Private home prices to stay fairly flat

[violinist]

Agents are the kind of people I dislike the most. I am not saying all are like that, but a majority are. Before they get your business, say until everything and anything also can, will help you as much as possible, answer your call at the very first instant. After you sign ........ hey hey. Call them no answer liao. You slowly wait!

[Julietjerez]

Thanks Guys for sharing this piece of information

[Ben]

Thanks Guys for sharing this piece of information

Hi Juliet, welcome to the forum and I am suprised that you dig up this thread where the last post was almost two years ago. Pls note that the information is very outdated by now.

I posted some questions in this thread in Oct 2010, seeking advice from property expert. Since then, I have invested in a private property in the resale market, in Aug 2011 and transaction was completed in Nov 2011. The seller decided to rent it back from me for a one year period while looking for a new unit. So it is like a sales and lease back arrangement.

So far so good, the price has appreciated by about 10%, and the rental is due for renewal soon, where I can expect to ask for at least a 10% hike. This is because as part of the agreement then, I agreed to a lower than market rate rental in return for the seller to agree to my purchase price.

The seller made a huge capital gain when he sold the property to me, and bet for the property price to fall, but we all know it has not....it will be quite hard for me to bring out the subject of rental increase

[godjira1]

Ben, thanks for your experience.

I'm actually struggling to get tenants for 2 properties that I own (both in d10) and my agent always delivered in the past so I'm putting it down to perhaps a weaker rental market in CCR. I'm currently in the midst of renewing my own lease (long story, but I rented a place near Tanglin for other reasons) and have asked for a 11% discount.

Let's see how the merry go-round works out else I'll move into one of my own properties.

[Bibi]

The seller made a huge capital gain when he sold the property to me, and bet for the property price to fall, but we all know it has not....it will be quite hard for me to bring out the subject of rental increase

Alot of pp sold off their properties betting they will fall. My wife fren sold off hers and stay in with in-law. In fact, the entire family there sold off all their properties and stay together in a rented multi-storey bangalow. In-laws, elder bro + wife, yonger + wife + all 3 kids all stay together.

[snowcap]

Ben, thanks for your experience.

I'm actually struggling to get tenants for 2 properties that I own (both in d10) and my agent always delivered in the past so I'm putting it down to perhaps a weaker rental market in CCR. I'm currently in the midst of renewing my own lease (long story, but I rented a place near Tanglin for other reasons) and have asked for a 11% discount.

Let's see how the merry go-round works out else I'll move into one of my own properties.

A bit OT, but can I ask based on your experience, how do the sums work out when you rent (out) a property you own, and then simultaneously rent (become a tenant) another place for your own residence? Isn't it cleaner to sell off the place and buy a new one? The only benefit I see is saving stamp duty. Otherwise as a landlord the property tax goes up from 4% to 10%. What other factors should one consider?

I'm thinking of moving, and considering a few options:
a) Sell current home (A) and buy new one (B).
b) Rent out A, rent B
c) Rent out A, buy B
d) Sell A, rent B
e) Rent out A, buy C and rent out, rent B
Headache boy!

Note, I have cash to buy B without selling A.
Thanks for any advice.

[godjira1]

A bit OT, but can I ask based on your experience, how do the sums work out when you rent (out) a property you own, and then simultaneously rent (become a tenant) another place for your own residence? Isn't it cleaner to sell off the place and buy a new one? The only benefit I see is saving stamp duty. Otherwise as a landlord the property tax goes up from 4% to 10%. What other factors should one consider?

I'm thinking of moving, and considering a few options:
a) Sell current home (A) and buy new one (B).
b) Rent out A, rent B
c) Rent out A, buy B
d) Sell A, rent B
e) Rent out A, buy C and rent out, rent B
Headache boy!

Note, I have cash to buy B without selling A.
Thanks for any advice.
[/quote]

it is cleaner to buy your own place of course but the incremental 6% property tax works out to about half a month's rental of my place so it's not a deal breaker.

to put things in perspective, because the rental yield is lower for more expensive houses, what i have is:
1) what i collect on property A + B (I own) = what I pay for rental on property C, after factoring in incremental property tax.
2) but the open market price of A+B = 75% of property C (probably in truth closer to 80% as the asking price my landlord wanted was ridiculous).
3) as an example a 10 mil apartment in D9/10 will prob fetch a rent of 15-18k/mth, but a 20 mil GCB will be 20-21k/mth so the yield compression at the top end is quite significant.

If you have cash to buy B, then it's just a call on whether you think it's a good investment and whether you are underweight on property in your portfolio. I'm a big believer in the tendency of fiat money inflation so all else being equal I tend to want to own property, equity, commodities versus nominal items like bonds.

[snowcap]

it is cleaner to buy your own place of course but the incremental 6% property tax works out to about half a month's rental of my place so it's not a deal breaker.

to put things in perspective, because the rental yield is lower for more expensive houses, what i have is:
1) what i collect on property A + B (I own) = what I pay for rental on property C, after factoring in incremental property tax.
2) but the open market price of A+B = 75% of property C (probably in truth closer to 80% as the asking price my landlord wanted was ridiculous).
3) as an example a 10 mil apartment in D9/10 will prob fetch a rent of 15-18k/mth, but a 20 mil GCB will be 20-21k/mth so the yield compression at the top end is quite significant.

If you have cash to buy B, then it's just a call on whether you think it's a good investment and whether you are underweight on property in your portfolio. I'm a big believer in the tendency of fiat money inflation so all else being equal I tend to want to own property, equity, commodities versus nominal items like bonds.

Thanks for the reply. This is enlightening.

Two important considerations for me are the view of the property market and interest rates. It is quite likely that interest rates will stay low for another year or two, given that Bernanke has committed to low rates, and even alluded to QE3. However, the Singapore residential market also has a supply pipeline of 40,000-80,000 units (depending on whose analysis you use) completing in the next 3 years. So I do not want to be overweight property if there is a slump.

And of course, there is policy risk, if govt decides on another round of cooling measures.