Saturday, June 21, 2008

About this Blog

When to BUY, When NOT to buy

When price is low and most people are NOT buying, it's the best time to buy
Not only do you pay low prices, you'll also be spoilt for choices. The last time this happened in the Singapore property market was 2005 - 2006. I was out property-hunting myself then and I can testify to the choices of beautiful freehold properties at bargain prices you can get at such time. This sort of market condition may come back in the near future as Singapore economy continues to suffer the blows of the global economic turmoil. For those who can wait, opportunities like that look very probable in the next 2-3 years. It's worth waiting for.

When price is low and most people are buying, it's still good time to buy
At least you'll still enjoy the low prices but choices will be increasing limited. The last time this happened was in the early part of 2007. Sellers who were waiting for years for the market to turn around were quite happy to finally unload their properties at fairly low prices but most of these properties are the more inferior old 99-leasehold properties. It's ok to buy if you're just looking for an affordable home but capital appreciation may not be so attractive for these properties.

When price is high and most people are buying, it's time to sell and NOT buy Market condition like that is highly speculative. People keep buying regardless of how ridiculoulsy high price has become because they were out there flipping properties. We saw this in the middle of 2007 in the mass market.

When price is high and most people are NOT buying, it's definitely NOT the time to buy
Some time in the mid 90 when property price was at its peak and sales had started to decline, I told myself, "Since nobody's buying, I should buy cos I should get a bargain". I did buy cos the developers did give me a discount but little did I knew then that price was still very high with the discount. When the reality of paying the mortgage finally hit me, I quickly realised that I was just a smart-alec that had fallen into the "discount-trap" of the developer. I sold the property as quickly as I bought it, for a small profit but what's most important for me was I got back my sleep.

Buying at a time when price is high with few buyers around to take over your "hot-potatoe" (should you need to unload it), is clearly a bad time.

May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
Smart Buyers, 10 reasons to wait
Property Price Index Graph Plotter & Online Property Valuation


PropertyHunter said...

Hi, great website. I just sold my property and am waiting for a correction before going in. I have one question, tho - what about IR and casinos?

When I talk to people about property prices, the sentiment is generally, yes, oversupply, global economy weak, etc. etc., prices likely to fall...

BUT got IR coming in, sentiment likely to remain good, 30,000 new jobs, many will be expats, will at least drive up the rental market, help to keep the property market as a whole stable.

Also Singapore property markets still quite cheap, lotsa expats coming in to buy properties...

What's your take on that?

Smart Property Buyer said...

Dear propertyhunter,
Thank you for your compliemnt.

Let's face it, Singapore's IR is a totally insignificant economic force against the global economic turmoil of high inflation and US Subprime problem. In fact, our IR may be drowned completely if the world economy get driven into a deep recession. How will Singapore's economy emerge from this turmoil and how long will it last is anybody's guess. What we all can see today is that the immediate threat of the global economic crisis is escalating each day.

As for the new jobs created, you may like to refer to my analysis in this post:

Singapore property is getting expensive. Sharp increases in property prices have contributed to Singapore now being ranked as the 13th most expensive Asian city for expatriates.

Indeed, high rental has pushed more expats to buy properties here but how sustainable is this ? If a recession hits (may be not this year, but it looks increasingly more probable to happen next year), these expats may be the first to loose their jobs. If they start packinng for homes like in the last Asian financial crisis, what would become of the Singapore property market? We've seen that before, haven't we ?

Best wishes for your property hunt.

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The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.

Smart Buyer :)