Sunday, August 3, 2008

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More Cautious Buyers at Park Central @ AMK : DBSS at Bishan Price higher ?

New reports show that buyers at the recent launch of HDB third DBSS, Park Central at Ang Mo Kio to be a lot more cautious; and they have good reasons to be. The Singapore economy in 2008 is obviously slowing and the government has told Singaporeans to "be prepared for a downturn". Sales of City View at Boon Keng has been less brisk than expected. There're still some 22% unsold units to date which clearly reflects the price-resistance among buyers.

Developers however argued that the current price level is realistic. In fact, reports said industry players (not known who exactly though) expect prices at the next condo-style public housing project in Bishan to be even higher.

The psychological pressure exerted on would-be buyers is obvious: Buy now, price is going up! That's an old trick in the property market, isn't it? But it works; and still works so very well.

I'd urge prudent buyers to distant themselves from such emotions and make a calculated decision based on logical financial anaylsis.

Recalling my own encounter with greed and fear in the 80s' and 90s' property cycles, I'd say they're extremely convincing and seductive.

This is my testimony against greed and fear: Because I saw through the game of greed and fear in the property market; because I bought within my means at each stage of my life; and because as I waited, my affordability grew and the market finally crashed (and it must), I eventually bought freehold properties at less than half the price that my friends paid at the peak of the property cycle and I did not need any mortgage.

May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
When to Buy, When Not to by
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase


Anonymous said...


I love reading your blog. Not only I gain more knowlegde about the property market in Singapore, and many views too are logical and reflecting many buyer's feeling.

I'm a PR, currently renting a $1600 HDB flat. Trying to buy a resale flat, viewed almost 30 over units so far, saw the price creeping up day by day. If I still can't find a place, might need to renew my lease, which cost me $20k per yr. If I wait longer, the price might drop. But others saying HDB market is still strong, and it will be for the next few yrs. So base on your experience, what is the HDB market outlook for the next few yrs?

Smart Buyer said...

Dear Anonymous,
Thank you for your support.

Judging from the last HDB report, the HDB resales market does look very strong. Based on my observation, any sign of softness in a property segment will first be reflected in the rents. For HDB flats, rents continue to climb by 15% or more.

Though there's no such thing as property price increasing forever, I'm afraid that peak has yet to be arrived at for HDB resale market.

The current peak for HDB resale flats is still lower than it's 1996's peak but the "real" value of HDB flats have in fact been enhanced by several HDB policies implemented after 1996. (Policies include sublet of whole HDB flats, singles ownership scheme, more generious govt subsidies which all go towards supporting higher prices for HDB resale flats.) Of course genuine demand for HDB resale flats has also been increased by PRs and new citizens. On top of this, Minister Mah has said that HDB would build only on "orders" (BTO = Build to Order), so the oversupply condition that happened in the 90s is quite unlikely to repeat this time round.

Personally, I think prices for HDB resale flats are likely to rise further, possibly superseding its 1996's peak, before stabilising.

A substantial fall in prices for HDB resale flats over the next few years is likely only if Singapore goes into a deep recession.

The good news I've for you is that rents are likely to fall in suburb condos and you may want to explore that.

Best wishes.

Anonymous said...

Hi again Smart Buyer,

Thanks a lot. You hv answered all my doubts.

Will keep looking for the right price right unit. Otherwise, will seriously consider renting condo.


Smart Buyer said...

Dear Anonymous,
I'm just giving you my best guess about what's likely to happen in the resale HDB market. It's by no means gospel truth. Ps do exercise your own judgement. You may want to refer to the HDB Resale Price Index from 1990-2008 in the following post:

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Dear visitors:
Your comments are most welcome!

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 :)