What does it mean to BUY PROPERTY at the Right Time?
We are living in crazy times now. You may have seen plenty of ads or articles telling you – Now are a great time to dive into the property market or it is the right or best time to buy properties. Is that really the case?
Based on our professional opinion, the best time to buy property for one person may not necessarily be the same for another – simply because everyone has different interests and considerations.
I prefer to recommend clients by helping them check off their personal needs to determine if the timing is right for them (and not anyone else) to buy that dream property of theirs or move ahead with their property journey.
Since this topic is on top of our mind for many these days, I thought I can share a popular list of conditions for you to consider before making the move.
My take: There is never one right time to buy a property.
The best property purchase is when you have checked off most, if not all the conditions on our checklist. Read on for more explanation on the conditions.
Table of Contents
Property Supply Exceeds Demand
I always go back to basics. As a buyer, the ideal situation is for supply to exceed demand. Simply put, it means more properties are being put on sale than there are buyers.
Sometimes after the MOP period of a new neighbourhood of BTOs, you might see a sudden surge in supply.
Otherwise, a good way to gauge if this is the case, would be to check the number of listings, how long they have been on the market (on property listing platforms such as PropertyGuru or 99.co and records of transaction prices and when they took place in the neighbourhood on the HDB or URA website.
After doing your homework, you realize there are more listings available than there are buyers in the recent months, then it is indeed a buyer’s market.
This is great for potential buyers, because sellers will realize they need to lower their asking price in order to sell.
This puts the ball in the court of the buyer, giving you stronger bargaining power.
Low Interest Rates
Most homeowners and property investors require bank loans when purchasing property. As lower interest rates mean less money needs to be repaid, they are incredibly attractive for anyone looking to take loans to buy a property.
Anyone on the lookout to purchase property should also definitely keep another eye on the interest rate trends.
Fun fact: SIBOR-pegged mortgage rates have been on a downward trend since Feb 2020, and experts say they have never seen SIBOR rates so low in this decade
One of the largest factors that can easily make or break your property purchasing decisions are the prevailing government policies.
If you are a Singaporean, you must have heard of the cooling measures and property purchasing rules revision the government has put in place in the past two years.
Depending on which type of buyer you are and if you are a Singapore citizen, PR or foreigner, you can be in a better- or worst-off position.
So be sure to check out the latest measures as you are preparing for a purchase – so you do not get an unexpected shock.
Economic Certainty or Uncertainty
I cannot emphasize more on this point – Always consider the (local and global) economy when you are looking to buy property.
Why? A huge purchase like this is not a one-off payment; you are likely to upkeep monthly mortgage payments – be it a home-buyer or an property investor.
And the economic conditions will affect your ability to do so.
For instance, in difficult economic times, corporations will resort to cost-cutting measures from retrenchment to reduction of expat packages which could affect individual abilities to manage their loans and or rentals that rely heavily on expat leases.
New Launch Discounts or Starbuys
This is a common practice amongst developers in Singapore. To create awareness for their new project, developers typically tie their previews and launches together with attractive developer discounts for the early birds.
Even if you missed the main launch, you may still be able to look out for starbuys with new promotions since units are normally released in phases. Developers may be giving incentives to motivate buyers and to boost sales for their balanced units.
No matter the situation, this puts buyers in an advantageous position – with the “build-in” profits and higher capital gains.
Owners are motivated by different reasons, sometimes practical sometimes personal, to let go of their property.
In some cases, they are motivated to sell their property quickly and are willing to let go of their unit below its true market value.
With right analysis and study, you might be lucky enough to get a really good buy!
Property Investment Vs Property Speculation
Property Investment refers to the purchase of an asset, with certain facts to gain returns on investment and substantial profits in the future.
Property Speculation refers to the purchase of an asset, with certain predictions that the value of the asset will appreciate in the near-future.
With the various cooling measures implemented in Singapore, the Government has significantly softened property speculations.
As such, price movements would not be dramatic in the short term.
Buyers must recognise that you should be looking at longer-term investments instead of flipping properties for profits.
Buying Property in Singapore down payment
You should know by now that personal finance is one of the most important factors to consider and I highly recommend getting this done, to get a clear picture of where you are now and what to expect moving ahead.
While all the conditions might look attractive for you to dive right in, understanding your own finances is equally important.
Trust me, you do not want to over stretch yourself and put yourself in a high risk position.
This is generally how much you need to purchase a private property:
75% Max Loan from Bank
Legal fee – $2,500 to $3,000 (cpf / cash)
Stamp duty :
- for property up to $1 million = (3% x Purchase Price) – $5400
- for property more than $1 million = (4% x Purchase Price) – $15400 >
Time plays a big part in our decision making since at any one point in time; everyone is of different age and in different life situations.
So, one common mistake is to assume that you can only buy at one lowest point and sell at one highest point of the curve.
Based on our experience, we can never make perfect predictions as we are not able to anticipate Government policies or black swan events like Covid-19.
Hence, you think you might miss the boat and want to wait for the next wave. Should you?
Property cycles may come in 5 to 10 years and there will always be elements that stand in our way when we want to make a purchase. For example TDSR, loan eligibility and our age.
In short, we can never be 100% sure in spotting the exact highest and exact lowest points.
Additionally, we may not have all the time in the world to take a wait-and-see approach if we think we miss one cycle and want to wait for the next.
My advice? Do your homework – know when you should be buying or selling property.
There is no need to wait for the exact moment for all elements to be perfectly aligned, before you take actions.
Other solid fact-based considerations like the Master Plan, Future Plan and Developments, Property peak values will help in your decision-making.
Well, have you ticked off on the above conditions in our list so far?
Bonus: If you are the lucky few, who are not impacted by the current downturn, and it just happens that the above other conditions are well fulfilled in your case, it is definitely looking like a great time to buy your property.
If you want to learn more about your specific situation, and would like a professional property expert to guide you through the process, please feel free to contact me
I have successfully advised and helped many of my clients, both property owners and investors alike, to upgrade their lifestyle and build-up their property portfolio.
I too, am grateful for the continuous opportunity to value-add in their property journey.
It does not take much and starts with just a simple phone call.
Turn your dream into reality today!
I will assess:
- Your Current life situation / life stage
- Do an IN-DEPTH Financial quick calculation
- I will only recommend proven methods and steps
You ONLY need 20 minutes to clear your doubts!
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Rick Huang, Associate Deputy Group Director of OrangeTee & Tie, has been in the Real Estate industry for a decade.
He is driven, committed and is enthusiastic about real estate investments.
Today, he leads Team Youhome.sg, and together, aims to provide his clients with the best experience in their property journey.
The team focuses on understanding client’s personal finances and needs, and is determined about delivering the best solutions and results for them.
Amidst the hustle and bustle, Rick enjoy quiet time and indulge himself in the intricate art of tea-brewing and tea pot appreciation.
He would also take this chance to energise himself and reflect on his personal development and areas of improvements.
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I have successfully helped hundreds of homeowners just like you since 2010