Ok, so the property market in Singapore looks like it's really trending up...

Yessss! I feel the excitement in the air as people talk about property in flowering terms again...

Property developers are out in full force to promote this good feeling. They are singing, dancing and generally telling you that "now is the time to go out and buy, buy, buy!!!!"

In other words, they are talking up the market...

The mainstream news media is lapping it up and dishing it out. (Don't believe everything you read though :))

And the people are feeling it. A few of my friends came up to me recently to check if the market is really really moving up...

Well... yes, and no.

Yes, because the property market in general (that means both resi and commercial markets) are really improving from just a year ago... the numbers prove it.

And no, because you don't really have to rush out to buy... the market ain't going to fly like it used to (the government policies are in place to check "speculation"). So don't panic. It doesn't matter if you buy at a slightly higher price, or if you lose a few discount points... you're buying property for long term right?

Take a closer look:- Most of the buying frenzy is happening at the "luxury end". The wealthy and cash-rich are buying. They have gotten richer over the last few years. (Sidetrack: You need to open your minds to learn how to make new money through multiple streams of income these days! There is no more iron-rice-bowl!)

There are also wealthy foreigners from Malaysia, China, Australia and Middle East snapping up luxury properties in Singapore. I heard from a banker friend that many of these guys pay cash. Wow.

The middle market - mostly those who are working hard in jobs to make a living - well, for them their incomes have not risen quite as quickly over the same period of time.

In fact, the price of sub-urban condos is becoming quite a stretch for them. This is evidenced by the slow sales of these mainly 99-year leasehold sururban condos. Go visit any showflat on a weekend. Most people there are there with their kids and they are browsing. I think they are just there for a family outing, to enjoy the aircon and escape the haze!

Also consider the on-going HDB glut. You need to consider how the HDB market is doing if you are buying any type of property in Singapore. HDB government flats add a touch of uniqueness to the Singapore property market.

Afterall, over 80% are housed in HDB flats. So they form a base or if you prefer, a floor.

For most other real estate markets in other parts of the world, there may be a bottom-less pit.

Anyway, coming back to the HDB flat-dwellers, these heartlanders do not have much incentive to upgrade to a more expensive condo in their neighbourhood these days. Makes no cents.

Afterall, they are comfortable in their improved HDB flats with fantastic amenities.

Instead of condos with tiny spaces, they'll rather spend on... holidays, more gadgets (talking about gadgets & IT, go and check out InnovationNation exhibition at the Singapore Expo!), and child-care, and school assessment books...

Hey, somebody should do a study on how the expensive cost of raising kids in Singapore is impacting the housing budget for families... I think the cost of living has something to do with Singapore's low marriage and fertility rates too...

Anyway, for those of us who have been in this property business for some time, we have long endured "droughts" of lacklustre market action in the last few years. Since 1997 in fact!

Are we really getting out of the woods and entering a phase of "property market bull-run" now? What do you think?

Whatever it is, we're happy for good news. We're relieved. We're excited. And we're ready to take massive action again!!!!

Parting note for today: If you're thinking of buying property to make money, spend some time to read the following article - The Insider's Way to Predictable Real Estate Profits. I believe you will learn a tip or two...

The Insider's Way to Predictable Real Estate Profits
By Jay Gottleib

When you ask most people how much they are willing to pay for a property, they usually say something like, "Well, the asking price is $875,000 . . . maybe I can bargain that down to $845,000."

That's how they decide how much they are willing to pay for a property. And that kind of thinking makes no sense. To make sure you make a profit from every deal, you have to "back into" the price you will offer by working the numbers.

First, Determine Your Estimated Sales Price

This is the price you will be able to sell the property for after you have improved it.

Look at comparable sales in your area, determine whether the market is going up or down, and understand exactly how much your property will sell for.

Don't exaggerate this figure, based on optimism. Don't expect your property to sell for more than comparable homes, just because you think it will.

It is that kind of unrealistic optimism that causes most people to lose money on real estate investments.

Second, Total Up Your Projected Expenses

These generally include:

Closing costs - Total closing costs, both for the time when you are buying the property and the time when you are selling it too.

Costs of renovations - Cosmetics, mechanicals, masonry, painting - everything.

Taxes - And don't forget that the longer you hold the property, the more taxes you will pay.

The cost of borrowing to buy the property - Your loan costs money, both at the inception and every month.

Realtor commissions - Unless you can realistically expect to sell the property yourself, plan to pay realtor commissions when you sell it.

Hidden costs - Depending on the age and condition of your property, you can expect that something unexpected will go wrong or need to be added to your list of renovations to perform.

An older house can hit you with as much as 15% of its market value in unanticipated expenses.

Insurance - Buy fire, liability as well as builder's risk insurance.

Maintenance costs - You will have to hire companies to keep your property in good shape, and possibly protect your property from vandalism while it is vacant.

Third, Subtract Your Projected Expenses From Your Estimated Sales Price

For example, let's say that you realistically expect to sell a property for $575,000. However, your projected fix-up and other expenses total $125,000.

That means the maximum sum you should offer the seller is $700,000. Otherwise, the deal makes no sense.

Actually, you should offer the seller less than that.

After all, you are investing in real estate to make money.

If you are not making money, what is the point of investing in real estate? So know how much you would like to make on the deal and work that into your estimates too.

Numbers never lie. Make them work for you, and never pay more than you should for any property.

If you do, you have no one to blame but yourself.

But if the numbers tell you that you stand to make a good profit, negotiate hard for the price that will allow that to happen.

If the seller won't accept your offer, don't feel bad about walking away. There will be another deal.

When it comes along, work the numbers to make sure it will earn you a handsome profit.


About Jay Gottlieb
Jay D. Gottlieb is one of the real estate experts on the Trump University faculty. In 1997, Mr. Gottlieb was recognized by Crain's NY Business as one of the "40 under 40" top business people of the year. In 1999, he won the Ernst & Young "NYC Entrepreneur of the Year" award in real estate. Currently, Mr. Gottlieb is president and CEO of Tri-State Home Sales LTD, a multifaceted real estate company that builds homes, owns land and rental properties; and specializes in the purchase, renovation, and sale of family residential properties throughout the United States.