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Thread: to invest now or to wait?

  1. #1
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    Default to invest now or to wait?

    dear forummers, would like to hear some views from you guys.
    We currently own a condo, fully paid up, valued at 2.2m. We wish to move to a smaller condo and rent out our current condo. We only have enough for downpayment of smaller condo, but we have no outstanding loans. Would you advise this is a good time to buy this 2nd condo now? Or should we wait for next yr as i hear prices may soften by yr end.

    And if we do go ahead and buy, would you advise us taking up a term loan off our current ppty or just take a bank loan? Any differences between the two?
    Last edited by penguin; 22-10-13 at 11:43.

  2. #2
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    I often referred by some forumers here as "a super bull". Maybe in a way I am. My advise is still the same. If you can afford it, just buy it. The conditions that create a property bull run hasn't change. Money is still depreciating, population is still increasing. Maybe the buying fatigue has set in, but the drive is still there.

    For example you are a very typical of the demand. Got the money, but hesitate to invest. Trust me, there are plenty of people in similar situation like you.

  3. #3
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    It is nice to be unaffected by all the damn cooling measures.

  4. #4
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    Dont buy dont buy

    just wait......

  5. #5
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    buy if you can get find a property asking for 25% discount or more from last transaction / valuation....

  6. #6
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    I thought most investors have turned to overseas ppty after the 7% absd.

    I have another thinking - to sell current ppty and buy a smaller ppty A and hold onto remaining cash till ppty prices soften, then get another small ppty B as investment. This way, we can purchase A and B under different names to escape the absd. But the downside is we wont be able to get a ppty for the same price in as good a location as our current ppty now.

    Would you advise me to keep current ppty and buy 2nd ppty with absd? Target purchase price is ard 1.2m. Or to sell current ppty as above?

  7. #7
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    Quote Originally Posted by limfc View Post
    buy if you can get find a property asking for 25% discount or more from last transaction / valuation....
    So far i have not seen any sellers selling below previous transacted psf. All are asking higher. I dont think the market has soften till prices drop 25%. I will be happy if can get same psf as previous transaction.

    Last week i went to see Coralis. Unit advertised at 2.2m. However when we viewed the unit,agent said seller asking 2.6m. Size is only 1257sqft. We were quite angry as the agent should advertise the right asking price. Then agent said seller paid in full for this unit, so in no hurry to sell.

  8. #8
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    Doing nothing is equivalent of:

    Current:
    $2.2m x 3% yield = -$66k (consuming)
    Interests Costs = $0

    Cash on hand = $0
    Profits = -$66k + $0 = -$66k


    Buying two new properties:

    A - Own Stay (New Place)
    $1.2m x 3% yield = - $36k (consuming)
    Interests Costs = 80% x $1.2m x 1% = -$10k

    B - Rented Out (New Place)
    $2.2m x 3% = $66k (renting)
    Interests Costs = 80% x $2.2m x 1% = -$17.6k

    Cash on hand = 99% x 2.2m - 23% x $1.2m - 23% x $2.2m = $1.396m
    Profits = - $36k - $10k + $66k - $17.6k = $2.4k


    Doing nothing is actually costing you $66k per annum. Buy two and sell old is actually having a nett $2.4k profits and not to mention the released cash of 80% equity. (NOTE: this is not cash flow)

  9. #9
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    I will wait. I don't like paying 7% ABSD even though you can get 80% loan.


    Quote Originally Posted by penguin View Post
    dear forummers, would like to hear some views from you guys.
    We currently own a condo, fully paid up, valued at 2.2m. We wish to move to a smaller condo and rent out our current condo. We only have enough for downpayment of smaller condo, but we have no outstanding loans. Would you advise this is a good time to buy this 2nd condo now? Or should we wait for next yr as i hear prices may soften by yr end.

    And if we do go ahead and buy, would you advise us taking up a term loan off our current ppty or just take a bank loan? Any differences between the two?

