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.

 

Property Auctions – Going, going, gone

With interest rates growing and demand on the decline, some home owners may be forced to allow their property to go to auction.

Mortgage auctions have been on the rise with a total of 99 homes put up for auction in the January to July period of this year alone. Property analysts are expecting an increase even as interest rates rise, with numbers hitting closer to 200 by the end of 2015.

GCB Leedon RoadRecently, landed homes, in particular larger ones such as corner terraces, semi-detached or detached houses, were the more frequent subjects of property auctions. Buyers may have been attracted to the higher profit margin of these properties, but failed to gauge their holding power. Finding buyers for these big ticket items is more difficult as they often come with a very much higher total quantum price and the pool of buyers is restricted to Singaporeans and Singaporean Permanent Residents (PRs).

Some of the properties which have sold at recent auctions include a Good Class Bungalow (GCB) at Binjai Rise, a detached house in One Tree Hill and some larger apartments in Seascape @ Sentosa Cove and Orchard Scotts.

Investors seem to favour smaller apartment units at property auctions as falling rental yields all around have made them more wary. Although not as dire as the 2008 Lehman Brothers and 1998 Asian financial crisis, investors and government authorities are keeping a close eye on the market direction. Property cooling measures have seemingly curbed rampant property flipping, but could there be more room for swifter, sharper manoeuvres? How much wriggle room should you leave yourself if you’re hoping to score a good deal at the auctions?

 

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.

Move further away for better property deals

No longer are buyers limiting their sights to properties in familiar districts or estates. They are now willing to move from one end of the island to another if the draw of a property and its potential value in appreciation is strong enough.

This could be certainly be seen from the weekend turnout at the High Park Residences launch. Situated in Sengkang, a district only a few were willing to move to a decade ago, the Fernvale Road show suite of this latest mixed-use development in Sengkang was swarmed with interested buyers from all over Singapore; a sign that buyers are now more savvy about property investment and keen on purchasing properties with long-term goals in mind.

High Park 2Previously monopolised by public housing, Sengkang is slowly rising up as a popular new town with young couples and families. Private condominiums have also entered the district with gusto and buyers are snapping up units at resale and new private apartments in the area. Some of the properties in the area include Riverbank, La Fiesta and Rivertrees Residences.

High Park Residences will boast a mix of commercial, recreational and residential units. Out of their 1,390 units, 1,100 have been sold, with all the one-plus-study, bungalow and commercial units snapped up. With the Thanggam LRT station and Seletar Mall nearby, it’s no wonder this new kid on the block was popular with buyers.

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?

Property auctions see more action

In light of the declining property market, more properties are finding themselves placed under the hammer at property auctions.

THeWaterlineLowered mortgage ratios, decreasing rental demand and increasing supply have all affected the property market. Most of the 180 units put up for auction in the 3 months up to 30 June have mostly been due to mortgagors defaulting on their mortgage payments. Industrial or residential properties alike have found it difficult to meet their mortgage payments if they were relying mainly on rents, especially as it has become harder to command leases at a level expected during the peak of the market.

Smaller private non-landed units such as studios or shoebox apartments were also facing some market pressure as their popularity waned. Supply of such units, or simply more private condominium apartments in general, has possibly exceeded demand and such units are now more commonplace. The next thing to budge would be rental and then sale prices.

Even as property loans become harder to secure, with the tight loan limits and hefty stamp duties implemented as part of the property cooling measures, the last hurdle that mortgagors have to cross would be the increasing interest rates.

For buyers and property investors, the proper might be a possible avenue to consider in their property search.

Seller’s Stamp Duty packs a punch

The Total Debt Servicing Ratio (TDSR) and Additional Buyer’s Stamp Duty (ABSD) have been hogging property news for some time now, but the Seller’s Stamp Duty (SSD) has packed quite a punch of its own as well.

SeascapeThe Seller’s Stamp Duty (SSD) is seldom mentioned, but ever since its implementation in 2011 to curb property speculation, it has collected up to $70 million in non-landed property transactions. February 2015 marked the record high in SSD collected. One of the biggest losses for the seller was a unit at the Seascape condominium at Sentosa Cove which sold in May with a $5.43 million loss. Another unit at Four Seasons Park incurred a $2.64 million loss as well.

How does the SSD work? For properties purchased after 14 January 2011, should the property be sold within the first year, the SSD comes up to a whooping 16%, then lowered to 12%, 8 % and 4% after the second, third and fourth year. Should you sell after the fourth year, the SSD will no longer apply and you will be saved from having to pay any additional seller’s stamp duties.

Though tough, industry analysts consider the SSD an effective tool in curbing property “flipping” and consider it mild when compared to the ABSD which is levied on foreign home buyers and Singaporeans purchasing second and subsequent properties. These do not have a time limit, and unless the regulations are amended in future, will continue to take a fair bite out of profits.

Sentosa Cove units fetch high prices once more

There was a time when luxury properties on Sentosa fetched luxurious prices. That time was more than 2 years ago. The property cooling measures have hit home since their implementation over the past couple of years however, and sales number sand prices have dropped with the imposed additional stamp duties and loan restrictions.

TheOceanfrontBut there may be light yet in the horizon. Recent sales of 2 units at The Oceanfront condominium apartments in Sentosa Cove luxury enclave have soared above the $2, 000 psf range despite their lack of a waterfront view and their low-floor  Previous sales, which were few and far in between, have gone as low as $1, 190 psf. That was a $463 psf loss on a $1, 653 psf second-storey apartment at The Coast. Considering the fact that most mass-market homes on the mainland are already going at the $1,000 psf range, prices have declined substantially since its peak in 2008.

Will investors with deep pockets continue to pick up deals on the island, especially as prices dip? And will those who have already purchase units on this exclusive waterfront-living enclave continue to hold off on selling in wait of prices rising in the future? How much more will prices be able to rise and will the competition with units on the mainland only become fiercer?