The missed boat feeling regarding property

[Wd40]

Yesterday, while chatting with my old friend he mentioned to me that I should have bought a condo by now and gave him my usual reasoning that prices are high and that there is ABSD now and its not worth it etc and he kept giving his reasons that its always better to buy rather than rent and even if I have to leave Singapore I can always rent it out.

After thinking for sometime, it really hit me that it has been 4 and half years that we have been in Singapore and waiting for property prices to fall, we have really missed the boat the 2nd time. The 1st time ofcourse was in 2009-10 period when prices were really juicy. The next was when prices climbed up, but still there was no ABSD until end 2011.

Now I really don't have the courage to buy with 15% ABSD, although it not impossible to mobilize the money required for the deposit etc.

I am just wondering 2 years down the line, will I again be left with the same missed the boat again feeling for the 3rd time? I wonder if there are others who feel the same like me, who have plenty of money sitting in the bank account but no conviction to buy.

[PrimroseHill]

15% ABSD? You are on EP still?
In my opinion, for what is worth, this is my take - if you are hit with a 15% ABSD, don't bother buying. Unless the govt decide to loosen up the ABSD rules. It isn't worth it.
If I am in your shoes, and I would use the additional cash you have stash away and buy a property somewhere else - Sydney, Melbourne, New York etc and hedge it against your rental here.
That would be my plan

[ScoobyDoes]

The ABSD is the killer now.

Even though interest rates are low, think of how long you'll need to hold the property in order to get back the ABSD and the interest paid to the bank.

The boat was missed 6-yrs ago already when prices were half what they are now. I can't justify spending S$1100psf on a property I know was selling for S$400-450psf when I arrived.

Paying S$1100-1500psf now for tiny, poorly constructed, high density units doesn't make sense when you know you're not going to retire here.

[AngMoG]

To chime in, just saw this today in the news (TRS):

In answering another question on foreign ownership of private properties in Singapore, Mr Khaw revealed that the proportion of purchase by foreigners has fallen from 17% in 2011 to 7% in the third quarter of 2013. Over the same period, the number of purchases by foreigners has fallen from about 1,400 per quarter to 330 in the third quarter of 2013.

So purchases by foreigners (non-PR/SC) has fallen dramatically by 75%. By extrapolating, we also know that total quarterly sales have fallen from 8200 to 4700, or about 40%.

Not a good time to buy, I'd say. I already bought property elsewhere anyway - just imagine that for the price you pay for a (tiny) condo here, you can have 2-3 houses in Australia. Or 10 or more in emerging economies in the region.

[Wd40]

Thanks guys! I agree with the sentiment that all of you share that is, it doesn't make sense to buy now. The mistake I did though was not buying here or in my home country(India) earlier. I kind of wanted to keep my options open and keep accumulating cash, I was hoping that I somehow be able to buy a house here, rather than India.

I didn't like the idea to buy in India because there the rental yield is pathetic compared to Singapore. Something like 2%, although capital appreciation has been very good so far. Singapore's rental yield has been so good and I am paying the rent here, so kind of getting hit from both sides, which leads to the missed boat feeling.

I guess I will give up on buying in Singapore and buy in India.

[JR8]

Posted: Thu Nov 14, 2013 6:05 pm Post subject: Shoulda, woulda, coulda

Yes, and I expect he is the kind of smug git, that believes you should replicate everything that he has done in life. I hate these kind of ‘you should have done what I did’ nags.

property will never fall. At least not for you. If you think for a second you’re somehow going to time a market correction... then I’d like to get my ‘FOOL’ branding-iron back out of storage. ~What is it they say ‘A fool and his money are soon parted’?

Do you think he wants you on-board? To agree with his view and plan? Tell him you used your money to buy a yacht... and you’ve so many chicks you have to peel off you, that hadn’t really thought of buying anywhere on land.

Property prices will never fall. If that were to happen, you won’t have a job or any money.

If you have no conviction to buy, then don’t. But for most people it’s a lifetime thing.

p.s. With property, it’s time in the market, not timing the market.

[Beeroclock]

Well hindsights a wonderful thing..... I agree very risky buying with all these cooling measures. Market is in limbo. Sellers also no need to lower prices with interest rates so low, can just hold. The money printing is the core problem. Not achieving much in job creation but driving significant asset inflation, and now becoming an addiction that is difficult to wean off.

[JR8]

Well hindsights a wonderful thing.....




So are my fore-sights, when I get to line them up.

[JR8]

As I have just done ....

