Results 1 to 3 of 3

Thread: Good time to buy that dream home?

  1. #1
    Join Date
    Oct 2011
    Posts
    10,829

    Default Good time to buy that dream home?

    http://www.straitstimes.com/business...hat-dream-home

    Good time to buy that dream home?

    Lorna Tan

    Invest Editor/Senior Correspondent

    Feb 12, 2017

    Rise in sales transactions, stabilising prices are encouraging signs





    Home seekers who have taken a wait-and-see attitude may be more encouraged to dip their toes in the property market this year.

    The sector is experiencing an upturn in sentiment, thanks to private home prices declining at a slower pace and increased sales.

    HIGHER SALES OF NEW PRIVATE HOMES

    DBS Bank's executive director of secured lending Tok Geok Peng is seeing more buyers returning to the market in the light of more property launches and prices normalising.

    Developers sold 11,971 units - private homes and executive condominiums - last year, up 20 per cent from 2015, she notes.

    The total included 7,972 private homes, up 7.2 per cent from the 7,440 units sold in 2015 - the best showing in three years.

    Ms Christine Li, director of research at Cushman & Wakefield, said developers gravitated around the sweet spot of $500,000 to $1 million on pricing to achieve sales volumes.

    Developers hope to boost the sales momentum further by launching at least six projects in the first half of this year.

    These include Clement Canopy in Clementi Park (its showflat opened yesterday), Grandeur Park Residences in Tanah Merah, Park Place Residences at Paya Lebar Quarter and Seaside Residences in Siglap.

    HIGHER SALES OF NEW AND RESALE HOMES

    Mr Nicholas Mak, research head at SLP International Property Consultants, noted that the private residential sales market appears to be recovering with resilient underlying demand.

    Ms Alice Tan, director and head of consultancy and research at Knight Frank Singapore, said that, despite property cooling measures, overall buying activity of private homes has picked up over the last two years since the total debt servicing ratio (TDSR) was introduced in 2013.

    Property experts noted that total transactions of private homes - in both the new and resale markets - rose by 10 per cent in 2015 over 2014.

    There was another 16 per cent uptick to 16,378 units last year from 14,117 units the year before. Ms Li said that this is particularly evident in the high-end segment.

    Improvement in transactional activity is the highest in the Core Central Region, which is the prime or high-end segment at 49 per cent, followed by the city fringe region or mid-tier segment at 27 per cent, and the suburbs or mass market segment at 4 per cent, said Ms Li.

    "The sentiment has improved since the beginning of this year with the risk of technical recession coming off. But the slow economy and the potential US Federal Reserve rate hike could dampen some demand for housing," Ms Li added.

    "However, with a slew of attractive projects (mostly near current and future MRT stations) in the pipeline, we believe buyers are quite ready to jump in at the moment once the project is priced reasonably. Hence, the buying interest in the first half of the year could be sustained."

    SIGNS OF PRICES STABILISING

    Ms Tan of Knight Frank said private home prices showed signs of stabilising in the second half of last year after the three years of decline.

    "With the market exhibiting general acceptance of current price levels for private homes, the 'wait- and-see' attitude that was present among some buyers for the past three years is now gradually switching to 'time-to-buy' decisions," she added.

    HAVE PRICES REACHED ROCK BOTTOM?

    Chesterton Singapore managing director Donald Han said prices seemed to have reached rock bottom, having fallen nearly 12 per cent from September 2013.

    At the same time, demand for new launches and from the secondary sales market has increased. He finds the rise in transaction activity encouraging as it is a sign of a bottoming trend.

    "Buyers are enticed to re-enter the market when prices start to stabilise, especially so when there's a propensity for prices to rise," noteed Mr Han.

    "The prime 9, 10 and 11 districts are likely to see improvement in prices this year, and the smart money has already started to trickle in.

