When it comes to purchasing a property, many of us are inevitably emotional buyers and we buy based on gut feeling and how we feel when we view the property. However, Property gurus have considerably different considerations when purchasing a property.
1. Exit strategy
Having a clear notion of the demography of your potential buyers and tenants is very important when it comes to selecting the right unit. Many times, Property gurus have a fixed plan on who their target buyers or tenants are before jumping into the purchase. As the saying goes ‘If you fail to plan, you plan to fail’. This is imperative as you need to know and understand your future buyer pool or tenant pool to secure a solid exit strategy.
One example of a clear exit strategy for condos in Clementi will be the schools in the area and the target group of buyers will be more geared towards families. From the popular primary schools to secondary, and subsequently tertiary education. Parents will flock to stay near popular schools to increase their chances for their children’s admittance into a good school. Ultimately, also closing the distance for the convenience of their children and themselves.
2. Entry Price (More convincing articles)
Property gurus are very particular about entering at the RIGHT entry price. The right entry price does not necessarily mean the cheaper the better because you need to dive into the different region and locale to do a proper comparative analysis with the surrounding projects around the vicinity.
Source: Propnex Average Price Range for New Condos Across Different Districts
Singapore properties are split into 3 defined regions namely: Core Central Region, Rest of Central Region and Outside Central Region. The average price range differs across the regions, and this sets a benchmark for finding the right entry price as well. From the graph, the average price range for RCR new condos is between $2500 – $2700 psf (per square foot) this year 2023. This effectively means that if you can find a new launch priced at $2400 psf, ceteris paribus, it is in fact a very safe entry price to enter in. These will set a very safe price margin gap for purchasers to sell off their property in the future. For a more comprehensive guide on spotting the right entry price, you can click here
3. Transformation
With new amenities and rejuvenations in the area, it is bound to create a better appeal for buyers. Once news of certain transformations is announced, the prices of the property in the area will rise and Property gurus are sensitive to such news of transformations happening and how it will rejuvenate the area. For example, the release of news on the urban regeneration of Paya Lebar Quarters in Q4 2016 has sparked the interest of many to purchase projects nearby. Situated just right beside the current Paya Lebar Quarters, Simsville rose 27% and recorded the largest transaction volume throughout its years during the news announcement. Its journey to the moon is hindered in 2019 by Covid-19.
4. Condo Size
Property gurus tend to lookout for a relatively larger development. Why is that so?
Smaller developments generally have fewer facilities and maintenance fees are usually higher as they are split among lesser units, but most importantly, they are concerned about the transaction volume in the development. A healthy transaction volume will mean a steady increase in the valuation and price of the property as subsequent owners will try to sell slightly above the previous high. Over time, this will help support and justify the increase in price of the project. Compared to a small project with less than 100 units, what if the last transacted was 2 years ago? This will affect the current selling prices and bank valuation of the unit. Bank valuation will determine your loan amount and indirectly takeout buyers who are planning to leverage to purchase the property. Even if priced properly in the current market, buyers only have the latest transaction 2 years ago as a basis and this puts a limit on the price one can sell. One example would be Ampas apartment with only 43 units.
Conclusion:
To Property gurus, these are the 4 key factors that have helped them time and time again to properly filter value projects and grow their wealth. Nonetheless, when it comes to purchasing a property, there are many other factors such as layout, orientation and many more that will affect the prices of the property as every project and unit is different. Feel free to speak to any of our consultants and they will do ensure you have a smooth property purchase journey and how to get the most bang out of your buck!
