Private Property prices......still up or down? Part II

[Wind30]

Since we are all boats today..

There’s no magic boat. No one is going to share their best secrets for free on a car forum like this.

Stay in the game, read up, go to seminars, talk to professionals, pay them and keep up to date with the market.

 

For example, someone sold a terrace in Ming Teck Park for 3.3 mil. Even if you spend 1 mil on rebuilding it, that’s still good value. But you won’t find people sharing info like that for nuts. You gotta keep your ear to the ground and your eyes in the game.

Both my previous property purchases are good deals... just buy...

 

I think if u have to pay professionals to spot a good deal, it probably isn’t a good time to buy.

 

I agree on keeping up to date with the market though which everyone will do due to the amount involved.

[Sdf4786k]

Yes I know a couple, both earning probably around 20K combined currently but started off with just over 10K when they started buying.

 

Scrimped and saved every meal. I have never seen them pay for a meal over many years working with them.

 

After paying off 1 FH landed, they bought another FH landed when prices were down, paying ABSD plus BSD over 200K.

 

Both are drivers. But a pretty tough life otherwise which very few can emulate. With that kind of mindset, only a serious disease or disaster can derail them from their intentions. It’s beyond the interest rate or external environment discussion.

 

It amazing that HK is suffering the worst decline, yet no one chiong 

 

https://www.bloomberg.com/news/articles/2018-11-27/hong-kong-s-housing-market-is-suffering-worst-declines-since-16

 

Hong Kong’s housing market is suffering its worst declines since 2016 -- by multiple measures.

 

 

New-home sales this month are on track to be the lowest by volume since January or February of that year, according to Midland Realty data.

Slowing Sales

New-home sales volume this month set to be lowest since early 2016

Meanwhile, used-home prices have fallen for eight weeks, the longest losing streak since 2016, according to the Centa-City Leading Index.

In addition, used-home prices have this month recorded the biggest single-week decline since March 2016, falling 1.3 percent week-on-week, the data show.

Anecdotal evidence, such as reports of slow sales at a Country Garden Holdings Co. project, is also fueling speculation that the world’s least affordable housing market is heading for a correction. So far, secondary home prices have dipped five percent from an August high.

Goldman Sachs Group Inc. is forecasting a 15 to 20 percent decline over two years as the city’s interest rates rise in tandem with the U.S., according to a research report handed out at a press briefing on Monday.

 

 

 

Not all boats are the same.

 

Some are luxury cruise for a decent price, some are sampans carrying loads of immigrants that pay thousands to board.

 

the worst are those that Miss the boat and sold their unit to catch a good bargain.

 

In the end, no boat but just a life vest

 

Lucky HDB as long as you dont own a property, you can still end up buying another unit, but must tambah the gain on the HDB

[Showster]

It cannot run on forever.

 

Luckily we (SG) took an ultra long breather from 2013 to 2017. 17 quarters of languishing breathers to be exact.

 

What we have to clear now is only pent up demand. Phew...

 

It amazing that HK is suffering the worst decline, yet no one chiong 

 

https://www.bloomberg.com/news/articles/2018-11-27/hong-kong-s-housing-market-is-suffering-worst-declines-since-16

 

Hong Kong’s housing market is suffering its worst declines since 2016 -- by multiple measures.

 

 

New-home sales this month are on track to be the lowest by volume since January or February of that year, according to Midland Realty data.

Slowing Sales

New-home sales volume this month set to be lowest since early 2016

Meanwhile, used-home prices have fallen for eight weeks, the longest losing streak since 2016, according to the Centa-City Leading Index.

In addition, used-home prices have this month recorded the biggest single-week decline since March 2016, falling 1.3 percent week-on-week, the data show.

Anecdotal evidence, such as reports of slow sales at a Country Garden Holdings Co. project, is also fueling speculation that the world’s least affordable housing market is heading for a correction. So far, secondary home prices have dipped five percent from an August high.

Goldman Sachs Group Inc. is forecasting a 15 to 20 percent decline over two years as the city’s interest rates rise in tandem with the U.S., according to a research report handed out at a press briefing on Monday.

 

 

 

 

the worst are those that Miss the boat and sold their unit to catch a good bargain.

 

In the end, no boat but just a life vest

 

Lucky HDB as long as you dont own a property, you can still end up buying another unit, but must tambah the gain on the HDB

 

Edited January 6, 2019 by Showster

[Sdf4786k]

It cannot run on forever.

 

Luckily we (SG) took an ultra long breather from 2013 to 2017. 17 quarters of languishing breathers to be exact.

 

What we have to clear now is only pent up demand. Phew...

