The 5 biggest regrets of property buyers

Ever heard of Laszlo Hanyecz?

Perhaps not.

But you may have very well heard of the guy that traded 10,000 bitcoins for two pizzas.

A true story that has resonated with so many, that the 23rd of May is now celebrated as National Bitcoin Pizza Day.

It may sound completely insane at this point as at the time of writing, those two pizzas would be valued at a staggering $510 million Singapore dollars.

And that’s just looking at it just after the recent crypto “crash”.

At its peak, it would have been worth an insane $800 million.

But despite all that, Laszlo claims to have no regrets on what he did.

To be fair to him, this was 11 years ago in 2010 – the world was so different back then, and a lot has changed since.

So in light of National Bitcoin Pizza Day, I figured it would be interesting to look back on real estate deals that some of our readers have regretted passing up on.

Here’s five of the top few.

1. A three bedroom unit at Park West

What did you pass up on?

M was on the look out for a three bedroom unit in Park West back in 2011. Back then, prices for a three bedroom unit of about 1,200 sq ft was going for around $800 psf – which was about a million dollars. This was meant to be an investment property for M.

He says, “I was looking for something with not bad rental demand and possible upside in the future through en bloc”.

For the sake of those of you who are unfamiliar with Park West, this was a property built in 1985 and had gone through three rounds of a collective sale process before finally being sold in 2018 to the SingHaiyi group. The 1,468 unit Parc Clematis is now being built on it.

Why did you not buy it?

M was also considering a two bedroom unit in the Holland area at the same time. “It was a smaller one at 700 plus square feet, and more expensive too with the going rate around $1.1 million.” M says. 

He explains that his main hesitation for Park West was that it was in an “inferior” location – a District 5 compared to District 10. He was also afraid of the lease as the property was already nearly 30 years old, and the prices at that point were already quite stagnant due to the lease decay.

Furthermore, he reasoned with himself that as a District 10 freehold property, there should be a good chance of appreciation since it was a premium district. And because it was freehold he did not need to be concerned about lease decay.

What has happened since?

M shared that he was still quite happy with his decision up till 2018.

“Prices for Park West had fallen since I was looking at it. So if I had bought it, I was carrying a paper loss.”

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That was up till the development managed to push through a collective sale, and went en bloc in 2018. If M had bought and held onto it, he would have made a good sized profit based on what he initially put in.

To be clear, Park West was sold at $840.9 million, or based on its built-up space then, $1,336 psf. A quick estimation would put a 3 bedroom unit sized 1,200 sq ft at a payout of $1.6 million.

To make things worse, M’s property in D10 has been at a standstill in terms of prices. M says that he still looks on the bright side despite the loss:

“At least I haven’t lost money on it, but rental has been dropping although it has also at least been rented out all the way”.

What is the learning lesson for you?

M had no reservations that he could have been more aggressive in his approach as it was after all, an investment property.

“While rental is good no doubt, the capital appreciation through en bloc is such a huge incentive that it would be worth that speculation.”

He did add that in hindsight it does seem like a no brainer for a future en bloc sale. For those familiar, Park West only had 432 units on a 633,644 sq ft piece of land. So if you were to judge it purely by redevelopment potential, it did possess that in spades.

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And looking at the size of that lagoon that Parc Clematis is building, you can see the attraction of such a big space.

M says, “Of course, maybe if it did not go en bloc I would have been more worried as the lease goes down further. But I think it would have definitely got sold eventually.”

As for advice for those looking for an investment property, M shared that he would do more due diligence on researching for the next one. He reiterated that it was because of his previous bias that he could not let go of – “it doesn’t necessarily mean that because it is in a prime district you are guaranteed to make money.”

To add on further, M says that to make an educated decision you will need to “take into account factors like the demographics of the area.”

Another thing he learnt was that a property good for rental doesn’t always result in one that would have good capital gains – a point similarly echoed in Sean’s piece on The Tennery .

2. A 3 bedroom unit at Sims Residences

What did you pass up on?

L was on the hunt for an investment property in 2009. He was searching in the east, in particular, at Paya Lebar and Changi. Eventually, he settled on Sims Residences, which is more well known for being the condo next to the mosque.

He was quite close to buying it in 2009 for around $820,000 back then – which was for a 3 bedroom unit.

Why did you not buy it?

L shared that on the surface, most people would identify Sims Residences as a bad spot as it is near a place of worship and close to the main road. But he was of the mind that it was actually quite convenient. He went with the theory of “what should be right” instead of following his gut instinct.

Instead of purchasing where he felt was a good spot, he decided to go with what seemed right based on facts. So in the end, he picked a place in Changi instead because he saw that it was near the SIA training centre and airport, which he felt would be good for rentability.

“It was freehold as well, whereas Sims Residences was a 99-year leasehold property so it seemed like a safer buy at that point in time,” L says.

What has happened since?

