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The Belvedere
09-08-08, 19:54
I am a new owner of Belvedere.I went through much trauma before buying one good unit there.I have met few dirty agents who are really despicable.
Here's a list of irresponsible agents.Beware..

1) Sharon from JTR***
2) Jennifer from Inno**
3) Mervis

shocked
09-08-08, 20:02
dirty... how? what do you mean?

The Belvedere
09-08-08, 20:42
dirty... how? what do you mean?


Playing dirty tricks just to close deals.Lying to me about the exact area of the unit and then convinced me to bring a cheque down on the day of viewing.Refering to Jennifer in this case.

Sharon arranged with me to collect cheque in Belvedere.Waited there like a fool but never turned up,then msg me saying she woke up late n will not b coming.Called her but refusd to answer.Not even a word of apology.This unprofessional agent is famous for being late and rude.

Mervis is unscrupulous basically.

It's a blessing in disguise I did not buy any of their marketed units because I managed to buy a much higher floor with full sea view at a lower price than all their low floor units.

Unregistered1
09-08-08, 21:07
Hi owner,

Good thing that you personally highlighted the agents.

I am also a agent myself. Heard before the agent from JTR are famous in a way or another.

Never dare to deal with them.

The Belvedere
09-08-08, 21:20
Hi owner,

Good thing that you personally highlighted the agents.

I am also a agent myself. Heard before the agent from JTR are famous in a way or another.

Never dare to deal with them.

Well,like what i said...I got a better offer instead. No losses.Just some bad experience to share & warn the potential buyers of belvedere:)

Starry
09-08-08, 23:04
Well,like what i said...I got a better offer instead. No losses.Just some bad experience to share & warn the potential buyers of belvedere:)


Hi,
How much was the value that you managed to get and when you bought it? I like to hav a feel of the property at that area.

Thanks

beacon
10-08-08, 09:16
Hi,
How much was the value that you managed to get and when you bought it? I like to hav a feel of the property at that area.

Thanks
He bought beacon lah, but pretend to buy at bel.

beacon sucks
10-08-08, 11:07
He bought beacon lah, but pretend to buy at bel.

Stop talking crap here..u cannot afford to buy bel stop saying people pretend..MAD Dog Bark All the way from Dist 9,10 to 15.._!_

Unregistered_!_
10-08-08, 11:30
He bought beacon lah, but pretend to buy at bel.

Mayb u cant afford belv lah n bought lousy 999 le@seh0le beacon^-^

dirtyagents
11-08-08, 11:27
Is there a place where you can file a complaint against "dirty" agents ?
Think they are scumbags to scoop so low.

Reh
11-08-08, 20:36
Is there a place where you can file a complaint against "dirty" agents ?
Think they are scumbags to scoop so low.

Call and feedback their bosses.Thats all we as buyers can do.Unless the law comes up with some penalties for them.

CX
11-08-08, 20:42
Call and feedback their bosses.Thats all we as buyers can do.Unless the law comes up with some penalties for them.

I agree with what you said Reh..can complain to their bosses..:P

Query
11-08-08, 21:08
I agree with what you said Reh..can complain to their bosses..:P
Does an act from an agent who advertised your property for rent (without the owner's permission) amount to a crimminal act?

Unregistered88
11-08-08, 21:52
Is there a place where you can file a complaint against "dirty" agents ?
Think they are scumbags to scoop so low.
yes, feel strongly need to have this governance body.
Experienced one agent from PxxNxx.
She asked for 3% from the seller and $6000 from buyer, selling the property below the market to the buyer as the buyer offered her commission, and the agent was acting for the seller.

Whose's fault, the buyer even told the seller at the option sign stage but the buyer said the agent mentioned 3% from seller is the market price.

So, who to blame? seller right?

The buyer filed in a complaint to the PxxNxx on the case...the seller is a real loser

Unregisteredfff
11-08-08, 23:36
if the agent offers free f**k if I buy from her, is tat considered dirty too?

