Buying Property

[skipper]

We're on local terms and have been renting for the past 5 years. We've decided to buy our own condo next year after our lease expires so we won't be wasting our rent. In the meantime, we've been viewing units every now and then. We saw a place the stood out that was being offered much higher than the last transacted price late last year (but in line with similar properties in the development being advertised today). As we liked the place despite us still having a lease, we made an offer. After much discussions, we're fairly close and even though they came off $80K from their selling price, the psf price will still be higher than the last caveat/transaction.

We're inclined to come to an agreement but we know that the market may soften when new condos come up in the next 2 years. We can wait and continue to lease but that unit may no longer be available and we may also need to move out (as our current landlord is also selling his place). We've moved once and it was a pain in the arse! If we stay here for another 10 years or so, should we be concerned with how the real estate market will move in the next few years?

[JR8]

We were looking to buy a place in 2009 but our agent (a relative) suggested we wait as the governments cooling measures were going to bring prices down. Except they didn't.

I think that for the vast majority of people trying to time the market is a mugs game.

[skipper]

We were looking to buy a place in 2009 but our agent (a relative) suggested we wait as the governments cooling measures were going to bring prices down. Except they didn't.

I think that for the vast majority of people trying to time the market is a mugs game.

Which means we should just do it...

Are you still looking to buy a place or you already went against your relative's suggestion?

[JR8]

Which means we should just do it...

Are you still looking to buy a place or you already went against your relative's suggestion?

It's just my opinion. For example I have a friend who lived in London Zone2. Sold his place in c.2002 because he thought prices would drop significantly. He then rented until 2010 when he finally accepted that prices were not going to drop, (in fact they probably had the strongest bull-run in history). He then bought again in outer London in 2010, and prices have since dropped. Almost perfectly counter-cyclical! And this guy is an investment banker so should know what the economy is doing.

There are only two people I know who timed the property cycle correctly (in the UK) and they're both portfolio landlords with 30+ years experience. That's why I say for most it is a mugs game.

Yes, we're still looking to buy. It is in fact my wife's project (I'm already fully laden ). When our relative suggested wait I was highly dubious, just as I was in my previous post to you. But as you will know in Asia they listen to their kith and kin family before anyone else so here we are now probably 20% out of the money

I think it is also complicated because of the nature of the SGn property market. I wouldn't call it rigged, but one entity just happens to own everything and control building on it and immigration. You have to wonder how much capacity there is for prices ever being allowed to fall.

[teck21]

I think it is also complicated because of the nature of the SGn property market. I wouldn't call it rigged, but one entity just happens to own everything and control building on it and immigration. You have to wonder how much capacity there is for prices ever being allowed to fall.

I think the government really wishes that were true! Any government for that matter.

Quick look at the property values over the past 20 years will reveal how much and how quickly Singapore property values have fallen at times. And stayed that way for years sometimes.

Boom and bust, feast and famine. That's just the way it is. Reversion to the mean is the only certainty apart from death and taxes.

Interesting to read a week or so ago how residential rental yields in Singapore are now at their lowest level since 2000, even lower than the absolutely depressed markets of 2003-2006.

[Girl_Next_Door]

Let me share some of my experiences... I have been renting for a few years and this year, my husband & I decided to buy a place.

We did what we deemed to be a suitable amount of homework, check the caveats lodged, monitor the property prices for the areas that we are interested, compare the prices around and viewed quite a number of properties.

Here are our experiences (some relevant to the OP queries, some are more for sharing purposes)...
- We started with an agent (no formal agreement signed) who arranged viewing in properties that we are interested. We made a few offers (some below the asking price, some at the asking price) and they are all rejected. We suspect its because the agent representing the seller is not interested to share the commission (yes, I know this is wrong but that is how it appears).
- Newly TOP properties usually have a list of units for sale. You can get one of the agents who is "camping" permanently in the development to share that list with you. You would be able see all the units for sale, the size, the rental that goes with the unit, and some comments from the agent on whether the seller is genuine or not.
- We noticed some agents advertised the "marketing price" (especially newly TOP properties) at a slightly lower price, to "lure" buyers, sometimes into a "bidding war".

Personally, we had very bad experiences for newly TOP properties. We felt that the agents are collabrating to push the property prices higher (our basis is on similar properties in the neighbourhood).

In the end, we give up the property (after several rejected offers against the asking price/above the asking price) because we do not want to be involved in the "bidding war".