    "Recent en bloc freehold residential sales involving 3 Hullet Road, 120 Grange Road, 3 Cuscaden Road and The Nassim for more than $600 million collectively, saw investors' confidence seeping into the prime residential market."

    He added that the "smart money" - defined as high-net-worth investors and investment holding companies - is starting to accumulate prime residential property and will continue to do so this year, leading to a potential rise in transaction volumes in the core central region.

    "Transaction volume is a prelude to a rise in prices. There cannot be a rise in prices without an uptick in volume," said Mr Han.

    Still, Mr Han warns that prices in the city fringe and suburban areas are more susceptible to market vagaries like economic and employment growth, which are likely to remain key concerns this year. Furthermore, there is a fairly substantial 20,000 unsold stock, with the bulk being outside the prime residential segment.

    However, homes near places like MRT stations and malls will outperform the rest. Overall, Mr Han expects total sales this year to mirror that of last year.

    "Everyone wants to buy at rock-bottom prices but the irony is that we won't know when the "bottom" price is, until we've gone past it. I think 2017 presents a unique opportunity for selective buying, especially those who have been sitting on the fence. Buying at today's price level, you have already taken care of the downside. The upside will look after itself," added Mr Han.

    OUTLOOK FOR 2017

    Mr Mak expects private house price indexes to continue to decline at a slow pace in the first six months of this year.

    "The downward pressure is mainly attributed to the slowing economy, existing cooling measures, rising interest rates and uncertainty in the employment market," he noted.

    He said the overall private residential price index is tipped to fall between 1 per cent and 3 per cent this year over 2016 while rents could slip at twice the rate - 3.5 per cent to 4.5 per cent.


    DBS Bank's Ms Tok has seen more buyers returning to the market. She notes developers sold 20 per cent more units from 2015.


    Cushman & Wakefield's Ms Li observes that improvement in transactional activity is the highest in the Core Central Region.


    SLP's Mr Mak says the overall private residential price index is tipped to fall between 1 per cent and 3 per cent this year over 2016.


    Knight Frank's Ms Tan says private home prices showed signs of stabilising in the second half of last year.


    Chesterton Singapore's Mr Han says 2017 presents a unique opportunity for selective buying.

  2. #2
    Join Date
    Oct 2011
    Posts
    10,829

    Default 6 Things to ask to help you decide which one

    http://www.straitstimes.com/business...cide-which-one

    6 Things to ask to help you decide which one

    Feb 12, 2017

    Lorna Tan
    Invest Editor/Senior Correspondent


    It is often said that the value of a home boils down to location, location and location, but other attributes come into play as well.

    A host of factors must be considered, including thoughtful design, product quality and a conducive living environment, says Ms Alice Tan, who heads consultancy and research at Knight Frank Singapore.

    "The value of the residential property is premised on location, and supported by site- and project-specific strengths," she notes.

    The Sunday Times offers six top points to look for.

    1. HAVE YOU SHOPPED AROUND?

    Ms Christine Li, who is director of research at Cushman & Wakefield, believes now is the time for owner-occupiers to shop around as developers have reduced their price expectations since the Total Debt Servicing Ratio (TDSR) was introduced in 2013.

    The biggest risk is still the state of the economy, so it is vital that you buy what you can afford, thoroughly research the projects and look at comparables.

    "Be selective about location as the rental market is expected to be weak over the short term," says Ms Li.

    "Some older projects could be more value for money in terms of space, so do not go all out for new projects, some of which could be quite small."

    2. WHAT ARE THE AMENITIES NEARBY?

    Having a wide array of amenities - dining, shopping, entertainment and recreational facilities - just a stone's throw away is a huge plus, and greatly treasured by owner-occupiers and tenants alike, says Ms Tan.

    Chesterton Singapore managing director Donald Han suggests looking for projects with a fairly large land base, near amenities.

    "These need not be brand-new developments. Some older developments (as old as 20-30 years) present inherent and intrinsic value... Land values in Singapore, especially when it comes to freehold tenure, never deteriorate over time," he points out.

