To buy now over next 6 months or not?

[riskybusiness]

We returned to SP a year and a half ago and we pretty much missed out on all the action with the flipping etc. We have been expats for 10 years now and we are getting sick and tired of moving around/ dealing with silly LL's etc. We have quite a nest egg in cash and we would like to buy our own place. Our lease is up at the end of the year. It seems like we are here for 5 years min, in fact we've been told we can stay as long as we like.

Here's the problem. We are paying 7K rent and we think this is a huge waste HOWEVER if we were to invest in a house/ condo with our savings and then we ended up with a property worth less than we paid for then all our struggle to save over the past 10 years will be a waste and we would be devastated.

Is it just too much of a risk to buy now?

[trustme]

yes

[agent x]

so you really expect to get some sensible advice from some annonymous buch of expats? As you mentioned, we are talking about your life savings here. No-one has a crystal ball. If people think prices go up, it comes down and vice-versa. in the long run prices will go up due to inflation but to buy at the bottom is a hard thing to. You could try averaging/hedging your property investments by renting first and buy property stocks or start of buying a small apartment for rental income while you keep renting. You could buy your house/apt within 6 month while buying putt warrants on prop shares. just some ideas to spread risk. good luck

[expat01]

Hello OP. I'm in very much the same boat as you, I'd like to buy but am nervous about the market coming down immediately after having done so. Like you my lease is up at the end of the year, so there's no rush. If prices have come down at the end of the year then great, I'll buy then. If not, then I'll consider it anyway as the prices will have held up against some pretty negative sentiments this year so I'd be less worred about a significant fall after I've bought.

There seem to be a lot of apartments for sale at the moment, including the one I'm currently renting as well as those of several of my friends. The fact that no-one has even viewed them seems to be quite telling. I've actually made enquiries as to buying the one I'm living in, however the price at which I would consider buying is 75% of the current asking price. I'm considering simply giving the owner an offer at my price and seeing how long it takes them to bite.

[cmdsea]

You have the luxury of time as your lease is until the end of the year.

My personal view is that prices will have already moved by September/October so for now, if I was in your shoes, I would just watch and wait.. Maybe identify either areas or specific developments that you like and track the asking prices and actual selling prices to get a better feel for when reality has set in and asking prices more accurately reflect what the market will pay..

[we bought]

this time last year and we are about to sell it because we want out of the sg market (real estate altogether at the moment actually). we don't live in it, we rent it out. My advice - don't buy yet. Wait a few more months, buy when market has dipped - currently it is on a predicted 10% slide. If you are here for 5 + years, better to buy. If you buy around integrated resort area you can't go wrong on your investment 5+ years from now.

[to expat01]

i am also hoping for prices to fall.. however if I was in your shoes, i'll be very tempted to try and negotiate with the owner.  Throw in your low ball 75% offer, and be prepared to raise it by 50 to 100k say (I am assuming the owner wants 1m, and your first bid is 750k...)

Not that I'd want to throw away 100k, but buying property is very stressful.  If you actually like the apartment that you are in, and if your owner is looking to sell then doing it this way is very easy for both parties(and particuarly for you as you save the hassle of not needing to pack and move).  Obviously no one knows for sure where the property market will go, so for peace of mind and certainty I would pay a bit more

[Ade]

In true cavalier style I have just bought a place. “Hang the markets, the stock exchange and the global recession” I declared. “If I want something I will buy it”. No sitting there analysing market trends for me. Just get in there and get what you want.

And in a slightly less cavalier style I should also point out that I only invested a tiny 600k, I plan to stick around for a while and I already have property dotted all over the world. Much as I hate the non-Cavalier phrase I should say I did minimise my risks.

:-)

[Dr. Phil]

We returned to SP a year and a half ago and we pretty much missed out on all the action with the flipping etc. We have been expats for 10 years now and we are getting sick and tired of moving around/ dealing with silly LL's etc. We have quite a nest egg in cash and we would like to buy our own place. Our lease is up at the end of the year. It seems like we are here for 5 years min, in fact we've been told we can stay as long as we like.

