Should we sell?

[Wunderkind]

Crash will not happen. 80% of the people I know are waiting to jump in... How to crash?

Don't think it will happen this round... We are only facing a technical pullback.. Once TDRS and ABSD are taken away, buyers will jump in like no tomorrow.

I am also waiting ... Seriously, don't think it will come.

It is unlikely that the property market will crash unless it is triggered by an external event which the government has no control over.

Some moderation of price will happen as demand tapers due to lesser liquidity. But the market will not fall by more than 20% to 30% in the current economic environment. The government can still intervene to prop up the market if the market signals an over-correction.

[invigorated]

It is unlikely that the property market will crash unless it is triggered by an external event which the government has no control over.

Some moderation of price will happen as demand tapers due to lesser liquidity. But the market will not fall by more than 20% to 30% in the current economic environment. The government can still intervene to prop up the market if the market signals an over-correction.

Agree with your viewpoint. Take the recent sky habitat for example. A price drop of 10-15% already lured a few more takers. If they drop another 10%, prob a good number will be snapped up. There is a certain threshold or demand-supply working here. Would I buy now? No. Would I buy if prices drop another 30%? Probably!

The govt knows this and it's letting nature take its course. Nothing for it to worry about. Its view is for the long haul anyway.

[Juniper]

You misunderstood my point. My point is that your objective must be clear.

From your reply, I'm not too sure if you were even considering selling in the first place or trying to imply that we shouldn't be selling our properties.

If I were to hold more than two properties, which I am not, I will seriously consider selling 1 or 2 to diversify my risks. If the market drops and CMs are eventually relaxed, e.g. absd or tdsr changes, I can pick up some good buys as I possess Firepower. Now if u keep all of them, you've basically locked all options.

You are also making a lot of assumptions here and it is still uncertain how things will map out. No one knows for sure what measures will be changed, how interest rates will go up and how rental will be affected, how much prices will fall or rise.

You may already be speculating by making assumptions on these and that may be dangerous by itself. Do map out other possible scenarios.

There is very little assumption on my side actually. The scenarios I painted are actually based on what you said about price falling 20%. The only assumption I made is the 20% fall will happens in 1 year time. If its 2 years, then it could even be less favorable to cash out.

Personally I would not bet on government removing cooling measures and even if they do, it might no necessary benefit my situation, plus removing cooling measures will actually benefit existing investors more than would be buyer, as the latter will be able be to cash out during the upswing.

[smartboy2]

Juniper,


keep your properties. if you want to sell, sell the one with the lesser lease remaining, unless both are FH, then sell the one with less desirable location.

[walkthetiger]

Crash will not happen. 80% of the people I know are waiting to jump in... How to crash?

Don't think it will happen this round... We are only facing a technical pullback.. Once TDRS and ABSD are taken away, buyers will jump in like no tomorrow.

I am also waiting ... Seriously, don't think it will come.

Agree, now indeed it still quite far to see it clearly happening.... the time is still not right..... all the worse has not yet fully arrive, now we are only beginning to see the worse coming slowly. This thing needs something to wipe out all the buying confidence to happen..

I worry the market turn into a long slow decline.... not a good thing either...nobody will gain from such market...If so, I rather see it crash....Hope all agree.

[Maxim1]

Agree, now indeed it still quite far to see it clearly happening.... the time is still not right..... all the worse has not yet fully arrive, now we are only beginning to see the worse coming slowly. This thing needs something to wipe out all the buying confidence to happen..

I worry the market turn into a long slow decline.... not a good thing either...nobody will gain from such market...If so, I rather see it crash....Hope all agree.

Long slow decline seems more likely than a crash. It looks like the government wants to wait for incomes to catch up with housing. But if you are an investor and have properties rented out (thus giving you >5% return on equity net of interest) then very little reason to sell unless properties are not in good location and difficult to find tenants.

[Londonproperty123]

Some want more cooling measures.

http://www.todayonline.com/business/...property-curbs

[Maxim1]

Some want more cooling measures.

http://www.todayonline.com/business/...property-curbs

These people have their own agenda. Whoever asks for more cooling measures should declare whether they are prospective buyer or not. The fact that people are calling for more cooling measures means they are very interested to buy. Thus why sell to them cheap now if you have good units?

