6 Myths About Using Your CPF For Housing
TLDR When it comes to purchasing a house in Singapore using CPF funds, there are several myths that need to...
Read More
TLDR
When considering the current real estate market in Singapore, it’s crucial to understand the impact of factors such as interest rates, Additional Buyer’s Stamp Duty (ABSD), and economic uncertainties on property prices. While high-end properties in prime regions may experience a price reduction due to rising interest rates, the potential decrease in foreign investments could be a more significant concern. As economic conditions evolve, there might be a shift towards more affordable areas, leading to a balancing of property values between different regions. For individuals looking to enter the market, strategic planning and caution in leveraging loans are advised. Whether to buy, sell, or wait depends on your unique situation, and seeking professional advice can help navigate the complexities of property investment in Singapore.
While it might not shock many, a study suggests that top-tier properties, such as the luxurious residences in our Core Central Region, may see a value reduction of about 3.9% this year. This trend seems to be driven by the increase in interest rates.
This might seem a little odd at first glance. The common assumption is that rising interest rates would likely impact the less affluent regions more than the highly valued areas. After all, those investing in $10 million penthouses could potentially borrow less if they chose to – some may even purchase without a loan, merely seeking financial leverage.
However, an average home buyer can’t just conjure up $1.6 million for a resale condo. The typical Singaporean requires a substantial loan to transition into private property ownership. Consequently, if interest rates alone can trigger a price drop in high-end areas, this effect would be magnified in non-prime regions where buyers rely heavily on loans and are more vulnerable to rising interest rates.
If there’s a decrease in prime region property prices, my hunch is that it’ll be more linked with our Additional Buyer’s Stamp Duty (ABSD) rates rather than bank loan rates. With the ABSD for foreigners currently standing at 60%, this is a significantly worrying factor compared to a slight increase in interest rates. If this does discourage foreign investors, we’re likely to notice the initial impact in the prime regions.
Economic Headwinds: Unveiling Their Overwhelming Impact!
At times, there’s a delay in how shifts in the broader economy affect the real estate market. Currently, we might not have fully grasped the implications of escalating global conflicts and the virtual upheaval happening within tech firms.
Furthermore, it appears that elevated interest rates are here to stay, prompting businesses to slow down expansion. This, essentially, makes employers more prudent.
From my experience in real estate during the previous financial meltdown, I’ve seen just how quickly circumstances can flip: An expatriate could choose any condominium in River Valley one day, and the next, they’re bargaining for a walk-up in Geylang.
As housing allowances dwindle and local workers replace expatriates (cheers to that!), we may witness a faster overall retreat from premium locations to city outskirts or even more remote areas. Over the next few years, I think it will be this scenario, rather than high interest rates, that will depress premium property values.
All things considered, these conditions present an opportunity for those who are ready. If you’ve been hoarding substantial savings and biding your time, now may be when the price difference between Core Central Region (CCR) and Rest of Central Region (RCR) could shrink significantly. Just be cautious not to rely too heavily on loans when upgrading.
Should You Buy, Sell or Wait?
If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?
It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.
I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.
I can help you by:
- Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
- Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.
You May Also Like …
CPF Accrued Interest On Housing: Learn What It Is and How to Calculate It
TLDR Understanding the CPF accrued interest on housing loans is crucial for Singaporean homeowners. When using CPF funds to finance...
Read More
5 Things to do When You Go For A Property Viewing In Singapore
5 Things to do When You Go For A Property Viewing In Singapore Here are 5 things to keep in...
Read More
Top 5 Considerations : Uncover the Secrets of Buying Older Properties – What They Won’t Tell You!
Buying an older property can be a dream come true for many homebuyers, as these homes often come with unique...
Read More
What’s Needed For Singapore To Lift Those Cooling Measures?
TLDR The blog post discusses the recent relaxation of real estate restrictions in Hong Kong, contrasting with Singapore's stricter regulations....
Read More
7 Essential Tips for Finding Your Perfect Retirement Home
TLDR Searching for a forever home should balance heart and practicality. Avoid homes with stairs, high cabinets, big kitchens, and...
Read More
When will En-Bloc set to Become Reality Beyond 2023?
TLDR The real estate market is experiencing a lull in en-bloc activities due to various factors. Higher Additional Buyer’s Stamp...
Read More
5 Factors : The Benefits Of Investing In A Property With Good Access To Green Spaces In Singapore
Real estate investment has always been considered a sound investment decision, as it offers long-term growth potential and a reliable...
Read More
Top 5 Tips for First-Time Chinese Buyers Looking to Invest in Singapore Today
Top 5 Tips for First-Time Chinese Buyers Looking to Invest in Singapore Today Here are the top 5 tips for...
Read More
Evaluating Property Investments: Pros and Cons to Keep in Mind
TLDR: Key Takeaways from the Blog Post Singapore's real estate market offers both pros and cons for investors. The advantages...
Read More
Should You Splash Your Cash on a Condo Despite the Sky-High PSF?
TLDR The blog post discusses various aspects of investing in condos in Singapore, covering topics such as leasehold versus freehold...
Read More
Top 5 : How Does Investing In Luxury Condos In Singapore Compare To Investing In Other Real Estate Asset Classes In Terms Of Long-Term Capital Appreciation?
Investing in real estate has long been considered a reliable way to build wealth and diversify one's investment portfolio. In...
Read More
Ouch! How Owning a Million-Dollar Home Can Sting with a Whopping $300K Interest in Just a Decade!
TLDR When considering property investments in Singapore, it's crucial to monitor home loan interest rates closely. Even a slight increase...
Read More
Top 5 Sushi Restaurants in Singapore
Singapore, a melting pot of cultures and culinary delights, is known for its diverse and vibrant food scene. Among the...
Read More
Ultimate Handbook on HDB Income Ceilings for BTO, Resale Flats, and Executive Condominiums
TLDR Owning an HDB home in Singapore depends largely on income ceilings. The HDB income ceiling limits monthly household earnings...
Read More
5 Critical Mistakes to Avoid When Investing in Singapore Property: Insights and Advice from Experts
Investing in Singapore property can be a lucrative venture for investors, but it's important to avoid common mistakes that can...
Read More
Making Sense of 99-Year Landed Home Investments in Singapore
TLDR Investing in a 99-year leasehold landed property in Singapore can be a lucrative venture due to the country's land...
Read More
With a population of 6.04 million in Singapore, who are the winners and losers in the property market?
There has been significant outcry regarding Singapore’s population hitting a record high of 6.04 million, largely due to an increase...
Read More
Top 5 Tips : Spot These Warning Signs Before Making a Home Purchase!
Purchasing a home is one of the most significant financial decisions you will make in your lifetime. It's essential to...
Read More
Exploring the Resale Condo Market? Here’s What to Watch Out For!
TLDR The impact of COVID-19 on Singapore's real estate market has been significant, leading to a surge in demand for...
Read More
