Your search results

Crucial Facts : All First Time Buyers Need to Know

Posted by Jayson Ang on December 7, 2022

| 0

TLDR

When it comes to property investment for first-time buyers in Singapore, careful planning and early action are key. Consider options beyond public housing for better future prospects. Analyze market trends, potential upside, and risks involved before making a decision. Learn from others’ mistakes to avoid financial setbacks. Join informative sessions and research historical data to make informed choices. Prioritize financial soundness and strategic property selection for a successful real estate journey.

As first-time property buyers, there are many things we may fear.

Most people lack the necessary experience in buying & selling properties so it may be daunting to choose the ideal property that could possibly enjoy growth yet well within affordability.

The number 1 property choice of most first timers is either the next BTO or a resale flat close by their families as most of them are being prudent considering the affordability of public housing. So is this a good idea?

If all you want is a humble and mundane life, it could be the right move. But if what you yearn for is the betterment of your future and lifestyle, you may want to reconsider other options. Why? Let’s take a look.

What most young property buyers do not consider is the lengthy timeline for one to realise their first pot of gold

The long 4 years waiting for construction to complete coupled with the Minimum Occupation Period of 5 long years easily lock a young 30 years old couple for a dreadful 9-10 years and means the young couple would have reached almost 40.

We all learnt that time is money and this is an irrefutable fact of life! Many people have the misconception that investment should only start at the later stage in life but due to the mortgage limitations in Singapore, the older one gets, the shorter the loan tenure will be and that sadly means that the monthly loan repayment will be heftier while other family expenses such as child care and education commitments are increasing. Many people have already missed this high-speed train of investment and while you still have this advantage , wouldn’t you do something about it?

So let say if you are able to get a nice home for your own-stay while this very first investment still has a high potential of making decent profit in 5 years (half the time of the public housing route), wouldn’t that be great help to jumpstart your real estate investment journey?

It is important to know that you have to start this journey as early as possible so long as your finances are sound.

Remember I mentioned that being prudent is important. I cannot stress enough that careful planning is highly critical to the success of your first investment. Now we can see prices of private homes hitting new highs in 2021 in Figure 1.

Every time the market dips, it rebounds even higher, and those who are apprehensive and choose to wait end up paying even more than they have to. These are fundamental mistakes that you can avoid easily.

Even though the overall chart shows that home prices continue to climb but truth be told, there are some inexperienced “investors” who made losses too. This could be due to various factors and some of the most common ones are not setting aside reserve funds, having slow hands or simply not understanding the property market well enough. Sounds daunting, right? It can be easy and much safer so long as you follow our proven strategy closely.

Figure 1: Private property price index (%) from 2000Q1 to 2021Q3

In Figure 2 below on the historical price chart of a private property Changi Green, as a first-timer, should you buy into the property since prices now are at its previous high in 2014? Do you believe that the price will continue to escalate in the next three years?

Figure 2: Changi Green historical monthly price (psf) range.

Now, let me draw your attention to Figure 3 below to look at some of the transactions that happened in these recent years at Changi Green. You might have noticed that some buyers brought into a resale property and ended up not making profits like they would like to, on the contrary, some of them even incurred losses.

Do not repeat these costly mistakes made by others!

Figure 3: Changi Green profitable transaction history

The question then boils down to, how does one select the RIGHT PROPERTY?

There are TWO important factors you should use to determine – Potential Upside & Risk Involved.

With these two points as my basis coupled with careful analysis of the facts, figures and market insights to determine if the property is safe to enter. And definitely no one can guarantee that you will make money for sure, that is why considering risk is equally important as the potential upside.

One last example to illustrate my points further. Looking at Figure 4 below, between Queens and Commonwealth Tower, you would have been relatively upset and utterly disappointed if you chose to purchase the former due to its lower entry price. As you can see, even though Commonwealth Tower has a higher entry price, the profits amounted to so much more. Why do you think that is the case?

Figure 4: Historical price (psf) trend for Queens & Commonwealth Tower

With all these questions in mind, you know that it is key to understand how to select the right property. With factors listed above coupled with criteria that are essential in spotting the right property, you will be able to start your real estate journey moving towards the right direction.

It can all be a seamless process when you grasp the fundamentals of choosing properties as it can be applied to find future properties as and when you upgrade.

Avoid repeating others’ mistakes and come join me at my upcoming zoom session, where I will address all these burning questions just for you.

