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Buying landed property in 2023: How I help clients navigate the hard truths

Got your sights set on owning a piece of Singapore's coveted landed property? Well, hold onto your hats, because heart-stopping price tags and regulatory minefields are just the tip of the iceberg.

With 16 years of dedicated experience analysing and transacting in the local property market, including personally navigating the intricacies of the landed homes segment, I've witnessed its evolution firsthand. Landed properties are not just a professional interest for me; they are a passion. And in this opinion piece, I will share my insights and hard-earned wisdom to help you make informed decisions.

Whether you're eager to dive in headfirst or hesitating on the sidelines, this article will prepare you for the dilemmas and realities you will encounter on this journey. We've got you covered, no matter which side of the fence you're on.

Exclusivity may not translate to value

So, my agency recently dropped a fancy breakdown of all the landed homes in Singapore, sorted by types and districts. But what the heck can a buyer even make of this overwhelming information? Let's face it, it's a dilemma wrapped in a conundrum. You snag a place with limited supply, and bam! You think you're sitting on a gold mine, ready to sell your fancy home at a ridiculous premium. But hold your horses, my friend. Turns out, because there are fewer transactions in that area, the prices might not shoot up as fast as you imagine, leaving your dreams of capital gains hanging like a sad balloon.

Here's the kicker: imagine 200 homes traded in District 19 and a whopping 400 in District 12 in the last year. Now, if you're bold enough to pick District 19, are you being strategic or just plain foolish, duking it out with all those other sellers? Obviously, the number of transactions correlates with the amount of supply in a district, and the answer isn’t so straightforward. This isn’t a factor you can ponder in a vacuum, though. It’s a tangled mess of considerations, which brings us to the following points.

Indecision about appearances ends up costing more

Unlike condominiums, which forces you into their standard 4- to 5-bedroom layouts, you’re working with a blank canvas when it comes to landed homes. That said, you’ll want to go for a flatter lay of the land with four corners ideally. Why? It’ll save you from the horror of additional costs and design limitations down the line. Once you've got that squared away, it's time to tackle the flaws head-on. Sure, I've had clients who are obsessed with appearances, thanks to those fancy home renovation videos on social media. But the longer you dwell on those imperfections, the more it's gonna cost you.

Think of it this way: the money you save by diving into the market sooner can be funnelled into transforming your dream home. Picture this: a S$4 million landed home versus a S$2 million condominium unit. A mere 1% increase in price means an extra S$40,000 for the landed home and a measly S$20,000 for the condo. Sure, you can splurge S$20,000 on sprucing up a tiny space, but trust me, you can't work miracles with a larger one. And here's the kicker: while you're pondering and procrastinating, that landed home might skyrocket by a whopping S$200,000, which is more than sufficient to makeover a landed home. Focus on the base models, not just the fancy facade. Just like you wouldn't expect your condo to look exactly like the showflat when it's done, you’re not buying the finished product, you’re buying a blank canvas. To fully come to terms with this, we have to accept that things are getting pricier by the minute, which brings us to the next point.

Homes with “poor” characteristics won’t settle for less

Just because a house has some "undesirable" qualities like facing the west or being tucked away in a slightly inconvenient location, it doesn't mean it'll come with a bargain price tag. Sorry to burst your bubble, but this is Singapore, and poor characteristics will not stop a house from growing proportionately with the market. So, if it’s a west-facing house, it’s just going to be a more expensive west-facing house than it was two years ago. Time to embrace the reality that the bottom of the barrel can rise too, especially in today's crazy market. But hey, I get it. Overcoming this mindset takes time. I've seen buyers agonise and hesitate for years, missing out on all the juicy action. Trust me, those precious years of indecision could have made them one of the proud 73,356 landed homeowners in sunny Singapore. Time is money, people, and the longer you wait, the more you'll be kicking yourself when those prices skyrocket.

The market will not slow down due to recession

Now, some buyers may be betting against the market, waiting for a recession to hit or interest rates to skyrocket before swooping in for the kill. After all, it makes sense on paper, right? Well, things don't always work out the way we hope. To make this self-fulfilling prophecy a reality, we'd need a horde of contrarian buyers who share this mindset. However, they're a rare breed in the local property market. There are plenty of eager buyers who believe in the magical power of real estate to churn out profits in the long run. They're out there, still snatching up properties, and guess what? Price points are being formed as we speak. For every contrarian soul out there holding off on their property purchases, there's a savvy buyer who sees this as an opportunity.

Here's the thing: one lone buyer or seller can't single-handedly shift the market. It takes a coordinated lack of activity, a synchronised dance of inaction, for the tides to turn. So, while they’re sitting there, twiddling their thumbs and waiting for the masses to think and act as they do, the market keeps chugging along. Maybe, just maybe, if we all held your horses and played a game of chicken, sellers might crack and prices might plummet. But let's be real, that's a long shot.

The market marches on, and if you want a piece of the action, you better jump in while the water's warm. Wait for the perfect storm that may never come and you may be left standing on the shore, watching others ride the waves of their success. If you're ready to make a move, take a position, and embrace the market’s chaos as what we like to call “endemic”, hit me (Harvey Chia) up for a non-obligatory chat at 9199 9141 when you feel ready.


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