Sometimes, the building specifications of the property do not even matter for buyers. Positive sentiments just drive them to pay whatever asking price is out there.
Building specifications? Yes, for example, when I buy a condominium, I will find out how many lifts serve each block and how many units are there per floor per block. This is very important to me because if there were too few lifts, the waiting time could be unbearably long especially if we were staying on a high floor.
A HDB point block has 2 lifts serving 25 floors and 4 units per floor . This means 1 lift for 48 units (remembering that ground level is the void deck). So, if a property has 36 floors and 3 units per floor, having 3 lifts is about right. We get 1 lift for 35 units.
So, the lift to units ratio is very important, wouldn't you think?
I also consider having ample parking lots essential. All too often, I hear friends living in some condominiums complaining that their visitors cannot find parking lots in their estates and some even got their wheels clamped for parking in lots designated for residents.
We see so many condominiums built with just 1 parking lot per unit these days. If a resident has two cars, he is in trouble. Of course, where are visitors going to park?
We see many condominiums built with enough parking lots for only 80% of the units just because the developments are a short distance from the nearest MRT station. If every resident owned a car, things could turn ugly.
We also see some condominiums these days with mechanical parking lots and I read that it takes 7 minutes for a car to be parked. Imagine if five people should come home at the same time. Could the fifth car's waiting time be 35 minutes?
Increasingly, we see newer condominiums being more and more marginal in that they are compromising on the day to day pragmatics. These are projects I would avoid but it does not mean that one would not make money in these projects, of course. It is just that if it is not a condo I would want to live in, I wouldn't buy it. Quite simple.
Of course, some would say that buying a piece of real estate is about location, location and location. Doesn't matter if it has enough lifts, parking lots or whether it is freehold or leasehold. I imagine this to be true for most but for me, it is more than just location.
Now, certain things I can see and analyse but certain things I can't. It is a bit like buying shares of companies. We can look at a developer's history and the project's specifications and asking price psf just like how we can look at a company's history, its numbers and its share price. However, there will always be things we cannot see.
Wheelock Properties is the developer of Ardmore Park, long regarded as the standard in luxury condominiums before SC Global came into the picture with even more grandiose developments. So, it came as a surprise to me that "in late 2009, building surveyors found at least 32 cases of defects in areas such as lift lobbies, the swimming pool, residential units and the basement car park.
"In addition, the MC claimed that the contractors did not carry out waterproofing properly in areas such as the basement car park, causing damage and safety risks.
"Residents said the same problem was occurring on the rooftops, which meant that higher-floor residents had problems of water seepage and water-stained ceilings and walls."
The Seaview was marketed as the Ardmore of the east and was a very pricey project. It still is. A 1,647 square feet four bedroom unit is asking for $2.5m today. With quality issues aplenty, I wonder if buyers would give it a wide berth. If we take a look at Property Guru's website, we see many trying to sell their units in The Seaview.
So, is buying condominiums developed by a reputable company always a good idea? Is buying new always better than buying old because the perception is that the property's condition would be relatively newer and that less repairs are required?
The article on The Seaview is quite detailed and I have only reproduced a small section of it. To read the whole article, click here.
I have very few blog posts on real estate investment, I realise, and I hope you have enjoyed this one, especially if you are thinking of taking that next step to invest in a condominium in the next few years.
1. Real estate as a hedge against inflation.
2. Money continues to flow into Singapore.