After multiple rounds of cooling measures and economic slowdown from the global pandemic, Singapore's residential property prices are on the decline. Nonetheless, there was an increase in pent-up demand as show galleries began reopening their doors mid last year, resulting in a resilient new launch and resale market in 2020.
So what does this mean for the Singapore property market in 2021? Buyers are looking to take advantage of some of the lowest interest rates in recent years and jump on the market trend towards new launches. As PropNex Senior Advisory Associate Branch District Director James Gan notes, there are opportunities where there is a crisis. But to navigate such a landscape, you will need to know what you're looking for.
When highlighting the market appeal of a property, particular attributes will affect its value more than others. Therefore, whether you are a seller or a buyer, knowing how to pinpoint these features is crucial in making the right decision for investment. Here are three things to consider when looking to identify a property with strong attributes.
1. Price Point Advantage
There is no such thing as the perfect price in the buying or selling process; both the buyer and seller must mutually agree upon a figure before proceeding. Therefore, when investing in a property of your choice, you must ensure the property has a price point advantage that is subject to supply and demand. If there is high demand within the market, but the supply is low, prices will often rise.
Do your research! Check on the current rates within the property’s vicinity and conduct a thorough inspection. Make sure to note its ageing properties, physical condition and, of course, the asking price.
In short, always evaluate your options based on facts and figures when shopping for a new house. This can help you establish a time horizon (the time you expect to achieve your investment goal) to allocate your investments more effectively.
2. Support Level
Pay attention to the property’s support level. Are you purchasing the property at high risk? Are there any future development plans in the location? Is the property price reasonable for future buyers? Understanding your returns is the key to a successful investment.
In this case, investing in new launches is proving to be more beneficial than resales despite the high prices. Developers can slowly increase the selling price during the initial launch until the project is completed, which means that even before the property's completion, buyers who purchase during the launch will gain the capital upside. This is known as the first-mover's advantage.
3. Easy To Exit
Behind every successful investor is a carefully well-thought-out investment plan. That plan should also include an easy exit strategy (to sell or rent your house). A strong resale demand will depend entirely on the property’s liquidity - whether a property will sell quickly, and if either above or below market value. A property’s liquidity is high if it is easy to sell and purchased at market value.
A short-term exit strategy is just as important as a long-term exit strategy. It can assist you in reducing the potential risks associated with leveraging. Understanding exit strategies before any investment ensures property investors find the right approach to maximise profits. This is where our team of property agent can help guide you on choosing the right exit strategies for your investments, so get in contact today for a consultation (link to contact page)
Remember to be realistic and prudent in your investments. Planning your exit strategy can be daunting, especially to first-time buyers. But don’t worry; reach out to your property agent about your investment goals, and they will advise you accordingly.
Property investment is about finding the right opportunity with a smart investment strategy built on a thorough understanding of the market assessment of one’s financial resources and goals. If you need any help, contact Property Giant Singapore and our agents will be happy to assist you!
The above article is written with reference from SPS2020 webinars, organised by PropNex in collaboration with Mediacorp and 99co.
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