New Launch Price is now Expensive?

Should I Wait or Should I Buy Now?

Updated on 23 Jul 2019

Many of you may ask the property price seems to be high now, should I wait for the price to drop then buy?

This is what many homebuyers want to know because Singapore property price is now higher than few years ago.

But your concern is: What if you buy now and the price drop later?

(1) After Cooling Measure Effect:

To begin, let’s take a look at the HDB Flat & Private Property prices for the last 6 years.

Notice that the HDB flat prices are sliding since 2013. Today I’m not focusing on the reason why, but I will make another video to explain about these phenomena.

Whereas for private property, after so many rounds of cooling measures, they are not able to stop the prices from hitting new ceiling.

As a result, the price gap between HDB flat and Private property is getting wider.

In other words, it is getting harder for you to upgrade from your HDB flat to a private property today.

After cooling measure in July 2018, the developers are now aggressively clear stocks with discount.

However, this window opportunity will not last for long.

Raising the ABSD and tightening the loan limits (LTV) in the past did not cool the market for long. Instead, it will still bounce back after a short period.

Will history repeat? Do you think where the property market trend will most likely go?

(2) URA New Guideline Effect:

Besides that, in October 2019, URA announced the new guideline to cap the shoebox units.

Under the new rule, the number of shoe box units will be reduced.

Previously, the maximum number of units was derived by dividing the Gross Floor Area (GFA) by 70 sqm. Now the new maximum number of units is dividing the GFA by 85 sq m.

Meaning the maximum number of units of the future project will be reduced.

With the same GFA, if last time the developer can build upto 1,000 units, now with the new guideline, they can only build upto 823 units only.

And now here comes the focus of the new guideline.

The average unit size of a project is determined by dividing the GFA by the maximum number of units.

With the same GFA, when the number of units reduced, the average unit size will increase.

As a result, the developers have to increase the average unit size from 70sqm (753sqft) to 85sqm (915sqft) for the future projects.

This new URA guideline is the alarm for you especially if you are looking for 1 or 2-bedroom unit.

The developers will have to build 20% bigger than the current 1 and 2 bedroom units.

In consequences, with the same $PSF, you will have to pay 20% higher price in the future.

(3) Inflation:

We all know that inflation is the killer to our savings.

Our living cost keeps increasing over the years. Same goes to the property, especially the new launch.

The land price, material cost and labour cost are getting higher over the years.

With the better transportation such as new MRT lines, the government land bid reserve price is expected to get higher in the future.

Despite there are many new launches coming soon, but those land which bought earlier, the land price is cheaper.

Let’s take a look at the recent government land sales, the land bid in Hillview hit $1,068psf. The breakeven cost is $1,561psf and expected to sell for around $1800psf with 15% profit margin.

(4) New EC Price as Support:

Look at the new Punggol EC, Piermont Grand, the land bid is $583psf.

EC in Sengkang, Tampines and Canberra, all their land bid are almost at the same price!

And the developers’ breakeven cost is around $950psf. Meaning they have to sell around $1,100psf for 15% profit margin.

As mentioned by our former National Development Minister, Mr Khaw Boon Wan: Buying EC is like buying Lexus at Corolla prices.

And the New EC prices have gone up from $750psf in 2015 to above $1,000psf in 2018.

Based on the past history, EC price is always the cheapest.

New EC are always at least 20% cheaper than the private property.

Do you think the new private condo launch prices will drop to match the EC price?

But I’m not here to tell everyone of you to just buy without doing any research.

Nevertheless, the most important is to buy something within your affordability range.

To gain profit is only possible if you know: which project to buy, what price to enter (buy), and when to exit (sell).

Plan For Yourself is very Important!

As a lot of people never plan anything before going to showflat, they usually end up paying more for a less ideal unit; thereby making less profit as compared to a better valued unit.

I suggest we have a short meet up first where I can share with you based on your case and what is the best scenario moving forward and based on the market now what are the projects best suit you!

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    New Launch Price now is expensive? Should I wait or Buy now?
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    Stephen Chong
    Stephen Chong
    Lim Ming Hwee
    Lim Ming Hwee
    Stephen is a very good agent who goes beyond his way to ensure that his clients are happy. He is very patient and helpful, and will always give good advice.
    Joseph Sze
    Joseph Sze
    Stephen is a professional & responsible person who has provided good quality customer services to our recent Condo housing purchase & related matters. I found he has put in great efforts and gone for extre miles to assist us in the whole process and related purchase issues. Excellent work, Stephen!👍🏼👍🏼👍🏼
    SZ Lim
    SZ Lim
    Was going thru Stephen's video when I noticed he had a google review panel up. Going to copy paste my review on his FB page from 2019. I still stand by my review. Stephen was very professional throughout our engagement process. I first engaged Stephen as his effort could be seen thru the videos he made. The videos were informative, detailed, yet easy to understand from a beginners point of view. Could also see the improvement of his videos as time passes, and that speaks volumes about one's character on his eagerness to improve and share. During my engagement with him, Stephen was very professional. Since I was very new in the scene, I required alot of guidance and honesty. Stephen was very upfront with me on many items and did not try to hide any facts from me. As a first time buyer, both good and bad prospects were laid out after his detailed analysis on my current financial condition and also on the projects we went to see. Comparing to other agents who will just blab anything that benefits their sales point, Stephen was straightforward and truthful on the issue. I have met quite a few agents but would highly recommend Stephen to people who are looking for properties, be it looking for a place to stay, or looking for a property to invest.
    YingYu Tan
    YingYu Tan
    Stephen handled both my HDB sale and new condo purchase. The whole process was fuss-free and smooth. What impressed me was his willingness to go the extra mile for his client, from analyzing every detail and being there for me and my wife every step of the selling/buying process.
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    Jade Bai
    Jade Bai
    We came across Stephen YouTube video and appreciated the tips he is providing. We decided to engage Stephen when we were house hunting. Most people may feel that you can DIY resale hdb buying process. Personally we feel its money well spent engaging Stephen. The whole buying process is swift. Stephen is very prompt in his reply. He did alot of detailed analysis and recommend us the units we can explore. He is very detailed anf meticulous. This process saved alot of time. He also gave us helpful advice on the units we viewed. No hard selling or rush you into hasty decisions 😊
    Adrian Tay
    Adrian Tay
    Knowledgeable and professional, Stephen is not the typical agent you will meet. Ever so patient, he will help provide his genuine feedback and never pushy unlike most sales agents. Fortunate to have Stephen walk with me in my property investment journey. Will recommend Stephen to anyone who is looking for a trustworthy agent to walk the mile with.
    michael tan
    michael tan
    Very patient and give good advise. I bought ec under him and he sold my hdb.
    CY Goh
    CY Goh
    I believe every property investors or home buyers have encounters with numerous property agents. However, how many of you ever met someone with passion and enthusiasm to sit down and analyze each property based on your criteria (budget, requirements like location, size, etc)? Having watched Stephen's videos in YouTube, decided to ping him and the rest is unspoken of. Not only did he helped to narrow down our search, he also analyzed which project has higher prospect and which unit (level, facing, etc) fits our living habits. No complaints, except for not knowing Stephen earlier. Good job Stephen, thank you.
    Esther Cheh
    Esther Cheh
    Stephen was the agent assisting us in the purchase of our condo and now to market them for rental. He is extremely helpful, open, transparent and reliable throughout the entire time. He went above and beyond to help us set things up while we are not in Singapore.He is also very professional and knowledgeable about the property market in general. I am confident to leave our condo in his care to find us a good tenant and to manage them in future.
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