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Thread: Rocketing prices dampen their hopes for condo

  1. #1
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    Default Rocketing prices dampen their hopes for condo

    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 [email protected] 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.'

  2. #2
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    Default Re: Rocketing prices dampen their hopes for condo

    Quote Originally Posted by ahlahdin
    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.

    ....................

    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.'

    This kind of thing.
    Cannot wait one lah.

  3. #3
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    Default Re: Rocketing prices dampen their hopes for condo

    yah lar..look at the stock market.

    capital land..from 1.40 all the way to $8.
    kepland..$9+
    Sgx...???
    Sia, dbs, uob etc etc...

    if you have gotten 1 lot each...it should be minimum 6 folds by now..

    how to cope?

  4. #4
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    Default Re: Rocketing prices dampen their hopes for condo

    Quote Originally Posted by Unregistered
    yah lar..look at the stock market.

    capital land..from 1.40 all the way to $8.
    kepland..$9+
    Sgx...???
    Sia, dbs, uob etc etc...

    if you have gotten 1 lot each...it should be minimum 6 folds by now..

    how to cope?

    Just look at the latest GDP figure.
    The GDP figure has also followed the rest of indices and gone crazy.

  5. #5
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    Default Re: Rocketing prices dampen their hopes for condo

    We are afraid rising prop. market might slow for a while due to gov's call for cautiousness, but not easy to effectively go down from here any time soon. Remember an article in Feb/March in newspaper saying that at this situation, only two solution: 1) join now, accept the loss already made, go buy a still affordable home quickly (may have to go further to city but still plenty of choices), or, 2) get prepared to wait for a long time, sooner or later prices will stop rising and go down, but nobody knows when and if it will go down to current level or lower. We agreed and bought our new home now.

    For home buyers like us, stable market is the best situation. Sigh.

  6. #6
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    Default Re: Rocketing prices dampen their hopes for condo

    Mr LEE is a smart guy. What he is worrying right now is the rising HDB price not Condo.

    Thats why HDB can only be purchased by Singaporeans(married couple). Why?
    So that the supplies and prices will not be affected by speculators.

    For those who complains about rising rent prices, Nobody here in Singapore force you to rent a dist 9 and 10 condos. You can always look for cheaper rent arount D 3, 15 and 21 yet quite near to orchard and the city. Rental price still low at that districts.

    No measures will be taken. The govt is not that stupid to turn the economy upside down when singapore is at its "GOLDEN YEARS" as what Mr Lee described it.

  7. #7
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    Default Re: Rocketing prices dampen their hopes for condo

    my personal thoughts..go to sub urb..prices still ok for now and convenient as well since mrt and circle line all coming..

  8. #8
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    Default Re: Rocketing prices dampen their hopes for condo

    Quote Originally Posted by Unregistered
    Mr LEE is a smart guy. What he is worrying right now is the rising HDB price not Condo.

    Thats why HDB can only be purchased by Singaporeans(married couple). Why?
    So that the supplies and prices will not be affected by speculators.

    For those who complains about rising rent prices, Nobody here in Singapore force you to rent a dist 9 and 10 condos. You can always look for cheaper rent arount D 3, 15 and 21 yet quite near to orchard and the city. Rental price still low at that districts.

    No measures will be taken. The govt is not that stupid to turn the economy upside down when singapore is at its "GOLDEN YEARS" as what Mr Lee described it.
    Quote Originally Posted by Unregistered
    my personal thoughts..go to sub urb..prices still ok for now and convenient as well since mrt and circle line all coming..

    Agree.

    1. HDB prices must only rise gradually - no surge is allowed. Otherwise, citizens will be priced out and become homeless.
    2. Stablise the suburb (Outside Central) condo prices so that citizens have choices to upgrade. Stablise means releasing more lands and calming people down - not stupid act of interfering with the market.
    3. Let market forces determine the prices for the rest of the condos (Central) so that we are seen as investor-friendly and market-friendly.

  9. #9
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    Default Re: Rocketing prices dampen their hopes for condo

    Aiyoh, may advice very simple. Tell an agent your budget is 600k for a 3 condo, ask them to show you where got? I tell you, sure got one lar. Yishun got alot.

  10. #10
    TOTALLY 100% AGREE!
    Guest

    Default Re: Rocketing prices dampen their hopes for condo

    TOTALLY 100% AGREE! And I think this will be the most probable scenario! They cannot clamp down on prime districts because that will scare off potential big foreign investors.


    Quote Originally Posted by Registered
    Agree.

    1. HDB prices must only rise gradually - no surge is allowed. Otherwise, citizens will be priced out and become homeless.
    2. Stablise the suburb (Outside Central) condo prices so that citizens have choices to upgrade. Stablise means releasing more lands and calming people down - not stupid act of interfering with the market.
    3. Let market forces determine the prices for the rest of the condos (Central) so that we are seen as investor-friendly and market-friendly.

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