The Singapore property market is facing its lowest prices on homes since the peak of 2013. This is good and bad news for both buyers and investors, and, depending on which side one is on, will have significant effects for both.
Local home sales and dumped values have been curbed by the Singapore government to fulfill the prices of ownership.
Home prices have been predicted to fall at least 8 percent in 2016, which is ideal for home buyers. The Singapore property market should continue to get better, especially with the Total Debt Servicing Ratio (TDSR) program, where the maximum loan does not exceed 60% of a buyer’s income.
It has affected the affordability of buyers to get a loan and appeals to investors who are unsure about getting into the property market.
Home values have dropped for a ninth quarter of the last three months of 2015, giving the housing market its longest streak in the last 17 years. The sales of last year are guaranteed to be the lowest in seven years due to the government introducing measures to cap the home sell prices.
Prices have continued to drop in recent years, due to the government’s property programs, which is excellent news for anyone looking to purchase a property.
The prices slid 3.7 percent in 2015, and a 4 percent decline in 2014. The decline was in response to the record high in 2013 when the government created additional residential property curbs to the low-interest rate and foreign buyer interests.
Creative financing has allowed investors to look at the property market, especially in the CCR areas. While creative financing has helped, only trained professionals can handle these transactions.
Agents like Dylan are well versed in creative financing, and he has the knowledge to find a property that is starting to rebound, especially in the CCR.
The CCR is where the property market begins to rebound and then blossom outwards toward the OCR. Smart investors have looked into the statistics and have decided to pick up on certain parts of the CCR where the property market is starting to recover.
Demand for Private Property
The demand for apartments in Singapore continue to climb, even with some of the lowest prices available for homeowners. The gradual effect to curb the measures will prevent the market from becoming saturated and the prices from driving back up.
The cooling measures were a way to help the first time property buyers purchase a house, but the fear of the decline in prices may lead to a housing collapse. The weak housing market and devalued properties have taken their toll on Singapore, and Hong Kong is starting to feel the effects as well.
If Hong Kong surpasses Singapore as the weakest luxury residential market, the curbs made by policy makers may start to lighten up.
Effect of Property Slowdown
While it is uncertain how the market will play out, there are a few silver linings. The lower prices allow for the first time buyers or investors get an excellent bargain if they find the right price. Preparing for the worst will help anyone who invests in Singapore property, especially for those who are unsure how the market will tilt.
Long term investments are an excellent way to have a plan against inflation because it is similar to purchasing insurance to prevent the effects of inflation. No more are the days of flipping properties at such a fast rate that the property does not have a chance to grow.
Understanding the rental aspect will help anyone from getting locked into a terrible lease agreement. It benefits the agents and the buyers since they will have to spend more time together to find the perfect property.
The lower prices favor the home buyer because they can get a better rate and a better property for a lower price than in years past. Since property buyers can get a better price for a property, mortgages are paid off faster to allow home buyers to save more money in the long term.
The long-term effects are important to both sides because it prevents the market from unexpectedly skyrocketing to their peak values. The amount of rent paid will add to the value of an apartment or property, increasing the chance to turn it eventually into a profit. Though it may seem crass in the short term, the long-term effects will benefit everyone involved.
The location of any property has become more important to buyers and sellers. The rental and buying prices help drive investment, so knowing what property values are going to boom will help both buyer and seller. Even a property with a lower price may not guarantee a profit, so understanding the location values are crucial to understanding the market.
It all comes down to the convenience of location and where tenants may feel more comfortable in certain areas. In places where public transportation is difficult to access, it will have an adverse impact on certain locations.
Get Someone to Give You the Facts
Finding a real estate agent that will disclose any information will make you a better idea of how the market looks and how it will respond. If you have an agent that will help you out and keep your interests at heart, it will save you a lot of time and money.
Contacting Dylan will help you make an informed decision based on your needs, so you do not get locked into an agreement that doesn’t work for you. Knowing the good and bad of a property will prepare you for any burdens or hurdles you may face when looking for a property.