Property Prices....

[HappyHouse88 0]

hmm.. i am not sure what are reason drives you to downgrade to 3rm hdb.

However, it looks like an extreme bet that prices of pty will def go down and go down big time.

why ? because you are lockout of the mkt for 5 yrs. If prices goes up, you may not be able to get a bigger space anymore.

Assume, you make 200k from selling your house and downgrade. Even if prices goes down, you cannot buy.. and your hdb will go down too. To invest in pte , you can now only look for pte less than 1 million (20% dp)or 500k (40% dp) if you didnt pay in full for the hdb.

Although i am optimistic abt the mkt, but i am not into extremes...Got myself a good size FH (similar to 5rm) at a prime location at 20% below bank valuation. CPF comfortably pays off the mthly instalment with 5yrs instl in FD/stock. If all things goes well, 4 yrs later, shld be able to sell for 30% profit. If things goes wrong, will just stay until the next cycle. anyway.. reasons to sell include pri 1 registeration.. So no choice, but to give up prime district HDB.

[RenoDaze 0]

just sharing my humble views and personal financial beliefs, none of which are backed by any stats or proven sources.

personally I hope property prices do not fall, simply coz' whatever I own now (and all other fellow local folks) will also depreciate - not good.

it has to still appreciate but perhaps at a slower pace - Like twice or thrice slower than what we are going through now so that the younger Singaporeans can afford their very first home more comfortably.

My beliefs:

1. Never depend solely on your salary income to get you a 2nd (ideally) private property, beside your HDB. Always generate passive income - cannot teach one, when you are desperately 'hungry' to earn more money, desperation will force you to come up with something.

2. First property - Buy within your means, target to pay off within 10 years, max 15 years, so that you can speed up your capital building for other investments.

3. Avoid shifting (if possible) every 5 yrs or so, to save on renovation, agent fees, stamp duties & COV. These monies can be put into investments that work better for one's retirement. This applies even if the existing property appreciated by 30% to 50% by the time one sells it, and that they nett a generous cash profit after considering interest paid over last 10-15 yrs, inflation, COV for new place & renovation etc. Property itself is usually an appreciating asset. COV, stamp duty and (to a certain extent) renovation hurts your pocket. It's the same philosophy as 'Housing loan is a good loan while renovation/personal loans etc are bad loans'.

4. Invest, invest and invest - Make your money work very very hard for you so that you can catch up with inflation & have enough for your retirement without killing yourself. Children's education costs a lot too.

5. Buying and renting out a 2nd property, a private one, is a common Singaporean dream, used to be mine too. But on the other hand, as long as my other investments net me as good a return, the focus on owning a 2nd property decreases in its significance. The bottomline is - I just want my money to earn for me and I'm very self-sufficient by the time I retire. Like HappyHouse, while I'm optimistic, I'm not an extremist. And thus, though I sort of regretted putting my money into a recent 3rd local purchase, I know it was still not too wrong a move.

If I did not sink my funds into my recent buy, I'll opt now to put the money into 1 or 2 specific US states or some European properties for 2 to 5 yrs, depending on country.

5 years, I think the returns should allow me to not just catch up with SG's inflation & property appreciation, but also yield a better profit that adds on to my retirement funds. And I will also not have to fork out money on renovation & fitting out the new place before it can generate rental income for me.

[BlurryKid 0]

hmm.. i am not sure what are reason drives you to downgrade to 3rm hdb.

However, it looks like an extreme bet that prices of pty will def go down and go down big time.

why ? because you are lockout of the mkt for 5 yrs. If prices goes up, you may not be able to get a bigger space anymore.

Assume, you make 200k from selling your house and downgrade. Even if prices goes down, you cannot buy.. and your hdb will go down too. To invest in pte , you can now only look for pte less than 1 million (20% dp)or 500k (40% dp) if you didnt pay in full for the hdb.

Although i am optimistic abt the mkt, but i am not into extremes...Got myself a good size FH (similar to 5rm) at a prime location at 20% below bank valuation. CPF comfortably pays off the mthly instalment with 5yrs instl in FD/stock. If all things goes well, 4 yrs later, shld be able to sell for 30% profit. If things goes wrong, will just stay until the next cycle. anyway.. reasons to sell include pri 1 registeration.. So no choice, but to give up prime district HDB.

