Buying Homes Today- Harder Than Before?
It has been 5 years since the government had implemented cooling measures to curb speculative activities as well as stabilise housing prices – with the 8th round of cooling measures being one of the most effective measures thus far. In June 2013, the Total Debt Servicing Ratio (TDSR) framework was introduced by the Monetary Authority of Singapore (MAS), impacting property loans given out by financial institutions. With TDSR framework in place, financial institutions had to take into consideration borrowers’ outstanding debt obligations – with their total debt not exceeding 60% of their income. This in turn has made it difficult for people to purchase homes – be it for own stay or investment purposes. Property prices has since seen a slow but steady fall in prices, especially in 2014, with HDB prices falling around 7.5% since September 2013 for example. (Statistics taken from Straits Times – ‘Is buying a home getting harder?’ Ariticle by Dr Larry Haverkamp)
Indeed, it seems as if purchasing a new home today is becoming more challenging. Is it really, though? We should not only look at one side of the coin- with these governmental policies in place, things could also work in your favour- you need only know how.
- A Buyer’s Market
You see it all over the news – HDB resale prices are falling, there is an oversupply of BTO flats (said so by Minister Khaw Boon Wan himself), private home sales has been slowing down etc. What does all this point to? This isn’t all bad news, it merely means that there has been a softening of prices. This is good news for prospective buyers since prices are generally lower than prices of housing say, 4-5 years back. Buyers will have more negotiating power when it comes to pricing. This softening of prices will also entice foreign investors to come back
- Study the Government’s Plans for Singapore’s Development
URA Masterplan, the first move is to always study and follow up with what are big plans for key growth area in Singapore. In the Masterplan 2014, Jurong Precinct, which includes 360 ha of land to go through the largest redevelopment that divides into 2 precincts – Jurong Gateway Precinct and Lakeside Precinct. With the only Executive Condominium launched in Lakeside and sold 95% of its units during the sales preview and the new launch condo in Jurong – LakeVille has top the sales in Singapore consistently from April 2014 to December 2014. The second key growth area which will be the Paya Lebar with 2 plots of land fetching the bid above $1.2 billion for mixed development usage and moving out the air base, thus creating more space for properties growth. One of the upcoming new launch condo near Paya Lebar will be Botanique @ Bartley. Popular New Property Launches like Tre Residences at Aljunied, Kallang Riverside Condo, Trilive @ Kovan, The Bently Residences and recently launched Sims Urban Oasis are greatly a popular buy among home buyers and investors whom love the city fringe of Singapore. Third key growth area which is in the northern part of Singapore like Woodlands and Yishun. In the coming up months, you will start to see new executive condominium launching at Woodlands, new condo launch at Yishun. The biggest project coming at North Point for year 2015 is the anticipated – North Park Residences, which will be launching next after the recently launched Symphony Suites.
- Invest Today For a Better Future
Of course we don’t actually mean that you can see the benefits within the next twenty-four hours. What we are saying here is that now is a good time to purchase your new home. When it comes to property, we always look at the long term benefits of it. Singapore has proven that property is a good investment for the past 50 years. What is 5 years of cooling measures then?
Did you notice the graph above? The new low is always higher than the previous low; the new high is always higher than the previous high.
All in all, the current policies in place are not all bad and it isn’t all doom and gloom. Stay ahead of the game by learning the rules and keeping up with the news. Study the trends and find out what works best for you. Should you continue to wait it out to purchase your new home? I strongly advise against it. There will always be short term unpredictable variables that affect property prices and there will always be incomplete information in the market. If you are looking to buy a new home, wait no more. Buying homes in today’s market situation is in your favour.