Sell now or later?

In real estate, it is often a timing game. How do you exactly know when to sell and when to buy? If you’re currently looking to sell your property, what should you be looking at for when making your decision of whether to sell now or later?

Just like buying a home, you first have to figure out why exactly you are selling. Is it to finance a new home upgrade, to invest in another property, or because you need the money urgently? The push factors are often stronger than you think when it comes to how much and how quickly you are willing to sell for.

KingsfordWaterbayAnother important question to ask yourself is “How much is my property worth?” Aside from getting a trustworthy real estate agent and valuator, spending a bit of time doing your own market research will help you determine where your property stands. A quick look at property websites, some of which provide tools to help you keep track of property trends and transacted property prices, or checking out resale HDB flat prices from the HDB website as well as attending property talks and seminars are just a few of the many ways to hone your pricing skills.

Market competition is also an important factor which affects pricing. Have a look at how other properties similar to yours are currently prices for a guide to pricing your property. But that said, if you know what qualities your property has above others in the market, list them. These may help you price above the market median. You do however have to be prepared to justify these premium prices and once you are confident the edge your property has, you will have a relatively easy time asking for higher prices. Location and proximity to transport nodes or schools are often a big plus; and sometimes the configuration of rooms, quality of renovation and age of the property could also be added to your property’s calling cards.

 

Resale HDB flat prices remain level

As the year moves quickly towards the middle of the second half, property sellers may be getting a little on edge about whether the property prices will fall further.

For the resale HDB market at least, property analysts are expecting prices to stabilise, with any fluctuations occurring only slightly on a month-on-month basis. Prices of HDB flats dipped slightly in July by 0.5 per cent, which is 4.3 per cent lower than July 2014. The fall in prices is still within the single digit range, and at the lower end of it, thus sellers could rest assured the boat will not rock too drastically. Most of the price drops were in the four- and five-room flats segment while prices of three-room flats remained flat.

The resale market for HDB flats seem to have taken a dive due to the bumper crop of BTO flats. Photo courtesy of Singapore Tourism Board.

Photo courtesy of Singapore Tourism Board.

Buyers looking to purchase a property within the year will still do so, and resale HDB flat prices and transaction volume looks likely to maintain at the current level for the rest of the year. The property cooling measures have taken a couple of years to take effect, and a sharp turnaround in prospects seem unlikely.

With a few more months to go before figures can be more effectively measured, property experts are nevertheless positive about the market stabilising soon.Though with a possible raising of the income ceiling which may draw buyers’ attention away from resale flats, and with the upcoming General Election in play, it could be anyone’s guess how property prices will fare by year end.

Rising property market – Vietnam

With a communist government, most would not have considered Vietnam potential ground for a thriving real estate market. Their property market suffered a severe blow about 4 years ago when property bubble burst, leaving banks in debt and buyers and developers defaulting on their loans.

hungvietmoi

Photo Credit: Phuoc Thanh Construction

But 4 years on, the government has injected stimulus into the real estate sector of up to US$1.4 million and has also restructured their banking sector to ensure history does not repeat itself. In fact, they have gone even further to relax rules on foreign investment money coming through their borders. Foreign firms, individual buyers as well as Vietnamese who have left the country during the war in 1975 – the Viet Kieu, are now able to purchase properties in Hanoi. And response has been overwhelming. One developer, Vingroup, reported a whooping 112 deposits on apartments within 2 hours of their launches specifically targeting foreigners and Viet Kieu.

Most foreign firms are keen to purchase properties to house their foreign staff. Intel and Samsung, which are situated in the Saigon Hi-Tech Park, are just a couple of the many international firms snapping up properties. Average prices of high-end apartments in the southern commercial hub go up to as much as US$1,800 per sq m. In the capital, prices are around $1,600, a number familiar to the property players before the last housing crisis. With a market value of US$21 billion, Vietnam’s real estate sector still has a way to go compared to Singapore’s US$241 billion, but that difference could be what most attracts investors.

Resale private homes – Slow climb up

There was a glimmer of light in the resale property market last month as prices of homes in the city fringe rose 1.1 per cent and 0.5 per cent in the suburbs. Overall private resale home prices rose 0.4 per cent.

BlueHorizonThough property analysts are not certain if prices will maintain their current level or dip even further in the later part of the year, the numbers gave at least a little hope to private property owners and sellers. While the resale market shows that it has steadied itself with a $0 T-O-X (the median transaction over X-value or a home’s market value), in the city centre district 9 which consists of Orchard Road and River Valley, more resale properties were being sold below the computer-generated  home prices dipped to an average of $55,000 below the X-value.

In district 5 of Pasir Panjang and Clementi however, the highest media T-O-X came up to $30,000; and in the Bukit Timah, Holland Road and Tanglin areas of prime district 10, the number came up to $14,000.