To correct u i m not going extremes. I have a roof over my head so is there any problem with that?

For me i will not get a 2nd ppty unless i can have the funds to fully pay it off. And even though i am locked in for 5 yrs with my current hdb i can easily get another pte using my parents name as they r also staying in pte or i can consider opting for commercial propeties hence no problem. I dont like debts and ppty are considered gd debts unless u get it cheap. Mkt may or may not not be toppish now but its definitely not cheap hence i rather not take this risk. I do my own risk assessment based on historical cycles. I am not as optimistic as u about the current global economy hence i wont be risking on it.

Edited September 15, 2012 by BlurryKid

[HappyHouse88 0]

Just to share some thoughts regarding HDB, I think that HDB prices will stablise and then drop by 20-30% in 2014.

Reasons 1) Oversupply with limited demand. Given that hdb is for locals only and only 1 per family. Demand is restricted. And with the limiting PR-ship and citizenship being issued, the demand will go down.

2) Economic downturn, many new buyers are overleveraging with little excess to spare after the high COV / renovation. They may have problem financing their buy.

Unless the government loose some of the restriction such as pte buyer to buy hdb, I dun see hdb prices going upwards unless it's super prime.

All that is taking into account the profile of hdb dwellers that mainly finances their house by salary. Not applicable to pte which is subject to global movement of funds. Note that companies also purchase pte housing. I would not be surprise many big company will buy up condos to use as service apartment. Having working closely with the hospitality sector, there is a acute shortage of hotel rooms in recent years.

I agree with renoDaze, shifting is very costly and shld be avoided. COV ,cash portion, agent fee and reno cost eats up quite alot of cash ~80-120k. Even more costly than rental which is ard 30k per annual for a decent hdb.If i really think the prices are coming down, i will rather rent for the next 2 yrs.. but of course, i am not so pessimistic.

Edited September 15, 2012 by HappyHouse88

[HappyHouse88 0]

i still remember when i bought my sbf hdb.. it's the same price my friend bought 3-bedrm EC at Yishun.

Then, 200k can get you a EA in Jurong West.. Then, my house was costly, alot of ppl stayed at the sideline , waiting for prices to "drop" and got burn really badly.

Edited September 15, 2012 by HappyHouse88

[Lauer 15]

Bo tai chi mah...both also vested in residential properties what?

Ah, the notion of 'value'. I find it fascinating when people debate on value. Did tulip really worth its weight in gold, as it did during the Tulip Mania? Of course not, retrospectively speaking.

http://www.youtube.com/watch?v=Fu19Ut5Bvu8&feature=youtube_gdata_player

Enjoy!

Edited September 15, 2012 by Lauer

[Jgal 0]

Like u say, once in a life time to hit the jackpot mah. Play with caution.

[BlurryKid 0]

Just to share some thoughts regarding HDB, I think that HDB prices will stablise and then drop by 20-30% in 2014.

Reasons 1) Oversupply with limited demand. Given that hdb is for locals only and only 1 per family. Demand is restricted. And with the limiting PR-ship and citizenship being issued, the demand will go down.

2) Economic downturn, many new buyers are overleveraging with little excess to spare after the high COV / renovation. They may have problem financing their buy.

Unless the government loose some of the restriction such as pte buyer to buy hdb, I dun see hdb prices going upwards unless it's super prime.

All that is taking into account the profile of hdb dwellers that mainly finances their house by salary. Not applicable to pte which is subject to global movement of funds. Note that companies also purchase pte housing. I would not be surprise many big company will buy up condos to use as service apartment. Having working closely with the hospitality sector, there is a acute shortage of hotel rooms in recent years.

I agree with renoDaze, shifting is very costly and shld be avoided. COV ,cash portion, agent fee and reno cost eats up quite alot of cash ~80-120k. Even more costly than rental which is ard 30k per annual for a decent hdb.If i really think the prices are coming down, i will rather rent for the next 2 yrs.. but of course, i am not so pessimistic.

