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🤔 Is 2021 the Best Market to Sell Your Property - Sell Now or Wait Longer?


The Singapore property market performed well in 2020 despite the uncertainties caused by COVID-19.


There were 9982 new homes sold and 10,729 resale transactions, both of which were higher than figures recorded in 2019.


This begs the question – is 2021 the best market to sell or should you wait longer?


According to HDB data, prices of resale flats rose 2.8% in the second quarter of this year and by 5.9% for the first half of 2021.

There is a strong demand for HDB resale, with prices increasing 13 straight months as of July this year.


Buyers are feeling the heat of rising prices and sellers are asking for higher cash over valuation (COV).


The delay in BTO flats caused by the pandemic has added to the strong demand for resale flats.


Also, as work from home (WFH) could become a permanent thing, quite a few are looking to upgrade to bigger flats.


With the current record low interest rates resulting in lower borrowing costs and monthly instalments, many people are taking this opportunity to upgrade.


Let’s look at several factors before you decide it is the right time to sell.

Low-interest rates



The current low-interest rate climate is not going to last forever. When the world economy recovers, the interest rate will go up.


Many people are selling their properties and upgrading to a bigger or newer place due to the low borrowing costs.


However, if and when the interest rate goes up, so too will your monthly instalments. Even a half-percent increase will have an effect on your financial commitments.


Costly replacement home


If you are selling your HDB and buying another, your replacement flat will also cost more.



According to the HDB resale portal, the resale price of a 112 sqm, 5 room premium apartment in Punggol with a remaining lease of almost 95 years, was sold at $642,000. In Tampines, which is not too far away from Punggol, a 104 sqm, 4 room flat with a remaining lease of 66 years, was transacted at $516,688.

That’s a difference of only $125,312.



So it doesn’t make any sense if you were selling a bigger, newer place in Punggol and downgrading to a smaller and older one in Tampines for that amount of money.


In the first 5 months of this year alone, there were 87 HDB flats that were sold for at least $1 million.


This figure is already higher than the 82 units sold for at least that amount in the whole of 2020.

Private property prices are also up



Just as HDB resale prices have gone up, prices of private property have gone up as well.


According to data from the Urban Redevelopment Authority (URA), overall private home prices rose for the fifth consecutive quarter in Q2 2021, rising by 0.9%.

Prices had gone up by 3.3% in Q1 2021.


For the first half of 2021, private home prices have risen by 4.3%. The highest increase in prices was in the Outside Central Region (OCR) with an increase of 1.8%, followed by the Core Central Region (CCR) with an increase of 0.6% and the Rest of Central Region (RCR) which posted an increase of 0.3%.


The increase in prices has led to speculation that the government could be implementing additional cooling measures.


The government is said to be paying "close attention" to the local real estate market "to ensure that it remains stable".


The battle against COVID-19 is far from over and the economic outlook remains very uncertain and they do not want to see the property market run ahead of the underlying economic fundamentals.


Summary

Seems like 2021 is shaping up to be a good time to sell. Many unsuccessful BTO flat applicants are looking into the resale market and this has resulted in sellers asking for a much higher COV.


On the flip side, if you sell, you have to buy a replacement, which is likely to cost just as much as the one you sold or even higher.


Unless you are an owner of multiple properties, you could end up paying more for your next home, which does not justify your selling the first property.


Interest rates are likely to go up when world economies recover and borrowing will become more expensive and less attractive.


Property agents will tell you to enter the market before prices go up further or before more cooling measures are introduced. That is probably just sales talk.


If more cooling measures are introduced, it will likely cause a knee jerk reaction and that will be a good opportunity if you are looking to enter the market.


Everyone’s financial situation is different and it is best to exercise prudence.


MOGUL.sg has recently launched its own For Sale By Owner (FSBO) service, where homeowners can directly list their properties for sale on their own.


Get started & get your free 30-day listing now, click here.


Have a question? Let us know in the comments below or on our Facebook post.



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