One of the two property questions I received these days is whether we can buy properties now. There are 3 reasons why people ask this question:
1) They are buying for personal reasons;
2) They think it’s time to buy now; or
3) They are looking for an investment.
By answering their burning question, I will also clarify the following in this video:
1. What is the safest property to buy at this moment?
2. What criteria you should set now when buying a private home for your own stay?
3. Why this time the crisis is very different from the previous ones?
4. Which group of people can say any time is a good time for them to buy?
5. Who are still buying up financial assets these days and holding up their prices?
6. What are the 4 important lessons we learned from negative oil prices?
7. What type of property you really can’t buy now and why?
8. Why the May 6 ABSD relief is bad news for developers and new project owners?
9. What are the 5 implications when buyers enter the market now?
You can now watch the podcast below. The video comes with full script or subtitles. If you are watching from your mobile, make sure that the “Caption” function is on. If you are on your desktop, turn on the “cc” button – the leftmost button at the bottom right hand corner.
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Maybe your topic for next podcast : when and who do you think will blink first?
Thanks for your suggestion. I tend to believe that, instead of who to blink first, this time we have to prepare to go through a long period of downturn esoecially the property market, and all stakeholders will be affected.
The top agents are now selling the point that the developer are selling new launch at very little or almost no margin to their cost. Therefore lowering their selling price is almost likely. One of them said in a zoom meeting that we would be ‘very very’ lucky to get a 3-5%dicount based on current economic situation.
Seems like developer are to taking huge risk.lol
Thanks for the update. The fact is some new projects have already started giving discounts to new buyers even before the Covid-19. The problem is: If your competitors in the same area or the same property type are slashing prices, why would the tiny pool of buyers buy from you if you still stay firm with your pricing?
I don’t believe that they don’t have margin to further lower the sell price. These agents must have a ‘Skin in the game’ to ask buyers to buy now.
Hi I am looking for the purchase of our first property with my fiancee as we are planning to settle down soon.
As we will not like to overextend ourselves by buying private in view of the ongoing economic uncertainty, most likely we are looking at HDB.
As a seasoned investor, what are your thoughts on the impact of this ongoing pandemic on HDB BTOs and the HDB resale market?
We are pretty confused as first-time property buyers.
Thanks for your help!!
Just check whether you can meet the three criteria of my 3-3-5 affordability rule before you buy -> https://www.propertysoul.com/2014/06/20/can-you-afford-your-dream-home-after-taking-the-3-3-5-test/
Hi Vina, would love to get your views on returned units and how one can find it from ura or sla
Please check my the content and the comment section of my earlier blog post -> https://www.propertysoul.com/2020/02/24/truth-in-new-launches/
Hi Vina,
Thanks for video, informative as always, Slight comment, speaking to a microphone will definitely improve your video recording, Your recording has a lot of echo which makes it a little hard to follow at times.
On the property front, it seems that the low interest rate environment is likely to stay for a long time to come, and this indirectly helps existing owners to hold onto their current properties. Developers in Sg are very rich and they will not give discount till the very last minute. Some of them have also managed to bypass all the ABSD by selling into funds to prop up their prices when they reach their deadline.
The other major factor for property prices drop is when there is massive unemployment, when owners lose their jobs and are forced to sell. In such cases, low interest rates are unlikely to help them too. If they are thinly stretched, they will be forced to sell. This is where, things are still not very clear it seems. So far, I believe the bulk of retrenchments seem to be happening to the lower paying jobs like F&B and retail staff, drivers, travel related businesses and probably the oil related companies too. The local banks have came out to say there will be no retrenchments. Unlike the GFC of 2009, there were massive layoffs in the finance and banking industry, and these are the people who own more properties and the impact was clearly shown in the prices.
I am also comptemplating to buy a property and still wondering how much price would drop from this crisis. How long would you envision a period to wait to see if indeed the market will correct substantially. Eg, if after one year and the prices have not dropped substantially, would you see that as a time to enter the market? I dont own any property, so it would be a property to stay but also hope that there is price appreciation moving forward.
Thanks. Because of recording outside the bedroom, the halls are too big for my voice. I have bought a mic so hopefully can solve the sound problem.
I don’t think interest rate is a concern when investing in properties. Remember interest rates escalated like crazy in 2006 and 2007 and residential property prices kept climbing? If tenants were willing to pay higher rent, who cares about higher interest rate? When I bought between 2002 and 2004, interest rates were much lower than now yet no one was buying. Who wants to be a landlord if there is no tenant and low rent?
I don’t think all developers who bought land here in 2017 and 2018 are doing well. I am not talking about the few SGX-listed and government-linked ones. Did you see the URA recent month developer sales, debt ratio and bond maturity of local boutique developers and foreign developers? Banks can extend the loans’ due date to make their bad debt look not so bad. But they can’t do it for too long.
Why would companies retrench their staff now when they could get government support grant for these few months? It is 75% of salaries for April and May. Just go for 30 percent pay cut for any one above the threshold of S$4,600. Of course there is “no retrenchment”. Why waste money for retrenchment package when you can opt for pay cut, unpaid leave and stop renewal of all contract staff? And just like the Seedly article said “being afraid to buy and not spend is a bigger problem than not having the money to spend”.
It is not about the price but the supply and demand. Why do I buy properties if the fundamentals aren’t looking better and the numbers don’t work?