30 January 2023
The new cooling measures may have an impact on the overall property market, but there are still opportunities to be found for those who are willing to adapt to the changing conditions. With the recent implementation of new cooling measures in the Singapore property market, you may be wondering whether it’s the right time to sell your property and upgrade, or to downsize and buy a more affordable
home. Whether you’re an upgrader or a downgrader, there are things you can do to make the most of the current market conditions.
The prices of homes have risen steadily since 2012, but recently, due to the recent measures, the government is trying to keep inflation under control.
In the face of rising interest rates, home buyers are facing a number of challenges. If you are upgrading or downgrading your home, you have 15 months to complete the transaction before the cooling period begins. If you are a first-time buyer, however, your options may be limited by the lower amount of loan available to you.
With rising interest rates, the cost of borrowing money to purchase a home is also increasing. This can pose challenges for home buyers,
particularly for first-time buyers who may not have as much available funds to purchase a home. There are a few different scenarios to
consider in this new housing market, including upgrading or downsizing your home, and being a first-time buyer.
We’ll break down each of these scenarios so that you can make an informed decision about how to proceed in this new housing market.
As someone looking to upgrade to a private home, you may need to adjust your financial calculations in light of the higher stress test interest rate. This could involve searching for properties that offer good value for money and have an affordable price point. You may also need to contribute more cash or withdraw more from your CPF account to cover the purchase. Have an entry strategy that includes a systematic crisis plan, ensuring that you have sufficient reserves to sustain your property for at least five years.
If you were planning to downgrade from a private property to an HDB flat, you may need to put your plans on hold or consider renting in the interim. The tighter loan-to-value limit may have brought down the loan quantum, making it more difficult to afford your desired property. However, if you’re facing financial hardship and urgently need to downgrade, you can appeal to the HDB for assistance.
As a first-time buyer, the recent cooling measures in the Singapore property market may also affect your plans to purchase your first home. However, there are still opportunities to enter the market and become a homeowner. With the tighter Loan-to-Value (LTV) limits, it may be wise to look for more affordable options to start small and build up your capital for your next upgrade. One strategy is to start small and focus on building your capital for future upgrades. It’s also essential to conduct thorough research on the market and consult. Ultimately, with careful planning and a clear understanding of your financial goals, you can navigate the current market conditions and find your dream home.
Watch below to understand how interest rates work for Real Estate in Singapore.
