Truths of the Singapore property market, according to Aaron. Today's article touch on the main factors regarding the 3 themes of Private Resale Non-Landed, HDB and New Launches.
Private Resale - Non Landed
There has been a drop in volume regarding Private Resale - Non Landed. As always discussed, when looking at prices, we know that volume of transactions will drop first.
Currently we are seeing crazy prices from sellers and many enquiries getting replies that the unit is tenanted. For listings with such replies or info, it's unsure if it's real or fake with no viewings arranged even after waiting. They could potentially be fake advertisements to swing buyers to new launch.
There is also the quantum effect to be noted. Units asking for 1.5mil and above will find it tough to find buyers even if the psf price is within the market range.
It's clear that there is strong demand and thus strong competition in the resale market.
Key tips regarding the resale market:
Do not enter if you are not ready to buy right now
Hard to beat the competition if you are not willing and ready to pay
Have the correct mindset for investment - recognise the differences between buying to invest and buying to stay.
There are areas that will see projects collecting keys very soon - this sudden surge of supply will 'bang' the area, and impact the supply. Thus, note the areas you are after and consider future projects that might make an impact on your transaction.
HDB
For Aaron, he believes in providing a realist views with no underlying motivation to swing buyers or sellers one way or another. His analysis might be wrong, but it's still fair as long as research, facts and stats are counted upon. These facts, stats are all out there for you to independently verify before deciding if you believe in what Aaron has to say.
The HDB August price index dropped and it's also observed for the units which are new, i.e 5 years MOP, price has increased to the point that less buyers are willing to pay. Despite the record breaking news this year, it's really quite crazy to pay 1 mil for HDB. For these new HDB in the current climate, there are higher COV possibilities with the prices they are commanding.
News in SG regarding property are always about BTO and supply, there are many news and plans of BTO launching which is the government strategy to increase in supply to push prices down. The well known and documented way to push down prices is through "Supply supply supply."
There have also been reports discussing the downward trend of HDB upgraders. It's easy to see why as affordability for HDB and private is different. HDB owners will likely not upgrade if they cannot upgrade to private. These owners are looking for asset progression, looking for opportunities to grow their money instead of getting more space. Thus, with the lack kof HDB upgraders there are less HDB sellers in the market.
Lastly, HDB units price depends on lease significantly. Young = high price, Old = lower price. Just fall back to the remaining lease to understand the prices for HDB.
New Launch
There is a constant flow of new launches happening. This is a constant and consecutive flow of ECs and other new launches.
For 2023, Chinese new year is in january and with many cities and countries are opening up since Covid, December will see many people travelling. Thus, new launch and property market will be slower from mid-november till after january & chinese new year. There will not be enough time to prepare after the series of holidays so it will be February before we will see the market move again.
Overall, we see loads of new launches in the pipeline for 8-9 months down the road, which means there will be no lack of supply for those in the market.
Summary
The last point we want to leave property investors with it that things constantly change in the market. So look at the long term rather than the short term and make sure to understand the long term plan and strategy for yourself, based on your own situation.
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