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With the daily cases of Covid-19 climbing, the situation in Singapore may start to look kind of grim, especially when it comes to our finances. It is no secret that many have found themselves caught in the shorter end of the stick with loss of income, whether it be company withholding pay, partial loss of income or even loss of jobs. It is now at this crucial time that we lean on to government funding to aid us in this difficult period.

As of 14 April, the government has given out a $600 cash payout to every adult Singaporean to help tide us through this time. But we should also help to improve our own cash flow by taking upon ourselves to look at this list of four things that we should do during this circuit breaker period:

Read more: Four actions you should take to improve your cashflow during Covid-19!

Has COVID-19 impacted property prices in Singapore? We get the first glimpse based on flash estimates released by Urban Redevelopment Authority (URA), which shows Singapore that residential property prices are down 1.2% in 1Q20. This marked a reversal compared to the increase of 0.5% in 4Q19.

Landed properties fell the most, by 1.7% compared to the previous quarter. For non-landed properties, the Core Central Region (CCR) has declined the most, with a drop of 1.5%. This is followed by the Outside Central Region (OCR) with a decline of 1.0%. Prices in the Rest of Central Region (RCR) were the most resilient, with a marginal decline of 0.5%.

Will we see further declines this year, given the severity of the COVID-19 outbreak in Europe and US? The chart below shows property prices over a much longer period, to provide readers with a sense of where we are in the cycle, and what happened during the Global Financial Crisis in 2008-09.  

Thinking about selling your property and considering your options? Speak to us today. We are seeing a significant increase in buyers approaching us at this time!

Chart 1

Note: The flash estimates on Chart 1 are compiled based on transaction prices produced in contracts submitted for stamp duty payments and data on units sold by developers till mid-March. Flash estimates and actual price changes could be different, hence readers are advised to interpret the flash estimates with caution.

 

Did you know that there are 28 districts in Singapore? Whether you live in the heart of the Central Business District (CBD) or in the corners of the island, the different areas and neighbourhoods can be divided into 28 districts. Starting from District 1 which encompasses Raffles Place, Cecil, Marina, People's Park, the list goes on to District 13, Pasir Ris in the East and District 25, Woodlands in the North.

Before we dive into each district, let's briefly discuss the three regions in Singapore; Core Central Region (CCR), Outside Central Region (OCR) and Rest of Central Region (RCR). With its suggestive name, most of us would have easily been able to guess which areas CCR consists of; the CBD. But what we may not know is which other districts define this term and of course, what defines the others. Here is a simple breakdown:

Read more: Everything You Need To Know About Singapore's 28 Districts!

 According to a recent news report in the Business Times, home loans in Singapore are becoming more accessible due to sliding interest rates which moderated to 1.88% in October 2019 following recent rate cuts by the US Federal Reserve. 

Some analysts expect the 3-month Interbank Offered Rate (SIBOR), which is the benchmark for mortgages in Singapore, to remain low or drop even further this year. 

This could increase the demand for private residential properties in the city-state, with analysts predicting that between 9,000 and 10,000 units could be sold in 2020. 

While the signs point to a healthy outlook in the property market, the Monetary Authority of Singapore (MAS) in its Financial Stability Review cautioned that prospective buyers should be mindful of risks and remain prudent before entering into buying a property, taking on a mortgage, and servicing the mortgage. 

So, what are some of the risks? Below, we’ve outlined the biggest risks facing the Singapore property market in 2020.

Read more: 5 property risks to watch out for in 2020!

Buying a private residential property as an investment is a tried and tested strategy to growing your wealth and achieving financial freedom. Not only can you earn passive income by renting out your unit, but the rise in your property’s value over time (known as capital appreciation), means you could make a tidy profit after selling it. But before you decide to rush out and buy an investment property, you need to follow these steps.

  1. Check your finances

Buying a property is one of the biggest financial decisions of your life, so you need to have enough money saved up to buy a house. Don’t forget that you still need to set aside sufficient cash for everyday expenses like food and transport, as well as for retirement.

While you can take a housing loan to help finance a property, you still require a significant cash outlay of 20% for your down payment. That would amount to $200,000 if you’re looking to buy condominium priced at $1 million. While this might seem like a lot of money, don’t fret because you can choose to pay 5% in cash for the option to purchase and the remaining 15% in CPF upon signing the sale and purchase agreement.

Read more: 6 Easy Steps To Investing In Singapore Property!

Property seekers who are looking to buy a private condominium in Singapore have the option of purchasing either a new condo launch directly from a developer or a resale condo in the open market. 

This year, we could see up to 60 new launches across the island offering thousands of condo units. In addition, hundreds of resale condos are being put up for sale every month. While this leaves home buyers spoilt for choice, it also makes the buying decision harder. 

To help you make the right choice, we’ve listed down various pros and cons of buying a new condo launch versus a resale condo. 

Read more: New launch vs resale condo – Which is better?

The property cooling measures announced on 5th July has claim its first enbloc victim. 

On 26th July, Tee Land announced that it was not exercising its option to purchase Teck Guan Ville. If you recall, Tee Land had earlier won the enbloc for Teck Guan Ville (338 to 364 Upper East Coast Road), for S$60m on 28 June. Details of announcements by Tee Land can be found in the links below.

Tee Land will be losing its 1% deposit, amounting to a mere S$600,000. What would the 14 owners of Teck Guan Ville lose? A cool S$4.285m. Ouch. 

http://www.teeland.com.sg/attachment/2018062817325911569358_en.pdf

http://www.teeland.com.sg/attachment/2018072618222409495535_en.pdf

 

Recap of the property cooling measures announced on 5th July 2018

First time property buyers were unaffected by the higher ABSD (Additional Buyer Stamp Duty) announced, while Developers on the en-bloc frenzy were stopped right in their tracks. The authorities are clearly sending a strong message against purchasing property as an investment. 

  Previous ABSD New ABSD
Singapore citizen buying 1st property 0% 0%
Singapore citizen buying 2nd property 7% 12%
Singapore citizen buying 3rd & subsequent property 10% 15%
Singapore PRs buying first property 5% 5%
Singapore PRs buying 2nd property 10% 15%
Foreigners buying property 15% 20%
Entities buying properties 15% 25%
Developers buying property 15% 25% + 5% (non-remittable)


Reduced LTV limits

However, first-time buyers were affected by reduced LTV limits, which would substantially increase the amount of upfront cash that first time home buyers would need to fork out. We think this is in response to the recent surge in property prices. Young home buyers would need to re-work their sums, and target smaller apartments. Alternatively, we think there exists much better value in purchasing resale homes compared to recent new launches. Do call us for a non-obligatory chat if you are looking to buy or sell a property. 

LTV limits Previous New
First home 80% 75%
2nd home 50% 45%
3rd or more home 40% 35%