Diligent homebuyers win the race

With the current headwinds from the western part of the world and the latest set of cooling measures implemented in December 2011, the Singapore residential property market is likely to moderate in the short term, with some procrastination in homebuyers’ decision and possibly an evident downward re-pricing of residential properties.

However, the key issue is how long any price correction can last, as history had shown the potency of opportunistic buyers. The buyer who can catch such a value purchase is therefore one who consistently monitors the market and who is quick enough to sense, enter and grab his property purchase when there is a soft landing. Missing the opportunity will be a regret for the persistent home seeker as such times can be quite hard to come. The only way to minimize this is to take on an active approach in this current property lull, by consistently monitoring and have a strong physical touch with the properties he is interested in.

Making use of the property lull
It has become common knowledge that before a residential property re-pricing, there has to be persistent contraction in demand. During the quiet period, it should be recognized that the silence was in terms of transactions and decision making, but homebuyers should instead actively do their homework during this lull. The rationale for this goes beyond being able to catch on a re-pricing fast enough.

Fundamentally, this is the period where home seekers are able to extract the most information from marketing agents and possibly sellers, about the property potential, the market trends and all related property issues. In a rising market where all sellers and sales representatives are focused on deal making and closures, it may be fairly hard to extract additional information although the standard level of service will no doubt be delivered. It is also the period where home seekers can go on a viewing spree and make comparisons of properties on offer, except that in such times, owners which are not cash strapped may not put their properties up for sale.

For home seekers with the intention to purchase for long term stay, it will be highly relevant to understand the locality and the neighbourhood. This will be all the more relevant for home buyers who have limited understanding of the location, especially those who have to choose far flung locations due to budget constraints. It will be a time to critically assess the convenience, the accessibility and the pitfalls of the location and where possible, to decide how best to live with the imperfections. It may be highly relevant for foreign buyers or permanent residents to walk the grounds and try out transport alternatives to the city centre and key destination places, especially for those without personal transportation.

Although a general wait-and-see attitude may mean fewer businesses for marketing personnel, it can be viewed actively as a period where more businesses is to come with enough sincerity and efforts to establish contacts and delivering the best services. It is also a time to take stock of clients, rebuild prospective buyers’ base and to strengthen the understanding of different developments, neighbourhoods and potential. The importance to be sharp in understanding and sharing property specifics is increasingly higher for sales agents as the matured property market carries with it savvy homebuyers with discerning expectations.

Moreover, there are increased locations with MRT stations with the completion of the Circle Line, posing essential buyers concerns for those without. Sales agents will find this window period good to refresh and up their property sales expertise.

Post Evaluation
Notwithstanding the luxury to window shop for properties in this period, what’s critical is to also maintain a sharp lookout and consistently evaluating property investment potential. As being open to property viewings and being fast in making decisions requires parallel mindsets, this is very well a challenge for the home seeker. In addition to plenty of homework, it will be the decisive home buyer who is quick to react before the offer is snapped, who will win the race.

Long Term Ownership Justifies Diligence
The residential market in Singapore has come a long way, seen through various cycles and has matured. With record high prices for many residential properties and the imposition of additional buyers’ stamp duty, speculations have become a thing of the past. Homebuyers are moving on to long term, tangible perspective of owning a residential property. Although it may be fairly difficult for property novices to critically assess residential properties before buying, it is a necessity in order to ensure one will happily live with his purchase given the high prices involved.

Moreover, if buying a residential property has moved from an instant gratification to long term affair, it may be worth spending sufficient, or even significant time in trying to understand your property before purchase, in order to connect better with your home after the purchase.

Ong Kah Seng, Director, R’ST Research