Scumbags
12-08-08, 00:30
I have experienced a agent from dt"x", sweet talking all the way.. charged me $2.3k for a paint job.. Found out from the actual contractors that let-slip that the "real" cost was only 1.5k !!! So much so for agents even from so called "reputable" agencies.. Believe the quality control deserved much to be desired ! Am still waiting an explanation on the overcharging but that never come. Surprisingly this is happening in Singapore, where there is stringent control on law and order and a safe place to live ! This is indeed Uniquely Singapore !

Ken SUCKS
12-08-08, 00:51
if u ever cme across an agent called Ken xxx frm DW, SHUN HIM! he is a double headed snake. I engaged hm once to find me a property in the west n just coz he had the exclusive rights to sell he became very yaya papaya. My deal wth the seller fell thru just becoz that bastard refused to deal wth me due to sme small misunderstandng. I urge owners nt to sign exclusives wth agents as they could jolly well be chasing clients away behind the owners back.
I have experienced a agent from dt"x", sweet talking all the way.. charged me $2.3k for a paint job.. Found out from the actual contractors that let-slip that the "real" cost was only 1.5k !!! So much so for agents even from so called "reputable" agencies.. Believe the quality control deserved much to be desired ! Am still waiting an explanation on the overcharging but that never come. Surprisingly this is happening in Singapore, where there is stringent control on law and order and a safe place to live ! This is indeed Uniquely Singapore !

get ready to burn
12-08-08, 01:37
See extract from www.salary.sg:

It’s not always so easy to make money, as the previous case studies suggested.

Slightly more than 10 years ago, a young couple bought something that almost ruined their lives financially.

It was the middle of 1996, a boom time for the stock market as well as the property market.

The couple - working professionals - were earning salaries that disqualify them for subsidised HDB housing.

Just married, they were yearning for a nice place to stay in.

They set their eyes on a 1,300 square foot condominium just north of Ang Mo Kio. The location is not very central, but the asking price was a crazy $1 million.

It was a stretch for the couple. Without huge savings, they could only afford the initial 20% downpayment and had to borrow the rest for the progress payments.

But given the rosy economy then, and the fact that they were holding well-paying jobs (making a combined $150k a year), they went ahead and bought the condo.

We all know what happened next.

The economy tanked. Asia went into financial crisis. Jobs were lost. Stock and property prices fell. Drastically.

Salaries were cut.

The couple also saw their income go down. Yet, they still had to make the mortgage repayments.

A big part of their earnings went to the bank.

They were slaves to the mortgage loan. (It’s still the case now. So they don’t save a lot.)

Worse, the condo’s value went down, almost to negative equity level, i.e. owing the bank more than the property’s worth.

Even now, when property prices are at peak levels (and maybe on the way down), the couple’s condo is still a loss-making investment. Why? Their condo is a leasehold property.

So, this unfortunate couple is “stuck” with a still-sizable bank loan, a condo that’s depreciating in value, and low savings. And they are considered high income earners…

A wrong move, and they are hit financially for a long time…

Will it happen again?

wont happen
12-08-08, 12:43
I think we cant compare 1996 to current situation.
The vision of our leaders differ then and now....

Singapore has changed and our leaders are pushing for a higher birth rate and pro immigration policy to bring population to 5.5mil.
there is also rebranding of the country with IRs and F1 to try and get more ppl, tourists, FT, immigrants.... to support the sevice sector...

Freehold hooray
12-08-08, 13:32
See extract from www.salary.sg:

It’s not always so easy to make money, as the previous case studies suggested.

Slightly more than 10 years ago, a young couple bought something that almost ruined their lives financially.

It was the middle of 1996, a boom time for the stock market as well as the property market.

The couple - working professionals - were earning salaries that disqualify them for subsidised HDB housing.

Just married, they were yearning for a nice place to stay in.

They set their eyes on a 1,300 square foot condominium just north of Ang Mo Kio. The location is not very central, but the asking price was a crazy $1 million.

It was a stretch for the couple. Without huge savings, they could only afford the initial 20% downpayment and had to borrow the rest for the progress payments.

