Business @ AsiaOne
Private properties looking attractive
What to look out for when hunting for that perfect condo or house.
Fri, Dec 26, 2008
By Shila Naidu
THE recession has resulted in a 25-per-cent fall in private- property prices from their market peak, and with prices expected to dip further next year, there may be opportunities to pick up some bargains.
However, buyers of properties - whether for investment or occupancy - should do their homework before committing to such big-ticket items.
Here are 10 tips to keep firmly in mind.
1 CONSIDER LANDED
The executive director of HSR Property Group, Mr Eric Cheng, feels that if buyers are willing to fork out $1.2 million to $1.3million for a condominium, they should consider buying landed property instead.
Due to land scarcity in Singapore, there is always more demand than supply for landed property, which is not the case with condos, said Mr Cheng.
2 INSTALMENT RESERVE
Mr Cheng said it is important to invest within your means. Have a reserve of at least one year's worth of instalments in case of shocks, like a loss of income.
3 LEASING OR LIVING?
Mr Arvin Sylvester Lim, division director of Century 21 SHL Realty, said it is important to be sure if you plan to live in the property or rent it out.
If you are making it your home, the equation is simple: Find something that you like and can afford.
If you are looking to invest and rent out, do your research to see if there is good demand in an area, and if the rent will be enough to cover the instalment payment and still allow a profit.
4 DON'T WAIT TOO LONG
While one should hold back until one finds something ideal, Mr Lim does not encourage overspeculating on trends.
"Buying a house is not like buying a car. The moment you drive the car...the value drops, but with property the value can go up or down," he said.
Even though prices are expected to fall further, "a home is a must", Mr Lim said. He advises against pegging buying one to unpredictable market movements.
5 MAKE OFFERS FAST
Buyers who bought too many properties or can't afford to keep up with payments, given the weak economy, will be selling off their investments now, said Mr Shannan Govindarajoo, marketing manager at ERA.
He suggests you start looking and making reasonable offers as he thinks more buyers will be entering the market, which could mean prices for these "must-sell" properties may rise.
6 CHECK MASTER PLAN
Look at the Urban Redevelopment Authority's master plan and invest where the Government is pumping in money, said Mr Govindarajoo.
For instance, he thinks those interested in the Marina area should strike now, as prices are down by 40 per cent, compared to last year's.
Mr Lim said investing in property in that area will reap great returns when the integrated resort is ready as "a lot of the management staff will be living there, so rentals will be high".
7 SHOP FOR A LOAN
Banks are now becoming more cautious with making home loans and how much they are willing to lend, said Mr Govindarajoo.
He advised shopping around for a good home loan first, so that you do not commit yourself to a seller before knowing how much you have to work with.
8 PRICE VS VALUATION
Check the valuations of the property you are considering at different banks to make sure you?re getting a good deal, said Mr Govindarajoo.
9 OLDER CONDOS
Mr Parthiban Sadagopal, a Prop- Nex realtor, suggests buying a condo "between seven and 10 years old in the outskirts", like Pasir Ris or Tampines.
Judging from the trend seen after the 2003 recession, such condos are good buys for living in and investment, as you could hope to buy one at $400,000 to $500,000 now and sell it for up to $800,000 when the economy picks up.
Renting it out could fetch $3,000 a month as well.