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We Just Ranked Every Single Home in Singapore

By May 26, 2020July 3rd, 2020No Comments

How did we rank all the properties in Singapore? There are two main reasons why we could achieve this huge feat. The first being, a complete dataset of all the homes in Singapore. The second important factor is that we have an Artificial Intelligence model (ZoomValue) to predict the price of every home in Singapore. We have explained in detail of how we made this happen in our previous post. (Click here to read more about the study)

Singapore’s housing market can be broken down in many ways. One such way is the type of housing.

The three main housing categories are:

  1. HDB

  2. Condos

  3. Landed

Singapore Property Market Value

As seen from the chart above, in terms of total value, Condos account for the biggest share. As such, let’s first dive into the Singaporean Condominiums.

Singapore Condos can be further differentiated by their tenure. Condos can be leasehold or freehold depending on how many years they have in their tenure. Leasehold Condos have about less than 900 years of lease available, whereas Freehold properties tend to have more than 900+ years of lease. As a result, Freehold properties lean towards the expensive side of the price spectrum.

Freehold Condo properties are quite rare as land in Singapore is scarce. With that said, what is the percentage of Freehold Condominiums to leasehold ones?

Condo_Tenure

More than half of Singaporean Condos have a Leasehold Tenure. There are only 40% of Freehold Condos.

Freehold condos are a clear minority in terms of the number of total units. However, when we segment the data in terms of the total value of Condos. We observe a totally new picture:

Condo_Tenure_Value
Median_Area_Condo

As you can see from our chart, the median area of a Freehold condo unit is about 1260 sqft as compared to the 1120 sqft of a leasehold condo unit.

But not only are Freehold Condo units bigger in size, the price per squarefoot ($PSF) is also higher in Freehold units.

PSF_Condo_Tenure

The bigger size of apartments and the higher PSF pricing clearly explains why Freehold Condos are more costly than their leasehold counterparts.

Well looking at the median values is a great way to understand the Condo market on a Macro Level. However, one of the most important factors that drives up/down the price is the location of the property. A good location leasehold unit say in Orchard is much more valuable than a freehold unit in Tampines.

Location&Tenure

We would be able to get the full picture by slicing the Condo data by the postal districts.

Condo District Level

As you can see from the chart, the prime areas such as District 9,10 & 11 have a PSF from $1600 onwards. It’s interesting to note that the highest PSF is actually from District 1, which are the condo properties in the Marina and Raffles Place areas.

In terms of the number of Units, District 19 (Sengkang & Punggol) has the greatest number of Condo units at a very affordable median PSF. So, if you want to live in a condo and not spend a fortune you might want consider District 19 condos.

Now that we have covered a substantial amount about the Condo market. Let’s move on to the HDB market where the majority of Singaporeans reside in.

Total_HDB_Value_By_Towns

By taking a look at the combined value of HDBs in the HDB Towns, we found out that Tampines is the most valuable HDB Town at S$42b! The high value could most likely be attributed to the higher number of units in Tampines HDB Town. What if we take a look at the median PSF for each HDB town?

Median_PSF_HDB_Towns

The HDBs in the Central and Bukit Timah Area come on top at about S$600/PSF. On the other side of the spectrum, we have the heartlands such as Woodlands and Choa Chu Kang with the cheapest PSF.

What if we broke down the Total HDB value by the different Flat Types ( 3 Room/ 4 Room)?

Kaypoh AuntyI love to read a book called: Facebook
HDB_Room_Types

That is surely possible. 4 Room units account for about S$218b. This could have been due to the high number of 4 Room HDB units in Singapore.

In fact, there is an endless number of ways that we can segment and slice this data. We are already planning to create multiple videos where we dive deeper into each and every town to find out interesting trends. Since we have the value of all the homes in Singapore, we are able to rank all these homes. So what did we find out?

