Is it too late to buy a property now?
It is not an easy task to buy an apartment that you like. When I bought mine last year, it was after more than a year of going to show flats, open houses, and even queuing up for a HDB flat. My heart wants a private apartment, while my head says public housing is more affordable. After wasting too much time waiting for public housing, we decided on a private apartment.
One worry we had was that prices of apartments were increasing and we were afraid to pay too much. One colleague lost more than $200k on paper on her apartment, and many others faced the same dilemma when they bought their properties at skyrocketed prices. Hence, we were rather apprehensive in the beginning. Having a paper loss means the bank will get worried about your ability to service the loan. It may ask you to top up the difference between the value of your property when you bought it and the value of your property that is worth now. This has caused many people to get into serious trouble during the property cash.
Another worry was the fluctuating interest rates. Almost 3 years ago, interest rates were only 1%. That was rather ridiculously low. However, about 1 year ago, interest rates suddenly rose up to 6%, and it caused a lot of stress on those who were overstretched.
About seven years ago (I cannot remember very clearly), I experienced the property boom when I had an assignment to work at a strata landed property project launch. The property agents were so fuelled by the huge anticipation that they hired part-timers to help them get the clients to fill in their particulars. They even told my friend and I not to serve the other team. Such scenes were happening again as many launches were sold out within a few days.
When I went to check out the prices of my property, which the developers had not started building yet, the prices had increased by more than $150000. If we had the extra money back then, we would have made this amount if we were to sell it now. However, we did not expect that prices would rally so high. Another leasehold property that we were eyeing costs about $100000 more now. Yet another place I had made enquiries about is going to go through an en-bloc sale soon, probably netting the owners huge profits too.
Does this mean that prices of property would continue to soar? According to one property analyst, the property cycle looks set to last another five years. Hence, if you have the ability to buy a property now, you may consider buying one, and sell before the prices go down. If not, save up and invest your money, and buy a property five years later when you are more financially secure.
Anyway, the rule of the thumb is not to buy when housewives and uncles are jumping into the market. At the same time, be quick to spot trends and not dither too long. Property prices in Singapore are still cheaper than those in other major cities.
Popularity: 5% [?]
