Yours Truly, Uniquely Singapore (10)

Incredible things have happened for the past one year in Singapore, and the most incredible is the way prices have rocketed in the property market in the little dot on the world map.

Around December 2006, my client had called me quite excitedly that she was offered $1.9 million for her 1,905 sq. ft. Grange Heights apartment and asked for my advice. I told her it should be around $2.3 million. Later I marketed the unit for her at $2.28 million. I had earlier advised her not to sell since Jones Lang La Salle had targeted it for enbloc at $2.72 million. Since she was going to rent a unit near her daughter's potential primary school at Bukit Timah, she might just as well rent her unit at Grange Heights till enbloc. Today, the enbloc price has been revised to about $4.5 to $5 million just after 6 months!

A client had asked me to sell his semi detached house at Springleaf. I told him that the asking price of $1.5 million was a little too far off from the market price and it would be better if we wait for a few months' time. Six months later, I called him and an exclusive was signed to market the unit at $1.6 million. Two days later, when we arranged for an open house, he told me that now he wants a nett of $1.9 million!!

Another client had agreed on the price of $2 million for his five storey leasehold unit at Hong Kong Street with a balance of 44 years. Yet, when the price of $2 million was offered, he changed his mind and asked for $3 million!! The building is extremely old, and one has to climb 119 steps to the fifth floor!! The ground floor is rented to a sea cucumber wholesaler. When I came out of the unit, my clothes stank of sea cucumber! Whoever buys over the unit will have to pay another million to top up the lease to 99 years!

The most incredible was of course the sale of a five room flat at Tiong Bahru area! The buyer paid $150,000/- above valuation! Flushed with cash from enbloc sales, the purchaser did not bother as $720,000/- would appear "cheap" in comparison to private units of the same size. Now that a benchmark has been set, other owners of 5 room HDB flats are also expecting around the same price!

It will be too boring if I were to list the number of clients with "business acumen" who suddenly want sky-high and unrealistic prices for their properties. Yet, some of these clients were desperately trying to market their unit at even below valuation when the market was quiet!!

I remember, last year, I kept persuading some of my clients to pick up some good properties but many were hesitant. It is strange that when the market is quiet, few want to buy; when the market is hot, many want to jump into the bandwagon! Is it the herd instinct? Can we attribute this partially to the failure of our educational system? No, I am not an economist; neither am I politically inclined, but I always want to learn from everyone around me. I still remember one of my pastor's sermons which he preached on the pulpit some twenty years ago. "When the market is high; let go of your stock investments when you have made some profits; when the market is low, buy for you do not know how much lower the stocks can get."

I remember when I first started teaching English and Literature in River Valley High School, I made the principal and heads of departments "nervous" with my style of unconventional teaching. I hated rote learning. I wanted my students to understand; not to memorise notes and facts. I believe that when we understand something, the memory stays not just for the examination but for life. It will also help us to become more analytical instead of just accepting the opinions of others. It was also important for the students to find the lessons meaningful and practical. Recently, the government has been trying to inculcate entreprenuership and creativity. I am glad I had already done that in my ten years of teaching. My superiors relented after they saw the good results obtained by the students in their "O" levels.

Of course, when some less informed people from other parts of the world read of how the property prices in Singapore have sky rocketed, they might think that Singaporeans are very rich. The fact remains that only the rich are able to jump in and ride with the market; flipping and making millions almost overnight; while the poor just look with on with worry - will their children ever be able to afford a roof over their heads? Now 3 room HDB flats are going for over $200,000/-. Those who are renting apartments will have less to take home as rents have also increased tremendously.

Scary, the way home owners simply "shout" their prices!! Even scarier are kiasu buyers who simply jump in and pay for them! Many have been burnt in the previous downturn of the property market. It is amazing that people forget their lessons so quickly. When will this frenzy end? Sigh :-(

Gan Chau