 

interestingly, my fren when I ask him to buy 5- 7 years back, he kept saying with cooling measure will correct one.. must wait .. dont kang chiong

 

I then went without him.

 

Now he kanna stuck with age and TDSR and cannot buy, yet still hoping against hope that the market will correct so that he can buy.

 

I can only say, buy if you need to buy in that case. Not buy because its reasonably affordable and trying to time the market

 

 

Edited January 6, 2019 by Sdf4786k

[Showster]

interestingly, my fren when I ask him to buy 5- 7 years back, he kept saying with cooling measure will correct one.. must wait .. dont kang chiong

 

I then went without him.

 

Now he kanna stuck with age and TDSR and cannot buy, yet still hoping against hope that the market will correct so that he can buy.

 

I can only say, buy if you need to buy in that case. Not buy because its reasonably affordable and trying to time the market

Exactly lor. I also have a friend like that. Lost a few hundred thousand in stocks but kept saying property price will drop one day.

 

Now renting to be near his child’s school.

 

End up now considering higher than the price he left off, but used by others for a decade...

[Wind30]

interestingly, my fren when I ask him to buy 5- 7 years back, he kept saying with cooling measure will correct one.. must wait .. dont kang chiong

 

I then went without him.

 

Now he kanna stuck with age and TDSR and cannot buy, yet still hoping against hope that the market will correct so that he can buy.

 

I can only say, buy if you need to buy in that case. Not buy because its reasonably affordable and trying to time the market

If he cannot meet tdsr I think better not buy. I don’t think the market went up in the past 5-7 years. Why can’t he buy now? Assuming he saved some more money in these 5-7 years.

[Showster]

If he cannot meet tdsr I think better not buy. I donât think the market went up in the past 5-7 years. Why canât he buy now? Assuming he saved some more money in these 5-7 years.

ABSD (second property) increased from 0% (2012) to 7 to 12%.

 

BSD increased by about 1 %.

 

Minimum downpayment increased by 5%.

 

11 to 16% more to pay upfront assuming one is buying the same property 7 years ago at the same price.

 

How fast can one save?

Edited January 6, 2019 by Showster

[Mercs]

IMHO, the current outlook isn't as rosy as 2018.

But barring any downturn, those who bought homes won't need to sell, unless they lose their jobs.

The developers who bought at sky high prices have a few years to sell, so they won't panic.

But if the outlook in 2020 remains uncertain, then you may see more bargains or fire sales.

If there is a downturn, not as many people can stand up and smile and say they won't be affected..

I do agree, but it hasn't been as rosy for quite some time already, just check posts from few years back can see some folks shouting recession/retrenchment/price crash etc

and today here we are, with resale psf at a high and new launch psf at new benchmark.

 

Is been shown developers would rather pay absd for unsold units than to lower prices by much.(2013-17)

 

Property investing has always been long term and seen as a 'safe' bet, made even more so now with CMs in place. (no price bubble)

With TDSR, the LTV is capped and int rates benchmarked at 3.5%, so overleveraging also not in play will hardly see any firesales, maybe some bargains from kanchiong spider sellers or those with weaker holding power.

 

So if downturn do come, more so may see funds/investors loading into property to park funds.

The rich and savvy will be more prepared to ride it out, as it wouldn't be their first rodeo, keyword being hold power.

[Mercs]

Yes I know a couple, both earning probably around 20K combined currently but started off with just over 10K when they started buying.

 

Scrimped and saved every meal. I have never seen them pay for a meal over many years working with them.

 

After paying off 1 FH landed, they bought another FH landed when prices were down, paying ABSD plus BSD over 200K.

 

Both are drivers. But a pretty tough life otherwise which very few can emulate. With that kind of mindset, only a serious disease or disaster can derail them from their intentions. It’s beyond the interest rate or external environment discussion.

While its good to be prudent with finances save and invest, this to me is rather overdone.

 

Must also live a little, spend and enjoy, strike a balance.

 

All i gotta say to this is ... 2 FH landed ... their next generation huat ah!

[Showster]

ABSD (second property) increased from 0% (2012) to 7 to 12%.

 

BSD increased by about 1 %.

 

Minimum downpayment increased by 5%.

 

11 to 16% more to pay upfront assuming one is buying the same property 7 years ago at the same price.

 

How fast can one save?

Sorry should be 13 to 18% more upfront.

 

Based on the same property price, the upfront amount has almost doubled if this is a second property from about 23% to 41% of property price. Even if first property, it would have increased to 29%.

 

That’s assuming same price.

Edited January 6, 2019 by Showster

[Wind30]

ABSD (second property) increased from 0% (2012) to 7 to 12%.

 

BSD increased by about 1 %.

 

Minimum downpayment increased by 5%.

