Posts
We always see things like "early bird discounts" or "VVIP discounts" when there are new condominium projects here and although I am not saying that they are all just a lot of hot air, I think that it is only prudent that we take claims like these with a pinch of salt.
After all, I have not come across sales people who would tell clients, "Hey, don't buy. Even after the discount, it is still not value for money." Sales people must always say optimistic stuff to their clients and look the part too.
"Being a salesman and an actor were not that dissimilar: It is a good lesson in covering up your feelings. No one wants to buy from someone who looks depressed." -------- D. Scott
Someone who recently visited a showflat received a strong dose of such optimism and shared her thoughts with me in an email. I would like to share a little bit of it here:
"So how did the agent try to convince me it is a good deal? The usual talk on
1. FH property and offering to show stats on the ROI in the area.
2. Discount is very attractive. 8% special discount + 5% VVIP discount if buy this weekend.
If you refer to the transacted prices of nearby developments which I included here, it is obvious that there is no discount to speak of."
Comparing with recent transacted prices of surrounding properties is something I do too and that was how I snagged good (i.e. undervalued) deals before. Comparative analysis is quite simple to do and I do it a lot in my investments in the stock market.
Now, in another blog post, I asked, "why would we want to buy a property that has priced in future value?"
(See: Buying a property: Affordability and value for money.)
Although this is not the motive of the question, it could give an impression that property prices would definitely go up in future but what if they were to go down instead?
Entry prices are important and if we ended up paying prices too high, we would have no margin of safety to speak of.
We should remember that nobody cares more about our money than we do.
Related posts:
1. Buying an apartment: Considerations.
2. Where to buy shoebox apartments for investment?
3. Apartments with rental yields of 4.95% to 7.3%
Bloggy Award
9 comments:
Hi AK,
Newbie in properties here.
Can tell me how u find out recent transacted prices of surrounding properties?
Esp private properties.
Do they have a website or something?
Hi Ray,
Check the caveats at URA:
Private Residential Properties Caveats.
Have fun. ;)
Hi AK,
Here's a principle which I learnt some 20 years ago when I started in sales:
"People are persuaded more by the depth of your conviction than the height of your logic, more by your enthusiasm than any proof you can offer."
So just one question for the agent - "Will you beg, borrow, or steal and throw in your kitchen sink to get a few units here? :P
Conviction - how deep?
Agent said that their 1-bedder units, 4XXsqf, are NOT shoebox apartments, because they have a bedroom.
Logic- how sound?
Hi Endrene,
You just threw away your anonymity which I was trying to protect. ;p
I like the way you put it. Indeed, if they are so sure, they should put their money where their mouth is.
For example, I have a friend who is a moderately successful property agent who actually went around to get a few friends to pool money to buy a condo unit in the Kovan area. He was convinced it was a good buy but he didn't have enough resources.
Did I contribute? Nah, I wasn't convinced. LOL.
As for shoebox units, some say they should be 50 sq meter or smaller and some say that they should be 500 sq ft or smaller. 50 sq meter is about 538 sq ft. So, a friend who lives in a 517 sq ft apartment has a problem. Is his home a shoebox unit or not? ;p
Have a separate bedroom in a 400 sq ft apartment and it is no longer a shoebox apartment? That is a new definition. -.-"
The property market is a big black hole. it sucks in our life saving, cpf.... and the kitchen sinks too! LOL
It is not healthy to have a nation full of households with million-dollar loan.
Hi seefei,
Definitely not good to have excessively high levels of debt. TDSR boleh!
Of course TDSR is bad for the developers which is why they are pretty upset.
Hi AK,
Oh yes, please don't plaster my name on your blog. I don't want to leave so many digital footprints around. On hindsight, should've just kept to my moniker 'EY' without revealing my name. =.="
Thankiew you for protecting my anonymity. Please continue to do so. Kamsiah kamsiah.
About the shoebox apartment definition, the 500sqf is given by Minister KBW, I think. Generally, shoeboxes are referred to as units less than 50sqm. But the definition in itself is problematic. How should we classify 6XXsqf 2-bedder or 3-bedder? Maybe call them mooncake box? :P
Not that it is going to make any difference now but:
Hi EY,
600 sq ft 2 bedders and 700 sq ft 3 bedders? Size 12 shoebox apartment and Size 13 shoebox apartment? ;p
Hi AK,
You are right. Too late oredi. So long as my name doesn't appear on in your blog content, that's ok. Comment section, like you said, nobody read one! LOL~
Your suggestion is very good. Maybe size 12/13 kids-size shoeboxes tied together!
Post a Comment