Which Direction Will Property Prices Go ?

petetherock

Moderator
Moderator
Joined
Jan 7, 2007
Messages
9,635
Reaction score
835
Friends
Lets get the property discussions going again, but let's keep it friendly and technical, cheers.

As the current recession deepens and the subsidies fade, the number of job cuts may increase and as a result, the job losses may increase substantially and as a result, there may be more distressed sales.

Even developers may be affected as they need to clear their stock as the deadline approaches.
Notice how the agents always say it's a great time to buy?

However there may be some truth and if you have deep pockets, or have a really solid job, this may be your time ... just make sure you have the means and are able to ride this crisis successfully..
 

petetherock

Moderator
Moderator
Joined
Jan 7, 2007
Messages
9,635
Reaction score
835
The plus side:
Interest rates are low and will remain so for quite a while.
There is a surfeit of homes right now.

The downside:
The immediate future for rentals and capital gain isn't there, but the key is holding power..

But avoid over-committing... you never know..
 

wetdreamx

Arch-Supremacy Member
Joined
Dec 26, 2007
Messages
14,451
Reaction score
767
The plus side:
Interest rates are low and will remain so for quite a while.
There is a surfeit of homes right now.

The downside:
The immediate future for rentals and capital gain isn't there, but the key is holding power..

But avoid over-committing... you never know..

True true....
 

skpuppy

Master Member
Joined
Feb 4, 2017
Messages
3,369
Reaction score
633
Actually I agree with petetherock. Long term (10 years) quite likely to be up but short term don’t know. The trick is to invest for long term. It is also extremely important to find “good” tenants and property agents. Property is an over leverage segment. Government don’t want it to fail because it will affect their beloved banks. If property is like stock market (less leverage), government don’t really care. If investor die, then their problem
 

drkcynic

High Supremacy Member
Joined
Jan 1, 2007
Messages
48,330
Reaction score
17,559
3 rules, holding power, location, entry price - won't go wrong.

Up or down also don't matter, you can ride it out.
 

petetherock

Moderator
Moderator
Joined
Jan 7, 2007
Messages
9,635
Reaction score
835
Actually I agree with petetherock. Long term (10 years) quite likely to be up but short term don’t know. The trick is to invest for long term. It is also extremely important to find “good” tenants and property agents. Property is an over leverage segment. Government don’t want it to fail because it will affect their beloved banks. If property is like stock market (less leverage), government don’t really care. If investor die, then their problem

Currently one issue is that the Covid situation has meant that WFH is a real long term possibility. And that means less need for prime office space, less need for FT and as a result, less demand for rentals.

And the capital appreciation will not be anywhere the heydays of the early 2000s.

So there are other instruments where you can get 2-3% returns. In other words, if committing a million or two towards property feels like a lot, there are alternatives.

As always caveat emptor..
 

pippo20

Master Member
Joined
Oct 22, 2018
Messages
3,519
Reaction score
900
Worse crisis of our time, obvious property price will crash... but.. no, what is there to discuss anymore?
 

normoh

Member
Joined
Dec 1, 2009
Messages
412
Reaction score
160
Property will rise slowly over the coming years, less then 1%, might even dip abit if the Americans keep the orange one or worst, print money like it needs it to replace toilet paper.

Those who are buying now are those who have saved to put the 5%+20% down, a plan 2 to 5 years in the making. Unless they are adversely affected they will still go ahead with the purchase. Reason being the graph that shows the economy bouncing ever higher after a drop.
 

drkcynic

High Supremacy Member
Joined
Jan 1, 2007
Messages
48,330
Reaction score
17,559
Currently one issue is that the Covid situation has meant that WFH is a real long term possibility. And that means less need for prime office space, less need for FT and as a result, less demand for rentals.

And the capital appreciation will not be anywhere the heydays of the early 2000s.

So there are other instruments where you can get 2-3% returns. In other words, if committing a million or two towards property feels like a lot, there are alternatives.

As always caveat emptor..

The thing about property is you can leverage, and while the returns might not be as straightforward as the 2000s or even the early 2010s, you can still make decent gains if you buy the right property.

