Every dog has it's day and certainly the Singapore property market has had it's days for the last three years. The market has gotten a great rally and prices are way ahead of the last peak in 2007. However, with the Europe debt crisis and the slowdown of the Chinese economy, Singapore seems to be affected as well. The property market is taking a hit and volumes have come down. As a real estate salesperson, I have felt the slowdown in terms of the number of appointments I have. However, buyers in the market are generally sincere and there are still sellers who are willing to let go at reasonable prices and thus deals can still be concluded. To be frank, the last two to three months have been my best months in terms of sales figures for the whole of 2011.
However, what will happen when almost all those who need a house have made a purchase? What happens if prices take a dip and sellers decide it is not worth their while to try to get a good price for their properties? What if sales volumes drop drastically? This time round, there probably will not be a quick rebound off recessionary lows. The main drivers of global economy, the US, Europe and China are facing problems of their own. Whatever is said, Singapore is definitely NOT immune to a global slowdown. The mere fact that the government is warning of a possible slowdown would mean that they have already seen some figures before we have and it does not look too rosy.
Just recently, my CEO spoke to me about maintaining one's bottom line. ie. keeping costs low. I realise that this is a very important concept lost by many out there. When times are good, some may spend lavishly on their lifestyle. They splurge on cars, branded goods and holidays. To them, summer is 24 hours a day, 7 days a week, 52 weeks a year and will never go away. Prudence is a concept lost by salespeople. I fear for those who have over-committed. Instead of upgrading our debt during the booming years, we should be downgrading our commitments.
Only time will tell who can stand the test of time. Times will be leaner but then for those who are willing to persevere and work hard, they can tide through the winter that is the upcoming economic downturn.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Thursday, November 24, 2011
Wednesday, November 16, 2011
Is the market slowing down FINALLY?
http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_734143.html
Really interesting to note that new private home sales are down 15% for the month of October. As a real estate salesperson, I do feel that the sentiment of buyers in general are one of "wait and see". No one knows what is going to happen to the global economy. Europe may or may not implode, China may have a hard landing and the US recovery story may not be as buoyant as earlier anticipated. If new private home sales are down 15%, I would encourage home seekers to take a closer look at the URA website to get a feel of the resale home market. Volumes have been diminishing since the first half of this year.
I personally feel that prices have run ahead of fundamentals. This then comes to my point. Paying in excess of $900 per square foot for a 99-year leasehold property in Punggol may not make much sense. Reason being that a 3 bedroom apartment with an average size of about 1000 square feet may translate to a price of a million Singapore Dollars. Which then brings me back to the point of "how many people can afford a property higher than today's prices?" My fellow graduates are not making tons of money. Most of them are earning salaries of about $4,000 to $5,000 a month at the age of about thirty. A loan of $800,000 would set them back about $3,000 a month thereabout depending on the interest rate. How much more can prices increase such that they can sell it for a profit in future? $1,500 per square foot for a unit in Punggol? With about 80 plus years left on the lease? What will the typical buyer say about the purchase he made today?
"For own stay. So high or low it does not matter to me".
My response, "I bought my car for own use. I am glad I bought it when it was 50% the price of a similar model today."
No one can guarantee that the house they buy today will be last house they will ever live in. Buying for own stay is the worst excuse for the financial suicide that buyers are getting themselves into these days.
This is a property boom of epic proportion. Prices have skyrocketed since the lows in January 2009. A mere two and a half year time frame has brought us to the dizzy heights of today. For those who jumped in without much thought, I pray that this boom is not a bubble in disguise.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Really interesting to note that new private home sales are down 15% for the month of October. As a real estate salesperson, I do feel that the sentiment of buyers in general are one of "wait and see". No one knows what is going to happen to the global economy. Europe may or may not implode, China may have a hard landing and the US recovery story may not be as buoyant as earlier anticipated. If new private home sales are down 15%, I would encourage home seekers to take a closer look at the URA website to get a feel of the resale home market. Volumes have been diminishing since the first half of this year.
I personally feel that prices have run ahead of fundamentals. This then comes to my point. Paying in excess of $900 per square foot for a 99-year leasehold property in Punggol may not make much sense. Reason being that a 3 bedroom apartment with an average size of about 1000 square feet may translate to a price of a million Singapore Dollars. Which then brings me back to the point of "how many people can afford a property higher than today's prices?" My fellow graduates are not making tons of money. Most of them are earning salaries of about $4,000 to $5,000 a month at the age of about thirty. A loan of $800,000 would set them back about $3,000 a month thereabout depending on the interest rate. How much more can prices increase such that they can sell it for a profit in future? $1,500 per square foot for a unit in Punggol? With about 80 plus years left on the lease? What will the typical buyer say about the purchase he made today?
"For own stay. So high or low it does not matter to me".
My response, "I bought my car for own use. I am glad I bought it when it was 50% the price of a similar model today."
No one can guarantee that the house they buy today will be last house they will ever live in. Buying for own stay is the worst excuse for the financial suicide that buyers are getting themselves into these days.
This is a property boom of epic proportion. Prices have skyrocketed since the lows in January 2009. A mere two and a half year time frame has brought us to the dizzy heights of today. For those who jumped in without much thought, I pray that this boom is not a bubble in disguise.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
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