The worst economic recession in history has left long-lasting effects on Singapore's property market, causing many to question whether the market would suffer from a fall in prices. To our surprise, the property market has remained rather resilient. Multiple cooling measures implemented by the government such as Total Debt Servicing Ratio (TDSR) and the Mortgage Servicing Ratio (MSR), has stabilised the market, reducing its vulnerability to the uncertainties of Covid-19.
Emerging as a front runner amidst the turmoil are the new launch condos. Developers' sensitive pricing strategies have successfully piqued investors and homeowners' interests who are now looking to capitalise on being first in line. Therefore, in this article, we have summarised how you can consider maximising your gain by leveraging on the first mover's advantage as suggested by PropNex’s Ken Ng.
1. The New Norm
Singapore welcomes the new norm as Covid-19 reshapes the lives of many. In addition to home-based learning, the "work from home" trend is encouraging homeowners to switch to bigger houses for comfortability and more space. This is partly the reason for increasing demand in larger condominiums.
Along with the current low interest rates, homeowners are joining the plunge to sell their existing houses and opt for larger new launch condos instead.
2. First Mover's Advantage
Developers are now using sensitive pricing strategies—offering early-bird discounts before gradually increasing the property's selling price until the project is completed. Property buyers who purchase early during the initial launch will gain the capital upside. This is what we call the first mover's advantage.
Another way of leveraging your first mover's advantage is to invest early in up-and-coming districts. When you purchase a property in an area before development, its value will surely appreciate or increase as the location undergoes transformation.
3. Accessibility & Mobility
The answer to what is most appealing to prospective home buyers is still: location, location, location! A property with access to a wide variety of amenities, good schools, and public transportation will always be an attractive purchase.
However, prior research on upcoming developments within the vicinity is needed to better indicate a property's potential capital appreciation. This can significantly affect the desirability of a particular location. You can easily obtain such information by referring to the Urban Redevelopment Authority (URA) master plans.
A good example is The Landmark—a timeless upscale luxury condo situated in the heart of the city. Its proximity to work, life and play indeed makes it a preferred choice for new homeowners. What's more, being close to the Greater Southern Waterfront and SGH Campus Master Plan will add to its capital appreciation. Speak to our property consultants (link to contact page) to find out more about the most desirable locations in Singapore for property in 2021.
4. Entry Price & Rental Demand
Before buying a property, ensure that the offered price justifies the location and available amenities. Yes, new launches are often priced higher, but consider the location's growth potential and surroundings.
Future developments can reap future returns as they will increase the demand from buyers and tenants and the property's resale value. To make sure your property has a strong resale demand, you must know the property's liquidity. High liquidity means the property is easy to sell at market value. Also, make sure to check the quantum price (total sale price) as this determines your rental yield, financing ability and holding power.
The key to maximising profits is finding the perfect time to buy and sell a property. Whether you're a rookie or a seasoned investor, you need to know how to utilise the first mover's advantage to make the most out of your property. If you need any help, don't hesitate to contact Property Giant Singapore and our agents will be happy to assist you!
The above article is written with reference from SPS2020 webinars, organized by PropNex in collaboration with Mediacorp and 99co.