5 most common questions a real estate agent gets asked
By Aaron De Silva
Realtors typically get asked dozens of questions by prospective buyers on a regular basis.
Here, Knight Frank’s Darryl Tan tells us his Top 5.
1. How's the market?
Whenever someone asks me this, I try to break it down into the various sub-segments of the market: the premium/high-end, the middle end, and the mass market. All these will perform very differently; the whole market will never be up or down at the same time. Last year, the middle tier of the market was relatively quiet until Q4. This year, in Q1 and going into Q2, this segment has picked up, especially in the Alexandra-Commonwealth stretch, as was highlighted by The Edge Property.
UOL's Principal Garden
That stretch has 11 to 12 different condos, all of which offer very different flavours. Commonwealth Towers and Queens Peak, for instance, target the mass market, so the units come in at very strategic price points. They offer good value for money, so you get bang for your buck. Further down that stretch, you get properties like Principal Garden by UOL, which offers sensibly sized homes, and The Crest by Wing Tai, which banks on the prestige factor by being in the Jervois neighbourhood.
2. Is now a good time to buy?
If one were to objectively read into the real estate market and its various sub-segments, not all segments are down at the same time. For example, the luxury end of the market saw many prime homes change hands over the past three quarters, and while prices for the middle-upper tiers may have come off a little for the past several quarters, the corresponding volume of sales resulting had increased disproportionately more. These, in my view, are among several indicators suggesting a market perception of price rationalisation and sensibility.
Most share this view, though some remain skeptical that the market has not bottomed-out yet. They feel that there are many macro-economic factors that have not completely unfolded, e.g. The Trump Effect, Brexit, tensions in the South China Sea etc. While these viewpoints hold truth, the reality in these fluid times are that new factors/challenges will present themselves. Seasoned real estate watchers will know not to get sucked into “Analysis-Paralysis”.
3. When are the property cooling measures (ABSD, TDSR) going to be lifted?
For all the measures that were laid out, one needs to read into the underlying intent. When the 15% Additional Buyers Stamp Duty (ABSD) was introduced, it wasn’t meant to keep foreign buyers from buying into Singapore, but to ensure that those who were investing genuinely saw value. The Total Debt Servicing Ratio (TDSR) was meant to discourage average Singaporeans from getting ahead of themselves. For ABSD, I suspect that the authorities will ease it, but not lift it entirely. And they will possibly ease it in tandem with a Seller’s Stamp Duty loaded specifically for foreign buyers.
Alternatively, they might ease the measures on certain property types. Last month, they eased certain requirements pertaining to the TDSR, allowing the property to be used as equity. If the property is deemed as equity, the banks can loan you money for it. That made it easier for Singaporeans to finance their properties, but it didn’t make it easier for them to go out and buy another three or four properties.
4. Where are the other sectors to look at? Should I be also considering commercial and/or foreign properties?
I tend to pry a little deeper into the underlying intent of the property purchase. And I also look into the client’s portfolio holistically. Sometimes the intent is not as obvious, such as the purchase being part of estate planning (for their children) or a calculated investment with a very clear exit horizon. All these concerns are taken onboard collectively and I advise them based on what I deem best.
Sometimes, I point them to other classes of real restate including commercial, industrial or overseas properties. Knight Frank has an extensive database of well-rated properties worldwide. Other times, this may mean advising them NOT to acquire the property altogether. The honesty is often well-received. That’s how I keep my clients, whom often become friends.
5. How do I avoid paying so much taxes? (usually asked by foreigners and PRs)
I tell them that they can’t. Again, I look at the client’s portfolio. If his/her intent is to mitigate risk by moving money out of his/her home country, then the total investment need not be consolidated in one or two properties. He/she could park the money on the Singapore Stock Exchange, say, with a REIT – an indirect investment in real estate without the commitment of a physical asset.
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