The start of COVID-19 last year brought about great stress and uncertainty. Most people, myself included, anticipated property prices to somewhat take a beating. While overall activity (number of transactions) did fall with most of us trapped at home during the lockdown, prices held strong on the whole.
And 1 year on today, we are facing a shortage in both resale and rental supply.
To the extent whereby the government has hinted of more cooling measures to curb rising prices.
Lesson #1: It Is Hard To Time The Market
Most of us emerged from the lockdown with great relief, that some semblance of normalcy would resume. Most buyers started to “shop” around, but with no intention to commit as they were very sure that property prices would plunge eventually. Everyone was on the search for a “fire sale” which they anticipate would be abundant for pickings in time to come.
The Singapore government was (and still is) lending support to businesses and workers. But with global COVID infection and fatality numbers increasing by the day, there is no way that the property market can go through this period unaffected. So some buyers opted to wait, even when they see something they like.
When I was marketing a 3-bedroom unit at Butterworth 8 shortly after the lockdown ended, we received overwhelming interests. But at that time, many of these buyers cooly told me to get back to them when the owners reduced the asking price. Some also offered ridiculously low prices.
My clients’ intention was to upgrade to a landed property, so we had to sell at the right price as well. And given the limited supply in the market and the fact that we were marketing at fair value (from various indicative bank valuations), I advised them to hold on a while more.
After all, good freehold properties in District 15 with full condominium facilities are always sought after. After about 2 months, we sold the unit at our target price.
Subsequently many of the buyers who waited, contacted me again and were disappointed to learn that the unit has been sold. Almost all were buying a family home for their own occupancy.
I can imagine those who continued to hold on till 2021 would realise that prices have continued to increase across all property types – HDB, private condominiums and landed properties.
Pandemic or no Pandemic, it is always hard to time the market. Buyers should always buy with certain evergreen attributes in mind – location, fair price, historical data and future growth/ development etc.
Lesson #2: Being Flexible and Keeping an Open Mind
Quite a number of my local clients who were based overseas returned to Singapore. While most of them own properties here, these were usually tenanted out. So they have to rent a place too in the interim.
My advice to all of them would be to start the search and viewing before they set foot in Singapore. Again they were taken aback. They assumed that it would be quite easy to secure a rental unit, and again prices should have fallen. They have no idea how hot the rental market is.
But most took my word when I told them to be very proactive in their search, unless they could put up with their family for a couple of months while they looked for a suitable place.
Those who agreed to view through virtual tours or Zoom meetings, got their friends or a family member to help view the physical unit, before we put in an offer while they are still abroad or serving quarantine. They were relieved after seeing or hearing how others in similar situations struggle to find ideal accommodations upon their return.
Unfortunately, there are also many tenants who are set in their ways and are not about to commit to anything before viewing themselves. I do not blame them though. Most of us are used to doing things a certain way.
So while it was stressful when I had to help this group with a unit, I have to expand their search to more areas or different projects. If supply is low, we cannot just wait for a unit in one development. I had a client who wanted to be in the same development as her parents in The Seafront on Meyer.
But I had to advise her to expand her search to other projects in the vicinity and district. We eventually settled in Dakota Residences much to her surprise.
Likewise for tenants who are already renting, and coming to the end of their leases, I usually advise them to renew if possible or start their search way in advance.
Given the situation, realtors must also step up. Some agents are still not too keen to conduct video viewings or do not bother to create virtual tours for the properties they market. They feel that given the market dynamics, their units will all be snapped up and there is no need to adopt technologies that I myself have learnt to embrace.
With one group of buyers/ tenants who insist on physical viewings, there will always be another who are keen on videos/ tours before viewing to reduce contact with others. I strongly believe I was able to close a few units because of the virtual tours I did.
Lesson 3: Being decisive and strategic
Gone are the days whereby tenants or buyers can take their time to find their dream home. In a fast-moving market, it is imperative to act fast once tenants or buyers find a property that fulfills most of their requirements and is priced right.
Most times, it may not be possible to find a place that ticks everything off the box. So it is crucial to be strategic, and decide from the start what is important.
