Property - how much to buy ?

[PrimroseHill]

Am I too late to the discussion? We have been here; what 18months, we have bought a place.
A lot of people have been saying that the housing correction will occur in London, the bubble will burst. Yup, all around the UK post financial crisis, property prices did tank. However, in central or prime London, price appreciated. As always location location location. Fingers cross, this is true to in SG.
We did find that when we arrived property prices were unrealistic. Property owners asking for crazy, over inflated asking prices. Also the banking valuation here in SG is rather different than a valuation done for a mortgage in UK. Private properties in the prime areas have been staying on the market for awhile. Yet, all I hear from estate agents are, well, a lot of owners in SG are cash rich so they are't fussed that their properties sat empty. Then the rent pressure came and at least I had noticed since Feb there had been more realistic expectations from the sellers.
Incidentally, the house we bought we one of the first places we saw when we first landed. At that time, the property was out of our budget that we had wanted to spend, 13months on, the sellers, dropped more than half a million in asking price but we gave them an ultimatum - our bottom line, our one and only offer and we had another house shortlisted.
So, answer is, if it is in a desirable location and you can negiotate a sensible price with a view of holding it for at least 5years, I think that it should be alright

[kookaburrah]

(...) 13months on, the sellers, dropped more than half a million in asking price but we gave them an ultimatum - our bottom line, our one and only offer and we had another house shortlisted.
So, answer is, if it is in a desirable location and you can negiotate a sensible price with a view of holding it for at least 5years, I think that it should be alright

Until, of course, someone comes along and does this right back to you.

[zzm9980]

(...) 13months on, the sellers, dropped more than half a million in asking price but we gave them an ultimatum - our bottom line, our one and only offer and we had another house shortlisted.
So, answer is, if it is in a desirable location and you can negiotate a sensible price with a view of holding it for at least 5years, I think that it should be alright

Until, of course, someone comes along and does this right back to you.

What you're saying to her doesn't really make sense.

[PrimroseHill]

(...) 13months on, the sellers, dropped more than half a million in asking price but we gave them an ultimatum - our bottom line, our one and only offer and we had another house shortlisted.
So, answer is, if it is in a desirable location and you can negiotate a sensible price with a view of holding it for at least 5years, I think that it should be alright

Until, of course, someone comes along and does this right back to you.

Why?

[the lynx]

(...) 13months on, the sellers, dropped more than half a million in asking price but we gave them an ultimatum - our bottom line, our one and only offer and we had another house shortlisted.
So, answer is, if it is in a desirable location and you can negiotate a sensible price with a view of holding it for at least 5years, I think that it should be alright

Until, of course, someone comes along and does this right back to you.

Why?

I assume he meant the seller could be doing the same thing, in reverse, to potential buyers: "our one and only offer, or we could have next buyer in the list"

[PrimroseHill]

Until, of course, someone comes along and does this right back to you.

Why?

I assume he meant the seller could be doing the same thing, in reverse, to potential buyers: "our one and only offer, or we could have next buyer in the list"

True, however, if and when I do sell and I put on such an unrealistic price, sooner or later someone will do the same to me. However, if the seller wasn't desparate, (a) they wouldn't have accepted the offer and (b) it shows the market forces at work, since it had been on the market for sale since March 2012 (well, thats when we first looked)

[Wd40]

I agree with PrimroseHill. Any asset like properties, cars etc is a game of negotiations, knowing the market very well and key thing here is the party that has time on their hands and least desperate to make the deal happen, wins.

There are always desperate people out there who want to sell off their property and sometimes dont care about the exact valuation so much because, they are making a good profit anyway. As a buyer you should be waiting for such people. Thats why its important to have time on your side.

And when you know that the price is right, act quick. Make the offer, hand the cheque, before the seller has time to think and look for other options.

[e93380060]

Good day all

Just my two cents.. The last time the markets tanked, the Asian crisis 98, SARS 03, the prices never moved past the previous dip. A lot of people who bought over-inflated properties did get burned, they had to pay the banks for the difference in the price of their properties that the loan could not cover. Some lost homes. So yes be careful not to throw everything into the property and plan for when such things might happen. But from what I see you could very comfortably put down a small part of your savings into a house, maybe even two, and pay very little in installments, and see very good returns in 5 years

At the end of the day figure out how your money can be made to generate more money. It may be property, it may be investment, but sitting in the bank or being tied up in the wrong places doesn't do your income any justice. I personally know a few people who don't have to work if they don't want to because they fully own a few properties and each one rented (3-6k per mth) out gives them more income than they would be able to get from a salaried position. They spend their time doing start-ups.

I'd say get a residential and commercial property and let that rental income turn your expenditure on rent into a lower sum that grows your money instead of being thrown away. The current outlook on the market could end up getting you a good deal from people thinking to bail before (they think) it gets bad. And its not going to be crisis bad.

[J.Maschetta]

Be patient. Buy or rent something that you like. Lots of agents who like to use pressure tactics like "oh, the owner is going to lease out the place real soon", "oh, someone made a counter offer of XXX". Just like in all big cities..... Use at least 3 property agents to help find a place. No obligations, they earn very well. Many of them driving big cars.

So ask them to show you the lease and counter offer of the check (check the date, could be an old check) 99% of the time its crap!

My local friends are telling me that expats are pushing up the property prices and rental prices unnecessarily. lol

Lots of rental flats in the market. So, drive a hard bargain! Gd luck

[henrycc]

First off congrats on having the savings. That will go a long way in offering you some choices in terms of what you should do. My advice:

1. Of the $1.5MM take out what the equivalent of 1 year of your fully loaded living cost and just leave in the bank. I think you mention about $140K so keep say $150K in the bank just if sh#t hits the fan.
2. If you plan on staying here for 5 years + then find a place. If not then I would hold off on buying as there seems to be a deluge of property hitting the market this year and next. I don't see that as a bullish sign due to the glut of supply.
3. If you buy a place then put only the min 20% down. Interest rates now are marginal and I am sure you can find something that can yield a whole lot better.
4. In terms of how much to spend, my gut would stick to a unit that mortgage comes out to the same amount you are paying your rent. If you want to expand that perhaps not include your CPF into this factor which should increase it by another $1K or so.

Interestingly your situation is somewhat similar to us as we sold a place in Jan and was planning to rent but then ended buying again as found a place we loved and figure we are going to be here for 5+ years so why not.