The rising prices of Singapore properties has casued people to panic BUY without considering the consequences. When the interest rates go up, people who have taken a loan from the bank will feel the pinch. A $1million loan currently needs only about $2,800 monthly repayment. This is due to the interest rate of close to 1% per year. What if the interest rate goes up to 2% in the next 2 years? The monthly repayment can go as high as $4,000 with the same amount of loan. If the interest rate goes up to 3%, I don't know how the investors are going to cope with the repayment. Where are the current property investors going to get the money to pay for the housing loan? They will have no choice but to sell their property.
So do we just forget about investing in Singapore property for now?
No, we don't. Instead, we will keep looking around for undervalued properties. There are bound to have some properties that have good value and selling below valuation price. At the same time, keep ourselves informed of the property trend through the URA website and news while we wait for the property prices to fall.
It is not going to be easy to look for such properties at this time. There will be weeks that you will not be able to find a single unit to view. But it's ok. We are not rushng to own one anyway.
Cheers and Happy Investing.