The real estate market is always fluctuating — the supply, demand, housing prices rise, and fall in response to each other.
So what defines a good property market?
In the context of property, the buyer’s market occurs when supply is more than the demand. Thus, in this case, the number of properties available for sale is more than the people willing to buy. Sometimes, you may have a property advertised even for over a year, and no one wants to buy it. Thus the seller has to lower the price to attract more buyers. In a market that is performing against their favor, sellers are more inclined to negotiate, and therefore the buyers get a better price.
The sellers’ market
What characterizes the seller’s market are the higher property prices and shorter sell times. When demand exceeds supply, then the seller has the liberty to push their prices higher and still sell their property. If a house receives multiple buyers, bidding wars may transpire and gives room for you even to put a higher price tag.
When no buyers in a buyer’s market
You’ve got the upper hand in a buyer’s market, and that is the time to swoop in and seal the deal. There is also a scenario where nobody wants to buy and, in such, might give feelings of apprehension in the market. Here you have questions like; will things pick up? Will there be a profit from the property?
What affects activity in the property market?
Most property buyers do so through bank loans, and the lower the interests, the higher the rate of uptake.
There is a lot of activity in the market stirred up by lower interest rates.
When the interest rates are lower, one will be expected to pay some reasonable amount as a monthly repayment, making the types of houses in Singapore more affordable.
With such low interests creating a high demand for properties, the property prices are likely to go up, and if you’re a seller, you’re likely to reap bountifully.
Increasing the prices again tends to tighten the property market, and therefore it becomes more expensive for one to buy a property, and consequently, the demand goes down.
Properties may be on offer and therefore sold in bulk and at reasonably low prices. That may lead to masses of property buyers running to get a ‘piece of the cake.’ It means you have an army of affected homeowners entering the market as buyers.
If you sell your home through en bloc, you could fetch more than a 25% premium more than the market rate.
That means some of these previously not buyers now have the purchasing power and are ready to enter the market as buyers. They have more to pay for the property, and that pushes the property prices higher.
MOP -Ed BTO flats
What would happen if there is a sudden wave of homes put up for sale? That would mean selling gets competitive, and buyers have the upper hand. The minimum occupancy for BTO HDB flats is five years. After that period, the homeowners are allowed to resell their property. If there are several of these properties under BTO, it would mean a good number of HDB flats enter the resell market at once. If you zero down to your estate, you know how the resale can fluctuate the prices.
With the luxury market, the currency is critical. Think of the private properties in Sentosa Cove, central Singapore, and other areas like the Prime “atas” district. Those are areas where international investors are turning to.
If a foreign currency like the US dollar strengthens against the Singapore currency, which would mean that the properties are less expensive. Thus you can expect an influx of foreign investors buying property, basically for speculation.
Before you buy any property in Singapore, you must get to understand the market dynamics of the property market. You also need to be careful with the government policies that could easily affect the sale or buying price. Be on top of the game by getting the relevant information in time.