But given the rosy economy then, and the fact that they were holding well-paying jobs (making a combined $150k a year), they went ahead and bought the condo.

We all know what happened next.

The economy tanked. Asia went into financial crisis. Jobs were lost. Stock and property prices fell. Drastically.

Salaries were cut.

The couple also saw their income go down. Yet, they still had to make the mortgage repayments.

A big part of their earnings went to the bank.

They were slaves to the mortgage loan. (It’s still the case now. So they don’t save a lot.)

Worse, the condo’s value went down, almost to negative equity level, i.e. owing the bank more than the property’s worth.

Even now, when property prices are at peak levels (and maybe on the way down), the couple’s condo is still a loss-making investment. Why? Their condo is a leasehold property.

So, this unfortunate couple is “stuck” with a still-sizable bank loan, a condo that’s depreciating in value, and low savings. And they are considered high income earners…

A wrong move, and they are hit financially for a long time…

Will it happen again?

Aiyoh... simple analysis.. negative equity was because of leasehold... Freehold and the house may hold up higher in terms of resale value and the couple may still be able to sell.... if not make profit, at least dispose of the financial burden...

Query
12-08-08, 22:08
Does an act from an agent who advertised your property for rent (without the owner's permission) amount to a crimminal act?
Any advise???

kal
12-08-08, 22:58
think about it, why would the agent spent $$ to advertise when the owner is not renting out?? Can't conduct viewing, waste of $$, waste time receiving calls ?? a bit no logic rite...:doh:

Free Ads
12-08-08, 23:56
think about it, why would the agent spent $$ to advertise when the owner is not renting out?? Can't conduct viewing, waste of $$, waste time receiving calls ?? a bit no logic rite...:doh:
Advertise in web does not neccessary need money.
Agent can use this tactic to growth his base....

Joe6816
01-09-08, 13:58
if u ever cme across an agent called Ken xxx frm DW, SHUN HIM! he is a double headed snake. I engaged hm once to find me a property in the west n just coz he had the exclusive rights to sell he became very yaya papaya. My deal wth the seller fell thru just becoz that bastard refused to deal wth me due to sme small misunderstandng. I urge owners nt to sign exclusives wth agents as they could jolly well be chasing clients away behind the owners back.


To me which agencies don't have bad agents, but there are good agent that don't under cut and give their best. I always meet up my buyer to show that what unit I have and prices transcated and selling before they commit. Call me for non obligation discussion on getting your choice home. Joe, 81712412

willing
11-09-08, 13:49
everywhere also got black sheeps one

buy
11-09-08, 22:36
i agree everywhere got black sheeps

BENTLY
12-09-08, 08:30
if the agent offers free f**k if I buy from her, is tat considered dirty too?

Wa! u dammed cheepo.... go geylang if u r desperate. respect agents dun tarnish buyers reputation looking for free ***.

Ethics
12-09-08, 10:49
Wa! u dammed cheepo.... go geylang if u r desperate. respect agents dun tarnish buyers reputation looking for free ***.

I agree, let's discuss these issues more ethically

BENTLY
12-09-08, 11:47
Does an act from an agent who advertised your property for rent (without the owner's permission) amount to a crimminal act?

Dun be an asshole la, u think police nothing to do isit?, little bit, complain n complain, typical singkie.

DW
20-09-08, 21:08
I am a new owner of Belvedere.I went through much trauma before buying one good unit there.I have met few dirty agents who are really despicable.
Here's a list of irresponsible agents.Beware..

1) Sharon from JTR***
2) Jennifer from Inno**
3) Mervis
Dear Belvedere,

Congratulations on your new purchase. I have been thinking about getting something in Belvedere for some time but pending some final due diligence. In respect, I wonder if you can share your views on the same, given you have probably satisfied yourself on the same - would be grateful if you can kindly advise.

