ahlahdin
11-07-07, 01:01
Rocketing prices dampen their hopes for condo
# MM Lee says the heated property market needs to be checked
# This couple agrees. The price of the condo they were eyeing has shot up
by $200,000 in 1/2 year
By Desmond Ng
July 10, 2007
THEIR decision to wait cost them $200,000.
Ms Pauline Lim, 29, and her fiance Patrick Ho, 31, decided not to buy a 1,000 sq ft two-bedroom condo unit at Heritage View in Dover Road.
It was going for $500,000 plus last December when the couple, both marketing managers, were house-hunting.
Ms Lim said: 'We decided to look around and explore our options. We didn't hear any news about prices going up, except the luxurious ones in the central areas.
'What we didn't expect was prices to go up so high and so fast.'
A similar-sized unit in the project was sold for $730,000 last month - a $200,000 increase in just six months. The couple's budget is about $600,000.
Private home prices shot up across the board for the April - June period. The increase of 7.9 per cent was the biggest jump since the third quarter in 1999.
Minister Mentor Lee Kuan Yew warned on Saturday that rising property prices and rents have to be kept in check, or Singapore will lose its competitiveness.
For Ms Lim and Mr Ho the Government's move to cool the prices may have come too late.
'Maybe we should have bought that property then. Then we wouldn't have to worry now,' said Ms Lim with a hint of regret.
Now, they're thinking of staying with her parents in a resale flat in Bedok Reservoir View until property prices start heading south.
But if this is what some believe to be the beginning of a property bull-run, they could be in for a long wait because a typical property cycle is about seven years, industry watchers said.
HDB OPTION
The couple could explore the HDB option, but their combined income of about $9,000 has busted HDB's qualifying income ceiling. The household income ceiling for the purchase of a subsidised new flat by first-time buyers is $8,000 per month.
The couple came to know about the ceiling when they went to look at HDB's The Premiere@Tampines last October.
Ms Lim said: 'We were eyeing a three-bedroom flat priced at about $380,000, which was well within our budget. We sat down and discussed it with one of the agents there and realised that we couldn't buy because our combined salary was too high.'
With new flats out of the equation, they considered resale flats in central areas such as Queenstown, but that too has become increasingly expensive, with record-breaking prices of late.
Just last month, a five-room flat there was sold for a high of $720,000.
ERA Singapore assistant vice-president Eugene Lim cautioned against chasing after soaring prices, especially for those who are afraid to miss the boat in today's booming market.
He said: 'In this market, first-time buyers are indeed getting priced out of the condo market. Even with a budget of $500,000, finding a three-bedroom condo will be tough. Perhaps they can look at old resale ones in far-flung areas.'
Buying at valuation is a rarity these days, even in the HDB market, where sellers are asking for $50,000 above valuation for a suburban flat with no outstanding attributes, he said.
Which way prices will go from here is really anyone's guess.
Mr Lim said: 'But at the end of the day, don't over-commit. Buying a property is a long-term affair. If you don't have the budget, be realistic. You can wait for the market to cool down.'
As a guide, he advised that no more than 30 per cent of the household income should go towards financing the loan.
NEGATIVE EQUITY
While some may argue that property prices are still 20 per cent from the 1996 peak, Mr Lim said there are lessons to be learnt from the 1997 financial crisis when property prices took a beating, plunging many into negative equity.
This is when the mortgage loan exceeds the underlying property's market value.
Mr Lim advised: 'As a home-buyer, what you want to do is to protect yourself. Learn from the 1997 crash. Do you have an escape plan, can you take the loss? If you can service your loan, then there's no problem. But if you were to sell it at a loss, can you take it?
'If you use your entire savings to pay the loan, you're essentially a slave to the bank. Don't overstretch yourself.'
# MM Lee says the heated property market needs to be checked
# This couple agrees. The price of the condo they were eyeing has shot up
by $200,000 in 1/2 year
By Desmond Ng
July 10, 2007
THEIR decision to wait cost them $200,000.
Ms Pauline Lim, 29, and her fiance Patrick Ho, 31, decided not to buy a 1,000 sq ft two-bedroom condo unit at Heritage View in Dover Road.
It was going for $500,000 plus last December when the couple, both marketing managers, were house-hunting.
Ms Lim said: 'We decided to look around and explore our options. We didn't hear any news about prices going up, except the luxurious ones in the central areas.
'What we didn't expect was prices to go up so high and so fast.'
A similar-sized unit in the project was sold for $730,000 last month - a $200,000 increase in just six months. The couple's budget is about $600,000.
Private home prices shot up across the board for the April - June period. The increase of 7.9 per cent was the biggest jump since the third quarter in 1999.
Minister Mentor Lee Kuan Yew warned on Saturday that rising property prices and rents have to be kept in check, or Singapore will lose its competitiveness.
For Ms Lim and Mr Ho the Government's move to cool the prices may have come too late.
'Maybe we should have bought that property then. Then we wouldn't have to worry now,' said Ms Lim with a hint of regret.
Now, they're thinking of staying with her parents in a resale flat in Bedok Reservoir View until property prices start heading south.
But if this is what some believe to be the beginning of a property bull-run, they could be in for a long wait because a typical property cycle is about seven years, industry watchers said.
HDB OPTION
The couple could explore the HDB option, but their combined income of about $9,000 has busted HDB's qualifying income ceiling. The household income ceiling for the purchase of a subsidised new flat by first-time buyers is $8,000 per month.
The couple came to know about the ceiling when they went to look at HDB's The Premiere@Tampines last October.
Ms Lim said: 'We were eyeing a three-bedroom flat priced at about $380,000, which was well within our budget. We sat down and discussed it with one of the agents there and realised that we couldn't buy because our combined salary was too high.'
With new flats out of the equation, they considered resale flats in central areas such as Queenstown, but that too has become increasingly expensive, with record-breaking prices of late.
Just last month, a five-room flat there was sold for a high of $720,000.
ERA Singapore assistant vice-president Eugene Lim cautioned against chasing after soaring prices, especially for those who are afraid to miss the boat in today's booming market.
He said: 'In this market, first-time buyers are indeed getting priced out of the condo market. Even with a budget of $500,000, finding a three-bedroom condo will be tough. Perhaps they can look at old resale ones in far-flung areas.'
Buying at valuation is a rarity these days, even in the HDB market, where sellers are asking for $50,000 above valuation for a suburban flat with no outstanding attributes, he said.
Which way prices will go from here is really anyone's guess.
Mr Lim said: 'But at the end of the day, don't over-commit. Buying a property is a long-term affair. If you don't have the budget, be realistic. You can wait for the market to cool down.'
As a guide, he advised that no more than 30 per cent of the household income should go towards financing the loan.
NEGATIVE EQUITY
While some may argue that property prices are still 20 per cent from the 1996 peak, Mr Lim said there are lessons to be learnt from the 1997 financial crisis when property prices took a beating, plunging many into negative equity.
This is when the mortgage loan exceeds the underlying property's market value.
Mr Lim advised: 'As a home-buyer, what you want to do is to protect yourself. Learn from the 1997 crash. Do you have an escape plan, can you take the loss? If you can service your loan, then there's no problem. But if you were to sell it at a loss, can you take it?
'If you use your entire savings to pay the loan, you're essentially a slave to the bank. Don't overstretch yourself.'