As the number of new properties being launched or completed rise, the prices of resale properties may face the danger of being pushed down by competition. Though location and condition of resale units may always have an upper hand. With the General Elections planned for the year ahead, prices may fluctuate with policy or economic changes. Could this year be the watershed year for the property market?

Private property prospects for the next 2 years?

The Singapore General Election may be coming up in the next year and a half, and that leaves most wondering about possible policy shifts and how that would affect the country’s economy. Since the last election, immigration and loan policies have changed rather substantially, both of which have impacted the property industry in a number of ways.

Melrose VilleOn the financial front, the TDSR (total debt servicing ratio) framework has been effective in slowing down property demand. With the likelihood of interest rates here rising in tandem with US rates, it seems unlikely that this policy will be removed or relaxed anytime soon as it aims to help households and borrowers build a clearer structure around their long-term financial stability.

A decrease in immigration numbers have also affected the property rental industry, with vacancy rates possibly hitting 10 per cent at the end of 2015. Coupled with a growing number of completed new units made available within these 2 years, the supply could majorly outweigh the demand. Property experts suggest that the only way to slow down the property prices and demand decline is to reduce the speed and quantity of new properties, and an adjustment of the TDSR. There is no sign of change for the moment, but would next year bring about a fresh wave of changes?

Rebound in resale private non-landed property market?

If sales volume are anything to go by, signs of the resale private property market rebounding could be imminent.

Since the fall of prices of resale units to equivalent of or lower than new private non-landed properties, the number of transactions have increased significantly. Within the first 4 months of 2015, transaction volume has seen a 20.7 per cent increase. Resale properties are often ready for immediate occupancy and rental, thus buyers tend to favour these units to new ones in order to skip the wait of building and construction. The rental opportunities to be had within the few years it takes to build a new residential property could be quite substantial. And oftentimes, resale units tend to have a bigger floor area.

PebbleBayCondoThough the number of transactions, 1,411 from January to April this year, is still lower than the 2,203 in a year-on-year comparison with the peak in 2013, property analysts are upbeat about the market as the year moves on. It could show that buyers are finally getting used to the cooling measures, in particular the TDSR (total debt servicing ratio) framework, and realising that the market could be reaching a plateau. Sentiments could be that this is the time to buy, before prices and interest rates start climbing again.

The promising signs could be seen across the island, though more markedly in Districts 5, 10, 15 and 23. Some of it could be due to the fall in prices over the past year, and some the potential of having the future Downtown MRT line in close proximity. Even the Central region’s luxury properties have seen a recent boost in sales numbers of 24.2 per cent, most evident in Districts 9 and 10.

 

Private resale home prices stabilising

With minimal fall in prices over the previous couple of quarters, could this be a sign that resale private property prices are stabilising? Could buyers be getting used to the current home prices and are coming back to pick up deals before a possible rise? Will the predictions of a 4 to 8 per cent drop in property prices this year continue on its track or will buyers buck the trend?

Botanique@BartleyThe NUS Singapore Residential Price Index (SRPI) has indicated a 2.2 per cent fall in resale condominium prices over the last 12 months. But since the first quarter of 2015, the fall has been more gradual and marginal, considering the expected 5 per cent year-on-year fall in prices per month in the last quarter of 2014. The next couple of months could be the watershed for the property market. A slow and small drop in prices could indicate a possible bottoming out of the market.

Part of the reason for last month’s 0.1 per cent fall in April could also be due to the high transaction volume. The recent new property launches of Botanique at Bartley and Northpark Residences may also have had a trickle-down effect on the resale market, in particular properties in the proximity of these 2 launches. Another promising bit of news is the 0.4 per cent rise in the prices of small apartment units up to 506 sq ft. A much untested market, particularly in the suburbs, as more commercial businesses move out of the central region and into the heartlands, the demand for these units may change in the next few years.

Rise in private condominium rental

Could the market be turning on its heels, headed up the charts? Vacancy rates have been falling as the number of rental properties finding tenants have been on the rise.

Property analysts are however not positive about the numbers. They have attributed it to statistics more than the actual market sentiment. Rental rates have instead fallen 1.7 per cent in Q1, which could show that the number of new occupant-ready properties entering the market last and this year may have shaven a chunk off the property rental pie. From now to 2018, almost 67,300 new units will flood the market, giving a possible indication of how the market will react in the months or even years to come.

AstoriaParkCondoLocation nevertheless still has the ability to bring rental prices up a significant notch. At the Astoria Park condominium near Kembangan MRT station for example, rents have risen for the first 3 months of the year. Older condominiums may have a battle at hand as newer properties offer fresher facilities; though the proximity to amenities, transport nodes and schools may put the former right back on the tenants’ maps. Landlords of older developments may also have an upper hand in their option of coming down on prices since they may have purchased the units at a lower cost.

As more new residential properties come into the fold in the months ahead, the symbiotic relationship between rental and sale prices could become more obvious and things may seem a lot clearer then.