I have made a couple of enquiry on Belvedere and from preliminary discussion from a number other investors, I understood this was one of the most controversial investment which Keppel Land (the developer) made and it was almost by sheer luck they managed to get away with this (or what it appears to be the case). I understand this was what seems to be a mistake on the developer whom back then purchased the land, not knowing there is/was another plot of land in front which could potentially block off Belvedere’s view completely (and potentially also block part of SeaFront). I am under the impression that a number of buyers was sold the idea that the plot of land immediately next to Belvedere was actually a Park (which, apparently, is not the case), and I believe most owners and prospective buyers continue to be under this belief still (which seems to be rather shocking!!).

I attached extract of the Master Plan 2008 (annotated) which is widely circulated amongst the investor community whom are looking at buying Belvedere and SeaFront. This will have an impact on our views on the the risk of another development to be developed in front of Belvedere, which is not unlikely at all!!

I wonder if anyone here can confirm the same or shed some light on this?

Petmail
21-09-08, 02:38
Hi there.. Congrates on finally getting yourself a really good unit @ a really good price in Belvedere!!! Good for both buyer, seller as well as we the agent to take note of those unethical agents who are really tanishing the professionalism in the real estate industry. What I can advise all buyers and sellers is that if you do have any complain or unhappiness about the agent serving you due to the earlier cases, do not hesitate to report them to the company or IEA etc. I am personally an agent and i have personally met with quite a number of such fellow agent during my new project showflat duties, resale & rental viewing... I can only politely turn them down... Please do remember this... the agent serving the buyer have to do all he has to do to make sure the buyer best interest is safe-guarded and of course vice-versa for the seller's agent to the seller. if as an agent we dun protect the interest of our client then why should buyers and sellers entrust us with their millions of $$$ property for management!!! I may not be a very super long serving agent in the industry but i definitely will make sure what ever i am doing is definitely for the best interest of my direct client. and honestly legally we are also binded for ensuring these.. there isn't any need for such regulations to protect the buyers or sellers if only most of us are doing the right thing and earning our ricebowl well deserved!!!

Nevertheless, I am sure there are also tonnes of hardworking and well-deserving agent in the market who are still worthy of everyone of your support in this business!!!

Cheers!
:)
Pet

agents are parasites
21-09-08, 02:56
no good or bad agents. They all come under the category "parasites". They offer peanut service and demand a huge chunk of commission. Why shud agents be paid a percentage of transactd price? They shud be given a fixed rate for processing all pte property transactions. Anythng mre is gratuitous frm the sellers n buyers.
Hi there.. Congrates on finally getting yourself a really good unit @ a really good price in Belvedere!!! Good for both buyer, seller as well as we the agent to take note of those unethical agents who are really tanishing the professionalism in the real estate industry. What I can advise all buyers and sellers is that if you do have any complain or unhappiness about the agent serving you due to the earlier cases, do not hesitate to report them to the company or IEA etc. I am personally an agent and i have personally met with quite a number of such fellow agent during my new project showflat duties, resale & rental viewing... I can only politely turn them down... Please do remember this... the agent serving the buyer have to do all he has to do to make sure the buyer best interest is safe-guarded and of course vice-versa for the seller's agent to the seller. if as an agent we dun protect the interest of our client then why should buyers and sellers entrust us with their millions of $$$ property for management!!! I may not be a very super long serving agent in the industry but i definitely will make sure what ever i am doing is definitely for the best interest of my direct client. and honestly legally we are also binded for ensuring these.. there isn't any need for such regulations to protect the buyers or sellers if only most of us are doing the right thing and earning our ricebowl well deserved!!!

Nevertheless, I am sure there are also tonnes of hardworking and well-deserving agent in the market who are still worthy of everyone of your support in this business!!!

Cheers!
:)
Pet

Petmail
21-09-08, 03:02
Dear Belvedere,

Congratulations on your new purchase. I have been thinking about getting something in Belvedere for some time but pending some final due diligence. In respect, I wonder if you can share your views on the same, given you have probably satisfied yourself on the same - would be grateful if you can kindly advise.

