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 is experienced, analytical and views properties comprehensively. This is evident right from the beginning when we chanced upon his informative YouTube videos. He provided us invaluable advice throughout the process of our property purchase. His calm, humble and polite nature made him an approachable professional to discuss the many questions we had. He was patient with his technical explanations as well as his insightful suggestions. He placed our interests first, in the buyers' shoes, gave us space to consider and has never rushed us to make decisions without proper considerations. His attentiveness goes a long way. Stephen carefully planned out the timeline for us and gave us reminders to complete the various items ahead of the deadlines to avoid unwanted hiccups. It was entirely a worry-free process. Stephen even gone the extra mile to meet us at the law firm to show us the way and be in person with us to sign the S&P. He made our property purchase a great buy and an enjoyable experience. Thank you, Stephen.
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    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.
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