Cost | $1,000,000 | |||||||
Interest Rates | 1% | 2% | 3% | 4% | 5% | 6% | 7% | 8% |
Increase % to breakeven | 15.46% | 16.06% | 16.66% | 17.26% | 17.86% | 18.46% | 19.06% | 19.66% |
Actual $ Increase to breakeven | $154,600 | $160,600 | $166,600 | $172,600 | $178,600 | $184,600 | $190,600 | $196,600 |
Breakeven Selling Price | $1,154,600 | $1,160,600 | $1,166,600 | $1,172,600 | $1,178,600 | $1,184,600 | $1,190,600 | $1,196,600 |
Based on my calculations, if you want to buy a property now and you are thinking of flipping within 1 year, you will need a price appreciation of 15.46% if interest remains low at 1% and 19.66% if interest were to surge to 8%.
Even if the measures doesn't work, i.e. prices increases again after stagnating for a few months, will it rise by 15.46%? I think not. The measures by Singapore is more stringent than Hong Kong's. It simply does not make sense right now for me to buy, not when the government has promised to add measures if the current measures fail.
Anyway, I invest in stock market and whenever the volume slides, the price will slide too. The same applies to property. My parents' HDB was selling for $600k during the 97 peak. It dropped to around $360k at around 2002 after stagnating for a few years. Currently, a similar unit just sold for $680k. Hence, it is not uncommon to see a 40% drop in price.
I must be patient.
