My Property Journey Rewind - 2005 Selecting a condo

Let's continue with part 3 of my story today

Part 1 is here.

Part 2 is here.

The background to this story can be summarized as follows. It was 2005 and we were looking for a condominium in district 8 since and districts 9,10,11 were too "expensive" for us.

We were deciding between 2 condominiums in district 8. One was City Square Residences and the other was Citylights. 

The 2 condos were still being constructed and there were no 'real units' to view. We have to make our decisions based on the location, the floor plans and 'gut feel'. As in all new condo launches, we can easily be influenced by the glossy brochures, the glitzy showflats and eloquent property agents. 

In Singapore context, the check lists can be as follows:

1.  Are there good primary schools within 1km?

As mentioned in my earlier post, many of our decisions are influenced and affected by government policies. One of the policy is the primary school admission criteria where children (used to include PRs also) who live within 1-2km of the school compound will get priority in admission. As such, many parents will buy property near good schools. The presence of good schools located within 1km of your condominium will likely maintain and enhance the value of your property. The only trouble is the congestion it creates during the mornings and evenings if you are staying nearby :-P. This wasn't a consideration for me back then.

2. Is the condo located near MRT?

If a condo is located near MRT, it will likely fetch a higher value vis-a-vis another condo further away. It will also appeal to people who wants to rent the place. The only concern for me is the 'noise pollution' you may get. As such, if you buy near MRT stations which are above ground, you will have to consider if you can live with the noise. It is interesting to note that many residents who stay near MRT tracks will "not hear" the noise any more after 6 months. :) For your information. City Square is beside Farrer Park MRT and Citylights is beside Lavender MRT.

3. Are there amenities near the condo?

If the condo is near shopping malls, coffee shops, library, parks, sport complex etc, it is likely to fetch a better resale or rental value. The concern will be the congestion such amenities may bring. It can be very crowded at the shopping malls on weekends or parks. For your information, City Square Mall will be constructed beside City Square Residences. I don't like the hotel currently beside Citylights though.

4.  Is the condo a leasehold or freehold ?

For value wise, i will go for a freehold unit because it represents better value for money although it is sold at a premium. However, i have since realised (from my personal experience in the how the resale prices of City Square and Citylights move) that in a red hot market, it doesn't really matter to many buyers whether the development is a freehold or a leasehold. This is especially if the government allows developers to top up the lease for redevelopment. In addition, the yield from a leasehold property is better than a freehold one because people who rent the units wouldn't care if it is freehold or leasehold and the capital outlay for a leasehold unit is typically lower. City Square is a freehold development but Citylights is a 99 years leasehold development.

However, during an economic downturn, i have witnessed that freehold units will preserve value better and the drop in value is not as drastic. If i am buying the condo for investment to hold for a few years, a leasehold will probably be sufficient. If i am buying to keep the property for my children in future and intend to stay for an extended period, then a freehold unit will make better sense.

Once you are okay with the location, you have to select the units within the development.  Some of the checklist will be:

1. Is the unit facing the evening sun?

Personally i prefer units facing the North-South direction. It can get pretty hot and humid in certain months if your unit faces west. However, i have also realized that foreign buyers from America or Europe seek the sun, so they probably wouldn't mind the evening sun if you sell to them.

2. Does the unit come with a view?

Typically everyone would prefer to have an unblocked view. As such, you either choose the pool view (which can get rowdy or noisy during weekends) or you have the outer view. Make sure your views are not blocked by any upcoming developments. I remember friends buying units in The Bayshore for the seaview only to have their views being blocked by Costa Del Sol a few years later and it was a "complete" block. As such, if the unit you have chosen faces an empty plot of land, it will be very sensible to find out for yourself the future URA development plans for it. If your unit has a view of conservation shophouses, then you are pretty safe in that there will not be any high rise condos blocking your views in future. (For example the units in Duxton facing the Chinatown area will have unblocked views).

3. High floor or low floor?

I prefer to stay on the higher floors but note that it will be more expensive by a few thousand per floor.

4. Layout?

I prefer layouts that are squarish or rectangular as they are more practical and functional. I am not sure if my gut feel is true but i always think that development that look unique on the outside will have a lot of wastage inside (such as curve or corners that is impractical). Perhaps someone who stay at Reflections at the Bay can tell me if it is true? haha

5. Is the unit near power station or the garbage collection point?

I will prefer to stay further away from them. The resale value may also be affected if they are located too closely. 

6. Is the unit big enough to meet the immediate and future needs?

It is a good idea to plan for a unit that will meet your future needs. You wouldn't want to consider a studio apartment if you intend to have kids 2 years later.

7. Can i afford it?

Last but not least, don't bite more than what you can chew. Make sure you don't overstretch yourself and the loan quantum is within your comfort zone.

So if you were in my shoes back in 2005, which condo would you choose? Will it be City Square or Citylights? 

In the end, i chose City Square Residences over Citylights primarily because City Square is a freehold development. I am also "bought over" by the upcoming City Square shopping mall and the fact that it cost less than Citylight. Citylight in turn, has a better view as the higher floors will be able to have a panoramic view of the sea. I also have had some concerns over the location of City Square as many foreign workers may gather at the park near the mall during weekends. 

Hindsight 

With the benefit of hindsight, the prices have City Square was lagging behind Citylights for a long period of time from 2006-2008. However, in recent times that i think the two developments are finally selling at prices near each other. In addition, the Citylights were completed earlier, hence you can receive rental income slightly earlier. I was just thinking if i can travel back through time and have to choose again between these 2 developments, will i still make the same decision? Which development would you have chosen if you were in my shoes?

Recent Transaction prices

Option to purchase exercised.

I dug out some old documents to ensure i got the dates right. Well in case you are interested, i paid $631 psf for a very high floor 3 bedroom corner unit. But i since let go of the unit some time back. I will share with you my thoughts when i decided to sell and the lessons learnt next time. :)

Happy investing and i hope this article will help you when you are faced with similar situations in future :)

URA Chart - To show you the various transactions and the timeline.

Till Next time

As i rewind my property journey, I will share some of the lessons learnt from the subsequent transactions and the importance of having a good property agent working for you. Ciao.