Market Outlook

Market Outlook – Q2 2020

We have passed the mid-year of 2020. Within the first 6 months, there has been a few key economical situations, which have directly and/or indirectly impacted the property market.

Some key situations are
1. Coronavirus Pandemic Since Jan 2020
2. Singapore Declared Technical Recession on 14th July 2020
3. The unemployment rate increased to 2.9% in June 2020

The above 3 situations have placed many Singaporean in a very uncertain economical situation, especially so those in the workforce, where job security is his/her major concern.

Market outlook

HDB – Resales

Looking back – Q1 2020

Since Q2 of 2019, the number of HDB transactions, regardless of flat type, has been fluctuating in the range of 6,000. This has been going on till Q4 of 2019.

Historically, the transaction did dip when it came to the beginning of the calendar year, which was sometime in January and February. Therefore, the moving down of the transaction in Q1 of 2020 is somehow expected.

The drop is the transaction for Q1 2020, from the statistic representation, is much healthier than Q1 2019, which hit a low of 4,500

Data Source : data.gov.sg

Looking from the price point perspective, all flat types are going very much constant, except for multi-generation. I will not take this flat type into consideration, as the requirement for this flat type is unique to a particular group of the buyers. This is also not to be used for benchmarking as the supply is limited to some of the HDB towns

Looking into – Q2 2020

From the transaction perspective, there has been a sharp drop in numbers from the earlier quarter of 5,500 units to Q2 of 3238 units. There are various factors leading to this dip.

The key factor was due to the enforcement of the Circuit Breaker in Singapore. The prelude of the Circuit Breaker started on 27th March 2020 where some of the entertainment venues were to close.

It further tightened on 7th April 2020, where non-essential services were not allowed. Real estate activity was, back then, classified as a non-essential service, and all viewing of the property was not possible.

Data Source : data.gov.sg

There was not much of an impact on the pricing of the HDB flat, during the Circuit Breaker period. Looking from the chart, except for the bigger unit, which is the Executive flat type (ie, Executive Apartment and Executive Maisonette) that has dipped by 2.9%. the rest of the flat types are still going very much stable.

Data Source : data.gov.sg

Future Sharing

With the relaxing of the Circuit Breaker on 2nd May 2020, real estate activities have recovered. The seller begins to allow the potential buyer to view their property and the buyers have started to source for their expected units.

HDB, being the public housing for all Singaporean, is always the first choice for those that are getting married. I foresee that the transaction will recover sooner than expected and it should be reaching the stable trend.

Private Property – Resales

Looking back – Q1 2020

Transaction for resale private property has come down since Q2 of 2018. The drop between Q2 and Q3 has come to almost 50% drop. In numbers, it drops from 3,975 to 2,172 transactions within that quarter.

After the drop, the number of transactions have been moving between the range of 1,600 to below 2,000. These numbers have been constant for the past 7 quarters.

Data Source : URA website

Although the number of the transactions have come down in Q2 2018 and remaining constant with a difference of 500 units between a quarter to quarter. The price of the transaction has been on an up.

During the initial drop from Q2 to Q3 2018, the price has come up from Q2 average per square feet of $1,357 to Q3 average per square feet of $ 1,375. The prices have been moving up since Q3 to the last quarter of 2019. Closing the year with $1,421 per square feet.

For Q1 of 2020, mainly due to the outbreak of Coronavirus, although not widely spread, has made many buyers aware, resulting them in holding back in offering any shortlisted property.

Data Source : URA website

Looking into – Q2 2020

With the implementation of the Circuit Breaker in Singapore which started in April 2020, which is the beginning of Q2. The number of the transactions have dropped from 3,773 in Q1 to 2,398 in Q2. A total drop of 1,375 units. Leading to, in percentage, 36.5%.

Data Source : URA website

The circuit breaker has created a very unique pricing situation for resale private property. The price during the Covid-19 circuit breaker period has come up. from $1,375 per square feet to $1,394 per square feet. An increase of 1.5%.

Data Source : URA website

Future Sharing

As we are aware, Covid-19 is not going to end anytime soon. Many agents have capitalized on the use of technology to conduct showing of resales to the potential buyer. This approach has given more opportunities for the buyer to feel comfortable and safer when they wanted to view the unit.

I will think that this is going to be the next wave of trend in the property shortlisting process. It also saves the time and effort of the potential buyer. With this convenience, I foresee property transactions will be back on track soon, living together with Covid-19.

Private Property – New Launch

Looking Back – Q1 2020

Transaction on new launches has been like a roller coaster since Jan 2018. It went up for 2 quarters, after which it came down, maintaining below 2,000 units transacted for another 2 quarters.

It swings up at a peak of over 3,000 during Q3 of 2019. The drop begins after Q3 and it went continuously down for 2 quarters, which the downtrend of Q1 of 2020 potentially caused by the outbreak of Coronavirus, leading to some uncertainty.

Prices for new launches do not get closely align with the number of transactions. Looking at Q3 of 2018, the number of transactions is on the up but prices have come down.

This trend goes the same for Q3 of 2019. Prices tapped down, although the number of units sold went up.

What has drawn my attention was the Q1 of 2020. With the outbreak of Coronavirus, the number of units sold came down, but the price per square feet went up, hitting past the average of $1,850 per square feet.

Looking into – Q2 2020

The numbers of units sold start to decrease since Q3 of 2019. This downward trend got worsen in Q2 of 2020 when Singapore went into the Circuit Breaker stage. Non-essential services were not made available leading to viewing at those new launched show flats not happening.

Unlike the resale private property, new launches prices have come down in Q2 2020. This largely was caused by the circuit breaker. The other possible reason is, the developer is reviewing their pricing to encourage the buyer to commit to those units that they are interested in.

