Let’s talk a little bit about history. I am not a history buff but I like to look back at the past and see what lessons we can learn from other people’s mistakes.

In 1942, Lieutenant General Arthur E. Percival, was operating under the strong assumption that the Japanese would attack near the Sembawang naval base, and so he placed his strongest forces there.

The conventional thought was this – Singapore was going to be safe.  The established paradigm was Singapore’s coastline was heavily fortified with massive guns to prevent naval attacks.

It was unimaginable that the Japanese forces would traverse the jungles and mangrove swamps of the Malay Peninsula in order to mount an invasion from Singapore’s north-west.

(All photos from: https://ww2db.com)

But that was exactly what they did. The unimaginable did happen despite the British forces being prepared and ready.

The British did what they thought was prudent. And Singapore fell to the Japanese within weeks. The established paradigm was broken. Singapore was not that “safe” after all.

Sources: 
Battle of Singapore – NLB
Fall of Singapore – History in An Hour
Battle of Singapore – Wikipedia

Prudent Choice Does Not Always Equal Safe Choice

As we go back to the present in my daily activities as a property agent – it becomes more and more obvious that what was once considered prudent is not exactly the safest choice. 

There was once a time that buying a flat with the following features was a prudent choice:

• 3-room (not 4-room, not 5-room, not EA/EM)
• great location
• near MRT

Unfortunately, taking the so-called safest choice by going through the more frugal route – didn’t materialize into actual gains 5 years later.

I can imagine the thoughts running through the buyer’s head:

• We didn’t buy the flat with the intention to “enjoy” – we are just being prudent.
• We didn’t buy a flat that was expensive.
• We are buying something with the hope that it will appreciate in value.
• But the appreciation never happens!

A buyer taking the more “frugal” route by taking a 3-room instead 4-room in Holland Close has a flat that has depreciated by $130K.

How about a more hypothetical example of a less conservative choice?

Buying a $1 million private property 5 years ago. It is now valued at $870K. The loss is $130K.

Which loss is more painful?

Both losses are actually equally painful.

But the first example – the original intention was to be cautious and prudent. That choice supposed to be a safe choice! 

Apparently we are discovering what we thought was safe – is not so safe anymore.

Is buying a private property a prudent choice… or a safe choice?

Here are some transactions of private properties being held within the same period of 2012 to 2018:

The less conservative choices, the less prudent choices – they are the ones that proving to be more profitable.

Be Aware of Potential Opportunity Costs

If you think about it, there are actually 2 types of losses incurred if a “wrong” choice were to be made:

• The actual loss from depreciation (eg the $130K depreciation)
• The potential gain from appreciation (eg a $100K-$200K gain)

That can add up to $300K worth of opportunity costs – which is actually the cost of a simple 3-room HDB flat!

Be Very Careful of Hype

I worry when there is hype. I will need to be careful and do my best to remain objective. This is especially so when there is a rush or chiong-feeling to quickly get into the action.

Why? Because not every single new launch is worth buying.

Almost everyone was thinking – buy buy buy just before the cooling measures took effect on the 5th July. Because we look around and see everyone is doing it.

The millennial generation even coined a term for it – FOMO – Fear Of Missing Out. 

Now, after the cooling measures, it seems the action has stopped and no one is moving.

I recall back the action at Twin Vew when it was first launched earlier this year. The take-up rate was amazing.

A lot of my buyers were eager to get into the action. Eager and ready to buy. Was Twin Vew a prudent choice or a safe choice?

Despite this much interest from my buyers, I didn’t sell them a single Twin Vew unit.

Right now in hindsight, one of my clients who didn’t secure a unit there sent me this message:

No matter what, the interest of my clients will come first.

I am here to maximize value for my clients and not for myself.

Because if I were to maximize value for myself… well, I will eventually find myself out of a business.

Some of these clients have not bought anything since meeting me but they are still interested to hear my thoughts and opinions on the property market.

These opinions are real and based on my own daily experiences. I will happily share because my goal is to add value to them.

If you are keen to know more as well and perhaps explore your options that are available – we can start with a detailed financial assessment.

I like to end off with this quote:

“If you always make the right decision, the safe decision, the one most people make, you will be the same as everyone else.” ― Paul Arden

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