Buyers these days are typically more savvy and well informed. This can sometimes be a curse. Joining property forum discussion, and ploughing through all the various property websites can overwhelm buyers so much that they become fearful of making a decision, for fear of making a mistake.
I assisted a couple to purchase their first matrimonial home late last year (2020). We started looking from July 2020. Being their first home, they wanted both sets of parents to be involved in their home search.
So after identifying something they like, they would request for me to arrange for their parents to view. And due to their parents’ busy schedule, it can be a week before we got the second viewing. Besides their parents, they also had to consult a geomancer (Feng Shui Master) whose erratic schedule has cost them 2 units they were very keen on.
I had to sit them down to discuss our game plan. For the next unit they identify, we would request to take a video if it’s not already available. And share the video, direction/ facing of key areas and the floor plan with their geomancer and other family members. And with this, we managed to put in an offer on Christmas eve after their geomancer cleared the direction, without a second viewing.
So most people would assume that sellers can then take their time to wait for the highest possible price. Well, it depends. For sellers who are selling an investment unit, and do not intend or need to purchase anything immediately, it doesn’t hurt to wait a while to get the best possible price.
However, for families who need to secure another house after they sell, then it is important to ensure that they act fast to ensure the units they are keen on are available and at the right price.
To put this in perspective – getting $5k – $10k more from the sale of your HDB flat (after rejecting a reasonable offer) and holding out for another 6 months, may not be a good idea in an environment where property prices is on the rise. This is especially so for upgraders.
The $10k more may cost you much more when you purchase a private property where the jump in price could be more significant. Or there could simply be a lack of options in the development you are keen on, as the limited resale stock and the better units of new launches are being snapped up.
So both buyers and sellers must be clear in their objectives and be resolute in making a decision. Sellers must often be strategic to start looking at possible purchase options way in advance too!
Lesson 4: Rely on data, do not assume
“Prices have not dropped?” – You will be surprised how often I get asked about this. Even though there have been constant news reports on the Government’s hint to have to cool the market at some point, buyers who just started looking are often still perplexed at the situation.
Especially for those who have opted to rent to wait for the market to “crash” or correct during the pandemic.
Tenants are also upset when landlords start to increase their rent come renewal. Many lament that landlords are not being reasonable and this cannot be the case with all the uncertainty globally. Yet the numbers do not lie.
First, look at the number of units available for sale or rent.
If you axed out all the duplicate listings (yes one unit for sale or rent can have multiple listings), you would realise that the properties available for both resale and rental is pretty low. This is especially so for rental units where you hardly have gaps. I haven’t heard this for a while, but I can confidently say that this is definitely a landlord’s market.
Although prices for resale properties are also dependent on the individual unit’s condition, level and facing, we have observed a steady increase of price of varying property types.
Take Blk 22 Eunos Crescent for instance:
Seeing that this flat was completed in about 1977, the increase is quite a feat, as most older HDB tend to depreciate with time.
So the assumption that we can definitely get a steal or lower prices for older flats may not be as easy as it seems these days. Which is also why I always remind sellers that they will have to plan carefully, on their next move, especially when they are only keen at a particular development/ area with limited supply. If you can sell your current property for a higher price, affordability for the next place may be an issue/ obstacle.
Yet, there are always exceptions. Excited homeowners who read about the private residential price hike would naturally assume that the price hike would apply to them. Sadly, there will always be some projects that are still less desirable even during a climate when it seem so easy to sell units.
The pandemic has upended all expectations we had about properties.
The economic uncertainties should make people become even more cautious and stay away from the property market.
But as the lockdown continues and all of us began to feel the stifling restrictions of being stuck at home, it has turned the property market into a booming one.
Buyers are more keen than ever for a ready-to-move-in home as construction becomes delayed.
Buyers are more hungry than ever for a bigger home – and location with respect to the CBD doesn’t seem to matter.
PRs are finally making the shift to becoming home owners in Singapore as they realize they are going to be stuck here in the medium term.
It is a great market for sellers now. For how long? I am unsure.
Have questions? Feel free to drop me a message with your queries.