Home_Ranking

We ranked every home in Singapore from the cheapest to the most expensive unit. The cheapest HDB is about S$100k, there is a gradual increase in HDB prices because of the homogenous HDB prices. When we reach the $500k mark, that is when we get to see the initial Condo units coming in. The Condos are increasing at a much rapid speed as compared to the HDBs. The landed houses make their grand entrance at about the S$1.5m mark and the prices just blast off as if they are on nitro boost.

Now some of you might actually wonder, why is the most expensive Landed is only S$29m? In fact, our visualization tool was not capable enough to take in 1.6 million rows of data. Thus, for us to run this animation without the tool crashing we had to bunch up every 1000 properties and take their median prices. This is the reason why the most extreme values like where the Crazy Rich Asians live can’t be seen from this visualization.

Wow the rich is so much richer than the others.

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Well, we actually come to a different conclusion. In fact, a more hopeful one. Have you guys heard about the power law (AKA Pareto Law): the top 20% account for the 80% of the total value. This law is used in many different domains and especially used to explain wealth distribution. (20% of the world population hold 80% of the total wealth). So does the Pareto law hold in the Singapore Housing Market?

Pareto_Law_SG

There is certainly some faith left in humanity. We found that the top 20% of the units only account for 57% of Singapore’s total housing value. But why is this so? Well, we believe that this a proof that the HDB asset class offers a substantial asset base to the lower to middle-income families in Singapore.

Many of you might not have been able to grasp Singapore’s total housing value as S$1.43 Trillion. It’s quite a lot of money that is for sure. Let’s make more sense of this total housing value by comparing it with Singapore GDP.

Singapore’s 2018 GDP is S$491b, that gives us a 2.9x multiple of our housing stock relative to our GDP? Is a multiple of 2.9x too big or too small?

SG_GDP_Multiple

To get a better understanding, let’s compare our Housing Stock GDP multiple to that of United States.

US_SG_Comparison

Based on Zillow’s estimation: United States’ total housing value is worth USD $33.3 Trillion, which is about 30 times bigger than Singapore’s total housing value.

Now that we know the Total Housing Stock in United States, what is the US GDP multiple?

GDP_Multiple

United States GDP multiple is 1.6x as compared to Singapore’s 2.9x. Why is this the case?

Singapore’s GDP multiple is much higher than that of United States because of two main factors.

1.Singapore has a better savings rate

Savings_Rate_Comparison

Singapore’s savings rate is about 48% while US is about 3 times smaller at 17%. The formation of assets is heavily linked to savings. The more savings you have the more you are willing to invest in a home.  Hence, this is the first reason why our GDP multiple is much bigger than that of US.

2. High Home Ownership Values in SG

Home_Ownership_Comparison

Singapore has 90% of home ownership in contrast to US with just 65% of their population that have their heads under a roof. Therefore, we have a higher affinity towards owning a property.

These are the main factors on why our Housing Stock – GDP multiple is much higher than that of United States. Most of Singaporeans’ wealth is accrued and manifested in the form of real estate as a financial asset class.

With all these valuable insights, we have built a product called the neighborhood intelligence report.

In this report we would be covering the following:

1. The Distribution of household income

  • Since we know the value of each home in Singapore. We are able to estimate the household income of each housing unit.
ZV_Family_Income

For instance, if you gave us any postal code, we can let you know the number of households and distribution of their household income within a 500m radius.

Map_Locality

2.Footfall Data

  • The patterns of traffic movement during the different timings of the day

3.Many More…

 

All this information would be valuable to anyone who is planning to invest in a certain area and wants to find out more about the different locations before investing huge amounts in their venture.

That sums up this piece. We have put in great effort into this study and we hope you gained as much information as you can. Stay tuned for more property-related data insights.

This is just one of the many interesting studies we are doing at UrbanZoom. We will be sharing more articles such as this one, full of juicy property insights. Sign up to our newsletter so that you don’t miss out on our future articles!

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