The global recession sent house sales falling, thus luring the buy-side sector to take advantage of big price cuts.  Sales of newly-constructed private homes hit a two-year historic low at 1,668 units last month, while housing prices were down by 25% since last year.

Though market observers are beginning to slip away from the bearish outlook, they warn that there are things worth considering before investing in the housing market.

First, set your investment plan. Do not rush to take advantage of price cuts; otherwise you’ll end up with property that will not give your expected return on investment. Estimate how much money you can afford to risk and only invest in property that is within your capital’s reach.

Second, determine the right time to purchase. The price index of the Urban Redevelopment Authority (URA) fall 14.1% in the first quarter this year and by 6.1% in the fourth quarter of the preceding year. However, the rate is expected to slow down in the second quarter this year.

“When the market is declining in price, like now, don’t buy, wait for the URA quarterly index to rebound,’” advised Leong Sze Hian, president of the Society of Financial Service Professionals.

Third, secure real estate financing from your bank. Ask your bank for in-principle approval or credit assessment, especially if you are planning to buy a pre-owned house. However, beware that some banks may impose more stringent credit requirements these days due to recession, and may even be unable to cover the entire asking price of individual home sellers.

Fourth, consider budget for renovation and repair costs. Don’t spend all your cash into real estate investment. Allocate some to cover renovation and repair costs.