By Property Soul (guest contributor)

This blog post is written solely for readers who want to know the truth. For those who prefer to listen to sweet lies, the bitter truth may be too much for you. Feel free to limit your exposure to property articles published only in the local papers and property portals. Then everything will be fine.

It is never easy to deny what we once believed in. We need the intellect and courage to understand and accept the truth. As Chinese writer and poet Lu Xun (鲁迅) said, “Only real knights dare to face head-on with the sad truth in life”.

That reminds me of three things I learned from a 2016 Cantonese drama Margaret & David: Green Bean (玛嘉烈与大卫: 绿豆):

1) We choose to believe in someone or something, though we already know that person may not be trustworthy and what he or she said may not be entirely true. But we would rather live in lies because we are afraid that the truth is too much for us.

2) When we have doubts, we look for assurance. When we have questions, we want the answers. But not all questions have answers; not all answers are the facts, and not all facts we can accept.

3) The closer we get to the truth, the more distant we feel. Because the truth often contradicts what we used to believe in. We need the courage to believe the truth and the guts to tell the truth.

When returned units and reissued options become the norm

Back in November 2018, I had been reporting the high number of returned units for new launch projects (read my earlier blog post “New launch returned units and 3 mysterious cases”). Contrary to what was reported in the media, the impressive number of new units sold could never tally with the URA website’s published data on “Private Residential Property Transactions.

Two months earlier in September 2018, developers reported a total of 542 units sold out of 26 new launch projects. However, there were 169 units that were returned. For every three units sold to buyers, one was given back to the developers. Nonetheless, a Channel NewsAsia article told us that “New private home sales jump 42% in September” compared with last year,

The following month in October, there was an extraordinarily high percentage of sold units being returned to developers, especially for Stirling Residences (48%), The Tapestry (40%), Park Colonial (38%) and Riverfront Residences (27%). And Orange Tee & Tie told The Straits Times that the October total new sales number “shows that demand for new homes at existing launches have seen a pick-up after the (July 6) measures” (The Straits Times, Nov 16, 2018).

In December 2018, the media reported developers sold 1,198 private homes in November which were nearly 2.5 times the 487 units in October and about 1.5 times year-on-year. Then a Credit Suisse report published in February 2019 pointed out the unusual spike in the number of returned units in December. A total of 398 units or 33 percent of units sold were returned to developers.

Since the introduction of the new cooling measures, it has become a trend for new units sold to be mysteriously missing both after the first launch weekend and in developers’ monthly sales reports. A significant percentage of these units have buyers who failed to exercise the Option to Purchase and returned the units to the developers. The same unit could have the option continuously reissued, returned, and resold by the developer multiple times.

This trick helps developers, their property agencies and the vested media to report impressive sales results to the public – good numbers to prove that there is pent-up demand in the market for their projects.

When the Credit Suisse report came to light, the URA finally announced that they would adjust the monthly sales figures submitted by the developers based on the number of returned units, starting from the January 2019 figures.

Or is that so?

Parc Botannia: The habitual misrepresentation of new units sold

In July 2019, a Straits Times article reported that there were four new projects launched in June and one of the June top sellers Parc Botannia booked 60 units (“New home sales in June drop 14% from May”, The Straits Times, July 15, 2019). But the July URA data showed that Parc Botannia had 48 out of 60 units returned to the developer. With a return rate of 80 percent, the project actually sold only 12 instead of 60 units for the whole month in June.

In January 2020, another article featured a new launch sales table again with Parc Botannia as the top-selling project in December 2019 after 49 units sold (“New private home sales in December down 53% from November but up 10.6% from year ago”, The Straits Times, January 15, 2020). But a check on the URA data the following month showed that Parc Botannia had 27 returned units out of 49 units sold. The return rate is 55 percent. Similarly, the previous month in November the developer claimed to have sold 59 units but 41 of them were returned in December. Again the project had the highest return rate of 69 percent.