Here's the problem. We are paying 7K rent and we think this is a huge waste HOWEVER if we were to invest in a house/ condo with our savings and then we ended up with a property worth less than we paid for then all our struggle to save over the past 10 years will be a waste and we would be devastated.

Is it just too much of a risk to buy now?

You know the answer. Wait!

You get the same sound advice, from "anonymous bunch of expats" as Agent x describes us.

However if your money is burning a hole in your pocket and you can't wait to spent it, or in this case lose it, go ahead. I can't believe this is not a wind-up from anothe Agent trying to attract some interest in a market characterised by grossly inflated prices representing huge negative equity for the foreseeable future, certainly the next 5 years.

(Renew with a 1 year lease. That will not prevent you buying. If falling prices accellerate you can buy, lease or no lease, and rent out until your lease expires).

[Cynical]

To ex-pat

Go direct to your LL and make an offer and negotiate.  But dont use an Agent.  Go Direct and save commissions.   Will also take away one major stress factor in real estate transactions too.

[Kubes.SG]

It really is simple.  Over the next 12 months your rental expense will be $84k.  Sounds a lot and wasteful.

But if you have to buy an equivalent property for what sellers are asking today, you will probably have to pay about $1.5m.    Do the sums based on a 5%, 10% and 20% decline in property prices between now and April 2009 (12 months).

We are on the edge of a significant property value decline for Singapore and most markets globally.  There are absolutely no buyers in Singapore.

[Long term owner]

It really is simple.  Over the next 12 months your rental expense will be $84k.  Sounds a lot and wasteful.

But if you have to buy an equivalent property for what sellers are asking today, you will probably have to pay about $1.5m.    Do the sums based on a 5%, 10% and 20% decline in property prices between now and April 2009 (12 months).

We are on the edge of a significant property value decline for Singapore and most markets globally.  There are absolutely no buyers in Singapore.

How many *** did you intend to preach ??

[Dr. Phil]

It really is simple.  Over the next 12 months your rental expense will be $84k.  Sounds a lot and wasteful.

But if you have to buy an equivalent property for what sellers are asking today, you will probably have to pay about $1.5m.    Do the sums based on a 5%, 10% and 20% decline in property prices between now and April 2009 (12 months).

We are on the edge of a significant property value decline for Singapore and most markets globally.  There are absolutely no buyers in Singapore.

Yes and dont forget to factor in interest earned on savings otherwise spent on a purchase. This will increase as interest rates increase globally.

Its the time to save.

I believe in the USA great pressure is mounting to deal with high oil prices which has hit road freight transport costs and also the ordinary consumer. The only way to reduce prices down to YSD 2/Gall is to strengthen the dollar. This means interest rate hikes.

The rest of the world will follow when global investments and savings flow towards USA.

So save now. Do not buy.

[IMHO]

think you should wait.  the prices seem to be settling...
but the way i've been thinking about it is this: we don't get a housing allowance since anything we put in (it was also around 7K) it's lost money.
We liked where we lived and don't think we could rent for anything less than 5K.
We are definitely staying 5 years plus. 5K*12*5 = 300K
We figure (simplistically) that we can "afford" the market to drop no more than 300K since it's sunk money anyway but in the meantime we can have our own place...

We've been expats for over 8 years now and were also tired of LLs and moving etc so we bit the bullet and bought. We only bought because something we've been eyeing for a while came up!

good luck.

[Your Savings]

think you should wait.  the prices seem to be settling...
but the way i've been thinking about it is this: we don't get a housing allowance since anything we put in (it was also around 7K) it's lost money.
We liked where we lived and don't think we could rent for anything less than 5K.
We are definitely staying 5 years plus. 5K*12*5 = 300K
We figure (simplistically) that we can "afford" the market to drop no more than 300K since it's sunk money anyway but in the meantime we can have our own place...

We've been expats for over 8 years now and were also tired of LLs and moving etc so we bit the bullet and bought. We only bought because something we've been eyeing for a while came up!

good luck.

If the rent rises by say 20% a year as they did in the last couple of years (and it rose by 6.0% in Q108), the savings would be much more than 300K.