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5 tips for homeowners for the 2021 housing market

tips homeowners housing market

tips homeowners housing market

5 tips for homeowners for the 2021 housing market

This article is contributed by ValueChampion Singapore, a personal finance research firm.

If you are interested in buying or selling a home there are trends and factors that you should be aware of. Read on to find out some key factors affecting the property market in 2021.

Over the past year, the average price for the public housing market increased 4.8%, a breathtaking increase from the 0.1% rise experienced in 2019 and a stagnation ever since 2013.

Even with the pandemic restricting activity across a number of industries, the housing prices in Q4 2020 experienced the highest quarterly rise of this decade.

The housing market is not going anywhere and we have some helpful tips and insight for anyone looking to buy or sell a property.

Know Your Market

In 2020, the housing market started with a slight dip in Q1 but rose by 2.2% during the following quarter.

Earlier in the year, the country experienced a decline in prices in the central urban locations; however, there was an uptick in the non-core areas where the prices increased by 5.1% between February and July.

During Q4 of 2020, residential property prices rose 2.1%. Again, although property prices rose in Q4 2020, central prices have decreased by 11.8% from Q3 to Q4 2020.

HDB prices

It is imperative that you research the housing markets of the specific neighbourhoods where you are looking to buy or sell.

We urge buyers and sellers to be on the lookout for price trends for their specific neighbourhoods. A start would be to look at current prices and compare them to prices over the past year.

Other factors that will be discussed in the following sections like interest rates and government initiatives also play a role in “knowing your market.” 

Keep Up with BTO Sales and Launch Announcements

Other than just looking to resale properties, it can also help to keep track of new Built-to-Order sales and project launches by the Housing & Development Board (HDB).

There have already been a few sales and project launches in 2021 and there is more to come. The HDB has announced that in May 2021, HDB will offer about 3,800 BTO flats in Bukit Merah, Geylang, Tengah and Woodlands.

On top of that, in August 2021, HDB will offer about 4,900 BTO flats in Hougang, Jurong East, Kallang Whampoa, Queenstown and Tampines.

For those of you interested in newer homes, BTO flats may be the more attractive option. The best resource for announcements on these is HDB and you should keep an eye on the best home loan rates for BTO flats to ensure you get a mortgage that fits your needs and financial requirements.

Keep an eye on the United States Federal Reserve

A major factor for fluctuating real estate prices is interest rates. Although many individuals may need to purchase a home within a certain timeframe, it is good to note that interest rates and home prices are inversely correlated.

Basically, as interest rates increase, real estate prices tend to decrease as demand from homebuyers decreases. You can save money by keeping this in mind.

Interest rates impact both current homeowners as well as prospective homeowners, as many home loan and home loan refinancing rates follow market interest rates.

Past data shows us that the SIBOR and SOR tend to closely follow interest rates in the United States. Due to this, we recommend keeping an eye out for trends and announcements regarding interest rates in the United States for current and future homeowners.

SOR chart trend

Stay Up to Date on Government Policy Changes

We have had the pleasure of speaking to Saxo’s Singapore-based Global Macro Strategist, Kay Van-Petersen to gain more insight on the market and insight for homebuyers and homeowners.

When tracking the housing market, Kay Van-Peterson reiterated the significance of monitoring policy and government initiatives. “Government policy remains the biggest factor for housing prices, which they are no doubt monitoring closely.”

We recommend that homeowners keep tabs on what policies and initiatives may be taking place to avoid any and all surprises.

For instance, zoning and land use regulations, fees on new land development, and restrictive building codes are a few ways government action can impact pricing.

Last, but not least, I’m sure most if not all property watches pay close attention to any announcements regarding property cooling measures

Renovation Loans Over Personal Loans

In Singapore, individuals are allowed to use a renovation loan to finance their home improvements.

This loan option is great for anyone looking to improve a home before either moving in or selling it for a better price.

Many people tend to go for a personal loan; however, the annual interest rates on personal loans can be up to 2% higher than renovation loans.

As a result, we would recommend this route.

Furthermore, you may receive a bank promotion where your loan will be interest-free for a couple of months. If you need more funding, then you can have a personal loan to supplement your renovation loan.

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