Dear reader, if you are keen to have another of my article that I share with my clients and friends on how I select a property that is $300psf to $400psf below the market price in the current market, do DM me for it.

Thank you for taking time to read my article, do share with your friend if you find this artice useful, greatly appreciated

You May Also Like …

All Blog Posts Buying Tips

3 Trends For New Launch Properties In 2023

Jayson Ang – March 20, 2023

TLDR When considering buying or selling a property in Singapore, it's crucial to understand the market dynamics and key metrics....

Mandarin Opinion Top 5

The Truth About Buying An Old Condo: Homeowners Reveal Their Top 5 Regrets

Jayson Ang – July 16, 2023

The Truth About Buying An Old Condo: Homeowners Reveal Their Top 5 Regrets Some homeowners may find themselves regretting certain...

All Reports

Finding Your Dream Home In The Near Future. Exciting Upcoming Property Launches In The First Half Of 2024

Jayson Ang – December 25, 2023

TLDR The real estate sector in 2023 saw significant policy shifts affecting both private and public housing, with various changes...

All Blog Posts Buying Tips

What’s The Difference Between An Offer To Purchase And An Option To Purchase?

Jayson Ang – May 29, 2023

TLDR Understanding the crucial difference between an Offer to Purchase and an Option to Purchase (OTP) is vital when buying...

All Opinion

Singapore’s Property Market: Will the Newly Proposed 2023 Cooling Measures, Including a 60% Foreigner ABSD, Make Waves or Mere Ripples?

Jayson Ang – April 27, 2023

TLDR The recent surge in Additional Buyer's Stamp Duty (ABSD) rates in Singapore targets mainly foreigners and entities, with rates...

All Blog Posts Buying Tips

Discover 11 Helpful Tips for Buying an Older Condo : A Comprehensive Guide for Buyers

Jayson Ang – March 2, 2023

TLDR When considering purchasing an older resale condo, ensure you investigate potential en-bloc bids, lift conditions, parking conveniences, playground safety,...

All Blog Posts Opinion

How Can Real Estate Investment Help You to Combat Inflation?

Jayson Ang – January 28, 2023

TLDR When it comes to real estate investments in Singapore amidst rising inflation rates, consider strategies such as capitalizing on...

All Buying Tips Opinion

My 6 Factors to Consider When Buying a Property in 2023

Jayson Ang – March 11, 2023

As the housing market shows no signs of slowing down, many of us may feel left behind, questioning whether it...

All Blog Posts Buying Tips

4 Simple Strategies to Help Future Homeowners Save Money

Jayson Ang – July 15, 2023

TLDR When it comes to being a new homeowner, it's essential to prioritize regular maintenance to avoid costly repairs down...

Mandarin Top 5

Discover the Best Breakfast in Singapore: Top 5 Must-Try Spots!

Jayson Ang – February 28, 2024

Trying out some of the best breakfast places, I've put together a list of the top 5 must-try breakfast spots...

All Blog Posts Buying Tips

5 Disastrous Property Transaction Nightmares (and How to Avoid Them)!

Jayson Ang – April 20, 2023

TLDR When attempting to sell your property, various worst-case scenarios can hinder the sale process significantly. These scenarios include buyers...

Mandarin Top 5

Singapore’s Urban Landscape Transformation: 5 Key Things You Need to Know

Jayson Ang – March 17, 2024

Singapore's urban landscape has undergone significant changes over the years, with the city constantly evolving to create a sustainable and...

Mandarin Top 5

5 Things to Know About the Singapore Property Tax System

Jayson Ang – June 18, 2023

5 Things to Know About the Singapore Property Tax System Here are 5 things you need to know about the...

All Buying Tips Top List

Tips for Choosing the Home of Your Dreams

Jayson Ang – December 26, 2022

TLDR Decoding the Singapore property market can be challenging, but understanding key factors like property size, location, and lease tenure...

Mandarin Top 5

Top 5 Factors to Look for in a Property Developer

Jayson Ang – March 13, 2024

With a highly competitive property market, it's crucial to choose a property developer that you can trust to deliver quality...

All Buying Tips Reports

2024 Residential Property Market Outlook

Jayson Ang – December 22, 2023

TLDR The market outlook for 2024 suggests continued uncertainties affecting housing demand and risk appetite due to geopolitical tensions, macroeconomic...