IS IT RIGHT TIME TO ENTER PROPERTY MARKET NOW? WHAT TO BUY? SHOULD I WAIT?
with the market at the highest point. The most common questions asked are, "Can I buy now?" "How to buy, what to buy?" This dilemma is most common in the market today. Aaron seeks to share the factors and considerations to be aware of when making buying decisions.
In terms of the fundamentals and asking what's different between the market today and the low market. There's actually no secret with similar content being done and shared by Aaron previously.
Non Serious Sellers
In a high market, it's easy to see a large number of sellers who are non-serious sellers.
Non-serious sellers are the sellers who are looking for record-breaking prices, always believing prices will keep rising and quoting prices that would make their sale the next record holder.
For buyers, it's important to keep an eye out for these non-serious buyers. The underlying logic is that price is the most important in buying. Buyers need to buy at the right price, so it's important to look at sellers in the area who are serious and selling at the right price. The right price being the reasonable one where buyers are willing to enter at.
At this point in the market, this identification of serious seller is the most important.
Looking at photos & videos
Oftentimes, it's easy to buy into the idea of looking for nice videos and nice photos. These nice photos would mean a 'nice' price for the sellers. If you buy based off these photos/videos, be aware of the tradeoffs.
Aaron prefers to ignore it when photos might not be nice, but the more important factor of price is within the range for buyers. One can save 30-50k to do your own renovation by viewing the units where photos might not be as nice.
The recommended concept is not to care too much about the photos, but focus instead on looking at the physical unit during viewing. Buying a property takes effort and a lot of this effort is needed during the countless viewings to find the right unit at the right price!
The first important factor is always price. After price, comes location.
There are certain locations you can never buy at. There is a consolidated list of areas where prices have gone up too high, whereas some other areas are not good locations regardless of market conditions. These locations are not great, hence will not be considered at all for investment.
However, if you are buying for a need to stay at a certain location, you are not able to look at properties for investment. There are now less choices available that can be bought, with areas seeing prices at all time highs.
The current pricing and future potential of the area are important considerations as the scale of price fluctuations would differ for different places. It's vital to look at good areas which would not suffer an overly drastic drop even when the market turns.
This identification of the right price and location depends of course on experience & research, traits of a great agent.
Timing the market
If the market is already high, why should you enter?
When the market is high, you need to still look at the right price and right seller. Search for and find the correct property with a serious seller. Remember that the real estate market is a competitive space with many buyers & sellers ready; they are looking to purchase the right place at the right price.
If you are not readily searching for the unit that is correct, it might be too late by the time the unit is available. The above are all observations and tips for the private market.
For HDB purchases, this will be a challenging year. They are hard to buy due to strong competition. It's likely to see COV going down even thought we don't foresee HDB prices dropping. COV decreasing is likely due to decreased competition and government increasing valuations.
There are also going to be a number of 5 years flats that are meeting MOP. These 5 year flats will come at a price premium simply because they are new.
For HDB, it's about buying at the range you are comfortable with, not overstretching yourself. Do not overstretch for a high installment. Make sure you identify the right COV, minimise risks regarding COV.
Thus one needs to get the right advice on how much COV should be paid and offered.
Similar to private. you need to find the serious sellers. Sellers that do not need to sell, would quote a crazy price and are obviously not serious.
It is important to have the right mindset for your purchase, and understand your own mindset. Is it about the price? Or is it about how 'nice' the property is?
By consider all the factors with the right level of priority, you would be ready and able to buy!
It requires experience to understand the buying process and evaluation process, thus getting the right expert would help smoothen this process, even in a high market like today.
Watch how Aaron shares about buying during a high market through the video below.