I dont agree with this sentence "I think that HDB prices will stablise and then drop by 20-30% in 2014.". How can it be possible that hdb price drop and u expecting pte ppty to rise by 30% in 4yrs? All of them are related. From the past 2 cycles i seen when hdb drop pte also drop? Just curious on this. Care to explain? Gam siah hor.

[BlurryKid 0]

Bo tai chi mah...both also vested in residential properties what?

Ah, the notion of 'value'. I find it fascinating when people debate on value. Did tulip really worth its weight in gold, as it did during the Tulip Mania? Of course not, retrospectively speaking.

http://www.youtube.com/watch?v=Fu19Ut5Bvu8&feature=youtube_gdata_player

Enjoy!

Btw sidetrack a bit. I thought u went England liow? U came back SG ah?

[BlurryKid 0]

Like u say, once in a life time to hit the jackpot mah. Play with caution.

No need lifetime to jackpot lah. I already earn twice from my housing liow juz time it right and u will get it.

[Lauer 15]

Btw sidetrack a bit. I thought u went England liow? U came back SG ah?

Good Morning,

London? On, it was a holiday, from Sept 09 - Jan 10 as previously blogged.

Must come home mah, for the next (at that time) trade to buy a land to build a house.

Cheers!

[Lauer 15]

I dont agree with this sentence "I think that HDB prices will stablise and then drop by 20-30% in 2014.". How can it be possible that hdb price drop and u expecting pte ppty to rise by 30% in 4yrs? All of them are related. From the past 2 cycles i seen when hdb drop pte also drop? Just curious on this. Care to explain? Gam siah hor.

True, there is the co-relationship.

Enjoy!

[BlurryKid 0]

Good Morning,

London? On, it was a holiday, from Sept 09 - Jan 10 as previously blogged.

Must come home mah, for the next (at that time) trade to buy a land to build a house.

Cheers!

Woah so good. Hope u earn a lot this round i stopped trading since last yr to comcentrate on kids liow. No time Wonder if i will get the chance to buy land n build hse. Lol. Maybe when i am 40 or 50 yrs old. Keke

[Lauer 15]

Woah so good. Hope u earn a lot this round i stopped trading since last yr to comcentrate on kids liow. No time Wonder if i will get the chance to buy land n build hse. Lol. Maybe when i am 40 or 50 yrs old. Keke

Aiyah, don't count la; plus some, minus some, so what?

But kids are priceless. Don't miss watching them grow up!

Enjoy!

[HappyHouse88 0]

I dont agree with this sentence "I think that HDB prices will stablise and then drop by 20-30% in 2014.". How can it be possible that hdb price drop and u expecting pte ppty to rise by 30% in 4yrs? All of them are related. From the past 2 cycles i seen when hdb drop pte also drop? Just curious on this. Care to explain? Gam siah hor.

First of all , i dun expect all pte prices to go up by 30%, just my property. I expect the overall to increase by ard 10% where better location 20%. As mentioned, i bought mine 20% below valuation, i do expect at least 30% increase.

The reason for the disconnect is the recent rule sthat 1) bar pte pty owner from buying hdb 2)the restriction on citizenship and PR-ship. 3)5 yr restriction for resale 4) prolong rent out for prs-owned

This basically,

- stop richer new citizen/pr from buying when they have existing pte oversea.

- richer citizen that has existing pte apt locally or oversea from buying hdb/changing their hdb.

- PR that left singapore not able to rent out hdb for profit. We shld see some selling from these grp soon.

- demand is stablised , limited increase.

- Increase supply. BTO , Oversea PR etc.

Unlike before, if you have $$, you cannot buy pte to invest, you buy hdb to invest. Pte owners as well as Pr. Keep it for a year and ,wah-la, you can rent it out liao, with a neat 4-6% yield.

Whereas for pte, the demand is getting big and big , with higher inflation and sg as a stable currency. Both funds from the pte owners as well as investment firms are looking into singapore for real estate investment. At the moment, comparing with HK and other growing city, singapore is still relatively "cheap".

HAving said that, these are my observation. You may have a differnt take on how these policies are working out. But like i said before, i am not taking an extreme steps. As mentioned, we are not max out for our pty with alot of cushion to ensure that if it didnt turn out the way we wanted , we are still well.

Edited September 16, 2012 by HappyHouse88