For myself, the aim is to utilize all my cpf OA to get a property of about 1+m with no cash, or if I want to increase the quantum of the purchase property, add some cash. Then service the monthly with all cpf (from salary contribution) and some cash. Then rent out to get 2-3% nett returns.

A proportion of my cash goes into a more liquid instrument such as etf, for growth. Some into FDs, and some into holding accounts like UOB one account or bonus saver. These monies are more liquid for in case of rainy days.
 

lockks

Supremacy Member
Joined
Nov 1, 2008
Messages
6,187
Reaction score
24
So funny,still got people dreaming thinking property price will drop.

U know hdb resale price is moving up?

U know enbloc owners looking to buy houses to replace the homes?

U know the effect of low interest rates?

Perhaps in your dream then prices will drop.
Already 20 years still got so many people dreaming. Wake up, dont ask obvious qns.
 

petetherock

Moderator
Moderator
Joined
Jan 7, 2007
Messages
9,635
Reaction score
835
This might be the time to buy.. that 5-10% drop in price that will allow you to score that dream home.

And with a low mortgage rate too.*

It won't be hard to find some bank who will give you under 1.6%. In fact some will go lower.

But some things to check first:

- how secure is your job? Is it as secure as you hope it to be?*

- how much do you earn? It may be less now even if you have an iron rice bowl. The bonuses will be different and if you are relying on it for a downpayment, be careful.

- check if the other party has financial issues, and if the place has more than one owner. Fire sales generate good prices, but make sure the place is actually his / her to sell. Get legal to check it. Do Not simply rely on your agent, who may be so hungry to sell that they may neglect to check.

- if you need to sell your own place, the price would have dropped too, so check on whether the budget still fits

- and as for renovations, check on your contractor, some may not survive this, so those one which did a good job the last time may be in danger of collapse too

- finally will there be delays because of lack of materials. Get realistic with the renovation times*
 

NewHerePlz

Junior Member
Joined
Jun 15, 2020
Messages
77
Reaction score
1
So funny,still got people dreaming thinking property price will drop.

U know hdb resale price is moving up?

U know enbloc owners looking to buy houses to replace the homes?

U know the effect of low interest rates?

Perhaps in your dream then prices will drop.
Already 20 years still got so many people dreaming. Wake up, dont ask obvious qns.

prices may not move up that much in the near future (2-4yrs)... like you buy 1.7k psf for a 2 bedder and expect it to sell at 1.9-2k psf within this timeline..

but agree that this 1.7k psf should not drop or decrease in value within the same time span as well all things the same with no war or another super virus...
 

petetherock

Moderator
Moderator
Joined
Jan 7, 2007
Messages
9,635
Reaction score
835
So funny,still got people dreaming thinking property price will drop.

U know hdb resale price is moving up?

U know enbloc owners looking to buy houses to replace the homes?

U know the effect of low interest rates?

Perhaps in your dream then prices will drop.
Already 20 years still got so many people dreaming. Wake up, dont ask obvious qns.

Don't celebrate yet... if things really go south, no one will be happy if the economy tanks and prices really go down..
 

skpuppy

Master Member
Joined
Feb 4, 2017
Messages
3,369
Reaction score
633
So funny,still got people dreaming thinking property price will drop.

U know hdb resale price is moving up?

U know enbloc owners looking to buy houses to replace the homes?

U know the effect of low interest rates?

Perhaps in your dream then prices will drop.
Already 20 years still got so many people dreaming. Wake up, dont ask obvious qns.

Well, that is the situation right now. But bubble and crash comes when ppl are least expected so don’t be arrogant. Personally I won’t invest in additional properties:

(1) You put in ABSD and I already lost $ upfront
(2) Uncertainties ahead. Already cheong so long, how much can it continue to cheong? The possibility of upside vs downside?
(3) Without the massive printing of $, quite likely property already down 10-20%

The almost 0% interest rate is sustaining this very well. Can we go negative interest rate? Does it make sense?

Seriously I don’t know.
 

wetdreamx

Arch-Supremacy Member
Joined
Dec 26, 2007
Messages
14,451
Reaction score
767
This might be the time to buy.. that 5-10% drop in price that will allow you to score that dream home.

