Buying behaviours

There has always been something illogical about the buying behaviours of Singaporeans in the property market.

Investors always caution against judging a product by its face value, looking thoroughly instead at its intrinsic value. But how does this theory measure up in our property segment?

Besides being well known in recent times for having a speculative environment, home buyers in Singapore also tend to buy based to "prestige" instead of the true-to-bid-rent-theory "location".

Don't get me wrong. Of course residential sites in prime areas in close proximity still do well. But you may be surprised at the amount of "forgotten enclaves" within the city. Is this a sign that Singapore might be experiencing what urban surveyors call inner-city decline that used to only affect long-surviving cities?

Take for example Newton and Little India. Newton is known for all its glitzy condos, often selling at record prices in recent times (with Lincoln Suites and more recently, L'viv selling at more than $2000 psf). Little India, on the other hand...the location seems almost to be left in the past. Little India is actually much closer to the city.

Of course properties in Little India would command less than desired prices you might say...what if I tweak the scenario a bit to include Cambridge Rd or even Mackenzie Rd areas into the comparison? You will be shocked to find a freehold condo along these above mentioned roads selling at barely $550 psf, compared to the average of $1500 psf in Newton and Mount Sophia respectively, barely just a few hundred metres away.

Once again, this is to be expected, as "face" indeed plays an important aspect for a Singaporean household.