5 Reasons Why Condos Are The Best Real Estate Investment in Singapore
Investing in a condo in Singapore is a popular choice for both locals and foreigners. Condominiums offer a range of...
Read More
TLDR
- Affordability of HDB Market: Government is focused on ensuring affordable public housing and may increase supply if needed. Long-term investment in private property is seen as offering more freedom.
- Seizing Opportunities: HDB prices have fluctuated, presenting opportunities for profit, especially for downgraders from private property. Recent measures aim to address challenges faced by first-time buyers.
- Property Market Cycle: Uncertainty looms with rumors of a recession and rising interest rates affecting property financing. Staying informed and strategic is key for success.
- Property for Retirement: Government recognizes private property ownership as crucial for retirement, exempting those aged 55 and above from certain restrictions.
- Multi-Million Dollar HDB Transactions: Data suggests downsizing from private property has influenced significant transactions, with older buyers making up a notable portion. Recent measures aim to balance the market.
- Current Market Outlook: Transactions are expected to decrease due to cautious approach, impacting sellers and buyers differently. Smart decisions are crucial in the current climate.
Since the 30th of September 2022, the cooling measures have been in effect for over a month, and as a real estate agent in the field, I’ve been inundated with queries from my readers regarding the immediate impact of these measures and their available options. Of particular significance is the 15-month waiting period required of former private property owners who are looking to purchase in the HDB market.
If someone desired to buy a HDB flat after selling their private property, they would need to find alternative housing for at least 18 months, plus an additional 3-4 months of paperwork, prior to being eligible to enter the HDB market. This waiting period seemed to be especially designed to lower the number of million-dollar HDB deals on the resale market.
I am thankful that my clients followed my intuition, especially considering how the property prices have fluctuated in recent years.
As the first month since the implementation of the 2022 cooling measures has passed, here are some of my musings and observations.
#1 The affordability of the HDB market is an enduring necessity.
The recent cooling measures have caused much speculation – and the government has been quick to assure the public that it will ramp up the supply of HDB flats by as many as 100,000 units, if needed.
This message has been repeated to us time and time again in various subtle ways – showing just how important affordable public housing is. However, for long-term planning, it is much better to invest in private property, where there is greater “freedom” – though HDB prices will continue to grow, it will always remain a pressing concern for the government should this growth become too unrestrained.
#2 Seize the moment! Don’t let opportunities pass you by – cash in on profits when you can!
Back in 2019, the talk of the town was all about the HDB prices that had been decreasing for the sixth consecutive year – news headlines declared, “HDB resale prices drop for sixth straight year”. But then, the pandemic of 2020 occurred, and as we come to the end of 2022, we can observe a remarkable shift in the trend, with HDB prices rising rapidly during the past two years.
The pandemic has presented both advantages and disadvantages, particularly for HDB owners with aging flats. For them, this was an excellent opportunity to make some gains, which might not have been possible in the past. Even if they didn’t make a large profit from the sale of their unit, it was still not as financially challenging as it could have been. This resulted in these big and old HDB units becoming highly desirable for private property downgraders.
The pandemic has been a huge setback for first-time buyers; there’s limited supply of resale units, delayed BTO flat completions, and cash-rich buyers pricing them out of the resale market. Understandably, this prompted the government to take action with their most recent cooling measures, which have hopefully put a stop to these struggles. Even still, 4-room HDB flat owners are still enjoying the benefits – such as downgrading retirees having access to that segment.
My clients’ decisive action in taking my advice was a reminder that, while we may not be able to control our environment, we can certainly control our choices and the outcomes of those decisions. Those who took action early on are now rejoicing in their lower purchase prices, while those who sold are celebrating their gains, proving that decisiveness can indeed be rewarded!
#3: The property market is a cycle
Rumors of an impending recession in 2023, coupled with rising interest rates making financing a property more expensive, have many asking if we’re on the verge of exiting this high-stakes real estate cycle. This uncertainty, combined with the recent cooling measures, has led to fewer sellers putting their properties up for sale, leaving private property owners worried about the value of their investments, HDB owners second-guessing their plans to upgrade, and landlords seeing a surge in demand in the rental market.
It won’t be a walk in the park, but the key to success is to stay informed and ensure that you are positioned at the optimum point of the property cycle.
#4 Recognizing property as one of the major building blocks of retirement is a crucial step in securing a comfortable future.
Check out the latest cooling measures captured in the screenshot from the press release below
It is fascinating to recognize that the government has acknowledged the importance of private property ownership in providing a stable retirement by exempting those aged 55 and above from the 15-month wait out period. As a result, these individuals are allowed to downgrade from their private property to a 4-room or smaller HDB flat. Previously, I had written about the advantages of downgrading from private property for retirement, which provides an additional source of income for individuals.
#5 The Mystery Behind Who Purchased the Multi-Million Dollar HDB Flats Unveiled!
The latest report from PropNex appears to indicate that the majority of people purchasing million-dollar flats are those who are under 55 years old and have downsized from private property, likely in light of the 15-month wait period the government has put in place.
Propnex data reveals a remarkable statistic – nearly half of all HDB resale flat buyers who paid more than one million dollars were 50 years old and above. This data serves to emphasize the financial capability of this age group to purchase these large flats. Interestingly, the introduction of a wait-out period appears to have greatly diminished the number of million-dollar HDB flat transactions in the news.
