Chat with Mr Chua I-min (CFA) on his views about Singapore’s property market

Today, I sit down with my friend I-Min to discuss his views on Singapore’s property market.

 

A little background about I-Min:

I-Min (CFA) is the Lead Instructor for Investor Education with A.B. Maximus & Co. Pte. Ltd. He conducts regular classes for SGX Academy on fundamental analysis, stock valuation, REITs and property stocks investments.

Professionally, I-Min has more than 11 years of working experience mainly in the investment industry. He was the Chief Operating Officer for A.B. Maximus before his current role. Previously as a real estate investment professional in CapitaLand and subsequently PhillipCapital, he had collectively done investment deals amounting to S$250 million. Prior to that, he was based in China, participating in a successful IPO exercise of a Chinese company listed on the Singapore Exchange.

Given the recent economic uncertainty and new cooling measures, I-Min has shared with me his view on the possible long term development and opportunities in Singapore’s property market:

 

Immediate impact of new cooling measures

Generally speaking, the demand for properties will be dampened. It is usually the unknown that is most scary and potential buyers are likely to be at the sideline, seeking for more clarity before making their investments. At the same time, developers / sellers may also be worried hence there is a tendency to lower their prices. All these will eventually result in lesser transaction volume at lower prices.

 

En Bloc & possible market rebound in longer term

However, I foresee this episode as rather short term (about 6 months) and market will eventually rebound back. One of the main push factors is the demand from displaced enbloc residents looking for replacement apartments. A significant number of them are quite senior with adult children. With the sudden windfall, some will buy replacement units for themselves and apartments for their children as well. Looking at the amount of total amount of enbloc payout (about $8 billion), we are definitely going to see huge demand from this group of people.

 

Opportunity for HDB Upgraders

In any case, property market is an inefficient market and we should not simply generalize. Every point in time, there would be undervalued properties and over priced ones regardless of the market condition. It is good to have an understanding of the overall market but we should also be aware of the opportunities available at every point in time. For example: today’s market is a very good time for upgraders and first time property buyers. they do not need to pay ABSD and yet the developers are giving very good discount to entice the buyers. My guess is that such condition will not be there for long!

 

Buyer’s upper hand for resale unit

At the same time, the resale market is showing a lot of potential as the prices have not really moved despite the increase in prices for new launch. It is still possible to find good investment units less than $1 mil in city area (D1,2,3,4,5,9). A 3 bedroom units at less than $1.2 mil is also not a tough find, given the current market condition, buyers may have some upper hand in their negotiation hence is definitely a good time for them to be in the market!

 

The new cooling measurements have definitely created ripple effect in Singapore’s property market at large. I have also shared my views about the cooling measures in this article¬†earlier.

 

If you hope to get more insights about Singapore property market’s future development and opportunity, you can like my Facebook page here. This is where I will share my latest articles and seminars so I can help everyone make wise investment choice and achieve financial freedom soon.

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