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.


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