Properties are not sure win deals

As this is my first blog with PropertyGuru, I have decided to share an interesting fact about the Singapore Property Market.  

Many people believe that properties are “sure win” investments.  As long as they have a sufficiently long investment horizon, many people assume that they will almost certainly make money from properties.  Even I used to think so too, until today.  

I was doing some analysis and looking at how properties bought in 1996 had performed. If you can recall, 1996 was one of the hottest boom years for the Singapore property market.  During that year, there were more than 15,000 non-landed private property transactions done.  Out of the total number of properties bought in 1996, about 59% of the owners are currently holding on to their purchases.  This means that 41% have already sold their properties (about 6,200 transactions).  The startling thing is that out of the total number of properties sold; almost 80% were transacted for a loss, with the largest loss amounting to a net drop in value of more than $1,466psf.  
 
Clearly, those who bought their properties in 1996 entered the market at a less than ideal time.  I have always advocated that market timing, property location as well as property price are important considerations when we look for properties.  This interesting fact once again highlights the importance of research and for us, as purchasers, to know what we are doing before jumping onto the property bandwagon.