Are You In The Singapore Property Trap......?

The Singapore Property Trap

Some of you might wonder, how rich Singaporean are, every new condo launch, sold likes nobody business, and we thought salary has been stagnant over the years, so where their money comes from??

First, don't you feel down. They might make more than you, but not to a big gap. Secondly, NO, those buyer are not rich, it's just "kiasu" mentality.
It's easy to sign the dotted line at the showflat, but the next 30 years are the pain, and yet so many people falls into this trap, are you one of them? Don't be…..

Put it this way, 10 years back if your salary was $3k and an average condo cost $500k. Now, if the condo cost $1M, shouldn't be your salary $6k?
But no, with slightly increase of the salary to $4k, people start to feel rich, and they think they are superman.

Most people always look at current situation, they think they are making $4k now, so they simply calculate based on this amount for the next 30 years. But do they ever think, what if the 5th year you lose your jobs? Company close down? Demotion? Recession? Retrenchment? Interest Up?

 No. They think current situation will last forever. Company will hire you forever.  So they start to buy 1M condo, 100k car, 2k handbag, and 150k renovation. When they finally settle down, and the bills start to arrive, they will scream "Shit…"

Did you read recent news that Singapore Divorce rate is very high?? Well my friend, I can assure you it's nothing more than money woe problems. Couples start to blames each other that they work so hard to pay the bills and the other party doesn't appreciate it…… are you one of them?

Now, if at first place, these couples try to lives lower profiles, stay at HDB, take public transport, decent lifestyles, keep lots of cash……do you think they need to work so hard to pay the bills??  Just for the sake of staying at condo with swimming pool, you need to slog your life for the next 30 years????

Too many people made such mistakes, and if you are not one of them…..DON'T BE ONE !!!

It's better to have a good sleep at night in HDB, rather than worrying your 30 years commitments in Condo…..trust me !!!   

Should we blame Government for this? BIG NO, it's our own Singaporean kiasu mentality. But I can assure you, when money problem start to arrive, the Gov is the first party to get blamed.

PART 2 : THE CONDO ILLUSIONS, Your Dream Home Might Not Be – Singapore Property Story
Before you sign the dotted line, maybe I can tell you a little story about Singapore Property. After reading this article, you will not easily sway by Developer's gimmick…….enjoy…….
90% SOLD!!!
That's familiar sentence you sees in every project launch. These two numbers somehow carry a big meaning: THIS PROJECT IS HOT, HURRY BUY NOW, OR NO MORE !!! ….. REALLY?
Try to read or ask further……" 90% of what????"

90% of Phase 1……that's the answer
How to define Phase 1? How many units in phase one???
Why don't they just put "100 out of 700" units sold, instead, using the words 90% ???

Unspoken Rules?
Singapore has it's "Anti Competition Law", that discourage price fixing among major industry players. Several industries have been punished recently, like the pest-control company or the coffee supplier companies. However, we never heard any problems among Property Developers.

REALLY???
Like big oils, property developers also have their own "unspoken rules" among themselves.   
Do you ever sees SHELL or CALTEX or Mobil having gas price wars?? If one increases, the other follows, in minutes. It's their Gentlemen rules : "Let's earn together"….."I support you this time, you support me next time"…..
Your property price always relies on your nearby project. Surrounding area is the gauge, that's the first formula in calculating property price.
This is exactly how developers are helping each other, to jack up the price, helping each other, make sure PSF always increase, never drop. "Today you launch at $700psf, I will launch mine $750psf after, yours automatically will becomes $750. We are the developers, we have powers to set whatever price we want, there are buyer no matter what price we set……"

Power to Squeeze
When I first visited a "mickey mouse" flat around 465sqft, I ask the agent…. REALLY  This is home....??
They gave a good name for such unit, "SOHO" or "STUDIO" or "SHOE BOX" apartment… sound hip and modish…..i rather like "Mickey Mouse" or "MATCH BOX"……because it's true….like a rat living in a box…..
Do you feel that newer flat are getting smaller and getting higher in psf???
Because of low supply and high demand????

REALLY????
It's up to them to say !!!!

Yes, it's up to developers to say how much the psf are. Let me give you example, if you go to China, a retailers will open the price at example $30, then you bargain till $10, you are very satisfied because you can haggle up to 60%off….…but next time, the retailer start at $80, and you bargain till $20, you still satisfied,  because you can haggle up to 60%off…..for same product different final price, but you still satisfied because you can get 60% off…….meaning of this story??

It's about how you price your product at first time, it's not about the haggling part……the PSF is the gauge that move the market…..Developers will try to squeeze the land and to get highest PSF……because once you set a PSF higher than before, you are TRENDSETTER….soon the rest will follows…..and so on……

Record Sale !!!
You will read such headlines once in a while…..especially when market is rather quiet. When suddenly a unit of property sold at a very high PSF to someone …..Really???