I could only think of two possible reasons to explain the high return rate of Parc Botannia since launch:

1) The developer is plucking numbers out of the air; or
2) Buyer’s regret for this project is as contagious as the coronavirus.

As I need to limit the number of words in this blog post, I am only citing one example here. Parc Botannia was picked among the new launch projects through balloting. If you are curious, feel free to check the URA website for the number of returned units every month for all the new launches.

As readers or prospective buyers, we are baffled: What makes a new condo project a top seller according to the local media? Have they ever questioned the high number of new units sold by a new launch that is not so new and has been in the market for many months? How do we know whether the reported number of units sold is really the actual number of units sold, with options exercised and caveats lodged with the Singapore Land Authority?

Developers are not required to sign any declaration form and the authority doesn’t bother to check and balance. So everybody is encouraged to cheat by plucking numbers out of the air to exaggerate their sales performance. The system is incentivizing those who cheat and making those who report the actual sales results look like fools.

Press articles reporting an impressive number of units sold in the first weekend is free advertising for the developers to get more buyers for the new launch. The monthly media reports on new sales of the month can show that the projects with a high number of returned units are the best sellers of the month.

Despite the market oversupply and lackluster demand, the private residential market and developer stocks are still attractive. Analysts are optimistic about the property market for no reason. Upgrade your recommendation to “Buy” from “Hold”. What ridiculous big lies they are telling. Who are they trying to fool?

If you have the rewards, you must also get some of the risks, not let others pay the price of your mistakes.
If you inflict risk on others, and they are harmed, you need to pay some price for it.
If you give an opinion and someone follows it, you are morally obligated to be, yourself, exposed to its consequences.

– Nassim Nicholas Taleb, Skin in the Game

Better be safe than sorry

Previously, The Straits Times reported that Wing Tai sold 70 percent of The M condo over the launch weekend. Assuming the sales number from the developer is valid, I must admire the incredible courage demonstrated by the buyers to stand tall amid a global pandemic and the unpredictable economic damages caused by it.

From what I’ve seen in the past, every time right before a recession starts (and even in the beginning stage of a recession), there will still be many buyers in the market. As the recession progresses, the number of buyers will slowly diminish. I don’t mind seeing brave “early birds” entering the market. Next time we are likely to get better deals from these fire sales than from the developers. In any financial market, if no one buys at the peak, where can value investors find bargains?

Celine Tang, Managing Director of property developer SingHaiyi once said in an interview, “If you miss out now, you could get another chance later. In the case of uncertain investments, it’s better to deal with a lost opportunity rather than a mistake.”

I resonate with her wisdom in investment, especially when I have my fair share of successes and failures through the years. It is far better to miss an investing opportunity than to make an investing mistake. You may lament over a missed chance to make money, but there are tons of other opportunities elsewhere. If you make any mistake in buying properties, you can end up with a negative equity, a bank foreclosure and a tarnished credit record.

We can’t compare the property market of 2003 and 2020. The residential property price index only fell 2 percent in the SARS year because prices couldn’t fall lower. But in 2020, property prices are still high so there is much more room for a market correction. Property Price Indexes are misleading because prices will continue to go up so long as developers continue to roll out new projects at higher prices and the fools continue to rush in.

John Maxwell said “Courage is making things right, not just smoothing them over”. I don’t know about you. But I always respect those who tell me the truth no matter how hard it is. I am always ready to face the realities in the property world because experience told me that, in any investment, not knowing the truth can cost me a lot of money.

By guest contributor Property Soul, a successful property investor, blogger, and author of the No B.S. Guide to Property Investment.

[Disclaimer: The main aim of is to provide good sources of information and opinion on the Singapore property market for our readers. These sources come from a broad mix of experts, who could be independent bloggers, analysts, and real estate professionals. We do not publish anything we feel is overly promotional or lacking substance, and do not get paid to post articles (any ads you may see will be clearly marked). That being said, you should be aware that every guest contributor has their biases, and so you are less likely to see an article from a property agent (for example) that will be negative on the market.]

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