Current Property Market Situation: - Some property consultants and agents tell owners to sell as property prices are coming down. Interest rate will rise. Market will crash. Some owners took action early and they sold. They rent and wait for prices to come down. Prices did come down but did not come down enough and so they wait for a good bargain to buy. They wait for market to crash and in the meantime, they pay costly rent. Some owners want to sell at their own prices and did not get to sell and so they waited for buyers to come by. Slowly the owners start to lower their expectation but still they cant sell because buyers also slowly raise their expectation. Their expectations never meet. Until finally, some owners decided to give up and not to sell as they think they might as well rent out if they can afford to hold and in any case over longer run, Singapore will have 6.9m people ... property prices can never go wrong over longer run. They can easily find all these justifications from some other agents and FB postings. But buyers are still not buying because they think they can wait, its a buyers market they say ... they want to wait for market crash. The Government tell them its too early. Prices have moderated but its still early. There is no crash. Interest rate will rise for sure. Market for sure will crash some day but no one really know when is that day. It could be next year or it could be a few years later. No one know. But how many will benefit from a crash? May be 5% of owners need to do fire sale because they are overstretched. But 90% of buyers today think they can be that 5% lucky buyers. Many think they have the luck. Even if some may have the luck presented to them, they may not have the courage to buy when it really happens. I will bet many dare not to push that buy button and miss the chance away. Foreigners are smart too. They are not buying. They rent and they said they will wait for Government to reduce stamp duty. The Government is waiting too. They said prices still have not really come down although moderated. But transactions reduced a lot. Sill the Government want to wait and not taking action as they see prices still at just moderated level. Everybody is waiting. Everybody is smart. Everybody is in the know because information is readily available and transparent. Everybody is too scared to make mistake. But no action = stagnant market = stagnant prices. This can be prolonged and go on and on for years really. But what have you missed out? You may have missed out selling at a profit. You may have missed out buying a good investment yield. You may have missed out saving on interest costs. You may have missed out your choice unit. You may have missed out your dream. An unknown is an unknown. Dont try too hard. Have a measurable plan. Do your plan and if it meets your plan, just do it - whether it is a sale, a purchase or a rental. For eg, if your plan is buy a property with a yield enough to cover your monthly loan instalment over 30-yr 80% loan based on say you think interest rate will not go beyond 4%, then the required yield is about 4.6%. If any property can meet at least 4.6% yield, then you should proceed to buy in accordance with your plan instead of waiting indefinitely for an unknown event.
Posted on: Sun, 31 Aug 2014 15:57:07 +0000
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