Are you capturing the real facts or just illusion?

Written by Ling CK

We are living in a massive media broadcasting all around the world. How do we know are these people feeding rubbish or real facts?

How do you analyze whether the price listed is genuinely worth buying or just falling into sales talk?

So far it is rare to see an educational article written but read a lot of praising sales articles stressing a lot of features and how to do a tasteful renovation. Personally feel all these can wait till the right place at the right price property is chosen.

I’m choosing a current new project (The Watergarden @ Canberra) developed by UOL as the discussion subject. So that readers can judge for themselves whether the asking price is genuinely worth buying price.

The Watergarden @ Canberra is located Southern tip of Sembawang, in proximity to the Canberra MRT station between Yishun and Sembawang MRT station. Proximity I mean it is definitely within comfortable walking distance from Watergarden to the MRT station. However, this is not as convenient compared to that integrated development where the MRT station is just a button away. But definitely, it is still worth looking into with the given price tag.

I’m using onemap.sg to do a rough measurement from Watergardens side gates to entrance “C” of Canberra MRT station. The nearest straight line distance is 255m, and the furthest is 362m.

According to an article read on PropertyGuru, there was research shows that properties within 500m are always more premium to those that are not. ?Thus The Watergarden @ Canberra definitely is one of the premium properties in terms of value.

Now let’s take a look at the nearby older condos on how they fare, how much are they selling, and how much rent they are able to get before we go further to analyze whether the developer is offering the right price.

There are 5 condos surrounding Watergarden, thus there is relatively sufficient data for the analysis.

I went further to check on the cost of each land bid and eventually how much the developers were selling.

Those land sales before 2010 are unable to be retrieved due to no data available. Thus only those the land bid after 2010 had recorded data.

First of all, we can see it is not uncommon that developers have to make a profit of +/- 10% on their investment. Not forgetting we are talking about hundreds of millions. They still have to answer to their shareholders, control the cost and at the same time ensure the building is up to quality according to BCA standards. So The Watergarden @ Canberra only launched with a profit of less than 10% is a good catch.

Next is to look at the current resale price of the older condo.

It is observed that the older condo with more than 10 years; Yishun Emerald and Yishun Sapphire although selling at the lowest psf, was also bought at a much lower psf (Per Square foot, a common unit used in the property). So in overall performance, it is showing a higher profit margin than the newer ones. Although it is selling at a lower psf than the others, the 1st owner is making more in this area. They have 90.91% and 54.13% respectively.

This again proves that property is a long-term investment and not for speculation.

The average Selling price around this area ranges from $800 psf to $1,000 psf.

However, just looking at the selling price of an old condo that started selling 10 years ago is very misleading because the price is definitely more attractive than the current selling price.

We have to follow the current market trend by looking around the island to determine the current sales of the new property. Otherwise, our boss will tell you your salary is a fair salary by comparing your salary to 10 years. This is unfair as your experience has grown, your knowledge has increased. Likewise for the building technology has improved, and finishing and quality are better than 10 years ago as well.

We are using the properties (new launches) that are still selling in the market to understand the average pricing in OCR to do a rough comparison and judge whether this is considered a good buy. The first thing to look at is whether The Watergardens at Canberra is more expensive or lower price than the others.

This will be followed by comparing the distance from this development to the nearest MRT station to determine the merit of connectivity. From research, we know that all properties within 500m of an MRT station will have a premium price.

Finally how convenient is this condo in daily life? Seems like it is not the best compared to the others. This is where we have to weigh between prices against convenience. If it wins all the way around, then there is no point for me to bring it out to compare.

When we analyze the rental performance of a property we have to return back to the location and compare it with the nearby condo.

By looking at the table tabulated below, was it a surprise to the result of the rental situation? Although lots of people were saying that this place is very “uru” (a Malay word that means remote, deserted), the fact is the rental yield is way above 3% which performs much better than many areas in Singapore.

Use square foot (a paid portal) to retrieve the rental contract number to show how popular this area is. The Rental contracts were not affected by the pandemic. Thus we know the rental here is persistent and withstand a crisis.

Comparing it to the national data of rental rate, this area's rental rate is consistent with the national trend. Therefore no saying of this is more “uru’ than other areas on the island.

You may see that the rental rate for OCR has increased the most during the pandemic period. It is now just slightly below the rental rate of RCR. This showed that OCR property rental is the most sustainable compared to other regions.

The rental rate is $2.3psf/mth to $3.1psf/mth. A 1,000 sqf 3-bedroom type can fetch $2,300/mth to $3,100/mth.

Now we have covered the following:

(a)???Land cost – is this a reasonable price from the developer in terms of profit margin?

(b)??Is this selling at the current price or future price?

(c)???Is the rental yield over here good enough?

(d)??Are there tenants over here?

(e) Does it score better in terms of prices, connectivity & convenience?

Hope that the analysis provided is helpful to you in any of your home searches and in identifying the potential of the property.

All Feedback is Welcome! Hope there are take away from this update. Happy Reading!!!

Also read:

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HDB & Private Residential:

Property Market In General:

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All Feedback is welcome!!!

Writer: Ling CK

CEA: R056727F

Contact: (+65) 90110636

Email: [email protected]