As you may well know, rental properties that are close to Changi will definitely be affected as the Covid-19 situation has severely impacted the aviation industry. So in L’s case, at this current juncture, it may seem that it was the wrong decision in hindsight.

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“While I still managed to rent it out, it hasn’t been as good a rate as I would like”, L shares. But he does recognise that this was an unprecedented black swan event, one that no one could predict will happen.

And of course, the comparison to Paya Lebar would be an even bigger one at this point because of the transformation of the area. With the addition of PLQ, the SingPost offices etc, it has definitely revitalised the area.

He has checked the prices for Sims Residences recently and conceded that while it has gone up slightly, it isn’t significant at this point.

A quick check shows that He does feel, however, that “down the road, it does have a good chance of going en bloc especially since Parc Esta which isn’t even at the heart of it has sold well”.

For those wondering, Parc Esta has managed to sell nearly all its 1,399 units in just two years – which is rather impressive all things considered.

What is the learning lesson for you?

As for what L would do in the future, he maintained that he would stick to his instincts in the future as sometimes property investing isn’t just about the hard numbers.

He advised, “Definitely do your research, but if your instinct has been right before and you feel that you have a good sense of what is happening on the ground then it will pay off.”

He added a nugget of insight from an old property developer friend too:

“What I learnt from speaking to a friend in property development was that in the old days when there wasn’t even much data lying around, many big decisions were made just on pure instincts.”

An interesting take, but nonetheless, we think it’s not something a new investor should be taking up!

3. Three bedroom unit In River Valley

What did you pass up on?

D was on the lookout for a 3 bedroom unit for his family in the River Valley area. This wasn’t a long time ago as it was only in 2017, which was a lull period for property if you checked the property cycle.

He recounts that he was most interested in Centennia Suites, a freehold development with just 97 units. Back then, the unit was listed for $3.8 million, which was a little over $2,000 psf for a 1,755 sq ft sized unit.

Why did you not buy it?

D says: “I guess this wasn’t so much of not choosing to buy it, but taking too long to decide that it was a good deal that I really should not be dallying on.”

He had been looking for a long time in the area, and even saw the whole row of condos just opposite Great World as he really liked the location. (The Cosmopolitan and Trillium included).

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But he ultimately liked Centennia Suites the most as it had the least number of units, and the seamless extension of the living to the L-shaped balcony was a unique selling point to the family.

For D, it also had the best of both worlds in terms of the location – it was just opposite Great World, yet the only one out of the trio that was next to the river.

To his surprise, there were two 3 bedroom units on sale at the point in time. One was on a higher floor (possibly 9th), and the one that D was interested in was located a few floors down. He went to view both, and was impressed by the higher floored unit as it was impeccably decked out.

“I wouldn’t have to spend a cent on renovation but it was asking for a full million dollars more at $4.8 million.”

To put things into perspective, the lower floor unit was going for $3.8 million, and it was undervalued at that point as a check with the bank valuations put it at $4.2 million.

Despite all those indications, D felt that he had the luxury of time as things were moving slowly in the property market at that time.

“Even though this unit was underpriced, it had been on the market for a couple of months. So I felt that I had time to look around more plus I guess it was typical human behaviour to feel wary that something might be wrong with the unit.”

He even felt suspicious as it seemed like a deal that was too good to be true.

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“If it was such a good price, why was no one buying it? It also seemed that prices could go down further.”

After much deliberation, he decided to make an offer of $3.7 million, which was promptly turned down by the seller agent – who maintained that the seller was firm on his price. As you can imagine, D was utterly shocked when he learnt just a few hours later that the unit was sold that day for lower than what he offered – $3.65 million.

“To cut a long story short, the agent didn’t realise there was another agent selling it too, and the unit was sold on that day itself for $3.65 million.”

What has happened since?

To make things worse, it wasn’t too long after that the unit above was sold for $4.5 million. And since then, prices in the area have gone up. He has been checking prices in the area and in his mind, he would never be able to get that price in the River Valley area again.

Today, new launches like Irwell Hill Residences had starting prices from around $2.5k psf, and to top it off – these are 99-year leasehold properties as well.

What is the learning lesson for you?

It would be hard for most people to not lay blame on the agent, and D shared that it was tough initially to get over the agent’s incompetence.

“Frankly, I do still partly blame the agent on his incompetence in handling the deal but then again if I had been more decisive to begin I could have closed on the unit earlier on.”

Despite that, he recognised that he had a part to blame – that he had to be more decisive in the future and “not try and time the market on buying at the lowest price possible.” After all, he was looking to stay in the area for the foreseeable future, so in the long run, it probably doesn’t matter as much.

He did reiterate at the end:

“Now looking back at the price, it’s likely that prices would never return to that level, so it’s definitely a deal that I have missed out on.”

4. Landed home at First Avenue

What did you pass up on?