I have made a couple of enquiry on Belvedere and from preliminary discussion from a number other investors, I understood this was one of the most controversial investment which Keppel Land (the developer) made and it was almost by sheer luck they managed to get away with this (or what it appears to be the case). I understand this was what seems to be a mistake on the developer whom back then purchased the land, not knowing there is/was another plot of land in front which could potentially block off Belvedere’s view completely (and potentially also block part of SeaFront). I am under the impression that a number of buyers was sold the idea that the plot of land immediately next to Belvedere was actually a Park (which, apparently, is not the case), and I believe most owners and prospective buyers continue to be under this belief still (which seems to be rather shocking!!).

I attached extract of the Master Plan 2008 (annotated) which is widely circulated amongst the investor community whom are looking at buying Belvedere and SeaFront. This will have an impact on our views on the the risk of another development to be developed in front of Belvedere, which is not unlikely at all!!

I wonder if anyone here can confirm the same or shed some light on this?


Hi there DW, seems like you are pretty right. however I feel that any future development on that particular plot of land is definitely not an immediate issue as most of the time it will take at least 5-10 years before URA will release the land for sale while keeping it under the stateland control till such time. Just my 2 cents worth!

:)
Pet

Petmail
21-09-08, 03:10
no good or bad agents. They all come under the category "parasites". They offer peanut service and demand a huge chunk of commission. Why shud agents be paid a percentage of transactd price? They shud be given a fixed rate for processing all pte property transactions. Anythng mre is gratuitous frm the sellers n buyers.


Wow.. seems like you are in a really big war with all the agents..

:p
Pet

DW
21-09-08, 07:29
Hi there DW, seems like you are pretty right. however I feel that any future development on that particular plot of land is definitely not an immediate issue as most of the time it will take at least 5-10 years before URA will release the land for sale while keeping it under the stateland control till such time. Just my 2 cents worth!

:)
Pet Dear Pet,
Thanks for your message and input.

You have made a valid comment which set me thinking how best to approach the valuation of the Belvedere property. Here are some of my views:- It appears to me,

1. views on property market tend to be like the stock market, a leading indicator of the economy. More often than not, the perception of the value of the property by the buyers reflects their view on the future cashflow/value which the property is likely to promise;

2. property market is similar to a stock market, in that ideally, it should factor in all the information available to the market place ; save for the property market being more illiquid than stock markets in general .

3. The view available to a particular property affects its price. If the view available to a property is adversely affected/blocked or changed, the value of the property will be depressed.


If my proposed hypothesis of the property market is correct, it would then seem to be the price of Belvedere should, rationally price in the information and prospect of being completely blocked. In my mind, I envisage Belvedere's value to be split into two phase over time

Phase 1: From now to the time URA officially announces their intention to put up the plot of land infront for sale ("Event 1"); and
Phase 2: From end of Phase 1 to the time a developer have successful purchased that plot of land ("Event 2").


I believe we are now in Phase 1. To my view, this is in effect Belvedere issuing an "option" to the property market to exercise a depression of its price, when Event 1 occur. Belvedere has in effect issued a call "option" to the general public, in that, subject URA executing Event 1 - their price will fall in such time in the future. This "option" did not come in free, the price of the property should have been rightly been factored at the time the information was available to the public - in this case, at launch (the land parcel demarcation was already known back then during launch). I am not sure if the market have already priced this information in their purchase back then. If they did, they should have purchased Belvedere cheaper than other similar properties with the possibility of being blocked in the future.

When Event 2 happen, price drop would be a foregone conclusion and it will not be necessary for us to outline the obvious here.

Back to your comment, I tend to think the value and indirectly (note : I make a difference between value and price, they being not always the same) the price of the property is not only affected by what will happen in the near term - but I tend to think the market will always factor in all the available information at this time, to price it correctly. If the public/universe of potential Belvedere buyers is not aware of such potential completely blockage in future, the price now probably does not reflect such information.

