Is 2010 a good year to buy condo?

[kiwi73]

OK so I have been here in SG for 3.5 years now and as everyone told me I should have brought my condo instead of paying rent for last few years.
So due to personal circumstances I am now applying for PR and looking to buy a condo on the east coast area within the next 3-4 months.

Has anyone been tracking general property prices over the last couple of years? I had heard there will be a flood of new properties on the market in 2010 which should result in prices coming down but I am afraid that may be for other areas in SG and not East Coast. I am currently in Tanjong Rhu and love it here, unfortunately the $$/psf is expensive so even for a 1 bedroom condo I am looking at 1M+.

Just looking for some feedback on general outlook in 2010 for private condo sales. Will prices continue to go up, stay as they are or drop slightly? I guess this is the million dollar question right

[revhappy]

High end property prices have gone up significantly in the past 3-6 months in Singapore and Hong Kong and are at bubble levels.

But Mass market prices are still low so there is a good buying opportunity there.

[ProvenPracticalFlexible]

I was pretty much in same situation 9 months ago, and went through the process of learning more about local real estate practices. I'm am by no means a real estate expert, though still think I seem to now know how it works here better than most agents I've met.

Nobody knows what exactly will happen. I personally don’t believe in prices sky rocketing in 2010, nor dropping much either. Now I’m referring to actual prices of signed deals, not the inflated asking prices you see advertised at the moment. There’s about 15-25% air in almost all asking prices compared to the actual URA statistics. The resale market in existing condos have slowed down in last quarter, which can be interpreted that sellers are simply asking too much. I would expect that the prices should remain around the actual evaluation values, maybe a small drop in 2nd quarter, but this is just me guessing. As it is so often mentioned in the newspaper by the "experts" that Singapore real estate market is driven by sentiment (= it is not rational), so it sometimes seems to be more human psychology than anything to do with economics.

Just follow up the condos you are interested in, and when units that suit your need are available go for viewing, get the unit number, size and other details and ask from your bank to get a preliminary evaluation to get an idea what they will loan for it. The evaluators are not from bank, but they’ll happy to help you to find them. Never believe the evaluation values the seller or seller’s agent claim. In my experience there can be easily up to 35% difference compared to the actual evaluation. This will also give you a realistic starting point for negotiations if you find anything you like. Never offer above the evaluation you get, unless you have extra cash in hand.

Please also do not believe any forecasts, justifications from real estate agents or so called professionals (who are unfortunately all the so called experts local newspapers refer to), they will always reason why now is the right time to buy or sell. For them it doesn’t really matter what the price is as long as they get their commission as fast as possible.

As for the question whether it is really a good time to buy for you, that I think is personal as you are buying for yourself to stay and not for investment.

Compare the rent you pay to the mortgage you’d pay monthly. Plus maintenance fees around 300-350 per month seems to be the norm in the east coast area condos. Plus property tax, which for owner occupied units is 4% of assumed annual rent of property, if you rented it out. If the figures don’t match with current very low interest rate loans, than it is not a good time for you to buy.

[Girl_Next_Door]

Personally, I have been monitoring the prices of private properties for a while. I even downloaded the sale prices from the ura website, based on the caveat lodged for the past few years. I re-looked at the numbers again last week, and its not looking good.

Based on my statistics, it seems like between Mar 09 to Nov 09 (last available data), the prices have sky-rocketed substantially. I cannot offer any reasons since my understanding is based purely on statistics. But looking at the current prices, I don't think it will be coming down to the same level as Mar 09 within the next few months.

If you are in no urgency to buy a place, maybe you can hang on for a while. Looking at the prices, it do seems a lot higher now than before.

[ProvenPracticalFlexible]

Based on my statistics, it seems like between Mar 09 to Nov 09 (last available data), the prices have sky-rocketed substantially. I cannot offer any reasons since my understanding is based purely on statistics. But looking at the current prices, I don't think it will be coming down to the same level as Mar 09 within the next few months.

Valid point, but did you try to make sense of the statistics, and ask the question why did that happen? Did you follow at all what has been happening in the World during last 2 years? There was the so called financial meltdown and people waiting for the worst recession after the great depression in the 1930s. Which obviously had an impact on the housing market in Singapore.

As an example for one of the bigger older condos I’ve followed, which has 400 units altogether. In 2007 and 1st half of 2008 the normal number of units sold was about 4-8 per month. At end of 2008 it was 2-3 units changing owners per month. From January to March 2009, only 2 units sold during the whole quarter. This was obviously the rock bottom time, when people who had to sell their apartment for whatever reason where getting desperate, and therefore had to accept lower prices; Result April 3 units, May 4 units and June 6 units sold at the lowest prices for the last 3 years. Now obviously this didn’t go unnoticed and was all reported in newspapers in Singapore, and after that we all know what happened. There were crazy lines around new launches, and asking prices for older ones started going up. That is the irrational element in Singapore called "the sentiment", when everyone jumps in because they’re afraid they’ll miss the right time. When at the same time banks were and still are offering mortgages at record low rates, it made sense to many to buy.

You can learn more about "the sentiment" in financial markets on the very good and educational clip on youtube, which explains it in layman terms
http://www.youtube.com/watch?v=SwRFoxgEcHc

I'd say it is a pretty safe bet that real estate prices are not gonna drop back to the March 2009 level in 2010.

[Girl_Next_Door]

Of course I have my personal theories on the statistics but I am merely preliminary view based on the statistics. I simply choose not to post my personal theories because I haven't validate them, and/or done sufficient research to back it up.

I obviously didn't keep the statistics out of boredom, and I am pretty sure everyone (including myself) is aware of the financial meltdown. But thanks for highlighting that, to those who are not reading the newspapers.

[taxico]

although i'm looking for a new place (thinking of starting a family), i'm not buying yet.

[nyc4ever]

i don't think so. prices will come back down. also, tons of new supply coming online from what i understand in the next 3 years. i just got here 5 months ago from nyc and the real estate market is a bubble just like the us.

[taxico]

...prices will come back down. also, tons of new supply coming online from what i understand in the next 3 years. i just got here 5 months ago from nyc and the real estate market is a bubble just like the us.

nice.