[Strong Eagle]

An interesting take on the situation.

http://www.todayonline.com/singapore/fa ... correction

[livingontheedge]

There are other regions in this world you can consider buying into now - Malaysia, Turkey, Aussie, etc. - countries that allow foreign ownership.

You probably can't predict the ups and downs of the property market, but if you buy a property at the right location with strong local economics and earns you a decent rental yield in the long-term to cover your mortgage payments, in the long-term, up or down, there is a high probability you will walk out a richer man.

[x9200]

I think this is pretty clear that over longer periods of time there are no losers in buying property but this kind of philosophy is only good if you have sufficient cash to spend. For average people buying just a place to live it is often an investment that wipe them clean from their savings and makes them banks dependent for years. Bad timing can mean here crippled life style for years or even bankruptcy.

[JR8]

An interesting take on the situation.

http://www.todayonline.com/singapore/fa ... correction

Heavens, agh!

So in summary 'I'm 20-something, it's my right to own a condo in D9/10/11. The world is clearly in imminent crisis if I can't. Prices are insane, and must fall, so that er, er... I can then buy. Once I buy then I'll celebrate prices rising at 50% a year, as by then it'll be entirely fair and justified, and if you can't oso afford then sorry that's just how it works right'.

The article is laden with such gaudy meretricious verbiage (see?), I had to try and stop myself laughing, imagining this uptight limp-wristed quitter-prig sitting in McDonalds Knightsbridge getting stuck into another 'I'm entitled' 1000 word piece for the SG media.

[PrimroseHill]

I found the article lack of clarity and written without much research both in terms of property market specifics or the international market specifics.

In truth income/wages versus ability for first time buyers are worse in majority of the major cities worldwide. It has been that way for many many years. It will probably get worse and never get better, hence thats why there are so many Banks of Mom and Dads and now the increase of Banks of Grandparents too.

I mean a first time buyer with the help of mom and dad and grandparents do not have any hope of getting on the housing ladder unless their basic salary is pretty decent and bonus is at 200%. I mean look at the D9/10/11, Knightsbridge, Sloane Square, Notting Hill, Chelsea, Primrose Hill, Hampstead, St John's Wood, Rose Bay, Marouba, Herne Bay, upper east, midtown, sacremento st, etc. I small studio is something like GBP300k.
Even Damansara Heights, Mont Kiara that sort of areas are rather expensive these days. However, late 1980s and early 1990s, when I was in UK, a lot of my colleagues were hit by huge interest rates of 12/13%, and their houses have lost something like 50-70%, yet thouse prime london areas didn't fall, merely stagnant. Soon after 911 and financial crisis, prime london housing stick went up, due to the influx of flight money, prices didn't drop either.

[Mi Amigo]

An interesting take on the situation.

http://www.todayonline.com/singapore/fa ... correction

Heavens, agh!

So in summary 'I'm 20-something, it's my right to own a condo in D9/10/11. The world is clearly in imminent crisis if I can't. Prices are insane, and must fall, so that er, er... I can then buy. Once I buy then I'll celebrate prices rising at 50% a year, as by then it'll be entirely fair and justified, and if you can't oso afford then sorry that's just how it works right'.

The article is laden with such gaudy meretricious verbiage (see?), I had to try and stop myself laughing, imagining this uptight limp-wristed quitter-prig sitting in McDonalds Knightsbridge getting stuck into another 'I'm entitled' 1000 word piece for the SG media.

You mean you didn't like the article?

Actually I thought it was pretty poorly written too, but the underlying hypothesis of an upcoming correction seems to be gaining popularity. Mind you, people have been talking about that for quite some time, so perhaps the bubble will keep on inflating (or at least not shrinking) for a while longer yet.

This paragraph irked me somewhat:

In Singapore, the problem is exacerbated by the pressures that our imported workforce exert — competition in the labour market depresses wage growth, while that same competition for scarce resources contributes to overall inflation for consumer goods, services and, yes, housing (although according to figures announced yesterday, this seems to have ameliorated — foreign buying in the private housing market fell from 17 per cent in 2011 to 7 per cent in the third quarter this year).

So once again, it's all the fault of those pesky foreigners who come here to 'steal' Singaporeans' jobs and cause property prices to go up. Never mind the fact that the vast majority of the foreigners are doing jobs that Singaporeans either don't want to do or do not have the experience for. If/when they kick us all out, then property will be nice and cheap, so everyone will be able to 'snap up' a condo unit or two at fire sale prices. The economy will have gone to hell in a handbasket, but never mind, at least the 'entitlement' will have been fulfilled.