My view is, the value of Belvedere now should rightly price in such future possibility (perhaps discounted by a factor of time, at best) as the property has in effect granted an "option" and that "option" did not come free - it came at a cost to the owners of Belvedere whom will be selling the property in future, even though the prospect of it being developed in the next few years may appear to be slim. As we would have observed by now, we are dealing with the possibility/probablility and chances of development of the plot of land blocking Belvedere. If issues of probability in the time horizon are involved, it is then even more evident that the price of Belvedere should be no different from option pricing model - having Belvedere issued an option to the general public for future price depression.

It seems to be most buyers or even owners are not aware of the plot of land infront of Belvedere could potentially be developed into another condominum and thereby potentially completely blocking its view (and consequently, as a result of Event 2, driving Belvedere's prices to what I believe would be substantially below current levels). If my postulation is correct, Belvedere is probably mispriced now simply due to ignorance by buyers, which unfairly caused them to price it at a level which they may not consider to pay for, if they are made aware of such potential blockage and undeveloped land parcel in front of Belvedere.

My questions are:-
1. Is the information on the flanking land parcels which will potentially and completely block off Belvedere's view already factored in the current price levels (I understand most owners/agents and buyers are not aware of this yet!)?
2. If no to Q1 above, does this mean Belvedere is currently mis-priced ?

Grateful for any views on the above will be most appreciated.

Petmail
21-09-08, 18:11
its seems that your worries are kinda unfound as if you look at all forms of property be it HDB or private, landed or condo... Their value depends very much on the market value at the point of sale which is usually being backed by the bank valuation. of course tangible & intangible benefits do adds into the difference between two property on the same elevation with the same size, setup & renovation yet different pricing. There are various factors which is determining the current price. if you look into property, future development may be taken into consideration for value boosting by most individual buyers & sellers but most often usually taken for "As is; where is" condition. There are also some buyers who are surprisingly willing to make better offer to seller for units with most unpopular condition in the views of the other buyers.

Just my 2 cents though.

:)
Pet

DW
21-09-08, 18:47
its seems that your worries are kinda unfound as if you look at all forms of property be it HDB or private, landed or condo... Their value depends very much on the market value at the point of sale which is usually being backed by the bank valuation. of course tangible & intangible benefits do adds into the difference between two property on the same elevation with the same size, setup & renovation yet different pricing. There are various factors which is determining the current price. if you look into property, future development may be taken into consideration for value boosting by most individual buyers & sellers but most often usually taken for "As is; where is" condition. There are also some buyers who are surprisingly willing to make better offer to seller for units with most unpopular condition in the views of the other buyers.

Just my 2 cents though.

:)
Pet
Dear Pet,
Thank you for your input and your reply is very interesting and certainly thought invoking in respect of how you approach property valuation.

I tend to believe we are probably talking about the same underlying basis of valuation but from a different approach. My view of the market will always price in all available information, informed and aware to the universe of buyers remains the central thrust of the analysis. Let me have a good at it, using your bank valuation basis.

On the assumption of the following:-
1. Bank valuation typically rely on an average of an aggregate of valuers' input.
2. Valuers input on fair value is typically dependent on recent transacted prices.
3. Recent transacted prices, assuming a competitive and efficient market, reflects and prices in all available information in the market, indicating what is agreed by marginal participants (buyers and sellers) in the market

Pt 3 appears to lead to Pt 2 and thus pt 1. Pt 1 points to your proposed observation of prices are somewhat backed by bank valuation. I believe this is consistent with the fact the market clearing price (transacted price) should always price in all available information. Bank valuation depends on valuers input, which in turn depends on recently transacted price. In a open market, property prices will reflect the fair price of all information available (which includes the prospects the optionality of a development granted itself of a future blockage, if they are aware so) to all participants, leading to marginal participants of the market having an agreement on price and thus the transaction.