[Kelonguni]

Some want more cooling measures.

Seller and buyer in equilibrium state. Govt collecting max revenue - price is exactly as planned. Why need to do anything more?

[DC33_2008]

This could be the group who have sold their homes and renting now.

These people have their own agenda. Whoever asks for more cooling measures should declare whether they are prospective buyer or not. The fact that people are calling for more cooling measures means they are very interested to buy. Thus why sell to them cheap now if you have good units?

[walkthetiger]

Long slow decline seems more likely than a crash. It looks like the government wants to wait for incomes to catch up with housing. But if you are an investor and have properties rented out (thus giving you >5% return on equity net of interest) then very little reason to sell unless properties are not in good location and difficult to find tenants.

Agree..it will go into a long slow decline, which is likely... then gov won the battle completely if so, there is nothing much we can do about it, unless big players want to sink the market but hard to see this happen in singapore too. So, in the end it will eventually goes back to some old days where nobody talk about property anymore...those older investors will know what I meant.

[DC33_2008]

Unlikely for a place like Singapore with limited land, strong currency, stability, etc.

Agree..it will go into a long slow decline, which is likely... then gov won the battle completely if so, there is nothing much we can do about it, unless big players want to sink the market but hard to see this happen in singapore too. So, in the end it will eventually goes back to some old days where nobody talk about property anymore...those older investors will know what I meant.

[walkthetiger]

Unlikely for a place like Singapore with limited land, strong currency, stability, etc.

....it is not so simple... think about what type of gov do you have first....good luck.

[teddybear]

The surveys are conducted mostly for buyers, so obviously those want property prices to crash!
Imagine a nation of 90% property owners, you think 74% will want property prices to drop?!

These people have their own agenda. Whoever asks for more cooling measures should declare whether they are prospective buyer or not. The fact that people are calling for more cooling measures means they are very interested to buy. Thus why sell to them cheap now if you have good units?

[august]

This could be the group who have sold their homes and renting now.

Quite a number are doing this. I say good luck to them.

[Maxim1]

Just thinking aloud from a buyer's perspective...

One factor now is the SSD which means if you want to buy you need to hold for four years. Thus the issue is not just whether there will be a drop now... but what happens if you buy now and can only cash out after four years.

e.g. for a 2 m property:

A expects price to drop 10% or 200k. A waits and doesn't buy until it drops to 1.8m.

B expects price to stay flat. B buys now and rents it out for four years thus making 200k in rental (conservative assumption).

If A is wrong about price dropping 10%, then A doesn't buy in the next four years and loses 200k in rental income, and takes the risk that after four years the down-cycle is over and price shoots up.

If B is wrong about price staying flat, then B takes the risk over four years that prices crash >10%. However as long as prices doesn't crash >10%, B is still better off buying as his rental in four years covers any potential loss, and perhaps, by the time he wants to sell, the up-cycle begins.

Admittedly, this is a very simplistic example - but considering the above, do you think buyers are more desperate to buy, or sellers are more desperate to sell?

[invigorated]

Just thinking aloud from a buyer's perspective...

One factor now is the SSD which means if you want to buy you need to hold for four years. Thus the issue is not just whether there will be a drop now... but what happens if you buy now and can only cash out after four years.

e.g. for a 2 m property:

A expects price to drop 10% or 200k. A waits and doesn't buy until it drops to 1.8m.

B expects price to stay flat. B buys now and rents it out for four years thus making 200k in rental (conservative assumption).

If A is wrong about price dropping 10%, then A doesn't buy in the next four years and loses 200k in rental income, and takes the risk that after four years the down-cycle is over and price shoots up.

If B is wrong about price staying flat, then B takes the risk over four years that prices crash >10%. However as long as prices doesn't crash >10%, B is still better off buying as his rental in four years covers any potential loss, and perhaps, by the time he wants to sell, the up-cycle begins.