  10. #10
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    Quote Originally Posted by thomastansb View Post
    I will wait. I don't like paying 7% ABSD even though you can get 80% loan.
    when do u foresee the earliest absd will be removed?

  11. #11
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    Quote Originally Posted by mermaid View Post
    when do u foresee the earliest absd will be removed?
    when market crash...

  12. #12
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    Dont think absd will be removed anytime in next 3yrs.

    What is the time lapse i can play with if i do sell my place and buy another without incurring 7% absd? Ie. If i buy new plc first, will i be given time to sell off current ppty? Or must i sell current plc first then buy new plc?

  13. #13
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    Quote Originally Posted by penguin View Post
    Dont think absd will be removed anytime in next 3yrs.

    What is the time lapse i can play with if i do sell my place and buy another without incurring 7% absd? Ie. If i buy new plc first, will i be given time to sell off current ppty? Or must i sell current plc first then buy new plc?
    Actually, I think you've almost made up your mind to buy another one. there is nothing wrong because no one can predict the future. As a matter of fact, given current environment, high inflation will be a long trend. If the properties prices in SG is subdued in two or three years due to the CMs and TDSR, there will be a burst of demand three years later.

    Given the relative big quantum of your current one, it does not make sense to sell the current one to avoid absd unless you want to buy a even bigger one because you need to pay the 3% sales tax for the current one.

    my understanding is that, to avoid absd, you must sell the current one to buy another resale one, or sell the current one before TOP if you buy new launches.

  14. #14
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    I believe you can avoid absd if you can provide evidence that you have sold or are selling (example have a signed option to purchase from your buyer) your property before you purchased your next property.

    If you buy buc before you sell your property I believe you still need to pay absd.

  15. #15
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    Loans are harder, for Hdb 30% income. how much more cov owners can ask, when the valuations price is alrdy so tough to get loan under 30% cm.

    Loans for Pte, at 60% income.

    Owners can hold if low interests maintain.

    Buyers wannabe cannot touch. It's a game of self illusion, holding to high values props but alot of buyers are chopped off by cms. Transactions to come down

    Where do we see its going towards..?

    *ps/ I tried applied for hdb/pte loans and got a shock, how stringent loans are being approved now

  16. #16
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    Quote Originally Posted by indomie View Post
    I often referred by some forumers here as "a super bull". Maybe in a way I am. My advise is still the same. If you can afford it, just buy it. The conditions that create a property bull run hasn't change. Money is still depreciating, population is still increasing. Maybe the buying fatigue has set in, but the drive is still there.

    For example you are a very typical of the demand. Got the money, but hesitate to invest. Trust me, there are plenty of people in similar situation like you.
    I like the way you put it..... buying fatigue at the moment but demographics trend sets the property trend as well.

  17. #17
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    Quote Originally Posted by lionhill View Post
    Actually, I think you've almost made up your mind to buy another one. there is nothing wrong because no one can predict the future. As a matter of fact, given current environment, high inflation will be a long trend. If the properties prices in SG is subdued in two or three years due to the CMs and TDSR, there will be a burst of demand three years later.

    Given the relative big quantum of your current one, it does not make sense to sell the current one to avoid absd unless you want to buy a even bigger one because you need to pay the 3% sales tax for the current one.

    my understanding is that, to avoid absd, you must sell the current one to buy another resale one, or sell the current one before TOP if you buy new launches.
    Yes you are right that i have made up my mind to buy. I saw a unit that i like but hesitant whether to wait for a few more months due to the fact that hdb cov is comin down. My own analysis tells me upgraders will have lesser budget or may just wait it out, causing market to be very stagnant and serious sellers may just sell lower than expected. The ppty im looking to buy is a small unit, low quantum which i think belongs to the same group as what hdb upgraders would want.

    Why do you say if i sell my current ppty i need to pay 3% sales tax? What is this tax?

