https://sg.finance.yahoo.com/news/lo...010100297.html
Many middle class income people whom I have come across often lamented to me for not having invested in a condo ten years ago when prices were half the price of what it is today.
I am also one of them who missed the boat and sometimes I do look back with a tint of regret. Well, we all know it's no use crying over spilled milk and we can only move forward and hope for something like that to happen again.
Fat hope right?
Property prices have risen so much that it has become out of reach for many middle-income Singaporeans.
Tell me who would have dared to invest in a condo when Singapore was still reeling from Asian financial crisis in 1997, followed by the dot-com burst in 2000 and the SARS crisis in 2003?
During those times, many people had to force sell their homes because of the need to top up money as collateral because their property market price had gone below the outstanding loan amount. Property market in Singapore remained stagnant for a next few years after the SARS crisis.
Just when people thought the financial crisis in 2008 would further dampen the property market in Singapore, the opposite happened instead.
Funds moved out of United States due to devaluation of the US currency and started to flood the Asia including Singapore. While many people lost their jobs and homes in the US, Asia was experiencing the opposite. The inflow of money from the US triggered a property boom for Asia and started a property craze in Singapore.
Every month without fail, we were bombarded with news of escalating property prices and people flooding condo showrooms to book a unit before the price went up further! The whole nation was caught up in the property craze and many people were buying and flipping properties to make a profit. I knew of someone who brought a condo for over $700,000 and sold it for $1.1 million in less than two years before the Government came out with the seller's stamp duty.
However, not everyone was happy. Many people especially young married couples were frustrated with the long waiting time to secure a government flat and prices of private residential properties had gone up so much that it was beyond their reach and soon people started calling for the government to intervene in the property market and built more public flats.
The government responded by building more Built-to-Order (BTO) flats and executive condominiums but it wasn't enough to cool the red hot property market, so they came out with cooling measures like Additional Buyer's Stamp Duty (ABSD) and Seller's Stamp Duty. Rules were also instituted for financial institutions concerning loans, to prevent people from speculating in properties and for them to buy only what they can only afford.
The cooling measures were sort of effective - private residential properties prices have started falling from their peak and we can expect prices to fall further due to rising interest rates, tighter immigration rules and oversupply of private homes.
Prices of residential private properties may have dropped but after factoring the Additional Buyer's Stamp Duty, prices are still on the high side. Guess, we can't win them all, right? Don't expect the government to remove the cooling measures anytime soon.
Well, if you have missed the boat like me, do not despair.
Build your cash reserves and wait patiently for prices to drop further before you jump in to buy.
If not, you can consider getting a new executive condo (EC) which is still pretty affordable. If you have constraints and need a condo for whatever reason, consider a resale EC.
For $900,000 you can get a pretty decent size 3-bedroom unit of about 1200 sqf. If EC is not to your taste, a private condo is still within reach for slightly less than a million dollars. But bear in mind that you'll have to make do with less space (perhaps 2 bedrooms or less), probably about half the size an EC unit can offer.
This article was originally on the GET.com blog at: Looking Back At Singapore Property Market With A Tinge Of Regret.
Reply With Quote