In this respect, I tend to agree with you - Yes, bank valuation to some extent is a proxy to market's perception of fair value on the basis of Pt1 - Pt 3 above. But it routes back to the fundamental analysis of market pricing in all information (i.e. source of bank valuation relates to market clearing price, as postulated herein, as assumed if it is acceptable). Further the concept of "As is, where is" is also consistent with market pricing in all the information. The transacted price reflects both the sellers and buyers appreciation and awareness of the facts/information/news available to them at the time of transaction which includes condition of the property, future development opportunities around the development. For example, I understand there was a increase in prices in properties near the IR (The Sail, Carribean..etc), as soon as the government announced firm plans of IR back in the earlier years. While the IRs then, was not built as is or neither were the development plans defined, property values in these IR neighbouring areas experienced a rise. This, I believe is an example property prices tend to be a leading indicator, even if the latest positive development have not have been there yet. Trades (i.e. property transactions) are done on the premise of these future prospects.

Similarly, I also understand some developments like Stella (West Coast) experienced a somewhat falling price after firm plans of a flyover is expected to be constructed immediately next to the property. Bad news/prospects are priced in as well, in a efficient market. By the same token, I wonder how this would apply to Belvedere, subject to the two phase analysis which I presented in my earlier post.

If my hypothesis is correct, and assume further my postulation that a free market will always price in all the information available, my primary question remains if current Belvedere prices have got the recent discussion herein below priced into consideration (coz market prices reflects what the marginal participants in the market agree upon based on all available information. If participants are not informed or not aware of certain information, the prices transacted clearly do not reflect that piece of information).

Grateful if others can share their views and perhaps any elaboration on the basis and principal points of underlying social-economical basis will certainly help. Its always nice and good learning (for myself) to hear from various standpoints and views on how market would price and perceive underlying fair value.

Thanks!

DW
21-09-08, 18:49
its seems that your worries are kinda unfound as if you look at all forms of property be it HDB or private, landed or condo... Their value depends very much on the market value at the point of sale which is usually being backed by the bank valuation. of course tangible & intangible benefits do adds into the difference between two property on the same elevation with the same size, setup & renovation yet different pricing. There are various factors which is determining the current price. if you look into property, future development may be taken into consideration for value boosting by most individual buyers & sellers but most often usually taken for "As is; where is" condition. There are also some buyers who are surprisingly willing to make better offer to seller for units with most unpopular condition in the views of the other buyers.

Just my 2 cents though.

:)
Pet
Dear Pet,
Thank you for your input and your reply is very interesting and certainly thought invoking in respect of how you approach property valuation.

I tend to believe we are probably talking about the same underlying basis of valuation but from a different approach. My view of the market will always price in all available information, informed and aware to the universe of buyers remains the central thrust of the analysis. Let me have a good at it, using your bank valuation basis.

On the assumption of the following:-
1. Bank valuation typically rely on an average of an aggregate of valuers' input.
2. Valuers input on fair value is typically dependent on recent transacted prices.
3. Recent transacted prices, assuming a competitive and efficient market, reflects and prices in all available information in the market, indicating what is agreed by marginal participants (buyers and sellers) in the market

Pt 3 appears to lead to Pt 2 and thus pt 1. Pt 1 points to your proposed observation of prices are somewhat backed by bank valuation. I believe this is consistent with the fact the market clearing price (transacted price) should always price in all available information. Bank valuation depends on valuers input, which in turn depends on recently transacted price. In a open market, property prices will reflect the fair price of all information available (which includes the prospects the optionality of a development granted itself of a future blockage, if they are aware so) to all participants, leading to marginal participants of the market having an agreement on price and thus the transaction.

In this respect, I tend to agree with you - Yes, bank valuation to some extent is a proxy to market's perception of fair value on the basis of Pt1 - Pt 3 above. But it routes back to the fundamental analysis of market pricing in all information (i.e. source of bank valuation relates to market clearing price, as postulated herein, as assumed if it is acceptable). Further the concept of "As is, where is" is also consistent with market pricing in all the information. The transacted price reflects both the sellers and buyers appreciation and awareness of the facts/information/news available to them at the time of transaction which includes condition of the property, future development opportunities around the development. For example, I understand there was a increase in prices in properties near the IR (The Sail, Carribean..etc), as soon as the government announced firm plans of IR back in the earlier years. While the IRs then, was not built as is or neither were the development plans defined, property values in these IR neighbouring areas experienced a rise. This, I believe is an example property prices tend to be a leading indicator, even if the latest positive development have not have been there yet. Trades (i.e. property transactions) are done on the premise of these future prospects.