  18. #18
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    Quote Originally Posted by mermaid View Post
    when do u foresee the earliest absd will be removed?
    Removal of ABSD may not happen as long as Singapore is seen as Switzerland of the east......

    The whole idea is to make ownership of a property in Singapore akin to a limited edition kind of purchase.

    This creates a larger pool of stakeholders both Singaporeans and foreigners in Singapore although the stake is only 1 property per person because barriers for >1 property are stacked up.

    It will be tough to remove considering that we are moving to 5.9 - 6.5 million population.

    Just imagine the China Chinese middle class rising in purchase power and if everyone of them wants to own a unit in Singapore is enough to sustain the demand, i.e. Singapore brand is worth alot.

    As for India, not too sure because their society structure is not as sound as the Chinese with FDI and rupee falling.

    We the early immigrants (not aborigines) of Singapore will become Straits Chinese 50 years down the road, i.e. a minority just like the Peranakan folks now.

    Adapt adapt adapt and embrace our heritage. We will need to strive and protect our way of living as the population scales tips out of our favour. The good thing is, we Singaporeans can help shape the system moving forward for us and the new immigrants.

  19. #19
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    Quote Originally Posted by solsys View Post
    Removal of ABSD may not happen as long as Singapore is seen as Switzerland of the east......

    The whole idea is to make ownership of a property in Singapore akin to a limited edition kind of purchase.

    This creates a larger pool of stakeholders both Singaporeans and foreigners in Singapore although the stake is only 1 property per person because barriers for >1 property are stacked up.

    It will be tough to remove considering that we are moving to 5.9 - 6.5 million population.

    Just imagine the China Chinese middle class rising in purchase power and if everyone of them wants to own a unit in Singapore is enough to sustain the demand, i.e. Singapore brand is worth alot.

    As for India, not too sure because their society structure is not as sound as the Chinese with FDI and rupee falling.

    We the early immigrants (not aborigines) of Singapore will become Straits Chinese 50 years down the road, i.e. a minority just like the Peranakan folks now.

    Adapt adapt adapt and embrace our heritage. We will need to strive and protect our way of living as the population scales tips out of our favour. The good thing is, we Singaporeans can help shape the system moving forward for us and the new immigrants.
    so if the general sentiment is tat absd will be here for good, hard for prices to really come down eg 20% wor since everyone who can still afford will no longer wait.

    unless policy makers state they will remove absd explicitly eg, latest by 2015

  20. #20
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    When the 7% ABSD and the LTV was imposed, Tharman already said these measures are drastic but temporary. COV dropping fast and furious, big HDB units are difficult to sell now, private resale prices starting to show weaknesses. I wouldn't want to bet on that.


    "These new ABSDs and loan rules are significant, but they are temporary. They are being imposed to cool the market now, and will be reviewed in future depending on market conditions."

    http://www.ura.gov.sg/pr/text/2013/pr13-04.html


    Quote Originally Posted by solsys View Post
    Removal of ABSD may not happen as long as Singapore is seen as Switzerland of the east......

    The whole idea is to make ownership of a property in Singapore akin to a limited edition kind of purchase.

    This creates a larger pool of stakeholders both Singaporeans and foreigners in Singapore although the stake is only 1 property per person because barriers for >1 property are stacked up.

    It will be tough to remove considering that we are moving to 5.9 - 6.5 million population.

    Just imagine the China Chinese middle class rising in purchase power and if everyone of them wants to own a unit in Singapore is enough to sustain the demand, i.e. Singapore brand is worth alot.

    As for India, not too sure because their society structure is not as sound as the Chinese with FDI and rupee falling.

    We the early immigrants (not aborigines) of Singapore will become Straits Chinese 50 years down the road, i.e. a minority just like the Peranakan folks now.

    Adapt adapt adapt and embrace our heritage. We will need to strive and protect our way of living as the population scales tips out of our favour. The good thing is, we Singaporeans can help shape the system moving forward for us and the new immigrants.

