Is now the time to buy
It's a buyer's market these days.
Data from the Singapore Real Estate Exchange (SRX) shows the number of home sales transactions last year dropped by 19 per cent in resale HDB and by 47 per cent in private non-landed units.
The number of sales transactions in January and February this year are also down.
At the same time, the SRX Price Indices show the prices of HDB flats to be on the decline while private resale prices have hit a plateau.
What does this mean for Singaporean buyers?
If the home you are eyeing is within your budget and you can negotiate a discount to protect yourself against a further drop in prices, now may be the time to buy.
It's a fool's errand to try to find the perfect time to buy.
You might be waiting for prices to come down further and wake up one morning to an upswing in prices.
By then, you might have missed out on a good deal.
The best thing to do in a buyer's market is to take advantage of the higher number of sellers than buyers and the fact that the number of homes for sale on the major listing portals has not dropped as dramatically as actual sales transactions.
This means that, as a buyer, you have negotiating power because sellers are more willing to negotiate and lower their asking price.
Consider using a third-party adviser, such as a qualified real estate agent, to represent you in the negotiations.
Advisers are worth the commission because they are more knowledgeable about the market and better positioned to keep the other side honest.
Real-estate negotiations are as much an art as a skill, but everyone starts with the listing or advertised price.
But be careful. A listing price does not reflect the value of the home. It is merely what the seller hopes to get.
You and your agent should ignore the listing price and assess the value of the home based on hard research.
Ultimately, the seller can only command a price that the market will bear.
Therefore, most listing prices must be realistic and based on these factors:
l Recent transactions of similar homes;
l Listed prices of comparable homes;
l Location of the home and its qualities; and
l How fast the seller needs to sell.
There is no perfect time to buy a home. The prudent approach is to stay within your budget and negotiate the price down to a level that will be comfortable enough for you to ride out a downturn in the market.
Sam Baker is co-founder of the Singapore Real Estate Exchange (SRX), an information consortium formed by leading estate agency companies to share proprietary sales and rental data. For more property-related articles and opinion pieces by SRX, visit www.srx.com.sg
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5 TIPS FOR FIRST-TIME BUYERS
Do your homework - compare and contrast
Seek out the advice of a trusted real estate agent
Don't let emotions cloud your financial good sense
Stay within your budget
Don't negotiate on your own. Employ a professional
INVESTMENT HOT SPOT
Geylang is emerging as a hot spot for investment.
It is just a short drive from the city centre and the area has sale prices that are lower than its surrounding neighbourhoods because of its reputation as a red light district.
Yet, its rentals are supported by demand among foreigners, especially singles looking for a relatively affordable place to live near the city.
Some of the top capital-gain projects are located there. Six of the top 10 projects with the highest capital gains in the last five years are in the Geylang, East Coast and Tanah Merah areas.