A lot of homebuyers think of property ownership as a club. The key thing is to become a member – buy a home that meets your needs now, then trade up later when your needs change. However, there is wisdom in thinking of not ‘for now’, but ‘forever’.
A ‘Sure Thing’ in Times of Uncertainty
There are definite signs of recovery in the property market, underlined by a 30 percent increase in the number of transactions in the second quarter of the year versus the first.
The question is – why?
In an environment of economic uncertainty, it could be that more people are looking at property as a wise choice of investment. Property, probably more so than investments in the vulnerable stock market, is likely to at least hold its value and weather the perfect storm of the global synchronised slowdown that has affected not just Singapore, but the world.
While there is no such thing as a ‘sure thing’, the consensus is that property is the closest thing to it. And the good news is, there are plenty of bargains to be had. You may well be able to afford much more than that shoebox apartment you thought you were confined to just a few years ago.
Unsold Units Waiting to Be Sold
After the property downturn of the last five or six years, there is a glut of unsold properties on the market. In August 2019, there were over 34,000 private units of unsold inventory. Developers are eager to reduce this number and make up for the tough times of the last half-decade.
Why not take advantage of that fair weather friend and sometimes-enemy, timing? Shop around and look for an attractively priced home that can grow with your family. If you’ve been an HDB-dweller all your life, perhaps now is the time to break into that coveted club of private property ownership. It’s still a buyer’s market.
Minimise Transaction Costs
Flipping properties comes at a price. Stamp duty and bank fees add thousands to the price of buying a property, so your property really has to appreciate sharply to offset these costs and still turn a profit.
There is wisdom in thinking ‘long term’ instead of ‘short term’. Not only do you avoid those transaction fees eating into your capital gain, you also avoid the cost of relocation and possibly temporary accommodation during the interim period between moving out and moving in.
Buy Bigger and Renovate
For many Singaporeans, upgrading is really a matter of upsizing. Their families simply outgrow the available space. To avoid this situation, consider buying not necessarily the swankiest home you can afford, but the largest. Then, instead of incurring transaction costs and uprooting the family in ten years’ time when your tots become teens, you can simply renovate when you tire of your current décor.
Future-proof Your Interior Design
Fads come and go, but the fundamental needs of homeowners remain. At the top of most homeowners’ wish-lists is storage. If you have kids or are planning a family, your storage needs will only increase as time goes by. Plan for more storage than you need right now. Look for sneaky ways to conceal extra storage without sacrificing space, such as under beds and beneath built-in benches. Your future self will thank you for the foresight!