Micro factors affecting property prices – Singapore property for rent/ sale
Singapore property for rent/ sale – Micro factors affect the prices of the property more directly such as the location, tenure, age, physical attributes, environment and economic obsolescence. The micro factors affecting property prices are as follows: Singapore property for rent/ sale.
- Location and location within location
The single most important factor is the location because of the immobility of real property. Location is the key factor for buyers to consider before making their decision to buy or rent. For dwelling, a location within walking distance to school, market, shopping mall, bus stop, MRT station offer convenience and time saving. The selling price of such a property is usually higher than that of a poorer location. For a retailer, a location within a location, say a ground floor unit fronting main entrance is an important factor for human traffic, visibility and identification. The units on different floor and visibility come with different premium.
- Tenure
Tenure is a very important factor that will affect the value of a property. Property with tenure of freehold status has a premium over leasehold, all else being equal.
- Age and condition
A newer property may command a higher price compared to an older property which may require major renovation. A property that is in bad condition may have to be priced lower as a buyer will factor in the renovation cost into the offer price. Conversely, a well renovated property will be able to fetch a higher price compared to one without any renovation for Singapore property for rent/ sale.
- Design and quality of fixtures
The design and quality of the fixtures including the layout of a property may have a impact on the value of the property especially luxurious properties designed to have a high class look and feel.
- Built-in area
The built-in area refers to the floor area within a unit. A unit with larger area is obviously going to cost more than a smaller unit. A unit with more bedrooms is going to be more valuation than a unit with fewer bedrooms even though they are of the same size for Singapore property for rent/ sale.
- Height and view
The height of a property is applicable more for a tall building such as a condominium. Generally, the higher the floor, the more expensive it is because of the commanding view.
- Orientation
Orientation refers to the direction of the property facing. Generally buyers inSingaporedo not favour west facing because of the hot afternoon sun. Pool view, greenery and sea view units will generally have a higher value than their neighbour without such view. The value of properties facing a highway will be negatively impacted due to the noise. Singapore property for rent/ sale.
- Environment, accessibility and facilities
Residential environment and neighborhood is a reflection of a person’s social status. Property prices in such high social status locations will tend to be much more expensive. Accessibility to highway, transportation, schools, main roads are generally preferred for Singapore property for rent/ sale. Condos or apartments with facilities such as tennis court, swimming pool and gym are generally preferred by buyers.
- Economic, Functional and Physical Obsolescence
Economic Obsolescence occurs when the environment around the property changes and causes the value of the property to diminish e.g. change in zoning on neighboring land from residential to industrial.
Functional Obsolescence refers to poor/outdated design, layout, size that are no longer popular resulting in a reduction in demand and value e.g. one toilet for a 3-bedroom apartment.
Physical Obsolescence refers to a property that is deemed to be physically in a very bad shape and it would cost more to repair than rebuilt due to gross mismanagement and physical neglect.
- Influence of a corner
For a residential property in Singapore property for rent/ sale, a corner unit may be more valuable because they have more opening for air and light. On the other hand, if it is located at a road junction, there may be more noise and air pollution due to heavier traffic thereby affecting its value. As for a commercial property, a corner unit at a road junction is usually more favourable because of higher traffic from two roads. The commercial property will be more prominent and the human traffic is higher.
In the case of a plot of land, factors that can affect the value of the land are the size, shape, frontage, topography and soil condition as follows:
- Size
The size of a lot is dependent on the width and depth. Generally, the wider or deeper is the side, the more valuable it is. Residential property normally prefers to have more depth unlike a retail shop which prefers more width to display their goods. For commercial properties, the space near the front is more valuable than the space at the back.
- Shape
The shape of a lot affects the value of the lot. Generally, lots with odd or regular shapes are difficult to develop and would usually fetch a lower value compared to a lot of regular size. For example, a triangular plot may result in building with some odd corners, inefficient use of indoor floor space and an increase in construction costs for Singapore property for rent/ sale.
- Frontage
The frontage of a lot usually refers to the boundary facing the road. If all things are equal, the wider is the frontage, the more valuable is the plot especially for commercial properties.
- Topography and soil condition
The topography will affect the value of the lot. If it is very undulating, it would be more costly to have more refills and digging to make the surface regular. Hence, the value of the plot will be lower because it will cost more to develop. If it is a high ground, the value would be higher because it provides more scenic view and privacy.
The condition of the soil will also affect the development costs. If the soil is unstable, deeper piles may have to be installed to support the building structure. The top soil will also affect the type of landscaping and the intensity of the drainage system to install on site. Singapore property for rent/ sale.
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