Admittedly, this is a very simplistic example - but considering the above, do you think buyers are more desperate to buy, or sellers are more desperate to sell?

Not all buyers are out to buy and rent so it's tough to use this as the main profile, so as you have said, it may be very much simplistic. If one is buying for own stay, should one buy now then?

Would it be possible that the gain becomes less than 200k after considering other implications such as months without rental, income and property tax, interest rate rise and loss of interest from the downpayment (some banks are already offering higher interest rates for deposits)?

If the market falls more than 10%, which has happened to buyers of some recent units, then they may already be worse off. Sellers may be less desperate to sell in good areas near MRT with good yields.

But what about those that are unable to get rental due to the recent supply spike? Especially considering the impending surge in TOP units?

[Wolverine23]

....it is not so simple... think about what type of gov do you have first....good luck.

So what is your view on our government and the likely development of real estate? Thanks.

[chestnut]

Deputy Prime Minister and Minister for Finance Mr Tharman Shanmugaratnam said: “The reality we face is that interest rates are extraordinarily low, globally and in Singapore, and continue to add fuel to our property market. We have to take this further round of measures now, to check recent market trends and avoid a more serious correction in prices further down the road.”

Minister for National Development Mr Khaw Boon Wan said: “A large supply of public and private housing – up to 200,000 units in total – will be completed in the coming years. Coupled with the new measures, we will be better placed to ensure that housing remains affordable to Singaporeans.”

http://www.iras.gov.sg/irasHome/page03a.aspx?id=14342

GDP
http://www.todayonline.com/business/...sts-mas-survey

http://www.mas.gov.sg/~/media/MAS/Mo...%20Dec2013.pdf

CPI
http://www.singstat.gov.sg/education..._on_CPI.html#8

Unemployment rate
http://stats.mom.gov.sg/Pages/Unempl...ary-Table.aspx

http://www.mom.gov.sg/newsroom/Pages...spx?listid=549

On coming completed units

http://www.ura.gov.sg/uol/media-room...pr14-29e3.ashx


Real estate stats

http://www.ura.gov.sg/uol/media-room...r/pr14-29.aspx

Add in some more information to help you plan/decide on buying or selling 

[walkthetiger]

So what is your view on our government and the likely development of real estate? Thanks.

I cashed out recently, and i am not coming back so soon, as an investor i am only interested in money.....i see nothing here coming...... the rest u see it for yourself..good luck..

Singapore gov is too capable to give fair share to all the people evenly.... can be good and bad.....

[walkthetiger]

The surveys are conducted mostly for buyers, so obviously those want property prices to crash!
Imagine a nation of 90% property owners, you think 74% will want property prices to drop?!

I wish it crashes, push the reset bottom, hope all see the big picture as it will be good for money making in long run, 良药苦口, the game will be in our hand again...but this will be challenging the gov ...gov control everything... pls factor that in....but if all people all want it to crash than different story of course, gov is concern of their vote in next GE, they don't appear very very confidence to me now...they are still trying to buy support... will give thousands of promise to people.

[NO_7]

Look at DBSS, a good example of ideas that doesn't work.
If more CM to come it might even further back fire on financing on buyer just like the 30% MSR.

[Yuki]

I wish it crashes, push the reset bottom, hope all see the big picture as it will be good for money making in long run, 良药苦口, the game will be in our hand again...but this will be challenging the gov ...gov control everything... pls factor that in....but if all people all want it to crash than different story of course, gov is concern of their vote in next GE, they don't appear very very confidence to me now...they are still trying to buy support... will give thousands of promise to people.

Everyone wished for different outcome based on their personal agenda. However if the housing prices crashed to 30 percent or more..or underwent a pronounced " reset", when that happens ever wonder what does it mean in general for Singapore. .?

It probably means singapore has significantly lost its competitive edge n that foreign investors find it no longer worth to invest in singapore anymore.

Or a sharp world wide recession has kicked in...n it means even longer recovery period.

Recession aside, is there any point to buy more property to invest since no one wants to buy?

