Singapore Property Launches Usually A Bad Deal?

Previously we warned that a hot Condominium launch market will lure dormant Singapore property agents into action. These agents will be armed with catch words such as “it will sell out soon”, “En-bloc”, “sea view”, “Expats are buying”, etc.

Between June to September 2009, dishonest Singapore property agents have a field day.

Can you get a good deal from Property developers?

You cannot get a good deal from the bigger developers as they have holding power and pricing power. These developers will make you pay for it on their terms, at a time of their choosing. Property buying is an emotional process. It is due to the fact that it is largely emotional that marketers have tried to whip up buying sentiments. Sustainable sentiments are fine, but sentiments are the most volatile and many people can get burned through a turn in sentiment.

But this is only half the story.

When a condo is to be launched, these days the condominium developer will likely appoint 1 or 2 marketing property agents. These agencies then inform their property agents about the launches and they appoint agents to man the show rooms.

These agents are taught what to say and what not to say in order to sell the condominiums fast. This included pressure tactics as well as making people queue up to constrict the showroom space to create tension and urgency to buy.

So do consumers get a choice to the best units and the best prices?

Usually not. This is because Singapore property agents dominate access to these information. And will they share these information with you? Mostly not!

For good property deals, Singapore property agents will buy it themselves. They may even ask their relatives to book the condo units and corner the development. These property agents then put up these property for sale again.

Genuine property buyers will have to pay more
Genuine property buyers will suffer high prices. This essentially is same as giving your money to property agent speculators. You expose yourself to home loan risks of not being able to get a loan.

This is still not the worst. Genuine Singapore Property buyers are convinced by these agents that banks can match the valuations and they place their 1% deposit.
The home loan valuations are already high, coupled with the fact that the property speculator have added an additional margin, the property buyer will have to pay through the nose.

How much does the property speculator make at your expense?

New condo launch price = $850,000 (property loan valuation stretched to match $850,000)

Speculator buys at $850,000 and puts it up again at $920,000 (within days).

What is the true cost of speculation?

$850,000 + $20,100 (Stamp duty) – $8,500 (1% commission for selling property) = $861,600.

Property agent flipperputs up at $920,000. (Bank cannot match $920,000 valuation)

Property agent speculator profit within a few days

Property agent flipper makes = $920,000 – $861,600 = $58,400.

This is the extra money you have to pay because of these property agents cornering the market and because banks refuse to raise valuations any higher. Many people will fail to get a Singapore home loan and lose their 1% deposit. Luckily for some, they have come to us at www dot propertybuyer dot com dot sg Property buyer Singapore Mortgage consultants at SMS 9782 8606 to do an Approval in Principle for their potential purchase.

How much extra did you have to pay?

$58,400 (extra) + $42,500 (5% cash) + $22,200 (Stamp duty) = $123,100

Suddenly the cash required to buy your dream home more than doubled. Normally you can pay your stamp duty through Central provident fund (CPF), but because for sub-sale, there may not be enough time to complete the transaction and insufficient time for your lawyers to work with the CPF lawyers to disburse the funds. Instead of using your central provident fund (CPF) to pay for your stamp duty, you will have to first pay it through cash.

How to avoid the property agents fleecing the customers?

There are no lack of good properties. You only have to look carefully at more places and do your homework.


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