  21. #21
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    Quote Originally Posted by penguin View Post
    Why do you say if i sell my current ppty i need to pay 3% sales tax? What is this tax?
    I had thought there was always a 3% stamp duty for sellers. but I checked the IRAS just now, it applies only when one holds a property for less than 4 years.

    thank you for pointing it out.

  22. #22
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    People are funny. Anyway, in 2009, prices dropped 32% but people still saying will continue to drop and never buy. Transactions hit an all time low of 100. Citibank also say likely to drop 45% although that didn't happen. So I will say if it drop 20%, all buyers will disappear overnight. Now no crisis, of course everyone waiting. When crisis come, some will lose their job, some will tighten their belt but most will be humji. Don't dare to enter market.




    Quote Originally Posted by mermaid View Post
    so if the general sentiment is tat absd will be here for good, hard for prices to really come down eg 20% wor since everyone who can still afford will no longer wait.

    unless policy makers state they will remove absd explicitly eg, latest by 2015

  23. #23
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    Quote Originally Posted by thomastansb View Post
    [I]"These new ABSDs and loan rules are significant, but they are temporary. They are being imposed to cool the market now, and will be reviewed in future depending on market conditions."
    look at how skilfully tharman phrased his words.

    1. whether it will be reviewed onot depends on market conditions.

    2. will be reviewed is diff fm will be removed.
    there is no guarantee tat absd will be removed.

  24. #24
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    Quote Originally Posted by thomastansb View Post
    People are funny. Anyway, in 2009, prices dropped 32% but people still saying will continue to drop and never buy. Transactions hit an all time low of 100. Citibank also say likely to drop 45% although that didn't happen. So I will say if it drop 20%, all buyers will disappear overnight. Now no crisis, of course everyone waiting. When crisis come, some will lose their job, some will tighten their belt but most will be humji. Don't dare to enter market.
    actually I did seriously considered tis qn too. will I buy if market is bad & job is uncertain?
    my answer is yes.

    will I buy if I lose my job?
    my answer is still yes but I will reduce my budget by 10%

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    Quote Originally Posted by mermaid View Post
    actually I did seriously considered tis qn too. will I buy if market is bad & job is uncertain?
    my answer is yes.

    will I buy if I lose my job?
    my answer is still yes but I will reduce my budget by 10%

    You should set aside some money to pay maintenance fee.
    "Never argue with an idiot, or he will drag you down to his level and beat you with experience."

  26. #26
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    Quote Originally Posted by mermaid View Post
    look at how skilfully tharman phrased his words.

    1. whether it will be reviewed onot depends on market conditions.

    2. will be reviewed is diff fm will be removed.
    there is no guarantee tat absd will be removed.
    he oso use the word temporily leh... as long as u are the head, u can say anything u want.
    Ong lai ah!

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    Quote Originally Posted by Ringo33 View Post
    You should set aside some money to pay maintenance fee.
    how come leh? issit u foreseen tat u will hv problem paying yr maintenance fee after burning a hefty hole in yr pocket fm the purchase of JG?

    dun worry wor, if the unit is exp I wun even buy in the 1st place

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    Quote Originally Posted by onglai View Post
    he oso use the word temporily leh... as long as u are the head, u can say anything u want.
    of cos cannot use the word permanently wat. 2016 is coming, nothing is permanent

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    Quote Originally Posted by mermaid View Post
    how come leh? issit u foreseen tat u will hv problem paying yr maintenance fee after burning a hefty hole in yr pocket fm the purchase of JG?

    dun worry wor, if the unit is exp I wun even buy in the 1st place

    1st property?
    "Never argue with an idiot, or he will drag you down to his level and beat you with experience."

  30. #30
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    Quote Originally Posted by Ringo33 View Post
    1st property?
    means wat?
    JG is yr 1st ppty?
    dun get wat u r asking.

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