If let's say the economy Singapore stops growing. ..population in general will drop since there will not be much FT. Unemployment rate will probably raise..n people might even move out of singapore in search of better job. There will mean a hell lot of empty properties doesnt it?

Of course it will be a different story if government purposely crash the prices.

However this will undermine the banks since a lot of people will be forced to top up the difference in their loan. Then a vicious cycle ensure...Wouldnt this undermind singapore banks in general? .

Would the goverment want to rock the boat so badly?

[Yuki]

Everyone wished for different outcome based on their personal agenda. However if the housing prices crashed to 30 percent or more..or underwent a pronounced " reset", when that happens ever wonder what does it mean in general for Singapore. .?

It probably means singapore has significantly lost its competitive edge n that foreign investors find it no longer worth to invest in singapore anymore.

Or a sharp world wide recession has kicked in...n it means even longer recovery period.

Recession aside, is there any point to buy more property to invest since no one wants to buy?

If let's say the economy Singapore stops growing. ..population in general will drop since there will not be much FT. Unemployment rate will probably raise..n people might even move out of singapore in search of better job. There will mean a hell lot of empty properties doesnt it?

Of course it will be a different story if government purposely crash the prices.

However this will undermine the banks since a lot of people will be forced to top up the difference in their loan. Then a vicious cycle ensure...Wouldnt this undermind singapore banks in general? .

Would the goverment want to rock the boat so badly?

If the goverment purposely crashed the prices to historic low, undermind the existing home owners n the banks, wouldn't this send a signal that singapore is not a stable place to invest in? Would anyone want to buy bearing in mind that they could be subjected to the same treatment when the goverment decides to intervene?

I tend to see everything as linked..n consequences of each outcomes. So many qns n no answers.

[propertyguru]

Just thinking aloud from a buyer's perspective...

One factor now is the SSD which means if you want to buy you need to hold for four years. Thus the issue is not just whether there will be a drop now... but what happens if you buy now and can only cash out after four years.

e.g. for a 2 m property:

A expects price to drop 10% or 200k. A waits and doesn't buy until it drops to 1.8m.

B expects price to stay flat. B buys now and rents it out for four years thus making 200k in rental (conservative assumption).

If A is wrong about price dropping 10%, then A doesn't buy in the next four years and loses 200k in rental income, and takes the risk that after four years the down-cycle is over and price shoots up.

If B is wrong about price staying flat, then B takes the risk over four years that prices crash >10%. However as long as prices doesn't crash >10%, B is still better off buying as his rental in four years covers any potential loss, and perhaps, by the time he wants to sell, the up-cycle begins.

Admittedly, this is a very simplistic example - but considering the above, do you think buyers are more desperate to buy, or sellers are more desperate to sell?

This was my perspective as a buyer last year and remains my view.

Obviously, this is on the assumption that you want to invest in Singapore (there may of course be better investments outside of Singapore). My view even when I bought was that prices were more likely than not to drop about 5-10% in the next couple of years, with a very small possibility of prices rising even higher than what they were. With that in mind, I had to decide whether to re-enter the market having just disposed of another property for a small profit.

Ultimately, I bought a >$2m unit with tenancy, because I saw that my potential (and likely) downside was about $200k, but if I waited, my potential (though unlikely) downside was being priced out of the market, possibly forever (I am not a rich man nor do I have a trust fund).

Half a year on, prices have softened further, and I think I would be able to get a bigger unit today for the price I paid (or pay less for a unit of similar size). The drop is about 5% I reckon (based on caveats lodged), so on a >$2m property, I would have saved more than $100k. Be that as it may, I have collected about $40k in rental already, which covers my mortgage payments so far.

What I effectively did by buying last year was to get my foot in the door, and protect my downside by buying a property with tenancy. It's impossible to time the market perfectly, and with hindsight, I daresay it would have been better for me to have bought the property today. However, there's no guarantee that unit I wanted would have remained available today (and we really liked it), and certainly, it would have been hard to find one with tenancy today (those invariably come with a premium because the sellers can afford to hold).

