Is Your Family Home a ticking time bomb?

Published by CY Lau | Real Estate

We all want the best for our kids – a safe home, a good education, and a head start in life. For many of us in Singapore, our home isn't just four walls and a roof; it's our biggest asset, our nest egg, and a key part of our children's future. That's why recent news about more and more homes being sold at a loss in Singapore should grab your attention.

It sounds like a complicated financial headline, but let's break down what this really means for you and your family.

Wait, People Are Losing Money Selling Their Homes? What's Going On?

Imagine you bought a house in 2021 or 2022 when everyone was snapping up properties, and prices seemed to be going nowhere but up. You might have thought, "Great! This will be a solid investment for my family."

Now, fast forward to today. The news tells us that in the last few months, a significant number of people who bought private homes are actually selling them for less than what they paid. This hasn't happened much since early 2021!

Why is this happening? Think of it like this:

• Prices went really high, really fast: Many bought at the peak, possibly out of fear of missing out on a good deal ("FOMO").

  
  

• Life happens: Maybe they got a new job overseas, or their family situation changed, forcing them to sell quickly.

  
  

• The economy is a bit wobbly: Interest rates (what you pay on your home loan) have gone up, and things are generally more expensive. This makes buyers more cautious and less willing to pay top dollar.

  
  

So, if you bought a home a couple of years ago, and now suddenly have to sell, you might find yourself selling it for less than you hoped, or even at a loss.

So, How Does This Affect Your Family?

This isn't just about abstract numbers; it has real-world impacts on your family's dreams and plans:

1. Your "Nest Egg" Might Feel Wobbly: If a big chunk of your family's savings is tied up in your home, and its value isn't growing (or even dipping), it might make you worry about your retirement or how much you can leave for your kids.

   
   

2. Saving for the Kids' Future Just Got Tougher: Thinking about university fees, that first car, or even helping your kids buy their own home someday? If your home's value isn't increasing as fast as you hoped, it impacts how much extra cash you feel you have for these big expenses.

   
   

3. Big Family Decisions Get Complicated: Were you thinking of upgrading to a bigger place for your growing family, or perhaps downsizing after the kids fly the nest? If you can't sell your current home for the price you expected, these plans might have to be put on hold or drastically re-thought. No one wants to "lose money" on their biggest asset!

   
   

4. Stress at Home: Even if you don't talk about it, financial worries can create tension. Knowing your biggest asset is on shaky ground can add to the everyday stress of balancing bills, saving, and raising a family.

   
   

Okay, So What Can Parents Do RIGHT NOW?

This isn't a time to panic, but it is a time to be smart and prepared. Here are simple steps you can take:

1. Know Your Own Home's Value (and Loan!): Don't rely on old estimates. Check with a property agent for a realistic idea of what your home might be worth today. More importantly, know exactly how much you still owe on your home loan. This tells you how much "equity" (your ownership slice) you actually have.

   
   

2. Review Your Home Loan: Have you checked your interest rates lately? With rates going up, there might be options to refinance (switch to a new loan) that could save your family money each month. Even a small saving adds up!

   
   

3. Build Your "Rainy Day" Fund: This is crucial. Aim to have at least 3-6 months of your family's living expenses saved up in an easily accessible account. This acts as a buffer if someone loses a job or if unexpected bills pop up, preventing you from having to make rushed, bad decisions about your home.

   
   

4. Think Long-Term: Unless you have to sell, try not to react to short-term market ups and downs. Your family home is usually a long-term investment. Market cycles go up and down; staying put often weathers the storm.

   
   

5. Talk to Your Kids (Appropriately): For older children, this is a great life lesson. Explain that money and investments have risks, and why saving and being financially responsible is so important. It's about budgeting and making wise choices, not just endless spending.

   
   

The Bottom Line for Parents:

The news about homes selling at a loss is a gentle reminder: your home is a huge part of your family's financial security, but it's not a guaranteed money-making machine anymore.

Instead of letting it become a source of worry, use this information to be proactive. Check your finances, build your savings, and act wisely. By doing so, you'll ensure that your family's home remains a foundation of comfort and security, no matter what the property market throws your way.

Disclaimer: This article is for educational purposes. All investment decisions should be made in consultation with a qualified real estate advisor.