Uncertainties singapore

Uncertainties in 2022 & Beyond: How Can We Better Safeguard Our Financial Future?

Many key issues such as a pandemic, the Russian-Ukraine conflict and/or sanctions imposed, etc. has varying degrees of effects on our lives and the world around us. Truth be told, many of this occurrences are beyond our control. In fact, just the rising interest rates and recent property cooling measures is enough for us to be concerned on whether the red-hot property market will be impeded despite the economic repercussions from the pandemic.

Does it affect you?

From the Figure 1 below, you can observe that despite several rounds of cooling measures implemented, the average prices of new homes & resale homes in the private property sector continue to flourish. From 2013 after the double round of cooling measures in January and June 2013, up till July 2018, new sales average $psf grew by 20% overall, albeit volatile. On the resale front, $psf grew by 7%.

Assuming you entered the market after the second round of ABSD in 2013 and bought a property of 1,000 sqft at $1,363 psf and kept it until the recent highs of 2021 when it is $2,248 psf, you could have the option to walk away with a staggering $900,000 profit!!

Now imagine you had made the right property move like buying a property for own-stay/investment and at the same time reap big profit margins, would that be a dream come true? Or would you rather save $900,000 in 8 years by working hard in your day job while scrimping & thrifting on your expenses?

Despite Cooling Measures, Average prices of New Sales & Resale homes continued to grow

Average transacted prices of non landed home new salesFigure 1: Average transacted price (psf) of non-landed homes (new sales vs resales)

Even on the outlooks of HDB during the same period as seen in Figure 2, from its peak prices in 2013, resale prices have dipped for 24 consecutive quarters (6 years) by 12.4%. After bottoming in Q2 2019, prices have rebounded and did remarkably well in 2021 as prices grew 12.7% – exceeding peak prices in 2013.

Looking at the data might trigger you to consider if it would have been better to sell your HDB flat in 2012 or 2013 before the price slum, or simply wait another 8 years to enjoy higher returns? Could you have foreseen how long it would have taken the HDB prices to exceed its previous high? Or could you have profited even more by reinvesting those possible profits? Many homeowners continue to battle with such questions and ultimately they did not take action.

HDB Resale Prices grew by 12.7% for whole of 2021!

Hdb resale price index

Figure 2: HDB resale price (%) index

How About Private Homes?

Let’s take a look at Figure 3 below, Double Bay Residences, a 99-year leasehold condominium with an average entry price of $600psf when it first launched. Reaching its peak at 2014, prices were soaring to an average of $1,250psf, which if you were to have sold it then, would reap you a handsome profit of $650,000.

Noting that prices continue to move sideways since the peak in 2014. Question is, will the price continue moving sideways or would there be any more upside for this development? The most important question should be, why did this property not ride the recent upswing like the newer developments? Could there possibly be key indicators out there you could read into so that you could enjoy the maximum gain like those highly savvy investors?

Double bay residences price chart
Figure 3: Double Bay Residences quarterly average price (psf)

With so many burning questions & concerns from homeowners and property buyers from all walks of life, we decided to take it upon ourselves to help others get them answered. At the same time, depending on where you are in your property journey, understand and address key concerns that you would be facing or are already facing.

Conclusion

Our objective here at Let’s Talk Property is to address all your concerns and provide clarity to property owners and aspiring ones about the ins and outs of the property market so that you could make wiser decisions moving forward.

Timing may be critical but precision is everything. If times are good, you are able to make good profits on your property. But even at times when it may seem unfavourable, there are opportunities that lie within, especially during a crisis. Timing your entry and planning your exit with precision is crucial as it often determines the kind of profits you are able to generate.

If you do need further advice, feel free to contact us for a non-obligatory discussion!

Best Regards,
Let’s Talk Property
Dillon @ 9389 1992

P.S If you are thinking of selling & buying a HDB flat concurrently without contra, Click HERE

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