The truth is that the price you pay for a property in Singapore (and elsewhere) is not necessarily its value.
There are many other factors that can affect property value – these can be related to its environment or to the property itself.
When buying a new home, what external factors should you look out for to ensure your property value appreciates over the years?
We at GET.com show you the 5 main external factors that affect property value.
This is one key factor in driving up property value. Most people pay for a centralised location near town or the Central Business District.
For instance, a 4-room HDB flat in Tanjong Pagar is very likely to fetch a higher price than a 5-room flat in SengKang.
2. Access To Transportation
We all know that it is extremely expensive to own a car here, so public transport is the main type of transportation that people use to commute on a daily basis.
If you home is near an MRT or has many direct buses to town, you can expect it to have a better value compared to one further away from accessible public transport.
This is also known as the "MRT Effect", where properties nearer to the MRT command a premium.
This is also a reason why homes which have had the good fortune of enjoying the new lines of MRT (circle and downtown) seem to have a new lease of life and saw their value rise.
However, there is a downside to being near the MRT as well. There are other considerations such as the noise level created by being near a main road or the MRT track, which could subsequently reduce the quality of living for the owner, as well as the property value.
3. Value Of Neighbourhood Property
Transaction prices of nearby properties have been known as a well-used indicator for a property's value.
If a similar unit nearby fetched a good value, you can expect to use that as a justification to ask for a higher valuation of your own property.
This could be the direction your flat is facing or how your apartment is shaped (square or L-shaped).
The direction your unit is facing can be a concern because most people try to avoid a place where the living rooms are directly facing the morning or evening sun, which can warm up the apartment and make it uncomfortable for the owners.
5. Nearby Amenities
Everyone loves convenience, and if you are already staying slightly away from town, you would want to be able to buy your daily necessities near your home.
Thus, many people look for supermarts, the availability of food courts as well as sporting facilities near their place. The presence of quality educational institutions can be a criteria for parents as well.
In recent years, more and more potential property buyers look at the Urban Redevelopment Authority's Master Plan as a guide to forecasting the value of properties.
The building of a new mega-mall, bus terminal or MRT station will likely inflate the value of nearby properties.
Similarly, the building of a crematorium will adversely affect nearby home values as well, so it is worthwhile to take your time to do some research.