I wanted to write a post on the property market in Singapore but realized that a single post will be too long. I think I shall do a “trilogy”.
HDB
It’s never a secret that there will be a bumper supply of Build To Order (BTO) flats this year and next year. This is to alleviate the pent-up demand of citizens who long to own a home and for the minority group of citizens who are planning to upgrade.
However, what does this means?
With greater supply and if demand is not there, the price will drop. Before price drop, Cash Over Valuation will drop first. Will the property market crash and hence send the price spiraling down?
Unlikely.
With a great proportion of Singaporeans owning their own homes, it will not be in Government’s interest to see a crash in the property sector. There should be a lot more resales this year.
Executive Condo are in the news recently, if you are looking for a big size unit in a EC, go for it now as there may be curbs on new projects.
For rental, if one is not too picky with the tenants’ profile and expectation is decent, it should be quite easy to rent out your unit. Despite the recent ruling on PR renting out the whole unit, it should not have a great impact.
My 2 cents worth: If you own a HDB now, you may wish to consider upgrading to a Executive Condo or a private property if you can, as the price difference in term of PSF is pretty narrow now.
Private Non-Landed
There were a lot of new project launches last year and many more to come this year. People are buying properties due to the low interest rates and the dismal interest rates in saving and fixed deposit accounts.
Owning a property with other’s people money (OPM) is always attractive. OPM in layman’s terms are tenants.
Rentals may stagnate but with the Government targeting a population of 6 million, investors should able to rent out their units.
My 2 cents worth: Property is all about location, location and location. If you are buying for investment purpose, do it prudently. Are you able to get tenants for your unit? What is the ‘catchment’ area? Is your unit near to MRT/bus interchange? Near any amenities? Do not over stretch yourself and do cater for at least 6 months buffer of bank repayment.
There is never a best time to buy but there is always a wrong time to sell! And the wrong time is when you sell at a loss! Do consult a trusted Real Estate Salesperson (aka property agent) to determine what projects are good buys.
Private Landed
Supply is always limited for obvious reasons.
Landed are great for capital appreciation (due to supply) but I cannot say the same for rental yield. Astute investors are looking for run down homes, which after a makeover, will definitively have a greater appreciation.
My 2 cents worth: The ultimate dream of all Singaporeans (almost, I guess). This is a very long term investment.
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