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Property Prices Went Up?- To Sell or Not

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house The recent hike in property prices means that quite a few people will be thinking of selling and locking in the gains. Today, a long time friend and his wife had dinner with us. Their property has went up quite a bit and they are thinking of selling their apartment and getting another.

For my wife and me, we had wanted to downgrade to a smaller flat to lock in these gains. So selling a larger flat whose prices has risen for a smaller flat so that the property will be fully paid for. And there will be more savings for investment purposes.

My friend’s thinking was to get an even bigger apartment but he hesitated over the higher price and concerns of affordability.

If we sell the flat now and get a even bigger flat, the gains that you have disappears and is transferred to the seller of the flat. The only way is unless you leave the country and go to one where the house prices have fallen markedly and buy at depressed prices.

An alternative is to downgrade and get a smaller flat. The smaller flat will have seen an increase, but not as much.

This can be seen through the fact that during the previous financial crisis of 1998-1999, the prices of the smaller flat actually rose because people were downgrading and getting a smaller house, while that of the private homes and larger flat went down. Sort of like elasticity at work here.

To be honest with you, I’m the furthest thing to a property expert that you can find. I have only bought one property in my life, so please take my ramblings with a pinch of salt.

With a successful sale and purchase of another flat within budget, we reach the goal of attaining financial freedom earlier.

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2 comments:
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Musicwhiz said...
February 24, 2010 at 5:45 AM  

A lot of people I know of are investing in property. I tend to be far more cautious as the leverage can either make you rich, or leave you very poor. So it's risky in that sense because of the borrowing.

But it seems in Singapore property prices can only go up and up? Haha.

Cheers,
Musicwhiz

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Alvin said...
February 25, 2010 at 10:35 AM  

Hi,

Apologies for posting here, but I couldn't find your email. We're starting a link list of Singapore bloggers who blog about stocks and investments, and found your site.

Would you like to be listed? The page that your link will be on ishttp://www.singaporestocks.com.sg/introduce-yourself/24449-singapore-stocks-bloggers.htm

To list your site, we'd require a link back from your blog in this format: Singapore Stocks.

Just let me know about your link details, and I'll put it up for you there. You can contact us through our website. Thanks!

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