UrbanZoom's AI Puts Current Combined Value Of All Residential Property In Singapore At S$1.43 Trillion
First-of-its-kind study based on ZoomValues (AI-based auto-valuations) of more than 1.6 million individual HDB, condo and landed properties
UrbanZoom, an AI-first property data analytics startup, has published a first-of-its-kind study on the entire residential property market with a bottom-up approach that accounts for every known residential address in Singapore, including 1.2m HDB units, 350k condo apartments and 80k landed properties.
"In 2018, we launched ZoomValue, a highly accurate auto-valuation tool, which has since been adopted in various capacities by banks such as DBS, OCBC as well as startups like MoneySmart, generating more than S$500 billion worth of auto-valuations in the process. Originally just targeting HDB and condo units with median error rates below 3%, we've made a recent breakthrough in our algorithm for landed properties, bringing its median error rate from double-digits to 7%." explains Michael Cho, founder of UrbanZoom.
"Meanwhile, we've also amassed, to our best efforts, a dataset from various public and private sources of every homes in Singapore, be it completed or under construction. Coupled with our ZoomValue AI, we now have the capability to calculate an estimate of the combined value of entire housing stock in Singapore, by running our algorithm unit by unit and adding them all up." adds Michael Cho.
Caption: A map showing the median ZoomValue (per square foot) of every residential postal codes in Singapore
Home Worth Distribution
In aggregate, UrbanZoom's AI values the entire housing stock in Singapore at S$1.43 trillion, spread across S$597 billion of condo apartments (41%), S$525 billion of HDB units (37%) and S$312 billion of landed properties (22%).
In terms of individual valuations, HDB (among 1.2m units) has a median value of S$390k, while condo (among 350k units) has a median value of S$1.3m and landed properties (among 80k units) has a median value of S$2.7m.
"We don't quite see the full 80/20 Rule or Pareto Law here, with the most expensive 20% homes accounting for just 57% (S$818 billion) of the entire housing stock. This is a testament to the success of the HDB program, which has provided a substantial asset base for the middle to lower-income households here." elaborates Michael Cho.
Caption: Distribution of ZoomValues across HDB, condo and landed properties
The study also found that S$57 billion of condo properties are under construction or announced for future sale, adding to the existing condo housing stock worth $539 billion. In contrast, only S$25 billion of HDB units are under construction in the BTO programs, adding to the existing HDB housing stock worth $500 billion.
"From a value perspective, the upcoming supply for condo units are significant, contributing more than 10% of new condo housing, while upcoming BTOs in HDB represents a more manageable 5% new stock coming online." adds Michael Cho.
One way to interpret the size of the national housing market is to compare against GDP figures. With Singapore's GDP standing at S$491 million in 2018, the S$1.43 trillion housing stock represents a 2.9x housing-to-GDP multiple. In contrast, the US market sees a relatively modest 1.6x housing-to-GDP multiple, according to data from Zillow, a prominent property listing and data portal in US.
"Singapore's high gross savings rate, at 48% vs US's 17%, and high ownership, at 91% vs US's 65%, coupled with the local population's affinity to property, likely contributed to the high multiple of the nation's household wealth being accrued to and manifesting in the form of residential real estate assets." explains Michael Cho.
Another way to make sense of this data is to compare the current value of the entire housing stock against outstanding housing loans. According to the latest figures from MAS and HDB, the combined utilized housing loans from banks and HDB add up to S$245 billion. This represents a very healthy look-through loan-to-value ratio of merely 17%, or a net equity position of S$1.19 trillion.
Neighborhood Intelligence Report & ZoomValue Rank Calculator
In conjunction with the release of this whole market study, UrbanZoom is launching an enterprise-level Neighborhood Intelligence Report, which takes advantage of the underlying data insights.
"A home valuation can be interpreted as a close proxy to the earning power of the household staying at that property. Given our knowledge of the distribution of nearly every homes in Singapore, we can generate a comprehensive breakdown of the demographics of any given area. Combined with other geo-tagged data such as transport and footfall patterns, we believe our Neighborhood Intelligence Report could help big retailers, landlords, urban planners, etc make more informed decisions." explains Michael Cho.
The general public may also find out how their own home's ZoomValue rank amongst all other 1.6m homes in Singapore from the UrbanZoom.com website.
"Our hope is that new insights can be gained from these new data points, aided by advancement in machine learning and data analytics. Hopefully, stakeholders from big enterprises to individual home owners will benefit as they make more informed decisions with these data, not just in Singapore, but hopefully for other markets in Southeast Asia in the future too as we expand our research to other cities." concludes Michael Cho.
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UrbanZoom is an AI-enabled research tool for home buyers, sellers, landlords and tenants in Singapore.
We are a team of data scientists and real estate professionals who are passionate about bringing full information transparency and actionable insights to the housing market.
We believe in empowering the man on the street so that he can be free of misinformation and fear when he’s about to commit to one of the biggest financial decisions of his lifetime.
For more on our team’s philosophy, take a look at our blog post here.