    "There are lots of such properties within the Cairnhill, Newton and Novena enclave that are going at prices well below $1,800 per sq ft (psf)."

    Mr Han says buying a prime property is always recommended. In bad times, such properties are the last to come down in price and, in good times, they are usually among the first segments to rebound - as we are witnessing right now.

    3. HOW'S THE TRANSPORT CONNECTIVITY?

    Homes next to MRT stations are highly sought after and are typically better received by owner-occupiers and tenants than homes with equivalent lease tenures that are farther away from public transport.

    "Locations near MRT station interchanges (with at least two lines) bring higher commuting benefits as residents can travel to more places conveniently. There are limited private residential developments in Singapore that enjoy close proximity to MRT interchanges," says Ms Tan.

    4. IS THE AREA EARMARKED FOR GROWTH?

    Ms Tan advises going for areas earmarked as future growth zones as they are likely to enjoy faster growth in terms of upcoming infrastructure, commercial and residential development.

    Such plans, when realised, would be catalysts for business and community activity, which would ultimately enhance the asset value potential of residential properties in these areas.

    5. IS THERE ACCESS TO WORKFORCE CATCHMENT?

    If you plan to rent out your property, look for catchment areas with potentially ready tenants.

    Ms Tan says properties near office and industrial precincts are generally selected choices for tenants who work in these areas.

    6. WHAT'S THE DEVELOPER'S TRACK RECORD?

    After you buy a home, the last thing you want is to deal with a slew of defects upon collecting the keys.

    Ms Li says this is why going for a reputable developer is important, while warning that there has been a spate of defects in recent completions.

    She adds that a developer's credentials determine project positioning in terms of the product quality, the design of the common facilities and the living environment. "Developers who are committed to ensuring product quality, creating liveable spaces and promoting environmental sustainability offer properties that are likely to be more enduring and endearing," she notes. This in turn will help ensure that the property stays popular, which will also boost the resale value.

  3. #3
    Join Date
    Oct 2011
    Posts
    10,829

    Default

    http://www.straitstimes.com/business...uying-property

    Do your homework before buying property

    Feb 12, 2017

    Make sure you can afford to repay loan, even if circumstances, interest rates change

    Lorna Tan
    Invest Editor/Senior Correspondent


    Buying property is a big financial and long-term commitment for most of us.

    So, we should do our homework when it comes to financing.

    Mr Vasu Menon, OCBC Bank's senior investment strategist, says buying a home is a very personal decision and that there is no uniform answer on whether you should purchase or upgrade now. Much depends on your circumstances and personal finances.

    When deciding to buy a property, consider your ability to pay the mortgage when interest rates and your circumstances change.

    It is prudent to ensure that you have sufficient funds set aside to cover your expenses, including home loan repayments, says Ms Jacquelyn Tan, head of personal financial services, Singapore, at United Overseas Bank (UOB).

    Mr Menon warns of the risk of higher interest rates this year and also that jobs are not a sure thing, given the uncertain economic climate.

    So, it is important to be brutally honest and not take on more debt than you can afford when buying a property or other big-ticket items.

    You must also factor in the property cooling measures, which set a limit on the amounts you can borrow and the loan period. Most of these measures effectively let us borrow based on affordability, helping us to right-size our property purchase and home loan.

    Ms Tok Geok Peng, executive director of secured lending at DBS Bank, says: "You could find that you have to make a bigger down payment with cash or your Central Provident Fund savings, or find that you cannot afford the unit you want and have to opt for another with a lower price."

    ADDITIONAL BUYER'S STAMP DUTY (ABSD)

    Introduced in December 2011, this levy is paid on top of the existing buyer's stamp duty. The rate depends on whether the buyer is a Singapore citizen, a permanent resident, a foreigner or an entity like a trustee. The number of residential properties the buyer owns is also factored in.