Future Sharing

We have started to accept the fact that, Covid-19 is not going to be gone anytime soon. Therefore, property buyers and investors are now positioning themselves, to purchase the right units when the price and opportunity are right.

Also, developers and agents are now capitalized on the use of technology, such as video calls to meet with potential buyers, creating virtual show-flat for the potential buyers to view the units.

The developer has also invested in technology, to create a virtual show-flat tour for potential buyers. Accepting more electronic funds for payment of option and exercise fees and more…

Summary

Looking at the transaction numbers, the pricing of the properties in various segments of Singapore, athough the economic situation is not that positive, the real estate is still moving and transacting in a very healthy way

With the support of the chart and historical data, to date, the Covid-19 did not crash the real estate market. With the adjustment of the bank interest rate, there is more benefit to capitalize on these benefits and invest in the market for now.

I will not be able to speculate what is going to happen in Q3, and Q4 of 2020, but I am positive that it is moving in a healthy direction. Currently, while I am touching onto the market. New launches that are still coming on, and it is transacting well. Some good potential project has sold over 95% of their units and there are more, that has sold over 75%.

HDB owners are also taking this opportunity to upgrade. Be it to new launches or from the resales market. The demand for private property will still be stable.


Lewis Tee

“I am sharing these, based on my past experiences earned while participating in the market also, the data collected over the years. Hope this is of help to you, in deciding what you plan in the property market.”


If my sharing is helpful to you, and you will like to have a more in-depth discussion, I am most happy to have a session with you, at your best convenient time. Do drop me a WhatsApp to kick-start a discussion. Don’t wait till everyone has dived into the market, as it might be too late.

投资新加坡房地产

在危机中投资 - 新型冠状病毒

很多时候, 我们都会听到人家在说。 危机就是商机, 有了商机就有利润。 可是, 我们怎么就没有遇见好的商机呢。 原因很简单。 我们习惯了稳扎稳打。 可是, 投资回报可不是稳扎稳打的。 危机跟回报是相对的。 危险性高, 回报利润就高。以一个投资者,我们能够做的就是风险维持在我们可以控制范围里面

投资选项

危机中投资

股市

在市场上, 比较普片的投资就属股票, 黄金和房地产了。以我个人分析, 在三个投资选择里, 股票投资通常被称为“高风险”。 投资股票的主要风险是可能导致资本损失。 股票的走向, 也是您无法控制的。 比方, 突发事件或公司内部的不利发展, 很可能会严重影响股价和您的投资组合的价值。

黄金

对于黄金投资, 尽管黄金与股市有反比关系,但股票市场也与黄金有着深远的联系。 在股市严重下滑的情况下,投资者通常将黄金视为避风港。 据推测,当我们遇到全球市场下跌时,股票和货币就会下跌。 一些投资变得不那么理想,投资者认为黄金会给他们提供喘息的空间。 但是,这并非总是如此,投资者可能会被烧死。

房地产

投资在房地产, 在三个选项里面, 我觉得它的风险是相对比较低的。 由于它是有形资产,因此有可能影响您的回报因素, 可能就是, 市场走动, 自然灾害,火灾,租户破坏,抢劫或故意破坏。

为何要在新加坡投资

土地有限

新加坡总面积就721.5平方公里。 2019 年的总人口为五百七十万。 其中, 有一百六十八万人口是非公民。 也就是说, 有三成的人口是租客。
预计在2030, 人口会达到六百九十万。以三成为基础, 等非公民 人数会到达两百零七万。 那么,对租屋的要求, 也会顺着提高。

政治稳定

新加坡具有拥有一个民主制度的稳定政治结构,它也拥有了一个完善司法体系以及良好的治理实践。土地虽然不大, 可是它有一个强大国家的内部机构。 这使新加坡的商业环境,在全球投资者眼里有着很大吸引力。

经济稳定

尽管新加坡国内市场狭小且缺乏自然资源,新加坡还是成功度过了1997年和2008年的金融危机。如今,新加坡是世界上最稳定的经济国之一。 它没有外债,政府收入高, 始终如一的正盈余。

新加坡经济主要受到电金融服务,旅游业以及全球最繁忙的货运港口出口的推动。

危机中的新加坡

经过六个月的辛苦战斗, 疫情在新加坡已经开始“接近尾声“了。 大家都开始活动起来。 生意也渐渐开始营业。 虽然,欧洲一些国国, 还有美国还在努力抗争。 这次的新型冠状病毒,对很多资产来说,是最好的考验。当疫情过去以后,那些更具有投资价值的资产,会更发光发亮。 这个, 不止限制在新加坡。 哪一个国家都会一样。

由于新冠病毒肆虐全球,各国的房地产市场也会随着疫情, 为之波动!随着恐慌心态的加剧,每个国家的楼市都会出现不同程度的停滞甚至倒退。

值得一提的是,疫情当下,你会发现新加坡房价与人气并没有因为疫情而受到影响。 相反的, 虽然有点波动, 不过还是依然屹立不倒。 市场是有一些波动, 不过整个房产市场还蛮稳定的。

投资

根据新加坡市区重建局最新发布数据,2020年第一季总售出新私宅单位有两千零六十一,环比上升57.3%,是自2017年以来最高的2月销售数字。

以现在私宅市场的销售数据显示。新加坡的房地产是禁得起考验。 这场新型冠状病毒疫情虽然严重,却挡不住投资者以及买主的热情。

到底是什么因素, 能够导致新加坡房地产能够维持着那么凌厉走势呢?

潜在需求强劲

正如我之前分享的那样,由于土地面积有限,新加坡对房地产的需求很高。 为了达到到2030年将新加坡人口增加到700万的目标,当地投资者正在积极利用这种市场疲软的机会进行投资。

投资 低利率

低利率

新加坡房屋贷款利息, 一直维持在低过2%。 这个低利率, 确保房子买主和投资者能够应付贷款的偿还数额。

低失业率

自新型冠状病毒疫情开始以来,新加坡政府已提出大量国家储备,以支持新加坡公民和在新加坡运营的公司。 这是为了确保裁员率保持较低。

新加坡房地产具有很强的韧性。自2010年以来,新加坡政府经过多次房地产的降温措施,以舒缓房地产泡沫破灭。 这些措施也同时舒缓金融危机对经济的冲刺。 为买主和投资者创造出一个良好发展的新加坡房地产方向。

Covid-19 coronavirus

Why should I Invest During Covid-19 Crisis

Crisis

For most of us, investment is usually the lowest priority when we are experiencing an extraordinary global crisis, as we are unsure of the current situation.

The most common concern is, if I invest now, would it drop further? This mindset is not wrong, however, if this is what you are thinking, you should not consider yourself to be an investor, as an investor is someone who is willing to step in with a manageable and predicted risk planned.

Before the crisis became certain, it was a very good idea to plan ahead and decide what your investment strategy is. Now that we are approaching the last part of the Circuit Breaker period, I am seeing that we are starting to work on having our economy recovered as soon as possible.

There are also news saying that we are going into recession, or maybe that we are currently already in recession. Recession is something out of our control, so why are we not taking this opportunity to invest on something that we could potentially appreciate after the recession?

Recession does not mean to stop all investment. It means, we are to be more careful in investing. In the market, 2 common investments that many talk about are, investing in Shares and investing in property.

A simple guideline to see which to invest can be, investing in share, most likely a short term and investing in property is very much a longer term.

Of course, being a realtor, I will still be recommending investing in property. Some of the reasons being,

  • You will still be having income, to support your mortgage repayment. Worst case situation, it may not be all, but there will still be support
  • You will get back your investment, if you sell your property at the right time . Especially in Singapore, with the limited land size. the chances of Singapore property prices to be on the up is higher.

Key Impact on Asia Property Market During Crisis

SARS

SARS happened between 2002 and 2004. During this period, many of us were more concerned with the infection rather than the investment, but the market never stopped because of that.

Let us do some analysis on the price index during the SARS period. Based on the chart, the price index moves down, in the year 2000.

That is 3 years before the SARS infection. The reason for the year 2000 dip in the price was the bubbling of dot-com.

You might be aware, dot-com, which is the Internet, was booming in late 1990. It has caused rapid growth in the U.S. technology stock. Many venture capitalist(VC) came in and supported them.

In the year 2000, the dot-com bubble burst and it affected the market globally. Singapore was also affected and during that period, many of the dot-com company was forced to cease their operations

Global financial crisis

15th September 2008 was an unforgettable date for many people, especially for those in the investment and financial sector.

On that day, the Lehman Brothers filed for bankruptcy, with a debt of 613 billion. It was the largest bankruptcy filing in U.S. history during that time of filing.

Looking at the private property price index during the Global Financial Crisis, the market came down after the announcement of the Lehman Brothers bankruptcy.

The market has made a return within 2 years. The chart indicates that, in the year 2010, the market has come up and it went on continually for a few years.

For those that have been in the property market, or been following closely on the market price index, The price went on an uptrend till 2013. The coming down of the price post-2013 was due to other reasons, as there were 2 financial crisis in the year 2013 and 2015, but it did not affect the market much.

Covid-19

The Covid-19, also known as the Coronavirus was first identified in Wuhan, China. This virus snowballed wordwide, and it was declared as a public health emergency of International concern by WHO (World Health Organization).

On 11th March 2020, it was being announced as a pandemic. As of 18th June 2020, more than 8.4 million cases across the world with over 450,000 deaths.

Looking back into the Singapore property market situation. After Q1 of 2019, the number of transactions has been on the rise. As of last quarter, which is Q1 of 2020, despite the Covid-19 situation, the transactions have not gone below what happened a year back. As in Q1 2019, there isn’t any crisis.

Data Source : URA Web Site

As for the price index. The average price index across all 3 region, which is,
CCR – Core Central Region
OCR – Outside Central Region
RCR – Rest of Central Region
areas are as follow

Data Source : URA website

Since 2016, the price has been moving between the price index of 139 to 142. After Q4 of 2017, the market has picked up. Since then, The price index has never dropped below 150.

In Q1 2020, which is the period of Covid-19, the index has come down in comparison to Q4 of 2019, but it has not past the price index of 150.

Analysis

With the analysis of the price index, personally, this is still a good time to invest in property in Singapore with the following considerations:

Economical Stability of Singapore

Singapore has grown to be a first world country in a short time of 30 years. We have proven our economical stability. Since the year 2001, we have been achieving positive GDP growth.

Data Source : Macrotrends

During the above mention crisis period, which is SARS between 2003 to 2004, Lehman Brothers in the year 2008, Singapore is still going strong in growth.

Limited Land Size

With the total land size of 792 square meters. Singapore makes sure that the property process is gradually being appreciated. The government controls the release of land accordingly to the needs, hence, this will not create sudden supplies of land leading to price crashes.

The alternative land supplies will be through the en-bloc process and developers who wanted to en-bloc any of the existing projects will need to consider, the market situation and the cost Vs the land released by the government.

Capital Gains and Property Inheritance Tax

Singapore property transaction does not exercise capital gain tax. Which means the profits that are made though the investment in properties are not liable for taxation.

This gives the investor, like yourself, the freehand to decide how much profit you wish to make from the property, basing on the market situation.

Property Inheritance Tax, which is also known as estate duty, is the tax charged on the total asset value of the deceased. This tax was being waived for the person that passes on after 14 February 2008. Since you are reading my article, you are not liable for this tax.

Conclusion

Singapore, due to the land size, the stability of both economical and political and development growth, has created a very unique situation for investor.

Be it good or bad time, investor are always keen in considering investing in Singapore. Taking the current Covid-19 situation, I strongly believe Singapore will be able to maintain, if not better the property market situation.

We might be seeing some headwinds for now. This potentially is a good opportunity for investors like yourself to enter the market while the prices are still soft.

Once we have moved out of the current crisis, as we have already gone into phase II of opening from Circuit Breaker. The price might have gone upwards, leading to higher investment amount for the same property.

Buying Selling Property

What Have CPF Accrued Interest Affected You Sales Proceed

Mr and Mrs. Tom is happily browsing the Internet, flipping on newspaper classified section, surfing on HDB website looking for the date of BTO, sourcing for new launch condo, etc.. … …

Having to stay in your current property for 10 years. The family has decided to sell the current property and upgrade to a bigger and better location. They did a quick calculation, basing on the buying price and the current average market value. They have made 100,000.

I was contacted by Mr. Tom since he bought his current property through me. He shared with me, his intention is to upgrade from the current HDB in Sengkang to a private condominium in Serangoon.

The very next evening, I met up with both Mr. and Mrs, Tom. We sit and discuss in more detail the intension and how they can move ahead seamlessly.

After the financial calculation with them. They did not make the expected $100,000 after selling. This came in shocking and the question is WHY?

In all mortgage loan repayment using Central Provident Fund (CPF). There are 2 interest that you paid. One is the interest for the mortgage, which reference SIBOR rate. Another part is the interest from the Central Provident Fund for using your CPF Ordinary Account (OA) to repay. when returning your fund to CPF. This amount can be obtained after you logon to the CPF website, under the accrued interest.

What is CPF

The Central Provident Fund (CPF) is a comprehensive social security system that enables working Singapore Citizens and Permanent Residents to set aside funds for retirement. It also addresses healthcare, homeownership, family protection, and asset enhancement.

Before your retirement, CPF has allocated 3 buckets of account. Mainly the Ordinary Account ( OA ), Special Account (SA) and, MediSave Account(MA)

Source: CPF Web Site

What Benefit did I get from CPF?

Additional Wages

Unknowingly, you are having an additional income every month. The amount comes to 17% of your monthly salary. This is from the employer’s CPF contribution to you during your employment status.

For example, your monthly wages are $5,000. You are supposed to contribute CPF, which is 20% of your monthly wages. Your take-home pay will end up being $4,000.

Going into your CPF is you $1,000 from your wages and employer will have to pay $850 into your CPF. That makes your total contribution to you CPF is $ 1,850

The amount of $1,850 contribution to your CPF. This amount will be distributed into 3 accounts. The OA, SA, and MA. Depending on the age, the able below share with you the distribution on the 37%

Age during employmentOrdinary AccountSpecial AccountMediSave Account
Between 36 to 4521%7%9%
Between 46 to 5019%8%10%
Between 51 to 5515%11.5%10.5%
Source from : Website AreYouReady by CPF

Higher Interest Rate

Buying Selling your property.  CPF calculation

Banks are offering an interest rate of not more than 1.5% for a Fix Deposit account. As for CPF, your interest rate earn is 2.5% for the Ordinary Account (OA) and 4% for Special and MediSave Account (SMA).

Using it as a source for investment

CPF fund can be used to do investment. This investment include the buying of property. But, for whatever amount that was withdrawal from CPF. There is an interest payable upon returning it back to CPF. Assuming you took $100,000 to do you property loan repayment. The return amount as shown on the following tables, including the interest incurred.

CPF buying selling property

What is the disadvantages of using CPF

Interest Payable

If you are using CPF to service your mortgage loan. There will be interest incurred when you sell your property.. This accrued interest can impact the sales proceed.

Interest buying selling property

Should I continue to use CPF to pay for my mortgage?

This depends strongly on your trade and your financial status. If you are a trade like me, a real estate professional, financial advisor, owning your own business. Cash repayment will be a good option to consider. As long as you are being employed. Your fixed salary received every month, with CPF contribution to your CPF OA account. It is worth considering using CPF to repay.

Interest buying selling property

CPF Accrued Interest

Although there is an accrued interest upon you selling your property. The amount will still return to your CPF OA account and the amount is not “missing”. At the age of 55. This amount will be part of the amount, transferring to your RA account.

You will feel the impact if you required this amount to purchase the next property. If you are facing the situation. Do share this with the real estate profession. They might be able to advise you on how it can be done. Everyone required a roof over your head at the end of the day.

Fund Management

Assuming you are in the workforce, where you have to continue CPF contribution. This amount into your CPF can only be yours after you age 55 (as of the year 2020).

Your monthly salary credited into your bank account, which is totally in your control. You will manage and use it for your daily expenses. If the mortgage loan repayment is going to be from the same pool of funds. It might add an additional burden in managing your cash on hand.

Without having to repay from cash. You can have peace of mind in the mortgage loan repayment.

Since the amount in CPF OA account is unable to use it for your daily spending, even, if you are jobless. Let’s use CPF OA to service the mortgage. In the event, your income was affected. The remaining amount in CPF OA is still able to support the mortgage.

CPF buying selling property

Buying a Home for Life without affecting the Retirement Adequacy

There is an update to the rules on both the use of CPF and HDB housing loans. The update provides more flexibility in buying a home for Singapore citizens at the same time, safeguard retirement adequacy.

The main focus of the new rules focuses on the remaining lease of the property. As long the remaining lease of the property can cover the youngest purchaser until at lease of age 95.

This rules has already taken effect as you read on this article.

In more detail sharing the new rules. As long as the remaining lease of the property is over 20 years. Also, it can cover the youngest buyer until at least 95 years of age. The repayment of the property can be through the use of CPF up to the valuation limit.

Should there be a more detailed understanding required, you can visit the site which gives you a more detailed explanation.

Will I be Debt Free after 30 years

Many homeowners I have spoken to. Their mindset is, I will buy the current property. Finished servicing the loan within the 30 years and I am debt-free.

This is correct in relation to the mortgage loan. What will happen to the value of the property? For HDB, the lease decay will have a direct impact on your property.

There is a very high chance the value of your HDB property will drop after it passed 35 years of age. The returns value of the HDB will not able to fetch as attractive price as current. This will lead to a lesser profit.

One of the recommendations, to safeguard the CPF, is to upgrade from your HDB to private. The upgrading is very much dependent on your financial capability.

Conclusion

We must give the credit to the CPF system. Without having to have that, many Singapore citizens may not able to afford a roof over their heads.

The consideration is, being a buyer, how can we fully utilized the system to achieve a positive return. It should not impact the retirement fund and at the same time for a better life living.

Singapore having a limited land size. The prices of Singapore property is very likely to be on the up as times goes by. We look at most of the countries. The property price is always on the uptrend as long as there is no financial crisis, be it within the country, the region, or across the world.

Therefore, even with the accrued interest compounded. You might not be losing any of your profits. Having said that, timing is the key to making the decision of selling or buying.

Lastly, with the financial and political stability of Singapore. Fund in CPF and the value of the property will be safe. Investors are also keen to bring their funds into Singapore to invest in property.

If you are unclear. Especially when it comes to, how the interest affects you and your CPF. How can you maximize the return so as to have more funds during retirement?
Do contact me at +65 90107188 or via WhatsApp here. I am most honored to share with you any concern you have and how can you move forward with a lower impact on the accrued interest.


Lewis Tee

Lewis became part of the family of Orange Tee and Tie in 2020. He has been in real estate since 2005. Together with him, he brought along a long history of experience in both HDB and Private property.

His personal belief is, to share the truth and facts with everyone. With that, he has good credibility with his client. His strong belief in a partnership and not the client made him successful in this career also.

Buying Selling Property

Who Should Do Mortgage Refinancing?

Who Should Do Mortgage Refinancing?

For many Singaporeans, the flat we purchase usually does not belong to us for several years, the reason behind that being that we put our purchased flat on a mortgage, where we then do our monthly repayment to the mortgage.

The situation worsens if you are repaying through your Central Provident Fund(CPF), which many of us are doing. Why is it worst off? Without realizing, you are paying double the interest rate, as one interest goes to the mortgagee, and at the same time, you are also paying interest to CPF for withdrawal amount. If you check on your CPF account, you would realize after years of repayment that you will have an “accrued interest”.

Should I refinance My Mortgage?

For the refinancing to happen, your mortgage loan has to be from banks. Any loan from HDB does not entitle you to any refinancing. As long as you have fulfilled the criteria above, the answer to the refinancing is YES.

Refinancing With Lower Interest Rate

As the loan interest rate for Singapore property mortgage in packed onto the SIBOR rate, it is a good opportunity to look at the rate and decide when to do your refinancing of a mortgage.

Mortgage Refinancing?
Data Source from : https://sibor.sg/history

Historically, the rate is on the downtrend, which means that with the same loan amount, you are paying lower interest.

Lower Repayment Amount

There are a few factors that would have a direct impact on the monthly repayment amount of your loan.

Firstly, the interest rate. Since the SIBOR rate has decreased based on the chart above, the computation of your loan repayment amount will be based on the revised rate. The total payable amount will be lower than earlier over the same repayment duration.

Secondly, your loan principal has also decreased the past few years as you have started repaying your loan. With that lower principal loan amount, the computation to the repayment would also be lower.

Shorten Total Repayment Term

Normally, when we first start any mortgage loan, we would look for the longest repayment term possible. This ensures that we are paying within our comfortable ability.

Never have we realized that these “slow and steady” repayments lead to a higher interest rate paid. With the refinancing of your outstanding loan and a lower loan amount and interest rate, we can consider repaying with the same repayment amount in a shorter duration.

Unlock Equity Financing

Equity financing, is a way where you used your property as a form of collateral for a sum of cash. The cash amount is relative to the value of the property

For equity financing to happen, all financial institutions need to ensure the following criterias are met.

Loan-To-Value(LTV)

For equity financing to happen, the LTV for the homeowners must be kept at 75% of the property value. This includes the outstanding loan secure on the same private residential property

Tenure Capping on Loan

For the equity withdrawal, your tenure is limited to a maximum of 35 years

Total Debt Servicing Ratio(TSDR)

Total Debt Servicing Ratio(TSDR), is a framework from the Monetary Authority of Singapore(MAS). It serves to safeguard the borrower from being over-borrowing which may lead to repayment difficulty.

TDSR is calculated using the formula : (Borrower’s monthly debt obligations / Borrower’s monthly gross income) x 100%. This drives to a percentage of his entitlement to TDSR.

In this formula, there is an element, which is the monthly debts obligations. This includes all debt obligation such as the following, but not limited to:

  • Property-related loans, including the current loan being applied for.
  • Car loans.
  • Student loans.
  • Renovation loans.
  • Credit card loans.
  • Any other secured or unsecured loans, including revolving loans.

Consolidation of Debt

Other than the mortgage loan, many of the homeowners do have other repayments every month. In some cases, there are a handful of homeowners who are having high-interest rate debts, such as credit cards (In many cases, is at 24%) or other debts.

Consolidation of debt, in this case, enables these homeowners to use the refinancing opportunity. Using the home as collateral to cash out funds in repayment to those credit card debts. The rate through the use of equity financing is of a lower rate as compared to some of those other debts the owner may have.

If the purpose of refinancing is to do consolidation of debts. There may not be any savings, should you look at total debts in totality. The consolidation of debts is to help them to overcome the struggling monthly repayment.

In addition, the consolidation of debts can also allow them to better manage the process of repayment of their monthly bills. Without the consolidation, these homeowners may be very much overwhelmed by their numbers of bills to be managed. The amount to be paid every month.

Even if the number of outstanding bills are not worrying, it takes time and effort to do the payment for all bills. With that, some homeowners might want to take the simpler way of doing the repayment.

Refinancing gives me all the benefit?

However, as in all situations, there is a flip side. Although there are the above benefits, there are also cons in doing refinancing of your property.

Property being collateral

Being a homeowner, when you put your property on collateral during the refinancing. If you, being the mortgagor, are unable, or refuse to repay the monthly loan, the mortgagee, in this case, the financial institution, essentially owns the mortgagor’s property

Therefore, if equity financing is your consideration, I will strongly suggest you work on the affordability. The comfortable level of repayment duration and amount before execution. Should you have any unclear concerns, do consult a professional.

Temptation

When you do equity financing to your property, you are like striking a 4D at that point in time. The main difference is, striking 4D does not require you to repay back but the refinancing requires you to do so.

Therefore, the mortgagee must be very sure of his/her purpose and intent of doing the equity refinancing. Some questions that may be asked are; What is the right amount you require? What is the repayment schedule and amount? Where is your source of funds to do the repayment?

Additional fee

The refinancing process is not just moving of blocks, and there will be parties involved in getting that done. To do so, there will be some fee payable.

Some of the required fees include legal fees. On average, it would cost around $3,000 just to complete the refinancing process. What you are paying is not limited to only the legal fees, and there are other fees payable by you such as property valuation fees, where a valuer is required to assess the value of your property to ensure that the worth of your property is of market value.

Although the interest rate is lower, there is a monthly saving, but do take note that there is a one-off payment required. These are some fees payable that you should take into consideration.

Before any decision, please speak to a mortgage broker. This would allow you to have a more detailed understanding, and would also give you a good understanding of how to crunch out all figures for you. If you are speaking to the financial institution broker, they can also help you with all the necessary paperwork if you are doing the refinancing through their financial institution.

Conclusion

Refinancing your mortgage required you to do some research beforehand. If you are not looking into doing equity financing during the refinancing of your mortgage, it will be very direct. As long the interest rate is low and the difference is able to recover your legal fee, it should be fine.

Should you want to do equity refinancing, there is more consideration on the Cons of the process. However, you may overcome these risks as the main risk to refinancing is the human factor. As long as you have the right aim and are well aware of the repayment amount and schedule, the risks are low and manageable.

There are many refinancing of mortgage available. Before talking to the mortgage broker, you may contact me for a discussion. I am neutral in the financing of your property. I am able to share with you an honest opinion.

At no obligations, I can be contacted at +65 90107188 or via WhatsApp here

Buying Selling Property

Want to be a Property Investor

Buying Selling Property

Got this WhatsApp during one of the afternoons. My mind was running actively, running through my list of contact that was named Frank. Lucky, I have only 1 friend who’s name is Frank.

Quickly, I dial to him and the first statement out from me was
“Bro, you know someone by the name called Henry?”
Nice to get a positive reply from him and the closing statement to him was
“Thanks. Another day we meet for a drink. Will share with you, on how to be a property investor”

I responded to Henry SMS with a phone call. The dialog goes on and the key point is, he wanted to get a unit for investment. Without spending too much time on the phone, I fixed an appointment with him, on the next day evening at 8 PM in his place.

Arriving his place, 5 mins before 8 PM. It was a landed inter-terrace in D19.

The discussion starts off, with the plan he has in mind. I recalled that was sometime early 2012. Back then, the ABSD (Additional Buyer Stamp Duty) has just implemented on the 3rd property purchase on Singapore Citizen.

He wanted to invest in a property, looking for the potential of short term, rental collection, and long term, Enbloc. I have during the discussion, assist him with the following key consideration:-

Investment

What Type Of Property He Is Looking For

I share with him, the pros and cons of buying brand new, which yet to be TOP Vs the resales market. Since he is looking at investment and at the end, sell-through Enbloc and not staying. I have suggested him to buy resales. The transaction, after offering the unit takes less than 3 months. after which he is able to put the unit for rent and start collecting rental.

What Is The Budget He Willing To Invest?

Nothing was in his mind. I have, therefore, help him to walk through the step by step of the financial calculation. Taking into consideration of OA account, loan and monthly repayment amount. Base on his comfort level, the budget for the purchase has come out to be not higher than $600,000

What Is His Short And Long Term Expectation?

He is unsure of the duration, he was thinking to have it within 5 years but I shared that, let’s not firm the date of when the Enbloc can happen. It is very much an opportunity that comes along, with the support of everyone in the project he purchased. Let’s have your unit purchase and rented out. As long as the rental is able to cover your total cost, with some profit. Don’t rush to get the unit sold or Enbloc.

Property

When To Have The Unit Purchased

I have suggested having the unit purchased ASAP. The cooling measure has implemented and if it does not drive to the expected outcome. There will be tightening the measure.

Buying Selling Property

Having to share with him, the few consideration. He has accepted with a bit of concern. Which is, “what if the unit is not rented out”. This concern, which I felt is valid, was overcome with location and expected rental.

During the discussion, I have also “blocked” his time-slot for the next 4 weekends, as his weekday timing is bad and he does not want to view at night.

On the 1st viewing, I have brought him to Bishan, which is near his place. We have viewed a couple of units but he wasn’t too keen. I have, therefore, shared with him, to consider West Coast. The reason given to him was.
The key education is there, such as NUS, Polytechnic.
There are industrial offices around.
There is no MRT line but, public transport is well established.
Ride to CBD was 15 mins away, from West Coast Highway

The viewing on the second week went on well. I have brought him to view units in Parc Regency, WestBay Condo, WestCove Condo. He has rejected all the 3 projects. But, I have managed to provide my view to him on the 3 projects viewed.

Parc Regency, the project is a bit too small. Which is only 20 units. But the upside is very near NUS, which we can potentially put on rental for oversea student
Westbay and WestCove Condo, These projects are of good size, over 200 units, and the developer might be keener in these. Also, Blue Horizon, which is across the street has just come up as a high rise building. There is good potential for the 2 to go Enbloc at a good price. Lastly, both the project was TOP in 2000. It has already past 10 years. The resident in there will start to consider Enbloc-ing it. That brings his long term plan potentially shorter.

Buying Selling Property

I have strongly recommended him to consider either Westbay or Westcove. We viewed 2 units in Westbay condo, which wasn’t too bad of condition also. You can rent it immediately after completion. The returns on the investment of this property start from that day.

Having taken my suggestion. He went ahead to offer one of the 2 bedroom units at Westbay Condo, the following week after viewing.

The purchase went through smoothly and the units were on rental late 2012. I have been since he took over the unit, done the rental for him. The unit has just rented out in Dec 2019, to a corporate lease.

Westbay has gone through a discussion with Enbloc in 2019 but the Enbloc was not successful. Should the Enbloc go through, with the current Site area of 236,806 sq ft and a plot ratio of 1.8. Technically, the revised build-up space can come to 426,250 sq ft. With the unit you owned, which is 936 sq ft. Your potential profit above $200,000 after less off your CPF accrued Interest.

Buying Selling investment

Nevertheless, I foresee the condo to go for Enbloc is still positive. Let’s wait for the next wave and in the meantime, continue to rent is as the current demand is still good.

The advise I have given to him on the purchase of Westbay condo became a ice breaker. Now, I am more the property partner to him rather than a real estate agent.

I just met him over CNY. I was asking him, to consider doing some financial restructuring on his properties. With the revised interest rate, it might be more worth the effort to do that.


About Lewis

Lewis Tee

Lewis Tee joined the family of Orange Tee & Tie in 2020 as an Associate Deputy Group Director. He has been in real estate trade since 2005 assisting many properties owner in fulfilling their dream home.

His strong belief is, there is no buyer, selling, landlord, or tenant. They are all partners, and this is his top priority. To ensure partners’ concerns are addressed.

As the topic may not cover every single detail. Should you have any queries. Do feel free to contact me at +65 90107188 or WhatsApp me.

It is my pleasure to walk through your concern and address it accordingly.

Buying Selling Property

为什么投资新加坡房地产是你的优先考虑

为什么投资新加坡房地产是你的优先考虑

在房地产行业的这些年里,我接触过很多人。 他们或多或少都有想过, 进行房地产投资。可是, 当他们跟别人谈起这事, 许多人都会说,如果你有过百万的资金, 还是你是含着金汤匙出生,有着一定富裕资金。 那么房地产投资对你就不是问题。 要不, 你就别想了。

他们将投资房地产想象为, 有钱人的游戏。 这个想法是错误的。
如何投资才会致富? 多少对我们来说,才算是富裕呢? 有钱的定义是多少? 这些数目字, 都是因人而异。

什么是投资?

新加坡房地产是你的优先考虑

投资, 就是让你现有的资金,为你赚取更多的回报,从而实现财务目标。
投资跟银行存款来相比,投资有望带来更高的回报,但同时也带来了一定的风险。 就如人们都说, 风险搞, 回报利也高。

为什么要投资?

投资 - 投资就是你牺牲现有的现金流, 去换取更高的现金流。 投资的方法很多, 储蓄是其中一种最普遍的方式。可是,您是否认为只要有固定的月薪和储蓄就可以快速增长你的财富? 那个不是必然的。 实际上,它可能在你不注意的时候,让你亏了。 怎么说, 每年的通货膨胀率都在涨, 可是您的收入未必和膨胀率成为对比。它的涨幅可能比你的加薪高。

创业, 一种回报率蛮高的方式。 可是它需要的资源太大了。 人力, 物力, 经商以及管理常识, 产品, 服务还有种种的种种。 这个方式可能变为转业多过投资。

股票, 一个回报快, 利润高的方法。 可是, 这个平台,风险也随着提高。 由于股市的波动快。 你需要时间来观察并且盯着股市。

房地产, 一个数目很高的投资概念。 不过, 比起股市它比较稳当,以把现钱放在银行的回报率高。 最主要, 它很可能是风险最低的投资工具,因为房地产是真实产品, 它不会消失。 唯一会改变的是它的价值。

在你开始任何投资之前,您都需要确保自己具备必要的信息和知识。 比方说,
定期存款, 你需要知道它的利息多少。
投资股票, 你需要知道那一个股票, 回报率高, 不会被除名。
房地产, 哪一个地点好, 租金回报高
然后再开始决定进场。

buying selling your property

为什么要投资房地产?

在过去的两个世纪中,全球约有90%的百万富翁是通过房地产投资创造的。

对于普通投资者来说,房地产是发展大量财富的最佳途径。 就像其他形式的投资一样,最好尽早开始房地产投资,这样您就可以节省时间。

房地产投资也是和通货膨胀对冲的最佳手段之一。 投资房地产的开始, 就是先购买您的第一个住所。 我们称之为家的地方。之后, 才由这里延长出第二, 第三地产。

为什么要投资新加坡房地产?

  • 地理位置
  • 经济稳定
  • 未来计划
  • 一个土地有限的小国
  • 透明的财产交易系统
  • 不征收资本利得税和财产继承税

新加坡的地理位置

新加坡位于世界上一个最佳的要地。 它连接东西两方作为从18世纪开始的贸易港口。 它也有着世界一流的国际机场和完善的海港设施,使它成为世界顶级的物流枢纽之一。

新加坡经济稳定

自1965年8月9日独立以来,新加坡已从发展中的第三世界国家, 成为今天第一世界的发展国。 前后不到40年。 我们必须赞扬新加坡政府辛苦维护的稳定的政治环境。 努力理解人民的需求,并制定出良好的发展计划。

为了让新加坡继续享有发展国的名誉, 其政府已经制定了未来四项重大计划。

  • 世界一流的运输/物流枢纽。
  • 世界一流的医学研究中心
  • 区域金融中心
  • 教育中心

为了支持所有这些发展,新加坡政府不仅为他的公民做好各项准备。 让他们掌握各个领域的知识,还以学习为最基本平台, 让他们学习最新的技术和专门知识。 新加坡政府也邀请这方面的专业人员加入。

新加坡政府宣布希望在2030年之前实现690万人口,目前,我们的人口为570万

以一个一百万人口的增长, 他们需要住房来安置这些人。 因此,即使您今天购买的价值比较高,当到了2030年,人口增加时,价格也不会“便宜“了。

一个土地有限的小国

新加坡是一个小国,土地面积792平方公里。 为了确保房地产价格稳定并逐渐升值,政府根据住房发展的需要控制和释放土地。

开发商只能从政府土地销售(GLS)中获得2个土地购置来源或通过集体销售具有重新开发潜力的旧开发项目。

每个新开发项目的成本将始终高于先前的成本,这使价格逐渐升值。

透明的财产交易系统。

新加坡拥有完善的,透明的财产交易系统。

每个买卖双方都可以在我们的公开网站中看到最新的交易。

我记得有一位香港卖家,当他需要向新加坡税务局支付一笔钱时感到非常困惑。 因为他觉得数目不对。 开始他最终说。 “没关系,只需付款即可,因为如果新加坡税务局多收了任何收费,税务局都会如实退款”

这就是外国人对我们的系统的信心。

政府引入了总债务服务比率(TDSR),以确保您在财务上能够维持和偿还贷款。

另外, 新加坡也推行了, 额外购买者印花税(ABSD)。 主要是减少投机着对房价的直接影响。 从而确保新加坡人仍然负担得起住宅物业,并确保价格与经济基本面同步波动。

卖方印花税,SSD适用于持有期内的住宅物业销售。实施SSD的原因是为了避免炒作房地产交易。

如何能够投资在新加坡房地产

对于新加坡公民,您应该细心了解现有政策。对你, 你还是能够在公共住房还是私人住宅, 从中选一。

新加坡房价, 现在平均价位都过一百万新币。 可是, 你不需要花费大量资金即可购买价值100万新元的房地产。您只需在公积金普通账户中拥有现金五十万新元和二十三新元的现金,即可获得售价的前25%。

那100万新元的余额又如何呢?

在这里利用杠杆作用,这笔余额由银行或金融机构负责。 如果这是您的第一笔抵押贷款(取决于TDSR),则您有资格获得房地产价格的75%。

其他数额, 我们就以房子抵押贷款, 来支付下来的余额。 以达到拥有权。
这里的关键是您正在利用房屋抵押贷款提供的大量杠杆优势。 房屋抵押贷款是您一生中最便宜的贷款之一。 此时,某些银行的利率低至1.7%。

您需要知道房屋抵押贷款的方式。 有很多方法可以降低房屋抵押贷款的成本(您可以随时以自己的优势重组贷款)。

资本收益税和财产继承税

资本收益税是根据资产的销售价格与其原始购买价格之间的正差评估的一种征费。

美国的资本增值税最高为20%。联邦遗产税是对2019年资产超过1140万美元(已婚夫妇为2280万美元)的资产征收的40%税,无论您居住在哪个州

在加拿大,任何资本收益的价值的50%应课税。
对受益人不征收遗产税;房地产支付欠政府的任何税款。

马来西亚,您的资本利得税最高可达30%。
如果死者的遗产价值超过200万令吉,将被征收5%的税,如果其价值超过400万令吉,则将被征收10%的税。

对新加坡而言,这里
没有资本收益税,你将得到你房子出售所得的利润。
没有遗产税,因此可以免税将您的遗产转嫁给您的继承人。

房地产价格不时发生变化,只有当您购买该单位时,您才能锁定价格。千万不能等到, 你的口袋有足够现金再进场。 因为到了那个时候, 你一定觉得价位太高, 而过后后悔。

这是我之前一位顾客的经历。

我的一位客户在向我商讨了, 如何帮助他增加房地产投资的财富后,决定购买High Park Residences。 一项新开发的私人公寓以进行投资。

他在发布当天以627,000新元的价格购买了一套两房​的公寓。 并在领取到临时居留许可证(T.O.P)后, 以76万新元的价格出售了。 在不到5年的时间里赚了13.3万新元。

他从口袋里掏出多少钱?

他从口袋里只拿出了
售价的25% = 十五万六千七百 ( $156,700 )
印花税(3%– 5400)= 一万三千四百十 ( $13,410 )
总数是十七万一百十元 (( $170,110 )

他从这项房地产投资中获得78.23%的收益

他并没有就此停下来。 他刚刚将这笔款项重新投资到另一个新开发项目顺福轩。 位于汤申一代。 一个开发中的地段。 他在那里选择了一个三房的单元中。让我们再看看他在领到钥匙后, 卖出的利润是多少。

Buy Sell Renting of your property

我希望以上文章可以帮助您了解如何通过房地产投资来积累财富以及为什么要投资新加坡房地产。

如果你对新加坡投资有着远见以及兴趣。 欢迎你随时联络我。 我相信以我的专业常识以及十五年累计的经验。 能够帮助为你提出有建设性的计划。并且, 你能够通过房地产投资获得财富。

WhatsApp微信
Buy Sell Rent. Connect to me NOWWeChat Buy Sell your property