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04-08-14, 15:34
http://www.straitstimes.com/archive/monday/premium/money/story/buying-home-wait-20140728
Buying a home? Wait...
Prices can only get more attractive down the road, says panel of experts
Published on Jul 28, 2014 1:23 AM
By Cheryl Ong
INDUSTRY experts have advised potential home buyers to wait if they are thinking about plunging into the property market as prices can only get more attractive.
They told a round-table session organised by The Straits Times last week that while eight rounds of cooling measures and lending curbs have sent private home prices down by 3.2 per cent over the past nine months, more declines are expected.
But buyers who do not want to wait should make offers that factor in this expected fall, ECG Holdings group chief executive Eric Cheng suggested.
He was one of four experts, that also included Chestertons managing director Donald Han, CIMB Bank regional economist Song Seng Wun and Qingjian Realty general manager Li Jun, who gave their take on the state of the residential market in a discussion moderated by Straits Times money editor Lee Su Shyan.
"Today, if I were to buy, I'll offer a price which is projected six months later - which could be 10 per cent from the asking price," said Mr Cheng. He pointed to the global financial crisis in 2008, during which the market swung up sharply after bottoming for eight months. "This time, it's taking us more than eight months, so I would take a wait-and-see approach. The signs are pretty clear - prices will come down and have to come down."
But buyers hoping for a steep fall in home prices may be disappointed, as the panellists noted that home owners have likely enjoyed one or even two sharp price rises over recent years so they are sitting on healthy capital gains and can afford to sit tight.
Home prices are also buttressed by a stable economy, with close to full employment, said Mr Song. While a crash is unlikely, the expectations of falling values have led some owners to lower their asking prices.
The numbers seem to bear this out. While the number of units resold islandwide climbed 7.9 per cent from May to hit 452 last month, prices slipped 1.4 per cent to an 18-month low, according to flash estimates from the Singapore Real Estate Exchange.
But Mr Cheng said this does not necessarily mean sellers are getting the short end of the stick as their next buy is also likely to be at lower prices, contributing to an overall decline in prices.
Though some have pointed out that private homes prices are still out of reach, Mr Han said buyers can always turn to Build-To-Order (BTO) flats or even executive condominiums (ECs). "These days, the queue for BTO flats is shorter, and there are a lot of EC projects where you can still get grants. You don't have to get into the private market," he said.
But as Mr Li put it, Singapore is still a good place to invest because of the appreciation in property values.
"If anybody finds a good location, if the price is right, and the yield can pay for your monthly instalments, it's a matter of choice of whether he wants to own it or not," he said.
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Buying a home? Wait...
Prices can only get more attractive down the road, says panel of experts
Published on Jul 28, 2014 1:23 AM
By Cheryl Ong
INDUSTRY experts have advised potential home buyers to wait if they are thinking about plunging into the property market as prices can only get more attractive.
They told a round-table session organised by The Straits Times last week that while eight rounds of cooling measures and lending curbs have sent private home prices down by 3.2 per cent over the past nine months, more declines are expected.
But buyers who do not want to wait should make offers that factor in this expected fall, ECG Holdings group chief executive Eric Cheng suggested.
He was one of four experts, that also included Chestertons managing director Donald Han, CIMB Bank regional economist Song Seng Wun and Qingjian Realty general manager Li Jun, who gave their take on the state of the residential market in a discussion moderated by Straits Times money editor Lee Su Shyan.
"Today, if I were to buy, I'll offer a price which is projected six months later - which could be 10 per cent from the asking price," said Mr Cheng. He pointed to the global financial crisis in 2008, during which the market swung up sharply after bottoming for eight months. "This time, it's taking us more than eight months, so I would take a wait-and-see approach. The signs are pretty clear - prices will come down and have to come down."
But buyers hoping for a steep fall in home prices may be disappointed, as the panellists noted that home owners have likely enjoyed one or even two sharp price rises over recent years so they are sitting on healthy capital gains and can afford to sit tight.
Home prices are also buttressed by a stable economy, with close to full employment, said Mr Song. While a crash is unlikely, the expectations of falling values have led some owners to lower their asking prices.
The numbers seem to bear this out. While the number of units resold islandwide climbed 7.9 per cent from May to hit 452 last month, prices slipped 1.4 per cent to an 18-month low, according to flash estimates from the Singapore Real Estate Exchange.
But Mr Cheng said this does not necessarily mean sellers are getting the short end of the stick as their next buy is also likely to be at lower prices, contributing to an overall decline in prices.
Though some have pointed out that private homes prices are still out of reach, Mr Han said buyers can always turn to Build-To-Order (BTO) flats or even executive condominiums (ECs). "These days, the queue for BTO flats is shorter, and there are a lot of EC projects where you can still get grants. You don't have to get into the private market," he said.
But as Mr Li put it, Singapore is still a good place to invest because of the appreciation in property values.
"If anybody finds a good location, if the price is right, and the yield can pay for your monthly instalments, it's a matter of choice of whether he wants to own it or not," he said.
[email protected]