And with a low mortgage rate too.*

It won't be hard to find some bank who will give you under 1.6%. In fact some will go lower.

But some things to check first:

- how secure is your job? Is it as secure as you hope it to be?*

- how much do you earn? It may be less now even if you have an iron rice bowl. The bonuses will be different and if you are relying on it for a downpayment, be careful.

- check if the other party has financial issues, and if the place has more than one owner. Fire sales generate good prices, but make sure the place is actually his / her to sell. Get legal to check it. Do Not simply rely on your agent, who may be so hungry to sell that they may neglect to check.

- if you need to sell your own place, the price would have dropped too, so check on whether the budget still fits

- and as for renovations, check on your contractor, some may not survive this, so those one which did a good job the last time may be in danger of collapse too

- finally will there be delays because of lack of materials. Get realistic with the renovation times*

Steady bookmarked .
 

surferpunk

Member
Joined
Oct 25, 2005
Messages
440
Reaction score
4
Will only go up. Govt has a lot of ammo of cooling measures to release. They smart. They waiting for property market to go into a proper correction before restabilising it back up.

Reasons for appreciation
1) Cheap interest
2) Rising number of high earning Singaporeans
3) "Stable" economy, even more foreign money parking here during recession.
4) Current oversupply but may be going to undersupply in about 5 years time
5) stringent loans now, less ppl overleveraging

Reasons to go down
1) Lesser FT now, rental may drop
2) retrenchment, but numbers may not be enough for private property market.
3) panic sellers
 

momoeagle

Master Member
Joined
Nov 1, 2007
Messages
2,787
Reaction score
509
Will only go up. Govt has a lot of ammo of cooling measures to release. They smart. They waiting for property market to go into a proper correction before restabilising it back up.

Reasons for appreciation
1) Cheap interest
2) Rising number of high earning Singaporeans
3) "Stable" economy, even more foreign money parking here during recession.
4) Current oversupply but may be going to undersupply in about 5 years time
5) stringent loans now, less ppl overleveraging

Reasons to go down
1) Lesser FT now, rental may drop
2) retrenchment, but numbers may not be enough for private property market.
3) panic sellers

One more reason to appreciate
6) Raising income ceiling for HDBs and ECs.
It is a signal that ah gong wants the prices to increase since max loan increases and more affluent Singaporeans are now able to purchase ECs.

Imagine Piermont still has about 40 units left that are around 1500 sqft, costing around $1.65mil, and still need to add stamp duty 50k+. And if second time buyer, maybe another $40k resale levy.

A cool total of $1.74mil.
$14k ceiling can loan max $935k --> Upfront cash + CPF needs to be $800k
-> Take away $350k HDB sale proceeds (assuming not fully paid) = $550k needed

$16k ceiling can loan max $1.07 mil --> Upfront cash + CPF easier at $670k
-> Take away $350k HDB sale proceeds (assuming not fully paid) = $320k needed


I would not be surprised that at the rate of increase of EC ceiling ($12k to $14k in 2015, $14k to $16k in 2019), they may raise it to $18k by 2023.
And

$18k ceiling can loan max $1.2 mil --> Upfront cash + CPF at $540k
-> Take away $350k HDB sale proceeds (assuming not fully paid) = $190k needed

And... PG TOP in 2023.
And... then they launch new ECs at $1.2k to $1.4k psf by then.



Although I do hope that property prices of new launches drop given that I'm looking to upgrade to a property bigger than my current 5-rm, it doesn't seem that current govt policy will enable that to happen.

The only thing I can do now is to work smarter to bring in more income.
 

petetherock

Moderator
Moderator
Joined
Jan 7, 2007
Messages
9,635
Reaction score
835
Whilst property may seem like a sure bet to park your money, it is often because owners don't explore other options.
Remember to add all kinds of costs and see if other options can deliver 2.5% and higher.
Otherwise even CPF will give you that.
 
Important Forum Advisory Note
This forum is moderated by volunteer moderators who will react only to members' feedback on posts. Moderators are not employees or representatives of HWZ. Forum members and moderators are responsible for their own posts.

Please refer to our Community Guidelines and Standards, Terms of Service and Member T&Cs for more information.
Top