Opinion: Property Ownership in Singapore amidst the COVID-19 Crisis.
This month, as we all stay at home observing the Circuit Breaker measures by our government to combat the deadly virus COVID-19 that is spreading like wildfire around the world. Let us all do our part by playing a small but a very very important role to ensure the success of the measure. Stay Home, and Stay Safe – by practising good hygiene and social distancing when you have to get out for necessary matters.
As we all know by now, the severity of this pandemic has major repercussion on many sectors of the economy . So many companies and employees are affected, and we see this happening not just here in Singapore, but around the world. The IMF has announced that this is an unprecedented event and the world is heading into a recession that could match the Global Financial Crisis, if not worst. One thing we know for sure – we are all in this together.
Everyday, we see reports across news channels and social media on how this pandemic has almost taken over the world, people are driven out of work, borders are shut down and travel reduced to the bare minimum. Many governments are desperately rolling out ‘lockdown’ measures to try contain the spread, some with little success and more maybe a little too late.
As I sit on my desk writing this at home on Day 2 of Singapore’s quasi-lockdown, I have come to realised how fortunate we are in Singapore. Our government has been extremely proactive in fighting the COVID-19, and rolling out not 1, but 3 rounds of support package to help individuals and companies tide over this storm. Masks have been distributed to everyone and we just have to abide by the rules to stay home for the remaining 27 days.
And HOME! Yes.
Aren’t we so fortunate that we all have a home to retreat to in Singapore? Think of those homeless people in other parts of the world with no where to hide during this pandemic. We really should think twice before making another complain about the state of things. Having a roof over our head is something we have all taken for granted in modern day Singapore – all thanks to the success of our government’s early policy to house every Singaporeans.
It is also during such time of crisis that we should realise the importance of owning a physical property. The economy may drip and stock market may crash, and some may also predict that property prices falling. But isn’t it reassuring to know that you have a physical asset on hand, a place you can retreat into while the storm is going on outside.
I am a real estate professional, and during the exam preparation for my licence, one theory that has stuck to my mind is “the property market moves in cycle and it always trail right behind the economy market. But the property index is always on a upward trending line over time.”
I am lying to you now if I paint you a rosy picture you tell you that the property market is booming right now.
Here are some facts, an article on Business Times on 2 Apr reports that the Urban Redevelopment Authority’s flash estimates for the first quarter of 2020 shows its benchmark overall private home price index shrank 1.2 per cent over the previous quarter.
Source: Business Times
Some notable points from the article:
“Analysts’ projections of the full-year 2020 drop in URA’s overall private home price index vary widely. At the low end, Colliers International’s Singapore research head Tricia Song predicts a decrease of one to 3 per cent. At the other end of the range, CBRE’s Southeast Asia research head Desmond Sim and Savills’ Mr Cheong say the index may shed 5 to 8 per cent. However, they are not predicting a steep fall like the 24.9 per cent slide over four quarters during the Global Financial Crisis.”
“Successive rounds of property cooling measures over the past decade have built up systemic prudence and prevented an asset bubble from forming. The URA private home price index has risen only 9.1 per cent from end-2010 to Q1 2020; so prices have not run ahead of fundamentals, thus lowering the risks for homeowners,” said JLL’s senior director of research and consultancy Ong Teck Hui.”
“Giving a positive take on the situation, Nicholas Mak, head of research and consultancy at ERA Realty, said: “Once the pandemic has been contained, there will likely be robust recovery in demand and prices due to the pent-up demand and fuelled by loose monetary policies. Housing demand might be postponed – but not destroyed – by Covid-19.”
Like many companies, real estate agencies in Singapore are all affected by COVID-19. Being classified as non-essential services has left many agents (like myself) stranded as developers show flats are ordered to close, and face-to-face home viewing has to be put on hold during the Circuit Breaker. Luckily the presence of digital tools and social media has allowed some of us to continue to engage with our clients during this brief moment of break.
While some homebuyers are apprehensive of the market and holding back their purchase, many home investors are out on the hunt for opportunities during this turbulent time to pick up some valued gems. So to buy or sell? Or to hold and wait?
These are some golden principles I believe in , be it good times or bad times:
Don’t try to aim to enter at market bottom (it’s never bottom until it starts to go up)
Property investment has to be an active strategy of entry and exit plan (4-6 years cycle)
Invest in property as soon as you can afford to. The younger you are, the more cycles you can ride.
Have a good entry and exit plan : buy at the low entry price (1st buyer price usually) and strategize to sell when the target exit price is meant (4-6 years)
Buy what is within your affordability and never overstretch yourself.
Have a longer view of the market. The market may seems all dark and gloomy at the moment. But what will the market be in 4 to 6 years when you are able to exit sell and enter again.
Depending on individual goals and financials, there are different strategies to ride this current challenges or opportunities – depending on what your mindset. If you are planning your property transaction but sitting on the fence at the moment, I am happy to discuss in-depth with you to give you my professional advise on what would best suit you.
Meanwhile, Stay Home and Stay Safe. Together we can put a stop to this virus.
William Tan, Property Advisor
If you are a property investor, or simply thinking about selling or buying a property. Feel free to contact me for a non-obligatory chat. I am happy to share different options to help you craft a strategy to meet your objectives. Email: email@example.com ; Mobile: 65-93863406.