Fortunately, we managed to find another unit (FH and bigger) at a price lower than the units that we were previously interested in (99 LH and smaller). The completion documentation is over and I have recently checked the caveats lodged against our newly owned property. We are quite happy with the price we paid, i.e. it is within a reasonable range of the recently caveats lodged.

Try to avoid "popular" properties if you want to avoid a potential "bidding war". Keep your eyes open and check the property sites very regularly. The property we purchased was newly listed and we made the offer to our property on the same day we viewed it. If a property has been in the market for a long time, there is a high probability that the seller is unrealistic (and you don't want to be the sucker who overpay the unrealistic price).

Singapore property price is unpredictable. If you have plans to stay here for a long time, go ahead and buy a place as it is not going to be possible to "predict" the right timing. Just make sure that you do not end up paying excessively for something that is not really worth that amount of money.

[JR8]

I think the government really wishes that were true! Any government for that matter.

But the govt do control the building land, and they strategically release and withhold sales of it to developers at times. I can't think of many (or any other) countries that can or do do that. I'll leave it at that.


Quick look at the property values over the past 20 years will reveal how much and how quickly Singapore property values have fallen at times. And stayed that way for years sometimes.

Even the best controlled system cannot predict tail risks like the Asian Fin Crisis, or indeed the current one. Construction and government legislation have longer lead times than the events that require them. And you can't take swathes of housing out of use during a downturn.

Boom and bust, feast and famine. That's just the way it is.

Ah but, at least in the UK Gordon Brown eradicated boom and bust ("Their will be no more boom and bust") er, didn't he?

Reversion to the mean is the only certainty apart from death and taxes.

But the mean always moves

Interesting to read a week or so ago how residential rental yields in Singapore are now at their lowest level since 2000, even lower than the absolutely depressed markets of 2003-2006.

The yield is probably one for another separate topic. I was interested in your term 'depressed' for the 03/06 market. I'd have called it flat-lining myself. But horses for courses eh?

[kensue]

I had met with the same problems as you did when I am looking for my own apartment after renting a unit for the last 3 years. I do not want to relocate out of the the meyer road area. I tried to look for various units in the area but could not get any with the budget that we are looking at. Finally we gave up and went to take a look at Katong and found a cheaper unit and FH unit for much lesser price.
No one can accurately predict when is the best time to buy but just look for bargains at an affordable price.
It took me several months before I finally found an apartment to call my home.

[skipper]

We also thought that the area where we're currently staying was already ideal. But alas, the units there were out of our budget or much smaller. So we looked further out and found this much bigger unit within our budget. We don't mind the distance -- 7.2 km away and 12 mins by car (and we have one) from our current place according to a certain mapping website.

We may finalize this weekend, unless the seller no longer budges and thinks he can get better offers from others. He should know that I'm effectively offering a premium for his unit as it was recently renovated (and the aircon units are new). Anyway, thanks for all the replies!

[skipper]

We finally came to an agreement with the seller but now we plan to bring in an agent into the picture to help out in the completion process. We negotiated the price directly with the seller and it is clear to the agent that he will not get a commission from the seller. However, we will pay him some consultation fee for his services: looking at the seller's OTP as well as a short term tenancy agreement with the seller (they will stay until we can move in by Feb) as well accompanying us on the OTP signing this weekend and the subsequent meeting with the lawyers.

We know we could do these things ourselves (and we probably should like other buyers) but we feel "safer" with a "professional" assisting us. What can be a reasonable fee for this?

[bluenose]

We bought in Queenstown, nice condo, nice area, ideal for services and we got a decent price for Singapore....and we paid the agent....NOTHING!
The seller paid the agent!

[skipper]

We bought in Queenstown, nice condo, nice area, ideal for services and we got a decent price for Singapore....and we paid the agent....NOTHING!
The seller paid the agent!

If it was a straightforward sale, we don't need to pay the agent. We found the unit and negotiated directly.

However, that agent helped us look for a place when we arrived and when we moved to our current place. Of course, he got paid for his troubles through commissions from our landlords. He was aware that we will be buying our own place after our current lease expires and has offered to help us look. Even then, there is no obligation from us to engage him. But as this sale will involve a short-term tenancy, then we thought of working with him. Again, we can just work this out ourselves and just refer on our tenancy agreements.

Anyway, we just want to do this with decency -- or maybe, we're just being naive...

[revhappy]

I think instead of trying to time the market, try to pick bargains so that even if the market falls your own property falls a lot lesser. I know it is easier said than done, but then same case with timing the market.

[davidcf]

Just be careful with property agents..