How to Purchase A Property During A Circuit Breaker/Quarantine?

Stay At Home Unless It is Absolutely Necessary To Go Out! Photo by Glen Carrie on Unsplash

I believe a lot of people are surprised that property sales are still being conducted during this “circuit breaker” period in Singapore. From 7th April 2020 to 4th May 2020, all show flats and sales gallery are closed. Real estate salespersons are not allowed to carry out any viewings as these are deemed non-essential services. So, the question is this. Why are some people still buying during this period? After all, real estate one of the most expensive purchases in our lifetime. Isn’t it vital to visit the sales gallery and understand more before signing on the dotted line?

The Reason Why Sales Are Still Moving

While the pandemic is spreading throughout the world, businesses are disrupted, and livelihoods are at stake. There is a climate of fear and a lot of uncertainty on people’s minds. I believe many people are asking themselves questions like these. “Is the company I am working in downsizing?” “Will my source of income be affected?” “When will everything be back to normal again?” The last time on their mind would be real estate. So why on earth are these people still purchasing real estate now? Isn’t this a time to take caution? Wouldn’t the prices collapse anytime soon?

Certain Economic Activities Are Ground To A Halt. Photo by Edwin Hooper on Unsplash

Fundamentals of the Real Estate Market

To understand why these people decided on purchasing during this period, let’s try to understand the fundamentals of the real estate market today.

1. The reason why housing prices collapse is because of the creation of an asset bubble. When the bubble bursts, that’s when prices fall. I have written about this extensively in my earlier article to understand if oversupply of new condos causes prices to fall. Long story short, according to UBS research, there is currently no asset bubble in Singapore. All thanks to Singapore’s government series of cooling measures.

2. Cost of ownership today is now extremely low due to the depressed interest rates. Once the climate of fear is over, and people start realising that real estate offers a much better return due to leverage. That’s when you will see volume begin to pick up. Also, did I mention that rental prices have been creeping upwards in some areas as well?

3. There are certain products out there that have more inelastic demands than others. For example, it was possible to buy a new launch shoebox apartment at $5xxk or a 3-bedroom condo* at $1mil or less ten years ago. Prices like these are no longer possible today. So once these unit types are sold out in the market, it is gone. Again, I have written about it extensively here in part 2 of my series if oversupply causes prices to fall.

Look At The Fundamentals Instead Of Being Clouded By Fear. Photo by Lauren Richmond on Unsplash

So How to Purchase A Property During A Circuit Breaker?

With the fundamentals right, it is not difficult to understand why these people decided to commit during the circuit breaker period. So how do you purchase a property during this time? Well, here’s a checklist of what you can do.

Understanding Your Finances and Loan Quantum

These days there are plenty of online loan calculators to give you a perspective of how much you can loan. Also, you can contact a mortgage broker over the phone and send them the necessary documents via email. CPF statements can also be extracted online via the touch of a few fingertips. This process of getting loan approval has been ongoing for years. Whether there is a circuit breaker or quarantine, it doesn’t affect the way you go about getting a loan. Or understanding your finances.

Understand the Surroundings Using Google Maps

The use of Google Maps is an excellent way to find out the nearby amenities of the property. You can take a walk virtually along the road to view the surroundings. There are also map features to understand the estimated travelling time to and from your workplace. Also, a shortcut feature allows you to discover nearby groceries, banks, post offices and even food takeout places! All of which are essential services during this time!

Interesting Fact: Some Places In Singapore Have A Slightly Lower Temperature Than Other Parts! Source: Google Maps Singapore

Understand the Project Using Videos and Virtual Tours

Housing developers can spend a significant portion of their funds on building showflats. Take JadeScape for example; the 22,000sqft building costs $6 million to build. Inside this temporary structure, it is common to find a 3D model of the development and certain unit types they want to showcase. Besides, developers also employ the use of media to come up with a 3D representation of the project. These can be computer-animated flythroughs, drone perspectives of the views at various levels and even virtual reality. The objective of doing all these is simple, to give you a visual representation of what you are purchasing.

However, you must understand that what you view at the show flat are mere samples of the physical product. So, once you know this basic concept, there is no difference in purchasing a unit “online” than going to the physical sales gallery. During this time, we have also uploaded more than 70 virtual tours in our microsites. That way, you can hop from one showflat to the next without ever leaving your room!

Example Of A Video Flythrough At Wallich Residence


Do Market Research on Surrounding Prices And Rents

With the plethora of information online, it is possible to decipher yields, rentability and comparative market analysis (CMA) on your own. The CMA is the portion I usually go through my clients because I have been studying real estate for years. I am constantly trying to understand what are the factors that make the winners apart from the rest. That’s when I will also showcase historical examples and correlations to give you a better perspective on what makes a good buy.

Booking and Paperwork

For properties under construction, all developers must follow URA’s progressive payment scheme. That also means that the funds for the booking fees can only be transferred directly to the developer’s project account. To verify the project account number, you can go to URA’s site to check the validity of their license. Alternatively, it is also possible to use courier services to send the cheque for processing. Documents can either be signed electronically or via courier. Very similar to what overseas purchasers have done even before the circuit breaker.

Exercising And Stamp Duty Payments

Exercising the option to purchase is still considered an essential service. So legal firms are still open.

To Buy or Not to Buy?

Whether you are comfortable purchasing a property with virtual representations are entirely up to you. Some have done it while others will never consider buying a property this way. Whatever it is, I believe it is far more critical to purchase the right property that will fulfil your medium to long term objectives. The real estate market in Singapore is a complex creature to decipher, and capital appreciation is not always a guarantee. To understand how we help our clients, do fill in the form for a video call meet up today! Meanwhile, stay safe, healthy and most importantly. At home!

*Exception of ECs

Article contributed by Jerry Wong.

Jerry Wong is a realtor with Propnex Realty. He loves coffee, cookies and condos. Most importantly, he loves connecting people to properties and gets enormous satisfaction when they acquire their dream home. Or making well-informed decisions that see their assets grow. Book a video call appointment and Jerry will share with you the following.

  1. How certain factors affect real estate prices. Why some condos can make a million dollars while others can lose that same million.
  2. Why timing is not the most important thing. Because some people can buy the same condo at the same time, but one end up making $100k to $200k while the other suffers losses of the same amount!
  3. Understanding your requirements and craft a solution for your real estate needs. Be it in the form of asset progression, tax planning, etc.

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