Updated: May 14
When is the good time to buy properties in Singapore?
Tons of buyers worried that they have entered the properties markets at the wrong timing.
So the very common question in their mind is when is a good time for me to buy a property.
A lot of advising keep coming to them from friends.
There are a lot of different versions of the answer
Some say the price is too high now, not a good time to buy.
Oversupply of unsold units, there is a supply glut, developers will need to reduce the price to sell.
It's all the answer matter you?
Property investment is a long time commitment and must be properly managed.
Firstly, you must understand why you need to buy the property?
Whether is for own stay or for investment?
Do you have a proper plan for what you intend to do with the property?
Let understand a bit more on Singapore and how the populations affect the demands for housing in Singapore markets.
Singapore is only 721.5 square kilometres, its smaller than a lot of big cities in the world.
In the year 2009, we only have populations of 4.988 million as shown in the chart below.
Recorded as of June 2019.
According to the department of statistic, we have a population of 5.61 million.
There is a growth of 622,000 thousand in populations over the last 10 years.
Now take a look at the supply of new home and sales in the market over the last 10 years.
A growth of 622,000 thousand in population in 10 years, also increases the demand for housing.
This chart shows the unit launch and sold units and the average price over the 10 years period.
As you can see from the chart, an average of 12,612 units is taken each year, and we are talking on a new launch, how about the secondary market and the HDB flats.
The Singapore government is planning to have a growth in the population to 6.9 million by the year 2030.
That makes it for growth of another 1.29 million populations in the next 10 years.
Averaging 120,000 populations growth each year.
120,000 divided into a family of 4, that will be minimum 30,000 families need to have a place to stay each year.
The demand for housing is still strong in the property markets.
Will the price of the new launch reduces?
As I mentioned, Singapore is a small country, we have limited land for new development.
Developers have to compete in the bidding of the GLS land or the en-bloc collective sale to make sure they have enough land parcels for development in the near futures.
The labours cost and materials cost has been increasing over the years.
This makes every new launch prices will be higher than the previous.
The above charts show that in the first quarter of 2019, the unsold units is estimated at around 37,000 units.
You have to understand that, most of the unsold units are those units that launch in the year of 2018 and 2019.
These two years have the most New Launches to replenish the stocks in the year 2017, the projects being T.O.P.
With an estimate of 13,000 units sold each year and a reduction in yearly supply for the next 2 years, the unsold units will drop to estimate 17,000 units in not more than 3 years time, ( this is where most of the existing development launch in 2018 and 2019 obtaining their T.O.P.)
Looking at the trend, No oversupply of units in the markets.
The primary markets are very healthy, they just starting a new cycle.
Now take a look at the history of the transactions price from 1995 to 2020.
Other than the year 1997, where the Asia financial crisis, you can see a dip in the price, the price in Singapore property is always on the uptrend.
2003, the SARs crisis, the price is still moving gradually upward.
2008 Leman brothers crisis, less than 6 months the price start to climb again.
As you can see, each time there is a drop in price, it will never be lower than the last high.
Now come back to the question,
When is a good time to buy properties in Singapore?
Everyone wants to buy property at the lowest price.
But when is the lowest price?
How do you determine is the lowest price?
Firstly, you have to determine whether this property is for owns use or for investment.
If for own use, anytime is a good time.
You are buying a property to built your dreams home, what your focus is to find a property to your expectation. important is that you must love the unit.
If you're looking to buy for investment
Instead of wondering when is the right timing to buy, you should rather focus on how to spot a good buy.
How to spot for a good unit?
1. Search for a property that has the potential for capital growth, it is important that there should be a transformation in that area.
2. Study the URA Masterplan to identify which areas the Government are going to be developing, as money is going to be spent on infrastructure, transport and amenities. The growth of this area will bring the surrounding property a capital gain.
3. Look out for high transaction volume development.
For development with high transaction volume clearly indicate that they are demand in this development, that make it easy for you to sell in future.
4. Study the vacancy rate of the development.
A development with low vacancy rates indicates that the development is of high demand, it will be much easier to rent out and the rental prices will always be good.
5. Look out for schools in the vicinity.
For tenants with children attending the nearby school, most likely they will not move, this will be an advantage that you will has a longer lease.
6. Look out for a ripple effect in surrounding areas. When there is any upgrading in the particular neighbourhood, prices in the surrounding rise.
If you happen to buy before the ripple effects, you might be able to make some gain.
7. Look for major infrastructure development.
Any upgrading to the infrastructure in the surrounding neighbourhood will give a positive upsize to the prices in the surrounding.
Key things that you should look for :
A new business hub or commercial building, offices. This will provides more employment in the area, so units around the surrounding will attract rental prospects and capital appreciation
Developing of parks and recreation facilities.
Developing of major transport facilities like LRT, MRT
Additional of Educational institute, especially International Schools
8. Always be ready to enter the market.
Opportunity never waits, if you happen to spot a good deal and you are not prepared, you will miss it.
ARE YOU READY?
Hi, I am Peter Tan.
The Real Estate Guy.
Since 1995, I’ve been providing professional consulting services to clients in Singapore and beyond.
From strategic getting to innovative solutions, my focus is usually on building an efficient and results-driven relationship.
I’ll work with you to make a customized plan of action for yourself or your organization.
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