Similarly, I also understand some developments like Stella (West Coast) experienced a somewhat falling price after firm plans of a flyover is expected to be constructed immediately next to the property. Bad news/prospects are priced in as well, in a efficient market. By the same token, I wonder how this would apply to Belvedere, subject to the two phase analysis which I presented in my earlier post.

If my hypothesis is correct, and assume further my postulation that a free market will always price in all the information available, my primary question remains if current Belvedere prices have got the recent discussion herein below priced into consideration (coz market prices reflects what the marginal participants in the market agree upon based on all available information. If participants are not informed or not aware of certain information, the prices transacted clearly do not reflect that piece of information).

Grateful, and more would be welcomed in sharing their views and perhaps any elaboration on the basis and principal points of underlying social-economical basis will certainly help. Its always nice and good learning (for myself) to hear from various standpoints and views on how market would price and perceive underlying fair value.

Thanks!

Petmail
21-09-08, 19:03
Hi DW, am just trying to look upon all these like a buyer or seller too instead of being an agent. To be honest, I would sincerely think the bank valuer does have statistics in hand to work out their valuation base line. example, land cost, construction cost, tenure, amenities, etc. current price after factoring all these will also be reviewed against the market transaction price plus the transaction price of nearby development both old and new as well.

:)
Pet

DW
21-09-08, 19:22
Hi DW, am just trying to look upon all these like a buyer or seller too instead of being an agent. To be honest, I would sincerely think the bank valuer does have statistics in hand to work out their valuation base line. example, land cost, construction cost, tenure, amenities, etc. current price after factoring all these will also be reviewed against the market transaction price plus the transaction price of nearby development both old and new as well.

:)
Pet
Dear Pet,
Thanks for your email. Actually I am currently rushing something and unfortunately I will have to give your comment a quick one. But the short version of my view/response as follows:-

1. I fully agree with you Banks do have their own internal statistics but that is done mostly by their equity research team for equity research purpose and I believe there are good reasons for doing so. If you are viewing property developments from an equity point of view, these are considerations which you would require from a true blue valuation standpoint in your recommendation of a particular stock pick. I know CS has a pretty good sector research team that does this, led by Wendy Koh. I am sure you guys have read about the real bad press sector review they issued in May 2008.

2. For mortgage financing purpose, the fundamental assessment (my personal thoughts) lies with credit risk. The bank assess credit risk of a particular mortgage lending transaction based on the potential write off in the event of a liquidation scenario (and their recovery rate). Banks do not really look at upsides, like they would do in the equity side of business in considering mortgage lending.

My own thoughts (purely my personal view) on bank's valuation and their underlying criteria and how it lines up with my interest as a homestayer as follows:-
a. Banks lend on a certain loan-to-valuation ratio (i.e. 80%, 90%) as a means of buffer for market risk in the event of a default by the mortgagor/Borrower.

b. In the event of a default by the Borrower, banks will exercise security and take over the legal ownership of the property. As most banks would prefer not to hold these property on their banks, they would usually take the liquidation approach - sell the property with a goal to recover all interest and loan principal outstanding.

c. The LTV ratios provides banks a form of buffer against market risk. SUppose a bank lends at 80%, they have in effect a 20% buffer against market risk should they need to enforce security / liquidation. As banks are primarily concerned about getting their interest due and principal back, financing at 80% appears to be a safe bet for them in this sense (i.e. subject to them able to sell the property at, at least 80% of the property valuation).

Given the exit analysis for a mortgage lender is essentially liquidation of the assets for the recovery of their loan principal, therefore, I think banks tend to use prevailing market price as the basis of their credit risk assessment (and thus basis for their credit approval) rather than actual underlying cashflow and equity value of these properties (i.e. value a property based on actual cashflow basis leading from various costing estimates).

I know the response above is rather hand waving and when I get the time, will perhaps share a more substantiated view (backed by a more thorough response) on why my views are as above.