I would not say this was faked sales, but rather strange. Such record sale always appears in timely manners. Majority of such "record sales" buyer are foreigner….. I m not against foreigner, but such "Record Sales" tactic need to be investigated. Was the buyer a real buyer????
Of course it will be hard to investigate such transaction….but such "record sales" will surely bring up the price of surrounding property significantly.
Tactic of Fears / Discount???

* If you don't buy now, I m afraid tomorrow good units are gone……
* This 15+3+5 discount only this week, next week developers are going to increase the price
* You better buy now, because next month another new project will launch at 1200psf…that's why we hold two towers……
* If I'm you, I will grab whoever offer 900psf, because the market will not fall beyond that level…..
* Gov will tear down those factories in front and this area will soon be the greenest ever…
* We got 150 booking already before we even open the showroom….
* One guy bough 5 units together……

Sound familiar???
Let me tell you about "discount" part……I visited one of new lunch in Sengkang during CNY, the agent told me that the 19% discount only during CNY, and only for those stay nearby……I almost cut my cheque, thinking of good deal I got…..but alas, I was too busy to follow up…..one months later, the agent called me, and ask me if I'm still interested, because if yes, bring cheque and offer the developer….might get even BIGGER discount…..
So what happened to those "CNY Only" and "Stay Nearby Only" discount???? All fake???
I think those bought a unit based on such "Discount" tactic can sue them……the discounts are basically a ploy to get your cheque out…everybody get the same discount if you bargain hard enough…

"Kiasu" Mentality
This is the worse cause of why developers are Kings. The very weakness of human being.
Being Singaporean, I m also considered kiasu.
When comes to property launch, the hype and crowded people in the showroom somehow push up my "kiasu" adrenaline, plus all the good things the agents said about the projects.
All the sandals and shoes outside the showroom just simply shows that this is hotter than Brad Pitt in town….REALLY???

I visited a newly launch project in Pasir Ris, it was bloody crowded, but when I look around carefully, majority are agents, very active agents…and their numbers are tremendously a lot….but it create a very "hot" sensations for the project….that lot of people are very interested at the project…
Remember one launch they ask STUDENTS to queue?? To make it looks like it's a very hot project???
Kiasu mentality is the worse kind of mentality we all have. We all afraid we don't get a good unit, we afraid price will increase, we afraid we don't get discount, we afraid we miss the ship…..
Let me tell you…..the sellers will psycho you till you think this is the ONE & ONLY. Let me tell you, after this project, there are 100 more projects coming up……there is no such things as ONE & ONLY…..
If you can just wait, you will open your eyes and you will know how fake the property market is…..that one day everything are just bubble building up….
Drop your kiasu mentality…..

Impulse Buy
How many people regretted after signed the dotted line?
Did you visit the showroom TWICE before cut the cheque?

I visit the showroom twice in two weeks, the second visit gave me lesser impression….than I realize it's all "IMPULSE" at the first visit…..the marketing psychology works very well through BEAUTIFUL BROCHURES, CROWDED PEOPLE, DISCOUNTS, IMPRESSIVE SHOWROOM & TERRIFIC MODELS…..

Fake Showroom
It's the BIGGEST and MOST IMPORTANT part to lure you to buy the units. Developers setup "state of the art" show flat unit with the best materials and best design……are they for real?  It's human weaknesses, when you see something so nice, it stored image in your brain, and you keep thinking that YOUR unit will looks like that ……

REALLY???
Government in fact already lies some new rules that obliged the developers to build the show flat exactly according to the real unit…..do they follow these rules????

NOT EXACTLY
The show flat I visited in recently, they have a show flat so beautiful, but when the agent explained to us, she told me that, this glass door is not there, that wall is not knocked up like that, that part is not there…..WOWWWWW! Everything is different……..they knocked up the wall in the showflat to make it looks big, they put glass door to replace concrete wall…..they tore down the bedroom wall overlook the huge patio outside….to make it super big and spacious….

I CALL THAT CHEATING !!!!
Will you later knock off your wall and replace with glass? Or knock off part of the wall to join two room??? NOOOOOO…… the day you collect you key, you will try to save money to buy furnitures after all money you paid for the unit…..those fancy demolition works will not in your schedule…..
Worse, all show flat built using GROUND FLOOR unit plan….means have a huge patio around….it give you a very spacious impressions…..and most show flat never draws proper line of where is the balcony/patio ends, all joins with the entire showflat floor.
If there is a rule that show flat MUST BUILT EXACTLY like the real unit without fancy renovations, wallpaper, furnitures…….in other words, exactly what you will get when you get your keys…..i say THAT'S FAIR !!!
Majority showrooms nowadays are too fake and too misleading. Do you know that to achieve exactly the showroom state, you need to spent 100k or more???

Your Dream Home???
You purchase your home 3-5 years before it completed….in your mind you always imagine the looks like what you saw in the brochure or the show flat…..but when you collected your keys 3-5 years later, then you realize…..it's not as fanciful as you thought…..
It's empty like HDB flat, you need to spend lots of more money and effort to renovate all. Almost 90% of owner will never renovate as nice as the showflat because they realize the cost is just damd too high….
And when you want to use the facilities, it's so crowded you need to wait for months? Do you know that to use the BBQ area, you need to book with management 2-3 month back? And when you jump into the pools, you realize you need to share with 700 families???
At first, all facilities seems yours alone….but when you move in, it's another story…..
In some condos, the pools are so crowded that looks like sentosa beach during holiday seasons. Imagine from 700 families, if 20% bring in their friends of other family to swim also…..what will happened???

Developer Cutting Cost???
After all the money you sink in into your so called "DREAM" home, you finally get your keys, and don't be surprise that your units or entire projects are so much different from what you dream of.
I give you example, a newly TOP project, the entire compound FENCE was built using MASH WIRE, not even concrete wall…..the entire project looks like workers dorms than "DREAM" home….
Did they told you during SALES period that the fence will be like that??? You also can't sue the developers because the brochures didn't draw the fences….
The owners of the project get shock they even setup a Facebook page to gather voice. And many of them even get shock further that their units are poorly done, bad workmanship, unbalance tiles, and terrible alignment.
All of that for 1.5M???? I think they can sue the developer (if they have enough voice)
One buyer even give up the unit straight away after seeing it, he posted in the facebook that he never thought it will be that SMALL……
That project my friend, is by a well known developers…..
Those Developers squeeze and lie to you during sales period, and after collecting your money, they still want to earn more by cutting cost in every materials or manpower they use……

Sqft
When you bought the unit, the price is based on psf (price per sqft), means every single sqft is money…your hard earn money….but do you ever measure your property??? Is it exactly 1000 sqft like they said at first place????
My suggestion, try to measure yourself one day, you will be surprise, that you pay for something you never have.
To be fair, the project brochure MUST have dimensions. Now, all brochures just drawing without dimensions and scaling, it's up to the developers to say and to draw.
If everybody really goes to measure their sqft to the last inch, I think there will be lots of lawsuit.
Never Believe Them. See Yourself. Do Your Homework.
I visited a new project that almost TOP ….when I visited the half completed project, I was really surprise when saw it…..one tower to another tower are sooo close that I think they can shake hand by standing out of the windows….

That's crazy. It's worse than Hong Kong. They squeeze every inch to crush 600 families into one plot…..unbelievable…..

And during sales period they said the MRT is within walking distance, I didn't saw that in the real place. It's so bloody far, at least 20 minutes walks….never believe what the seller said, always do your own homework…..
When I looked around, on the right is another condo, another project, on the left is another coming projects, each projects at least 500-700 families……all connected by a small road……I wonder when all settle in, HOW CROWDED THAT AREA WILL BE????

Did they told you during sales that other projects will surround you???? NOOOOO
The brochures always looks as the project sit in the middle of FORREST with birds flying over and serene surrounding…..and now you find out that all your views are BLOCKED by other projects….

I CALL THAT CHEATING !!!!
The developer must inform buyers what will happen to surrounding area, must inform buyers what will be built in near future……THAT'S FAIR !!!!
Worth The Money?
My answer to you is NO.

Let me give you an example.
In KL, a big 7000sqft 3 stories freehold house in elite area cost around S$300k. A bigger bungalow of 10,000sqft with swimming pool stayed by tycoon cost maybe S$700k- 1M. And you paying 1M to get 1,000sqft flat ? Yet sharing all facilities with 700 families????

Of course you might argue that I m wrong to compare KL to Singapore, Yes I m wrong, however, I purposely compare with Jakarta to let you do some deep thinking……what is my intention to compare with KL…….
We have been played by Developers my friends. We are the last part of the food chain, the one that pay everything. Same case with Hong Kong. Developers are Kings, and HK people are fed up with the way they control the economy. It might not be the FT or Gov problem that we always argues about. It's the Developers that set the rules here. They have becomes too powerful that Gov need to control them.
If you know that we are in their games, why should we join them? Drop your kiasu mentality !!!!!
You save every penny, you bargain with auntie for the cloth you buy, you eat less more expensive chicken rice, but those developers are just anyhow "rob" your HARD EARN money ….
Do you ever think that it's better for you save the cash to travel around the world rather than having a swimming pool to share with 700 families??
Do you ever think that it's better for you save the cash so one day you grow old and get a big bungalow and stay in JB instead? Why not, in JB you got everything you need in Singapore….

Why don't we just happy to stay in what we have now?? Forget about to have "FACE" to tell your relative that you stay in condo???
Let me tell you my own experience.  Everynight I never lose sleep, because I m holding cash, I never worry about anything for now. Imagine, if last month I bought the unit because of the impulse buy, now I will have difficulties to sleep, as I worry that I need to clear my 1 million dollar debts……what if I lose my jobs??? The worry never ends…. 

Live within your means. Even if you have extra money, don't make big decision, especially in Singapore property. Because the dotted line you signed, that's NO TURNING BACK !!!! 

I have a millionaire friends that until today still live in HDB, he never worry a single bit, he never want to show off his wealth, but he and his family is the happiest, because they are DEBT FREE…..CASH RICH….  

Foreigners always jokes that Singaporean never have cash on hand, some blame CPF, but I blame our own mistakes….to sink all the money in property and cars…..after all, it's our own fault…..not others…. 

What is your level?
You are earning $5,000 every month now, and the banks will tell you that you are eligible for 1M purchase……REALLY???
The correct way to calculate your eligibility is based on "WHAT YOU HAVE TODAY"…
Yes, check your cash, how much you have…..not your "Future" cash…but today cash…..that's your gauge…
 

Closing Conclusion 
You own your DREAM HOME….but end up in DEBT FOR LIFE…..worth it???
The answer is NO my friend….NO
Keep Cash, stay happily in HDB, our HDB is already a condo standard in other countries….visit Malaysia estates and you know it…..
You spent 700k to get a swimming pool that shared with 700 families, let me tell you, for 700k, it's enough for you to TRAVEL around the world 3x + Retirement Home in other countries……

Be Wise and heed my 2 cent worth of advice.....

 

 

 

 

 

WORDS OF WISDOM FOR THE DAY : Making Your Children And Grandchildren Millionaires....!

Many of us work hard in order to provide a comfortable life for our children. We also try and give them a head start in life but giving them the best education possible, and in some instances, paying through the nose for private tuition, piano lessons etc. Instead of just giving them money or paying for tuition, one of the best things you can do for your kids is to show them how money works: how to make money, how to manage it, and how to make it work for them. The best way to do this is to invest for them while they are young, slowly building a solid financial foundation for them to stand on. A lot of people are quick to dismiss this as indulgent behaviour guaranteed to turn out spoilt-rotten children who will sponge off their parents for the rest of their lives, but I urge you to think a little more broadly.

Making your child a millionaire is about ensuring your child is able to enter adulthood without serious financial worries, and with the advantages money can buy, and the kind of financial sense – instilled in them by you – that ensures a healthy relationship with their dollars and cents for a long time to come. Granted, with inflation and without guaranteed rates of growth, you may not reach a million dollars by the time your children become adults. No matter – by then, they'll be finance-savvy savers and investors themselves, building on the foundation you began.

How to invest for your children

Stock market, stock market, stock market! Let's assume a conservative return of 10% a year over the lifetime of your child. Take a look at what might happen if you invest just $25 each month on your child's behalf, and what might happen if you leave it up to them to start on their own:

Investing for your children
Child's age	Invest $25 per month until 21 then stop	Start investing $100 per month from age 21
0-21	$19,200	$0
21-62	$955,912	$645,164
Total invested:	$6,300	$46,800

If you put $25 a month into a stock, REIT, ETF or tracker fund that generate a returns of 10% per annum until your child's twenty-first, it would then be worth about $24,064. If you hand the fund over and it continues to accrue compound interest, then by the time they reach 60, a total outlay of $6,300 would be worth around $955,912. However, if you invest $100 a month from age 21 to 60, you'd only end up with $645,164, despite having invested considerably more.

For simplicity, we've ignored the impact charges and inflation here, all of which would take a hefty chunk from these sums. But, even allowing for these, the basic message remains the same and that is the earlier you invest, the easier it is to build a significant pot of wealth. The easiest way to teach your children about finance is to get them involved. Investing money on their behalf is a great place to start, but that's just the beginning. Teach them how money invested sensibly will grow, and how, when the growth is added in, that will also start to grow. Show them how to save by opening a savings account for them, and get them to pay the money in themselves. You could even introduce the idea of buying shares in individual companies by opening an online POEMS trading with Phillip Securities once they have reached the qualifying age of 21 years.

Happy saving, investing, and living fruitfully; You only have 1 life, live it to the fullest and have no regrets......!