To Buy Or Not To Buy
In a down market, smart buyers want to buy at an absolute low. ‘Bottom fishing’, so they say. But no one knows for sure though when is the bottom until after it is over. Since timing the property market is intriguing, buyers have bought across all the price spectrum, including at their highest peaks in 1996 and 2013.
To buy low and sell high, isn’t that what we are supposed to do?
Do buyers regret not buying during the crisis of 1986 and 1998. Of course some do, but the likelihood that prices will return to 1998 or 2004 levels is minuscule. Never say never, though. Should this scenario present itself, then know for sure, not just Singapore but the whole world economy is in a depressed state.
“Prices have softened so much, that downside is limited. If they wait any further, they can miss the boat,” commented an analyst.
Is downside really limited? Is 8.4% drop really 'that much'? Why the contradiction, when only a short while ago, so many, many industry players were predicting dips of 15% - 20% or more. Something has to give, since the narrative is always changing and so fast at that.
From (Q3 2013 to Q4 2015) private residential home prices are down 8.4 per cent from their recent peak. HDB prices have declined 11.1 per cent (Apr 2013 to Jan 2016). A home price trend has clearly emerged. No drama here – price falls are gradual, not dramatic.
Amidst loud calls for rolling back some of the property cooling measures, the authorities have came out openly to say that now is not the time. Their rational:
- Stabilising the property market for economic purposes;
- Government’s intent to ensure affordability of homes for those who have not bought;
- Preserving the wealth of those who own homes.
So there you have it. It is official policy not to wreak havoc on household net worth or the economy. Though some are hoping for housing prices to go down even more.
As for the upside potential, it’s anyone guess when that will happen.
To buy or not buy now, well it’s your call.
If you intend to buy, here are some tips to go by:
- Buy within budget and create a buffer for unforeseen circumstances
- Hire a real estate agent to benefit from their profession expertise and to defend your interest.
- Buy into LOCATION
- Be realistic about prices.