3 Strong Upside Signals that it is Time to Enter the Property Market

(Add 3 more upside signals if you invest in Forett at Bukit Timah. Click here to talk to us to discover the 3 additional upside signals exclusive to Forett at Bukit Timah) (~ 7 mins read) 

We are still in the midst of Covid-19. Singapore’s economy has weakened and there are more uncertainties ahead. In short, we may be heading into one of the worst recessions in Singapore.

Singapore Recession is Looming

BUT.

HDB resale volume in July was highest in 2 years and price has also inched upwards.

HDB Resale Volume Up

Condo resales volume also bounced back in July.

Condo Resale Rebound

New home sales up for 3rd month in a row. Average around 1,000 units sold per month.

New Home Sales Up for 3 Months in a Row

Are you confused by the mixed signals?

Should we enter, or should we not enter the market?

Warren Buffett once said, “Be fearful when others are greedy and greedy only when others are fearful.”

Let us clear the smoke for you.

Unintended Effect of Cooling Measures

With the property prices between 2009 and 2013 outpacing the household income growth, Singapore government introduced a slew of cooling measures to prevent the formation of a property bubble.

Property Prices Outpaces Household Monthly Income

These cooling measures ended the party and property prices started to fall from its peak in 2013.

Cooling Measures between 2013 to 2019

Since then, between 2014 and 2019, private home price growth (+4.5%) has lagged behind economic growth (+16%), household net worth growth (+36%), cash deposits growth (+72%) and CPF balance growth (+68%).

Private Home Growth lags Behind Income Growth
Private Property Price growth lags behind Household Monthly Income
Cash Growth faster than Property Prices
CPF Growth outpaces Property Price Growth

With a substantial build-up of liquidity in the market and a recession in place, what would the smart investors with liquidity do?

They have seized this golden opportunity to enter the market. Their actions have resulted in the healthy take-up rate of new private homes in the past few months.

New Home Sales Up for 3 Months in a Row

As Winston Churchill says, “Never let a good crisis go to waste”.

Oversupply? Look Closer!

Which is a better time to enter the market? When the supply is increasing or when the supply is falling?

Let’s take a real close look at the market supply in the coming months.

Land sales have dropped dramatically after additional cooling measures were implemented on 6 July 2018; putting a brake on the raging en-bloc activity. Ministry of National Development has also taken additional step to stop the burgeoning home supply from en-bloc activities by cutting the supply of government land sales.

Land Sales dropped off Sharply

In 2019, Covid-19 exacerbated the supply of new land with less than 3,000 new homes added into the market. Shockingly, the 3,000 new homes have been absorbed by the market in the past 3 months.

Private Housing Supply Cut Due to

Looking at the current Government Land Sales sites, the supply of new homes will remain low. Sites at Northumberland Road and Ang Mo Kio Avenue 1 are the only sites adding to the supply of new homes in 1H2021.

How about the unsold stock of private residential properties?

Every critic out there is shouting that there are plenty of unsold units.

The truth is… the supply is falling.

Here are the numbers and trend:

Oversupply of unsold unit

Here come the exciting part and the signal you do not want to overlook.

History has shown that when the inventory of unsold stock of private residential properties falls below 17,000 units, developers will turn aggressive and snapped up land. From 2017 to 2018, the growing en-bloc activities, in turn, push up the resale prices of private properties.

Based on history, the current inventory is similar to the inventory level in 2014 1Q, and it takes three years then for inventory to fall below 17,000.

17000 in 3 years

Looking forward, with the supply of new land from GLS & en-bloc in 2019 & 2020 much lesser than in 2014 & 2015, coupled with a healthy take-up rate of new homes shown in recent months.

Land Sales Dropping Faster

Do you think we will reach a low inventory of 17,000 in less than three years?

2 Years

Now put yourself in the shoes of the developer or any businessman.

Would you raise or lower your price when your inventories become lesser?

Would you raise or lower your price when there is a lesser competition?

So, when is it an excellent time to enter the market? When the stock is limited, and the developer has increased the prices? Or now, when the inventory is becoming lesser, and the developer has not raised the price?

Price up or down

It’s your call.

Show me the Buyers!

HDB Owners!

It is now a fact that HDB value depreciates over time. When property prices recovered in 2017 for private property, HDB prices continues its downward trend and flatten at the moment. HDB price is likely to remain moderately flat.

HDB down Private Up

To avoid making losses on their HDB, these HDB owners are hurrying to sell their HDB flat to upgrade to private property for better growth potential.

In the past, HDB owners hold onto their property because their home prices increase at 10, 20, 30 years mark, but this is no longer the case.

Sales of newer HDB (HDB below 10 years old) flats hit its 9-year high in 2019.

New HDB sale at 9 year high

The trend is expected to continue.

Increasing number of New HDB Sales

From 2019 onwards, a large number of flats will be reaching their 5-year minimum occupation period (MOP), and they will add to the growing pool of home buyers.

HDB reaching MOP

Next is EC Owners!

Between 2013 to 2018, EC owners are absent because there is no EC that TOP between 2008 to 2013. In case you are unfamiliar with EC, EC owners have to fulfil their 5-year MOP period from year to TOP before they can start on their next property cycle (to sell their EC or purchase their 2nd property).

No EC TOP

Starting in 2019, EC owners are beginning to fulfil their MOP period.

Apart from fulfilling their MOP period, they are also sitting on a tidy sum of profit and ready to embark on their private property journey.

EC Top in 2019
EC Top in 2020

If these strong signals (1) Strong Liquidity, (2) Reducing Supply & (3) Increasing Demand aren’t enough to you roaring to enter the market, Forett at Bukit Timah itself has 3 strong signals that will position you for success in real estate investment.

Talk to us and find out how to position yourself for success in your real estate investment journey.

Book your no-obligation 1.5-hr Investment Consultation today.

(Session includes the tour of Forett at Bukit Timah showflat by Official Developer Salesperson.)

During this session, you will discover…

☑ 3 More Strong Signals You will Make Profit with Forett at Bukit Timah in 5, 10, 20 Years or more.

☑ 3 Exit Points for Forett at Bukit Timah.

☑ Highest Investment Potential Unit in Forett at Bukit Timah that Matches your Budget.

 

All investment requires careful planning and comes with risk.

Let our experienced consultant help you with:

☑ Asset Progression Planning to Optimize your Return on Investment.

☑ Risk Assessment and Management for a Sound Investment Journey.

 

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