Is Now The Right Time To Invest In Property?

Here is my post on CNA forum, reposting here to share. Enjoy!


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Property investing is about the timing and the purchased price…if you have purchased a ppty when the px is low, one would have made a huge gain..BUT the reverse is also true, if you have bought it when px had gone up a lot, be prepared to suffer huge loss when mkt turns (unless you are prepared to hold long which we don’t know when…the opportunity cost is high)


Just to create awareness that property price is coming down; I have re-pasted my post on reflection at keppel bay below again:
Reflections at Keppel Bay ---> want to buy at more than 20% discount from initial launch price?

Launched at average psf of $1900psf. now can get at $1500psf. ---> http://www.channelnewsasia.com/stories/s...30/1/.html

Go to the property guru url link i pasted below, once u go to the webpage ----> stroll down to bottom of page 1 and to page 2 and 3 etc, u can see alot of listing at around $14++psf. based on a area of around 1100sqft.

http://www.propertyguru.com.sg/project-l...&order=asc


There are currently 290 unsold units in reflections at keppel bay. Keppeland had said that they intend to rent it out at $8-9k/mth, don’t believe them. If you go to propertyguru, you can see lots of listings wanting to rent it out. Browse through the page, you can see that the quoted price is about $4+ to $5+ psf (I am sure one can negotiate a much lower rental than the quoted price which usually is a mark-up)..This would translate to $4k+ to $5k+/mth…given that one can get rent it at a half the amt in the mkt, do you think that Keppeland can rent it out at $8-9k/mth?


Some more facts to illustrate the importance of purchased price and timing:

1. Do you know that property price of HDB masionette (2-storey type) was once about $500k when it was first introduced in the late 80s? It took them more than 20 yrs to breakeven and maybe minimum profit (over 20yrs, its definitely not a lot, and note that this is not taking into consideration of inflation…opportunity cost is high)
2. Do you know that private ptty at sub-urban area was once selling about $1000psf in the 90s (around 95/96)…it took them more than 15 yrs to see this px again and im not sure they make any profit taking into consideration the interest, mthly maintenance fee, inflation…
In short, now is not the right time to purchase property if you intend to invest your money somewhere. Reasons are as follows:
1. Employment rate is already very high..it can only maintain or go lower which means limited upside but massive downside. If we do see massive retrenchment in sg, be prepared for the great singapore property sales
2. Interest rate is already so low, it can only maintain or go up. In fact, it is already going up…it was 0.8% in jul 11, now it is about 1.08%
3. Massive supply coming up and many unsold units…just go to URA property information, you can find the info…there are about 79k private ppty under construction and out of that amt, about 40k are unsold…the media is only reporting on those which have good sales but there are many which are not selling well, why are they not reporting?
4. Govt would not want price to go up...if price go up somewhere, govt would only introduce more measures…I guess we would need price to come down substantially (20 to 30%?) in order for govt to remove these measures…
5. Price had already gone up quite substantially for the past few yrs (especially so for mass mkt)…not much meat left, limited upside but downside a lot..price alrdy coming down if you monitor the mkt


The above are just my 2 cents. To me, there are better alternatives to put your money, opportunity cost is definitely high if you intend to invest in property now (the money get stucked if ppty px come down substiantially)…one can perhaps take a look at ppty again when px has come down about 20%...

Happy investing. Cheers!

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D' Leedon

launched in 2010. up till now still got 1255 unsold units (source - URA). only 20+ % sold (Total units: 1700+ units).

launched at around $1700psf.

---> http://www.channelnewsasia.com/stories/s...33/1/.html


now can get at $1400+psf. somemore this is for small unit. bigger unit will be much cheaper in terms of $psf.

---> http://www.propertyguru.com.sg/listing/9...rrer-court-

well...timing is important.. and location too..

so.. go in with ur eyes open!

D' Leedon location is not that bad, at the prime district 10. Still sales is bad and price is coming down...when it TOP in 2013/2014, expect px to come down further as those who go in with the intention to sell quickly for capital appreciation will not hold as they dont want to start paying installments...u will know if you are a ppty investor and u will find that during TOP, before collecting of keys, you can find vv good bargains!

In ppty investing, Location is vv impt but if you hv bought a piece of property at superb location at over the moon px, when the mkt turns, u will still suffer loss. maybe it could be the first to recover (due to its superb location) once mkt recovers (the analogy is like bluechips) and u can recover back but the question is how long will it take for mkt to turn? The opportunity cost is high (the money get stucked for many yrs cant put into better use)...

let me give you a hypothetical e.g. .... buying DBS bank at P/E ratio of 100x when the mkt is in super bull run. even though DBS is a blue chip, it may not recover back to this high again or even if it does, it may take donkey years...


extracted from D' leedon website
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With the Farrer Road MRT Station on the Circle Line walking distance away, d’Leedon residents will be easily and quickly connected to other parts of Singapore such as the Central Business District. The project is close to highly-sought-after top schools like Nanyang Primary School, Raffles Girls’ Primary School and Hwa Chong Institution, as well as popular lifestyle hubs such as Dempsey Hill, Holland Village and Orchard Road.

Peak at supply around 2014-2015 is what i understand. The question is whether the demand can catch up then. A potential oppurtunity for bargain buying. Caption of what i had read below

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Another area of concern lies in potential oversupply.

Singapore's delivery of 12,300 residential units per annum (6,400 private) over the past five years has been substantially below the demand of around 35,000 units, which resulted in a strong appreciation of housing prices. To remedy this, government initiatives have focused on increasing the sale of land available for residential development, including boosting the construction of HDB flats.

As a result, supply is expected to reach 40,000 units in 2014 and 45,000 in 2015, said UBS.
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lvpierre,

Thanks for your contribution to this forum and I concur with your views.

However, the links in your post don't seem to be working.

Actually if you don't need the money for your life time, property investment is right for you anytime. The more properties you own the better for your genes. If you keep fiat money, it may be valueless in the future or devalue a lot due to inflation. Of course if you want maximum returns no matter what, timing is very important. So is everything in life.Just you imagine you were born in WW2 period.
After letting go "gas", i am surprised that the shoe-box unit i booked in early 2011(top at the end of this year or early next year) from the developer, is in the money now. i not very sure but monitoring the shoe box units on sale prices definitely much more than what i am going to pay the developer.
Cheers!

Shoe box is cute. If I were single, I would probably like to live in one - low maintenance, in terms of cleaning and management fees, because of the smaller area. I just wonder if the bed (over-hanging) will be counted again in the floor area. Anyone knows? Hillsta even has 5m ceiling for ground level units...

I personally won't go near a shoebox unit for investment. The price psf is too high and during downturns, you never know if you can rent it out. Frankly, 500 sqft doesn't seem like a very liveable space to me.

Then again, perhaps I am just too used to my 1,100 sqft HDB flat!

i like shoebox more of personal preference. Though psf is higher, the loan burden is more comfortable.

I am not so sure on rental but to a cost conscious executive who are not use to large apartment,
is a good way to save rental money and maintenance.

so, what's the rental for a typical shoebox apartment?

$3K per month?