CNY Property Tip #1
As promised in my first post, I will be sharing some tips for choosing the RIGHT property for capital growth during this CNY festive season.
Number 2: The Power of First Move
Many people rush to buy houses in a HOT property development when everyone is buying. Just because everyone is queuing for the wanton mee stall doesn't mean that it is always good. In my previous post, you noticed that Watertown condo is making lesser profit (and even losses) as compared to Prive condo.
Is following the demand always the BEST option?
Warren Buffet said, "Be fearful when others are greedy and be greedy only when others are fearful."
Of course, as a believer, I am not advocating greediness. I am sharing the principle that Warren Buffet gave. When everyone is buying, there is demand and where demand is, the developer will leverage on that to INCREASE the price.
Take a look at Rivercove Residences (see attached below). It was supposed to launch around $820-$830 PSF. However, due to the overwhelming responses, the developer launched around $920 PSF to gain more profits. The remaining units were snapped up quickly even though they reached $1000-$1052 PSF!!!
If you apply Warren's principle, you want to look at a development where NOT many are buying. Of course, there are some other factors involved when it comes to choosing the right property, but looking at the supply in a development is one of the factors.
My BTO flat (I have sold it away. Read more at https://bit.ly/2WERF7q) was in Punggol. When I applied for it, the demand wasn't high. Many people were skeptical about living in Punggol. They felt that it wasn't accessible and there wasn't sufficient amenities.
It's true. When I moved in, there was only one coffee shop near my place. There was NO shopping mall. But because of that, I paid at a considerably low price for the HDB flat. Today, you cannot get the same purchase price again. In fact, many new Punggol BTO owners are not going to earn much profits when they reach MOP (5 years' stay) because they are paying a higher price due to the developing estate.
This is the Power of First Move ----- you make the move before others move, buying at a lower purchase price and gain a greater profit than others!
One more example can be seen in Kingsford Waterbay condo. It wasn't a hot property development at the beginning stage. It was sold around $1100 PSF (see attached). Towards the end, developer raised the price to around $1300 PSF because of the demand.
The owners who made the power of first move already gained $200 PSF even before they moved in to stay!
Hope this helps! Enjoy your First Day of CNY! Stay tuned for more property tips at SG Home Affairs.