Paya Lebar Quarter

[bargain hunter]

The recent tweak in measures does give developers an opportunity to sell more with right pricing. The market is sentiment driven. With 'songs and dance', it attracts some people to enter the market. This encourages some people who are staying on the sideline to take the plunge. Usually people who buy from new launches are cash tight or the less savvy. Savvy investors usually buy resale completed units and not quite in RCR or OCR where prices have corrected only by 11% as compared with CCR by more than 30%.

i agree with you on your final sentence and hope that i am also a savvy investor haha. however, people who buy from new launches are not necessarily cash tight or less savvy. in general, there are a lot of people who like brand new units, a lot more than savvy investors. they buy for various reasons. e.g. grandeur park units are so small but the quantum is "affordable" so the product is something which these buyers want. they may be low budget but not necessarily cash tight.

with regards to savvy or not, i'd say buying at 30% discount in CCR is a long term thing and also requires enduring lower rental yields in the short run, especially for the older properties. meanwhile, a project like park place would give higher short term yield and cash flow especially when it is brand new. its more of different strategy than anything.

[Kelonguni]

It's overly judgemental to conclude that.

People buy property due to various reasons. One should note that TDSR is a permanent measure and the sectorial gaps might be long lasting. In other words, we are not sure if the gap will widen back to pre TDSR levels 10 years later.

Both CCR and OCR comprises highly heterogeneous regions. It is quite naive to think every development in the sector will experience same price movements as well. In fact, even in the same region, different micro location factors, density and workmanship factors influence buyer and seller dynamics as well.

The recent tweak in measures does give developers an opportunity to sell more with right pricing. The market is sentiment driven. With 'songs and dance', it attracts some people to enter the market. This encourages some people who are staying on the sideline to take the plunge. Usually people who buy from new launches are cash tight or the less savvy. Savvy investors usually buy resale completed units and not quite in RCR or OCR where prices have corrected only by 11% as compared with CCR by more than 30%.

[Kelonguni]

You are definitely savvy and discerning who has snapped up a great bargain!

i agree with you on your final sentence and hope that i am also a savvy investor haha. however, people who buy from new launches are not necessarily cash tight or less savvy. in general, there are a lot of people who like brand new units, a lot more than savvy investors. they buy for various reasons. e.g. grandeur park units are so small but the quantum is "affordable" so the product is something which these buyers want. they may be low budget but not necessarily cash tight.

with regards to savvy or not, i'd say buying at 30% discount in CCR is a long term thing and also requires enduring lower rental yields in the short run, especially for the older properties. meanwhile, a project like park place would give higher short term yield and cash flow especially when it is brand new. its more of different strategy than anything.

[Amber Woods]

i agree with you on your final sentence and hope that i am also a savvy investor haha. however, people who buy from new launches are not necessarily cash tight or less savvy. in general, there are a lot of people who like brand new units, a lot more than savvy investors. they buy for various reasons. e.g. grandeur park units are so small but the quantum is "affordable" so the product is something which these buyers want. they may be low budget but not necessarily cash tight.

with regards to savvy or not, i'd say buying at 30% discount in CCR is a long term thing and also requires enduring lower rental yields in the short run, especially for the older properties. meanwhile, a project like park place would give higher short term yield and cash flow especially when it is brand new. its more of different strategy than anything.

Could you enlighten how new under construction project gives higher short term yield?

You start paying for your under construction unit progressively the moment you sign the agreement to purchase. You continue to pay and even need to draw down your loan until TOP and not collecting any rental for the next 4 years. For completed resale, you start collecting rental almost immediately.

[bargain hunter]

Could you enlighten how new under construction project gives higher short term yield?

You start paying for your under construction unit progressively the moment you sign the agreement to purchase. You continue to pay and even need to draw down your loan until TOP and not collecting any rental for the next 4 years. For completed resale, you start collecting rental almost immediately.

for owner occupiers, there are buyers who like to build up their cash hoard during those 4 years while the loan also only kicks in partially at each stage.

sorry, for investors, what I meant was upon completion, it would be easier to rent out and at a higher rate vs an old freehold property.

[Amber Woods]

for owner occupiers, there are buyers who like to build up their cash hoard during those 4 years while the loan also only kicks in partially at each stage.

sorry, for investors, what I meant was upon completion, it would be easier to rent out and at a higher rate vs an old freehold property.

So for investors, the so call "higher yield" only kicks in after TOP but they continue to pay progressive payments and even drawn down their loan without collecting any rental for 4 long years. So for investors, it does not make sense to buy new launch. Investors should buy completed and less than 10 years apartment to get the higher yield right?

Most of these new launches are either shoe box or compact units. Not many owner occupiers are buying them. Hence, you will be surprise that many of these buyers are actually fairly new (less savvy) investors.

[bargain hunter]

So for investors, the so call "higher yield" only kicks in after TOP but they continue to pay progressive payments and even drawn down their loan without collecting any rental for 4 long years. So for investors, it does not make sense to buy new launch. Investors should buy completed and less than 10 years apartment to get the higher yield right?

Most of these new launches are either shoe box or compact units. Not many owner occupiers are buying them. Hence, you will be surprise that many of these buyers are actually fairly new (less savvy) investors.

actually the progressive payments on the loan can be 'fairly light' till closer to TOP. ie for the first 3 years, between the first 20% and the closer to TOP say disburse 10% p.a. (i'm not too sure coz i only buy resale lol) the montly payment is not that high. there's also currently a loan war for such loans right? think banks are trying to "help" these buyers with the lowest available rates for these new units. somehow, the math will add up for these buyers if u add in the "brand new" mentality.

[Amber Woods]

actually the progressive payments on the loan can be 'fairly light' till closer to TOP. ie for the first 3 years, between the first 20% and the closer to TOP say disburse 10% p.a. (i'm not too sure coz i only buy resale lol) the montly payment is not that high. there's also currently a loan war for such loans right? think banks are trying to "help" these buyers with the lowest available rates for these new units. somehow, the math will add up for these buyers if u add in the "brand new" mentality.

So we can safely say these buyers are likely to be cash tight and need the additional time to accumulate their cash position. Alternatively, just like what you said, it is their "mentality" if that sounds more acceptable to these less savvy people.

[Kelonguni]

What one buys does not fully determine whether he/she is savvy, although we know how savvy those are that wait and wait and wait calling others non-savvy.

What a buyer uses it for is the main factor. Warranty, new unit and building, own stay reasons, avoidance of SSD period etc... Older units also have other issues. An old car does not suffer high depreciation but costly repairs can set in. If you avoid that, then it is the better deal, but there is no way to guarantee avoidance.

According to progressive payment schedule, the full payment will kick in only after about half to one year after TOP when the project receives CSC status. 15% of the payment from the developer is withheld by the bank.

[teddybear]

Ai yoh, there is a group of property speculators/specu-vestors like my friend, who will buy new 99-years leasehold with little cash upfront (with progressive payment) and then flip to others within 10 years and let others hold the babies as the lease runs down...

Obviously for such people, they will tell you BRAND new or relatively new <10 years old properties are GOOD, 99-years leasehold properties doesn't matter and even better than freehold properties because LOWER PRICE and higher rental yield (but conveniently will not tell you 99-years leasehold means you collect rental for 99-years only vs freehold FOREVER and also the VALUE of your 99-years leasehold property is ZERO at the end of 99-years lease).......

So we can safely say these buyers are likely to be cash tight and need the additional time to accumulate their cash position. Alternatively, just like what you said, it is their "mentality" if that sounds more acceptable to these less savvy people.