Whether one should buy now or not must depend on where you see the market going, but it's hard to argue against buying now (prices have softened considerably) unless you think the Singapore economy is going to tank and stay in the doldrums for years. Otherwise, as the global economy picks up steam, and Singapore benefits from that growth, property prices will only continue to rise (not even taking into account the expected population growth).

Even for home-owners looking to buy, I would think it makes sense to buy now provided you really like the unit on the market. If you plan to stay more than a few years in it, you will likely be able to ride out any temporary turbulence even if prices do drop further in the next couple of years, whereas if you wait, the potential for a drop in prices may be outweighed by the risk of prices rising beyond your reach.

[DC33_2008]

"Fair share" to all people policy by garment favours property investors as most of the people from 30s and above are servicing their loan. A major correction of more than 20% will not be good for the garment especially during GE. GE can happen in 2015.

I cashed out recently, and i am not coming back so soon, as an investor i am only interested in money.....i see nothing here coming...... the rest u see it for yourself..good luck..

Singapore gov is too capable to give fair share to all the people evenly.... can be good and bad.....

[chestnut]

"Fair share" to all people policy by garment favours property investors as most of the people from 30s and above are servicing their loan. A major correction of more than 20% will not be good for the garment especially during GE. GE can happen in 2015.

Looks high chance in 2015

[Yuki]

If the goverment purposely crashed the prices to historic low, undermind the existing home owners n the banks, wouldn't this send a signal that singapore is not a stable place to invest in? Would anyone want to buy bearing in mind that they could be subjected to the same treatment when the goverment decides to intervene?

I tend to see everything as linked..n consequences of each outcomes. So many qns n no answers.

Lastly although very slow take up...there are more n more people purchasing the properties. .once onboard i doubt they want the prices to crash.

when the net effect kicks in...ie tipping point...I think only the minority hopes the prices to crash.

Bearing in mind singapore has the highest homeownership. ..n surely a good percentage is still servicing their loan.

[Yuki]

This was my perspective as a buyer last year and remains my view.

Obviously, this is on the assumption that you want to invest in Singapore (there may of course be better investments outside of Singapore). My view even when I bought was that prices were more likely than not to drop about 5-10% in the next couple of years, with a very small possibility of prices rising even higher than what they were. With that in mind, I had to decide whether to re-enter the market having just disposed of another property for a small profit.

Ultimately, I bought a >$2m unit with tenancy, because I saw that my potential (and likely) downside was about $200k, but if I waited, my potential (though unlikely) downside was being priced out of the market, possibly forever (I am not a rich man nor do I have a trust fund).

Half a year on, prices have softened further, and I think I would be able to get a bigger unit today for the price I paid (or pay less for a unit of similar size). The drop is about 5% I reckon (based on caveats lodged), so on a >$2m property, I would have saved more than $100k. Be that as it may, I have collected about $40k in rental already, which covers my mortgage payments so far.

What I effectively did by buying last year was to get my foot in the door, and protect my downside by buying a property with tenancy. It's impossible to time the market perfectly, and with hindsight, I daresay it would have been better for me to have bought the property today. However, there's no guarantee that unit I wanted would have remained available today (and we really liked it), and certainly, it would have been hard to find one with tenancy today (those invariably come with a premium because the sellers can afford to hold).

Whether one should buy now or not must depend on where you see the market going, but it's hard to argue against buying now (prices have softened considerably) unless you think the Singapore economy is going to tank and stay in the doldrums for years. Otherwise, as the global economy picks up steam, and Singapore benefits from that growth, property prices will only continue to rise (not even taking into account the expected population growth).

Even for home-owners looking to buy, I would think it makes sense to buy now provided you really like the unit on the market. If you plan to stay more than a few years in it, you will likely be able to ride out any temporary turbulence even if prices do drop further in the next couple of years, whereas if you wait, the potential for a drop in prices may be outweighed by the risk of prices rising beyond your reach.

I think you are weighing the lost opportunity costs (tangible n intangible cost) vs the cost saved if you have waited.

[DC33_2008]

Can you see the stars are all aligning?

Looks high chance in 2015