suburban streets and large family homes.
- Gated secure community, best for family life.
- Minutes away from the Botanical Garden and Orchard Road.
- Have the best schools, art galleries and shops.
- Ample restaurants and cafes with a community village feel.
District 11 – Novena, Newton, Thomson
- Exclusive private housing area.
- Have large reservoirs, renowned schools and religious buildings.
- Easy accessibility with area wide MRT connection.
- Famous for delicious food in Newton Food Centre.
- Novena houses Novena Square shopping mall, sports themed Velocity and kids oriented United Square.
- Has one of the best hospitals, Novena Medical Centre.
Where can you find your undervalued properties in Downtown Core?
Downtown Core is the least underperforming area in CCR. But if you prefer to live here, the Districts above are your safe bet to find the undervalued property you are looking for. Before you start digging up the listings of all 3 districts, I have one ready for you. Check out if you are looking for something like this. Being already the most undervalued property in Downtown Core, if it matches your other requirements, this might be your Star Unicorn!
Undervalued property in Downtown Core available for sale by developers.
Check out the pros and cons to decide which property is YOUR Star Unicorn.
3 Orchard Road by the Park
Pros:
- Starting from S$7.97 million (S$3,528 psf).
- Located at Orchard Boulevard right next to Tanglin Shopping Mall (FH).
- Just 2 minutes away from the future Orchard Boulevard MRT Station. You can live a vibrant lifestyle in the centre of the district with the MRT so nearby.
- The view from 3 Orchard by the Park is a vision in itself with spectacular landmarks all around.
- Park Nova development nearby is the most expensive project in the area. The state of the art development will add to your home’s unique beauty in the future.
- The Cuscaden reserve landmark will add on to the aesthetics of the landscape.
- Selling at a competitive price compared to its premium factor.
- The area is reputed to have one of the highest residential government land sales at 2,377 psf. This is because it is a brand new development by SC Global as well as a 99 year leasehold Cuscaden reserve. Usually, a 4-bed 99-leasehold unit like this sells around S$3,648. In comparison, this is a FH brand new condo. And it is selling at the best value of S$3,528. That too at fully completed, ready to move in condition.
Cons:
- Construction of Cuscaden reserve and Park Nova is going on right beside it. So, you may find it an eye sore, but that is only temporary. Once the construction is completed, these establishments will add to its architectural beauty. This will very well go on to add to your capital appreciation in future if you decide to sell the house.
Downtown Core Underperformed Project Comparison in Historical Price 2014-2021.
Developers have not adjusted the price of 3 Orchard Road by the Park like the rest of the condos in the area. So, you can buy it at 30%, making it the most undervalued property of Downtown Core.
3 Orchard Road by the Park is underperformed by a wide margin compared to the rest of the Orchard Road properties. The overall Orchard road houses have increased by more than 30%. But this condo’s price has not been adjusted much by the developers. Hence, you have the rare opportunity to grab it before the price is adjusted to meet the others in the area.
Want to see more listings in Downtown Core?
Have you found your STAR UNICORN?
If you like any of the undervalued property listings above, enquire here for more details. I offer unbiased consultation so that you get the right house without having to overpay.
Finding an undervalued property with less price than the last peak is a critical task. It demands precise analysis of the market and price index. As well as assessment of individual property prices based on region, area, and district. An expert like me can help you to find the perfect undervalued property for you!