 

11 to 16% more to pay upfront assuming one is buying the same property 7 years ago at the same price.

 

How fast can one save?

Just decouple. Most people will do that to avoid paying absd. I can save quite a fair bit in 5-7 years..... I paid off my first place in 8 years.

 

I delayed my purchase for around 2 years... almost bought a similar unit 2 years back. My finances is significantly better now as I paid off quite a bit of my old place housing loan.

 

To me, all these minimum down payment does not really come into the equation as I don’t take max loan.

I hope you are right.

 

OCBC just increased their fixed rate to 2.58% !!!

 

 

https://www.ocbc.com/personal-banking/loans/home-loan-hdb-and-private-property.html

Ocbc just up their fixed rate to 2.68%....

[therock]

It might be a bad patch now, and the property marker needs new leads, eg foreign investment, people willing to come in and pay top dollars for rental.

Otherwise at current rental rates, those who paid 1800 for some RCR LH condo won't be able to break even. 

Best rental to loan ratio comes from HDB flats in good locations.

 

But in the long run, unless SG tanks, things will pick up and property is the simple no brainer investment tool for most of us with less than florid imaginations.

[Showster]

Just decouple. Most people will do that to avoid paying absd. I can save quite a fair bit in 5-7 years..... I paid off my first place in 8 years.

 

I delayed my purchase for around 2 years... almost bought a similar unit 2 years back. My finances is significantly better now as I paid off quite a bit of my old place housing loan.

 

To me, all these minimum down payment does not really come into the equation as I donât take max loan.

 

Ocbc just up their fixed rate to 2.68%....

Last time HDB also can decouple. Now cannot.

 

Only can sell...

 

So his friend might be stuck in one of the scenarios. Or already decoupled and looking to buy second but delayed until stuck with 41% upfront payment...

 

Last time price of housing can pay off in 8 years is normal. Now is very abnormal.

Edited January 6, 2019 by Showster

[Throttle2]

I think u underestimate the reno/contractor cost nowadays. But nevermind.

A lot is dependant on what is done and the material used.

 

European tiles are double the price of Chinese tiles.

Real marble is easily quadruple the pric of fake marble / glazed porcelain or ceramic.

Also, change in structure layout etc....

 

So yes, at least prepare half a million on hand for a very simple but decent job.

[Throttle2]

Just decouple. Most people will do that to avoid paying absd. I can save quite a fair bit in 5-7 years..... I paid off my first place in 8 years.

 

I delayed my purchase for around 2 years... almost bought a similar unit 2 years back. My finances is significantly better now as I paid off quite a bit of my old place housing loan.

 

To me, all these minimum down payment does not really come into the equation as I don’t take max loan.

 

Ocbc just up their fixed rate to 2.68%....

 

 

Huat ah!

 

[therock]

My friend did reno. also about 300k.

Another one just build an awning on roof and minor touchups to exterior and repaint, 200k. 

 

Like my friend says, "1 toilet is 15k minimum. And i have 5  [laugh]"

 

Polycarbonate on aluminium awning, say for a 3 by 5m stretch - 5k, 50% more for glass

Painting of an intermediate terrace - exterior - around 5k plus scaffolding. Interior around 4k or less depending on the size

 

Toilets... wooo if you hack, the costs can be pretty high, especially if you use fancy brand toilet ware...

[Mercs]

interestingly, my fren when I ask him to buy 5- 7 years back, he kept saying with cooling measure will correct one.. must wait .. dont kang chiong

 

I then went without him.

 

Now he kanna stuck with age and TDSR and cannot buy, yet still hoping against hope that the market will correct so that he can buy.

 

I can only say, buy if you need to buy in that case. Not buy because its reasonably affordable and trying to time the market

Those wait and wait ... age catching up/ time lost / opportunity cost = priceless

 

and if buy now ... pay more with ABSD (12%) ... huat ah!

[Mercs]

Exactly lor. I also have a friend like that. Lost a few hundred thousand in stocks but kept saying property price will drop one day.

 

Now renting to be near his child’s school.

 

End up now considering higher than the price he left off, but used by others for a decade...

If that few hundred thousand lost in stocks was invested into property instead, would have been collecting rental with tenant helping pay up the bank loan, while enjoying super low interest rates for many years, if lucky enough to have met with enbloc fever, would have even seen that few hundred thousand easily up few folds to become millions.

 

During uncertain times and especially in a volatile stock market, best play for stocks is do fast in fast out, with exception to companies with healthy balance sheet/strong expansion plans/ offering good div yield to justify the risk of holding long term. With stock prices often doing rollercoaster, in out few rounds would already have made some good money.

 

Invest in stock market rather than SG property? lol good luck