To buy or not to buy?

Discuss about where to live, renting a property, tenancy issues, property trend and property investment in Singapore.
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InTheBlue
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To buy or not to buy?

Post by InTheBlue » Fri, 31 Dec 2010 12:23 pm

I've had a lot of conflicting opinions about buying a condo in Singapore.

Several friends think that the market has a long way to go up as Singapore is bringing in more and more people and there is limited availability of property.

Whilst a Singaporeans property investor has told me to stay away as there are no institutional investors and the market is being propped up by small investors trying to make money - he thinks there is a bubble and it's about to burst.

We are thinking of buying but just don't know whether to wait or not.

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Re: To buy or not to buy?

Post by Barnsley » Fri, 31 Dec 2010 12:30 pm

InTheBlue wrote:I've had a lot of conflicting opinions about buying a condo in Singapore.

Several friends think that the market has a long way to go up as Singapore is bringing in more and more people and there is limited availability of property.

Whilst a Singaporeans property investor has told me to stay away as there are no institutional investors and the market is being propped up by small investors trying to make money - he thinks there is a bubble and it's about to burst.

We are thinking of buying but just don't know whether to wait or not.
If its to live in why not?
Life is short, paddle harder!!

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Post by InTheBlue » Fri, 31 Dec 2010 12:41 pm

it is to live in but also an investment. Don't want to lose $$$$$$$$ !

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Post by JayCee » Fri, 31 Dec 2010 2:45 pm

InTheBlue wrote:it is to live in but also an investment. Don't want to lose $$$$$$$$ !
If you live in it for a few years you'll see the cycle repeat itself anyway so I wouldn't worry about it

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Post by Seasoul » Fri, 31 Dec 2010 3:50 pm

Asking myself the same question..
My other concern is the loan to property value cap at 80% for private properties, any chance this will go back to 90% or is it likely to stay on for a few years ?

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Post by InTheBlue » Fri, 31 Dec 2010 4:41 pm

Loan to property value has gone to 70% for Expats especially if you own a property in another country!

Can't see this changing for a while as the government is trying to slow down the property prices. :(

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Post by Segue » Sun, 02 Jan 2011 10:34 pm

To buy I think you need a lot of guts, and plan to stay here 5-10 years. I wish I had bought when I first got here in 2006, but even at that time I thought it was expensive. Now, I think its crazy prices are unsustainable.

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Post by InTheBlue » Mon, 03 Jan 2011 6:46 am

Segue - I think you are right. Lots of confidence and lots of time here might make it worthwhile.

I wish I had bought 3 years ago when I arrived and still think I should now but I am very aware that there may be a property bubble in Singapore.

Would the government here allow a sharp drop in prices or would they shore the market up?

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Post by teck21 » Mon, 03 Jan 2011 12:16 pm

InTheBlue wrote:Would the government here allow a sharp drop in prices or would they shore the market up?
Governments everywhere would never allow a sharp drop in property prices. Never ever.

That is, if they could do anything about it.

They, like everyone else ins Asia now, could try to put a lid on prices, as they are doing now, but it could do absolutely nothing. Or they could apply even more pressure, which could bring it all crashing down.

Market forces, governments can't suppress that. Look at the price charts of every asset class over the past 3, 5 10, 50, 100, or 500 years. peaks, troughs, spikes, plunges whatever.

What makes this one different that governments can do something about?

If you're going to stay in at, and won't be rlying on expected rental income to pay for it's upkeep,

You are certain that you will be able to service the mortgage payments when interest rates rise (which they will, I know alot of first time property buyers who have never seen 4% in Singapore before and don't believe it will happen, nor have a clue what happens when it does), and

You are not neck deep in debt in other areas.

It is always safe to buy a property, especially if you are going to stay in it.

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Post by InTheBlue » Mon, 03 Jan 2011 12:24 pm

tech 21, you have a good point although I think the Singapore government would try and have the capital at their backs to slow a drop in prices.

Do you also have an opinion on the prices here in Singapore and whether they are sustainable?

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Post by teck21 » Mon, 03 Jan 2011 12:56 pm

I am very fearful of residential property myself and would not be shopping for any unless I was actually looking for a place to stay, knowing I can shrug off any drop in prices.

The way I see it, governments are trying to stop prices from rising.

Which obviously limits capital appreciation on what is already a very high price.

If on the other hand, prices continue to rise unabated despite the fact that governments recognize the dangers of such a situation and are acting accordingly, then I'd think there is something completely wrong with property prices.

As with all investment, you want to balance the risk you will take on board for whatever level of returns you expect.

I don't think any returns on residential property now is worth the risk being taken. Unless you are the most bullish of the bullish speculators, and are able to act exceptionally decisively when the time comes to take action.

And most people are not able to act decisively AND rationally when it comes to these things.

That's the natural bear in me though. :) Some bubbles can go on really, really, really long before going POP.

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Post by InTheBlue » Mon, 03 Jan 2011 1:18 pm

The reason I stated this thread this that I am a natural optimist but am very concerned about Singapore prices at the moment.

I am more inclined to agree with you on property here so thanks for your input.

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Post by revhappy » Mon, 03 Jan 2011 1:42 pm

Right now it would be a great time to pick up an HDB apartment as COV prices have plummeted. A colleague of mine picked up a 3 RM HDB in Tampines close to the MRT at 320K which includes a COV of 15k.

So right now if you are a PR and still renting, its probably the best time to buy your own HDB.

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Re: To buy or not to buy?

Post by Wind In My Hair » Wed, 05 Jan 2011 12:17 pm

InTheBlue wrote:I've had a lot of conflicting opinions about buying a condo in Singapore.
Buying property should be based on mathematics and not opinions. My opinion anyway :wink:

For example: If you are a PR paying rent of $2k a month and planning to stay for 5 years, your $120k housing outlay is enough for a 20% downpayment on a $600k HDB. If you sell when you leave, even if the market falls by 20% the amount you lose is the rent you would have paid anyway. It's unlikely that the market will fall 20% unless you're in the prime luxury speculative end of the spectrum. The downside is therefore relatively low compared to the potential upside.

However, if you're buying not for residence but for investment, you have to compare property to all the other investment options you have. It's still about the numbers though. You're better off choosing the highest present rate of return than trying to time the market.

Or, you could randomly choose to listen to either side of the 'conflicting opinions'. Since there's a 50% chance either side will be wrong, I suggest listening to the people you don't like, so your friendships with the ones you like won't be affected in case their 'advice' causes you to lose money :D

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