    The ABSD imposes a 7 to 10 per cent tax on Singaporeans buying their second and subsequent properties, and a 15 per cent tax on foreigners.

    TOTAL DEBT SERVICING RATIO (TDSR)

    The TDSR, which was introduced in 2013, measures all your monthly debt repayments against your monthly income. The higher your existing debts, the less you can borrow, says Ms Tok.

    To qualify for a home loan, your TDSR cannot exceed 60 per cent. That is, your total loan obligations cannot exceed 60 per cent of your monthly gross income.

    MORTGAGE SERVICING RATIO (MSR)

    This is an additional requirement if you are looking to buy an executive condominium or an HDB flat. It measures the total amount of your monthly mortgage repayment against your income, says Ms Tok.

    The MSR requirement limits your monthly mortgage repayment instalment to 30 per cent of your monthly gross income.

    LOAN-TO-VALUE (LTV) The LTV

    ratio at which banks may finance your property is capped at 80 per cent of the property price, and 90 per cent for an HDB loan.

    Financial experts suggest that you check the maximum LTV that can be granted. Note that your LTV ratio decreases to 50 per cent from 80 per cent if you are buying a second property and have not paid down your existing mortgage.

    LOAN TENURE

    Ms Phang Lah Hwa, head of consumer secured lending at OCBC Bank, advises that for refinancing a home loan, the loan tenure is computed at 35 years less the number of years the loan was first disbursed when the property was purchased.

    "Hence, documents need to be furnished to the bank to ascertain this. When there are joint borrowers, the loan tenure is also impacted by 'income-weighted average age'. This is calculated by taking the average age of the borrowers, weighted by their respective gross incomes."

    Ms Tan notes that the retirement age of 65 has an important influence on applying for a mortgage.

    "The maximum loan tenure is 35 years for a private property and 30 years for an HDB flat. If, at the end of the loan tenure you will be above 65 years old, the bank can lend you only 40 per cent of the cost of the home, as opposed to 80 per cent under normal circumstances," she says.


    Eye on property developer stocks

    Buying an investment property is not the only way to make money in real estate; you can also buy shares in developers.

    Mr Eli Lee, investment analyst at OCBC Investment Research, notes that Singapore-listed developer stocks have had a good start this year, with the FTSE Straits Times Real Estate Holding and Development Index up 13 per cent, its best showing in over four years.

    He says the aggressive rally was kindled by long-depressed valuations across the sector and rising anticipation that cooling measures could be reversed over 2017 and 2018. Home prices are now down nearly 12 per cent from their 2013 peak.

    "With primary home sales rising 7 per cent to almost 8,000 units in 2016 over 2015, a soft-landing scenario for the domestic residential sector is appearing increasingly realistic," says Mr Lee.

    He adds that developers with significant majority shareholders trading below their net worth continue to appeal to investors chasing profits by buying into firms that may be bought out or delisted. OCBC Research's top picks are:

    •CapitaLand (target price at $3.68)

    •OUE ($2.17)

    •Wheelock Properties ($2.27)

    •Wing Tai ($2.37)

    Lorna Tan



Similar Threads

  1. A good time to refinance home loans?
    By reporter2 in forum Finance and Legal
    Replies: 0
    -: 19-09-16, 00:27
  2. My dream retirement home...
    By roly8 in forum Coffeeshop Talk
    Replies: 43
    -: 14-11-12, 12:26
  3. Affording that First Dream Home
    By carbuncle in forum Singapore Private Condominium Property Discussion and News
    Replies: 4
    -: 19-05-12, 12:48
  4. Make a bid for your dream home
    By mr funny in forum Singapore Private Condominium Property Discussion and News
    Replies: 0
    -: 19-10-09, 17:51
  5. Dream home? Dream on..
    By mr funny in forum Singapore Private Condominium Property Discussion and News
    Replies: 11
    -: 21-09-09, 13:57

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •