Common mistakes that property buyers in Singapore commit

With so many developments blossoming in Singapore, such as HDB in Tampines, there are many property buyers out there looking for properties, whether it is to invest or for own stay. There are many types of property buyers out there in Singapore. Some property buyers are still new to the property buying bandwagon, therefore has committed some mistakes when it comes to property buying. Fret not, this article will highlight the common mistakes that property buyers commit in Singapore.

1.                  Obsession with properties
Many Singaporeans are obsessed with properties. Most of their dreams go like this:

a.                   Apply for a BTO or HDB flat.
b.                  Upgrade to private condominium or executive condominium after 5 years
c.                   Save money for the next private property for investment purpose

The life or dream of a Singaporean revolves mainly around properties. The constant upgrading from a HDB or BTO flat to a private condominium. Most Singaporean are paying from one mortgage loan to another mortgage loan until the day they retire. It seems like owning as many properties is their ultimate goal. Property ownership is something to be proud of. Each and every time after they invested in a property, they pray hard for the property value to increase.
In the last few decades, Singapore has evolved into a developed country with a stable economy and improved infrastructure, making the property prices multiplied. This has then given faith to property buyers that the property values will be increasing in the coming years. But they do not understand the property market well and have forgotten that the growth in GDP will never go back to how it was in the last few decades.

2.                  Looking for free advice
Let us admit this, we all love free things. Most property buyers are taking kindness for granted. Many people will ask property bloggers for advice regarding property buying. In addition, it is free advice that they do not need to spend a single cent for advice. As a result, the property buyers will either trust the blogger half heartedly or take the advice. Then they forget they asked for advice and they forget to thank the property blogger for giving advice. Similarly, if the advice affect the property buyer to make a wrong decision, then the property blogger will get all the blames.

3.                  Herd mentality
Singaporeans are all very good in queueing. People like to join in the crowd as long as there is a queue with the mentality that they do not want to lose. That being sad, if the crowd is huge in the sales gallery, it is considered a good buy for the new project.

4.                  Blindly trusting the media
Property buyers trust the media a lot where the media are considered to have the tendency to interview industry stakeholders and quote the comments for catchy headlines. People tend to believe in conventional wisdom without going through verification on the facts that are behind traditional beliefs, such as:

a.                   Freehold properties are better than leasehold properties
b.                  New properties are better than resale flats
c.                   It is always a great time to purchase property
d.                  The price for property will continuously increase
e.                   Investment in properties is always better than depositing money in the banks

It is always good to know the sad truth than to be kissed with beautiful lies. Hence, do your research beforehand and be clear on what you want to achieve to avoid making mistakes that people are making.

5.                  Avoiding legwork
Buying a property is different from buying a car where you go for test driving before purchasing. Advertisements are placed everywhere and you can just walk into a sales gallery to book a unit in one hour. You blindly follow the property agent for property viewing and notice that the units look all the same. Therefore, you decide that it is a waste of time to go for viewing.

Many people did not do their research on Singapore’s property cycle, the past transactions and the government policies. Not forgetting the good bargain available in the marchet, types of housing loans, property agent and conveyancing lawyer.

In order to make a wise decision on property investment, it is essential do do your homework and research that require your time, patience and effort.

6.                  Financially overstretched
Many property buyers overstretch their finance when it comes to property investment. They become financially ignorant and listen blindly to the media, bankers and property agents that tell them they could afford buying a property. Not to forget, they get motivated when they see people with lower affordability or equal jumping into the property market.

It is advisable to go with the 3-3-5 rule to check for your housing affordability before making any major decision. Do not be the one that overstretched or overcommitted in the boom market.

7.                  Fantasy on being landlords
Many property buyers have a dream of becoming a landlord. Therefore they buy a private property that is meant for rental purpose to collect monthly rental. If not, they upgrade themselves to a private condominium and rent out their HDB flat to earn some passive income.

However, do bear in mind that it is not easy being a landlord. It is a hassle to manage the tenants. The rental that you collect is not worth the effort and time you spent in managing the tenants.

In conclusion, these are the common mistakes that most property buyers commit. Do think properly and do you your research in advance before you make such major decision that involves a huge sum of money. 

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