Tuesday, July 20, 2010

Can we still buy property in the already hot market?

The current property market is overheating. MM said probably no housing bubble yet. But we can see for ourselves how steep the price index is from the URA website.
So, can we buy property in the current market?
My answer is yes. You will still be able to find property that is undervalued. I bought a top floor (15th) 3 bedroom unit for $615 psf. This project is just 8 minutes walk from Hougang MRT station, Hougang Mall, Food Courts and within 1km of a SAP, Holy Innocents' Primary School.
The project may be 13 years old out of 99 years leasehold. You will not disagree that the potential for the upside is there. Comparing to neighboring estates that were selling at $700 psf, I was actually buying at a discount of 12.1%.
The maintenance of the estate was very well kept and the maintenance fee is only $180/month.

Another private property sector worth considering, landed properties. Some landed areas, outside core central, like Luxus Hills, Mimosa Terraces, Realty Park were all asking for prices that cannot be bought by the middle income family. So what can we do?
Look for alternatives.
I have been going around viewing open houses at different areas. Seletar, Teacher's Estate, Telok Kurau, Poh Huat area, Park Villas. Just take 2 areas for comparison. Park Villa is a 99 year leasehold terrace selling at $1.35 million while Teacher's Estate, a 999 year leasehold, terrace is selling for $1.3 million. Which is a better buy? I think you will have the answer now.
A 999 year or freehold terrace at other places listed above are asking for at least $1.8 million. How can a middle income family afford that kind of price?

Further investigation of the transacted prices at URA site confirms that Teacher's Estate is really a good buy. Prices were stable and in the uptrend even during the recession last year.

To buy a condominium unit, size 1200, at $1.5 million, at Meadows @Pierce or to buy a land, size 1800, for $1.3 million, it's your call.

Continue to save more money and look around for valuable properties. You will be able to climb up the property millionaire ladder one day.


Monday, July 19, 2010

Phase 1A of the downtrend

This piece of news is extracted from the businesstimes.

July 19, 2010, 8.40 am (Singapore time)

China to maintain property tightening

BEIJING - China will maintain its tightening campaign to cool real estate prices, the Minister of Housing and Urban-Rural Development said in remarks published on Monday, while urging local governments to build more affordable housing.

As Chinese economic growth slowed in the second quarter, some analysts and investors expected Beijing might loosen its efforts to temper the real estate sector, which accounts for more than 10 per cent of gross domestic product.

But Jiang Weixin, the housing minister, told a meeting of more than 70 mayors that the risks of doing so were too high.

'Once the policy is relaxed, property prices will rebound strongly. Our macro control efforts will then fail overnight, and the government will also lose the trust of its people,' he was quoted as saying by the China Business News.

China's property prices fell 0.1 per cent in June from May, the first monthly decline since February 2009, after Beijing rolled out a slew of measures in April, including higher required down payments and mortgage rates, to curb rapid housing price rises.

Mr Jiang urged the officials to speed up efforts to meet the country's target of building 5.8 million units of affordable housing this year.

His ministry will make a two-week check on the progress of construction beginning on Aug 10, he told the mayors. -- REUTERS

Now for my comments.

Prices of the properties in China as dropped 0.1% in June. It indicates that we have progressed from Phase 1 to Phase 1A. The dropped in property prices in China means that the other countries in Asia will follow suit. It may take a few months or even a few quarters for the Singapore property prices to go down too.

Prices will go down, but when? I do not know. Meanwhile, just need to continue to build our war chest with $$$ ammunition so that we can strike when the price is right.


Disclaimer: The above comments are personal comments. They should not be used to decide if one should buy or should sell their properties.

Sunday, July 4, 2010

Phase I of downtrend is on the way

This is an excerpt from the business times breaking news.

July 5, 2010, 1.22 pm (Singapore time)

China property prices to fall before long: minister

BEIJING - China's property prices will fall within a few months as government steps to cool the real estate market bite, Xu Shaoshi, minister of land and resources, said.

China introduced a slew of measures in April, including higher down payments and mortgage rates, to curb excessive real estate price rises, which the government sees as a threat to social stability.

'Property transactions have fallen now and prices have stagnated,' Mr Xu told a meeting of ministry officials on Sunday in Dalian, a northeastern port city.

'In another quarter's time or so, the property market will probably come to a full correction and prices will fall. But it's hard to say to what extent they will fall,' the official Xinhua news agency and other domestic media quoted him as saying.

Mr Xu added that China's land market had cooled and Beijing would continue to build more affordable housing, which could pull down the average level of house prices.

Nationwide, property prices rose 0.2 per cent in May, leaving them 12.4 per cent higher than a year earlier. The increases were smaller than in April. -- REUTERS

The china property market will take lead the downtrend. The rest of the region, where property markets are over heated will follow suit. Just wait for a quarter or two and we can strike using all our reserves in our war chest.

Wait no further, save more cash now.