Very sad evening for me.
I just rang up my agent and told her that I am cancelling the purchase of a studio unit at The Clift that I had just bought last week. 1% deposit already paid last week. Supposed to exercise the option on the coming Monday. I have been shopping for the last one 1 year and finally just decided last week to realise my dream as a property owner.
I was not worried about the LTV (cos I am a first time buyer) or even the SSD (cos I can actually exercise my option tonight at the lawyer's). But I decided to forgo my 1% deposit due to the following reasons:
1) I bought a studio unit in Shenton area. So very clear cut, it's for investment/speculation reasons only. My next buyer (say... even 4 years later) is likely to be an investor as well, cos it is extremely unlikely for a genuine long-stayer to move his whole family into a studio unit in Shenton. So, will the next buyer be willing to also hold for 4 years? Unlikely. Well, he might - but only if the price is really cheap.
2) This cooling measure was the most dreconian ever. Remember when Shanghai imposed the 15% SD 2 months ago, property sales volume plunged by 80% in the next 2 months?
3) Prices are very likely to drop, or at best stagnate, after these new cooling measures. I am now going to target at least a 2-bedder in RCR (my budget cannot get a 2-bedder in prime area anymore). That will give me a larger investment window because the next buyer can very likely be a long-stayer rather than a speculator.
4) If the market turns during the older times, I can still afford the 3% SSD. But if market should turn within the next year, wah piang how to find 16% to pay iras, or pay for the margin call?
5) To begin with, I bought the unit at an "ok" price only, not that it was a fantastic price. It was actually a sub-sub-sale unit, right before T.O.P.
6) I think with the CPF i have on hand, can invest back in to equities, since the equity market is going well now.
7) The rest of the cash on hand can buy London property, or KLCC, or even some good buys in the States. Places where cooling measures are not in operation (well, at least not yet).
Haii... the new round of cooling measure really kill speculators la.. Well, at least it had an effect on me.