Z was on the lookout for a landed home for his family back in 2005. At this time, the market was just recovering from the bottom of the property market in 2003, so Z thought it was a good time to get in on the landed market segment. “The first one that I viewed was on First Avenue.

It was about 5,000 sq ft and it was only going for about 5/600 psf at that time”. Although he was resolute in his decision to purchase a landed home, he was eventually talked out of buying one by his friends that had bad experiences and settled on a cluster landed home instead.

Why did you not buy it?

Z started getting input from his friends who shared about the perils of owning a landed home – particularly on the aspect of building and maintaining one. Z laments “Although I was resolute in the beginning, I ended up being talked out of it.”

So instead of going with his gut, Z decided that having the best of both worlds – a home with space and also peace of mind when it comes to maintenance, and settled on a cluster landed home.

What has happened since?

Anyone who has been in the property market back in the 2000s would well know the intense price appreciation year on year that led to today’s high housing prices. Z was, in some sense, fortunate enough to have been a part of this growth.

However, while Z did make money on his cluster landed family home, he does wonder what would have been if he had made the landed purchase instead.

“I can’t say that I am keeping tabs on the current situation now with landed properties, but I’ve been reading headlines that these have been moving. I would think that I could easily more than triple what I would have paid for it back then?”

Indeed, landed homes growth outpaced non-landed ones from the run up between 2009 – 2013 and continues to trade relatively higher than non-landed homes back in 2005.

What is the learning lesson for you?

But Z understands that hindsight is 20/20, though he adds that once in a while, a tinge of regret is felt. “There are definitely days when I look back and think about how much could have been made if I decided to go with what I believed in instead of being fearful. I guess you live and learn.”.

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But Z added that it’s normal for people to focus on their losses more than their gains, and he’s just grateful that he made money on his initial decision to purchase a home rather than not buying a home at all.

This was just one of Z’s property purchases, and over the years, he has gained more experience with other investment properties. For those deciding to purchase a landed home, he has this advice to give “Maintenance is an ongoing challenge and no matter how much you’ve set aside for it, you will always be surprised at how some problems may just rear its head.”

One example he gave was a rental property that he purchased. It had consistent bug problems, and due to the layout, the airflow was terrible and the place was always more “damp” than other homes.

Armed with experience from that property, he now knows that having a good layout is especially important if you are looking to keep that rental property for some time to come.

5. Two bedroom unit at Clementi

What did you pass up on?

T and her partner (back then) were looking for an investment property in 2017, and had settled on the Buona Vista/Clementi/West Coast area. They had viewed numerous resale properties in the neighbourhood at that point and happened to drive by the showflat for Clement Canopy.

She was quite impressed with most of the offerings, and was most taken in by the efficient layouts and the price point for a two bedroom was just under a million at that point in time.

Why did you not buy it?

“I was more taken in than my partner at that point,” T shares, but as with most people, she was skeptical of the agent’s claims on the rental prospects. “The agent kept harping on the rental as it was near NUS and the like, up till a point where I started to doubt the claims”.

It wasn’t just the rental aspect, as she was worried about the fact that it wasn’t exactly near an MRT station. It was also at that time that the property market was slow, so she was a little afraid that prices could drop further.

“I figured it may be best to wait and see what would happen next.”

What has happened since?

As those in tune with the property market would know, Clement Canopy has fared well in the resale market. A quick check online shows that it has 14 profitable transactions so far, with zero unprofitable ones. In fact, each has gone for at least a 6 digit profit, which is a very good showing.

T estimates that she would have made about $150k from it, and regrets not moving for it as the timing would have fit perfectly in her investment timeline.

“After exiting in early 2020 I would have definitely rolled that into another new launch. Instead, I ended up not purchasing anything till Q3 in 2020, so I missed that boat.”

What is the learning lesson for you?

She doesn’t want to push total blame to it, but a small part was really the psychological factor of the agent. The pushy tactics had a negative effect as it backfired, and instead pushed her away from making a decision on it. She also attributed the lack of people at the showflat as a possible reason:

“It didn’t help that at the time the showflat was quite empty too, so in my mind, I was thinking that if this was such a good property, why was no one else buying and why did the agent have to be as pushy as he was.”

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T also shared that she would have paid more attention to the property cycle rather than listen to fears of where the market was at from friends and family. To be fair, it is typical human behaviour. Everyone thinks the same way in the real world.

As a market is “crashing” there will be very few people interested in buying when it stops declining, everyone is fearful that it could drop further.

Everyone is only interested in buying it after the market bottoms out. In other words, people will wait for confirmation before they do anything.

She has learned her lesson though. Last year in 2020 despite the pandemic, she decided to finally make her move. To her, it was in a similar situation where if you were about to buy a property, you may be afraid because of the external factors – that the market could get worse and prices would fall.

“I wasn’t going to time the market this time, and judging from where prices are at today, I’d say it has been the right decision so far!”

This article was first published in Stackedhomes.