Conclusion
At present, people are adopting a “wait-and-see” approach, meaning that transactions will be reduced in order to calm the heated property market. For sellers of 5-room HDB flats and larger units, the number of potential buyers has dwindled due to the restriction of private property downgraders. On the other hand, buyers now have less competition and an interesting opportunity in the current climate. I did not discuss the new Loan-To-Value ratio as I believe it is relatively moderate.
After years of low interest rates, I believe it’s high time for interest rates to increase and temper inflation. To make the wisest decisions for the long-term, when buying a property, ensure that it has the potential for greater upside than downside, and when selling a property, make sure you capture the necessary gains to safeguard your next purchase.
With all the transactions I’ve seen, I’m confident that if we make smart decisions now, we’ll be well-prepared for what lies ahead.
Thanks to the amount of experience I have in the market – from the frequency of transactions and negotiations I’m involved in – I’m able to identify patterns and foresee outcomes better than the average person. With a yearly average of 120 – 150 families that I meet, which is multiple times more than what most agents do, I can confidently provide solutions and property options for anyone seeking assistance. Should you have any queries, feel free to drop me a WhatsApp message – no obligation, of course.
You May Also Like …
Say Goodbye to “Sell One, Buy Two” Approach in 2024
TLDR Summary: The "Sell One, Buy Two" real estate tactic, popularized in 2016-2017, involves selling a property and buying two...
Read More
5 Things to Know About Singapore’s Freehold & Leasehold Properties
5 Things to Know About Singapore's Freehold & Leasehold Properties Here are 5 things you need to know about Singapore's...
Read More
Three Singaporeans Share Their Experiences of Co-Owning a Property with Friends
TLDR In Singapore, some individuals venture into property investments with unrelated partners, driven by opportunities and personal circumstances. Jim, leaving...
Read More
Why Aren’t Spacious, Wallet-Friendly Homes Our Reality Yet?
TLDR The article discusses the current housing market in Singapore, focusing on the challenges faced by individuals like Sherlyn Tan...
Read More
Crucial Facts : All First Time Buyers Need to Know
TLDR When it comes to property investment for first-time buyers in Singapore, careful planning and early action are key. Consider...
Read More
Top 5 : Common Characteristics Of Singapore Condos That Make Them An Attractive Investment Opportunity For Foreign Buyers
Singapore, a thriving hub of business and commerce in Southeast Asia, has become an attractive destination for foreign investors looking...
Read More
Discover the Optimal Timing to Invest in Singapore Real Estate: Unveiling Historical Insights
TLDR When considering the best time to buy or sell a property in Singapore, historical data analysis reveals key insights....
Read More
Lessons from the Rollercoaster Ride: Homebuyers Share Their Singapore Housing Market Experiences
TLDR The Singapore housing market is a rollercoaster of unpredictable changes. Three homebuyers share their experiences: Tristan waited too long...
Read More
Top 5 Tips : How Investors Protect Themselves From Risk And Capitalize On Emerging Opportunities In Singapore’s Real Estate Landscape
The real estate landscape in Singapore has always been a lucrative investment opportunity for both local and international investors. However,...
Read More
5 Impacts Of The Singapore Government’s Cooling Measures On Property Investing
The Singapore government has implemented several cooling measures over the years to regulate the property market and prevent it from...
Read More
3 Steps to Prevent Rental Scams
TLDR: Prevent Rental Scams in Real Estate Scammers are targeting prospective tenants by impersonating Real Estate Salespersons (RES) to deceive...
Read More
Avoid These 6 Terrible Property “Tips” in Singapore
TLDR When it comes to property advice, it's crucial to be cautious of common misconceptions. For instance, schemes like the...
Read More
Top 5 : Why Ultra-Rich Foreigners Will Still Buy Property In Singapore
Singapore, a small island nation in Southeast Asia, has been steadily gaining recognition as a hotspot for the ultra-wealthy to...
Read More
Top 5 Reasons : Why Do Singaporeans Still Flood The Property Market?
Singapore, a thriving city-state with a robust economy and a strong demand for real estate, has always been an attractive...
Read More
Are You Ready to Take on the Singapore Property Market in 2023? 12 Reasons to Be Hopeful (Or Wary)!
2022 sure was a rollercoaster ride for the property market, and the world! From war in Europe to skyrocketing interest...
Read More
How to Build a Property Empire in Singapore: Scaling Your Investments
Real estate investing is a popular way to build wealth and generate passive income. However, like any investment, it comes...
Read More
When Should You Consider Investing in Singapore Property, and When Should You Avoid It?
TLDR Investing in real estate is a complex decision influenced by personal goals, investment horizon, rental plans, and financial liquidity....
Read More
5 Disastrous Property Transaction Nightmares (and How to Avoid Them)!
TLDR When attempting to sell your property, various worst-case scenarios can hinder the sale process significantly. These scenarios include buyers...
Read More
How to Avoid Forfeiting Your Security Deposit: A Guide to Your Rental Property
TLDR When bidding farewell to your rented property, ensure the safe return of your security deposit by: Regular Aircon Servicing:...
Read More
