For all intents and purposes, it was a crisis. Short but a crisis nonetheless. Between 2009 and 2013, Singapore’s housing prices surged more than 60% due to rock-bottom global interest rates and quantitative easing in developed economies. This resulted to a decline in buyer confidence and from there emerged a new problem: a difficulty to sell private property in Singapore.
As a natural response, the government enacted a series of cooling measures in 2011 including lowering of seller's stamp duty and shortening the minimum holding period. As a result, it improved buyer confidence and enlivened the market. These cooling measures were very successful that they are still in effect in Singapore today.
Real Estate Policies and Alternatives
With this regulatory policies still enforced, there has been a steadily growing activity in property sale in Singapore and the public seem to be in still in a frenzy. A clear manifestation of this frenzy is how various locals have shown willingness to pay additional costs of luxurious high-end condominiums and extravagant waterfront villas. Consumer analysts have explained this frenzy as a sign that Singapore homeowners now want to ditch their old real-estate and residential property and move on to better ones.
Another visible manifestation of this frenzy to sell property may be gleaned from a growing activity of public real-estate auctions. This is all the more significant since the auction is not a particularly preferred form of property selling. Yet the vibrant scene is convincing evidence that Singapore residents are looking for alternative means to sell their property fast.
The Dangers of and Cautions for Auctions
Auctions are generally quick transactions and are therefore advantageous to reduce long-term carrying costs, including taxes and maintenance processing. Since auction makes a property visible to the public, or at least, to a large number of pre-qualified prospects, it creates immediate interests and fosters a healthy competition among buyers. It also exponentially increases likelihood of quick purchases and is therefore a very clever strategy for those looking to sell their properties very quickly in order to buy and upgrade to a newer one just as fast.
As a quick-fix solution to property selling in Singapore, there are also substantial dangers and many precautions that must be taken to make the most of this alternative selling mode. For those choosing to auction their property, it is important to set realistic prices. Often enough, it is tempting to raise prices in auctions due to the perceived notion of qualified bidders and that the biding process almost assures that the price of the item would go up anyway. Most people also would like to take opportunity of the current selling and buying frenzy in private property in Singapore. But putting a high price tag in a property may be a bad idea since there is a high probability that there are many properties out there that are also for sale and prospective buyers will most likely find a better choice. Property owners must set realistic asking prices that reflect the current soft market. In order to do this, owners can consult banks to get a valuation on their property or check the latest transacted prices of similar properties in the area through property portals.
And more than anything else, hiring a real-estate agent is necessary before getting into an auction. Agents generally want to conclude a deal as quickly and this advantageous. They are also most likely knowledgeable of market prevailing prices, competitions, real-estate issues, client’s purchasing history, tax requirements and other such procedural nuisances.
