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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