#2 What’s Happening to the Landed Property Market in 2021?! | NOTG S2 E2

1[Melvin Lim]
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All right, welcome back to our episode two,

2[Melvin Lim]
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part of season two on Nuggets On The Go.

3[Melvin Lim]
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Very happy to be back here and we wanna kickstart

4[Melvin Lim]
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on our Nuggets On The Go session at the start of 2021

5[Melvin Lim]
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and thank you for supporting our podcast channel

6[Melvin Lim]
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on Spotify and Apple Podcasts.

7[Melvin Lim]
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And once again,

8[Melvin Lim]
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you can also have a look at the video version

9[Melvin Lim]
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as in what we’re recording right now on our YouTube channel

10[Melvin Lim]
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at PropertyLimBrothers.

11[Melvin Lim]
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If you prefer something more visual,

12[Melvin Lim]
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you want to watch a video

13[Melvin Lim]
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rather than just listening on the go.

14[Melvin Lim]
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Now, today, we wanna talk about cluster houses

15[Melvin Lim]
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and 99-years landed property, but in particularly

16[Melvin Lim]
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to what is happening in the landed property market.

17[Melvin Lim]
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So late last year in around,

18[Melvin Lim]
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I think the November 2020 period.

19[Melvin Lim]
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I had a webinar session with UOB,

20[Melvin Lim]
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It’s a collab between PropertyLimBrothers and UOB customers

21[Melvin Lim]
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talking about some of the updates on the real estate market

22[Melvin Lim]
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towards the end of 2020

23[Melvin Lim]
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and what is actually happening

24[Melvin Lim]
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after the Circuit Breaker in Singapore amidst the pandemic.

25[Melvin Lim]
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And so in particular, I made a summary

26[Melvin Lim]
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in terms of what will be some of our forecast

27[Melvin Lim]
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in our own opinion.

28[Melvin Lim]
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Of course, ever since the Circuit Breaker has been lifted up,

29[Melvin Lim]
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landed property has been the blue chip.

30[Melvin Lim]
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And in fact, for the entirety of 2020, landed property prices

31[Melvin Lim]
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in terms of price index has risen by

32[Melvin Lim]
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quite a significant amount of percentage.

33[Melvin Lim]
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So we also talked about why did that happen.

34[Melvin Lim]
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If you want to have a look at the full UOB seminar,

35[Melvin Lim]
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that particular recording

36[Melvin Lim]
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is actually in one of our playlists

37[Melvin Lim]
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under “Talks and Seminar”

38[Melvin Lim]
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on PropertyLimBrothers YouTube channel

39[Melvin Lim]
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you can have a look at that.

40[Melvin Lim]
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But we wanna talk about cluster houses

41[Melvin Lim]
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and at 99-years landed property

42[Melvin Lim]
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in particular for today’s episode,

43[Melvin Lim]
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because in our opinion, cluster houses

44[Melvin Lim]
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and 99-years landed property

45[Melvin Lim]
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of course, they’re two different types of properties

46[Melvin Lim]
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but they have always been sort of classified

47[Melvin Lim]
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as a different kind of landed property

48[Melvin Lim]
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in the sense that

49[Melvin Lim]
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because of the fact that cluster houses

50[Melvin Lim]
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came about in terms of popularity

51[Melvin Lim]
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probably over the past 10,

52[Melvin Lim]
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I think it’s about 10 to perhaps at most 15 years,

53[Melvin Lim]
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because in the past,

54[Melvin Lim]
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people are usually very used to just pure landed properties

55[Melvin Lim]
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and cluster houses came into play

56[Melvin Lim]
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when there was this new concept

57[Melvin Lim]
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that developers came up with

58[Melvin Lim]
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whereby they usually will buy up a row

59[Melvin Lim]
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of the older landed properties

60[Melvin Lim]
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or so-called bungalows that are side by side

61[Melvin Lim]
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and then they’ll redevelop the entire

62[Melvin Lim]
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probably a huge plot of bungalow land

63[Melvin Lim]
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or maybe two plots of bungalow land

64[Melvin Lim]
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and then redevelop them into probably like 10

65[Melvin Lim]
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to 20 cluster houses.

66[Melvin Lim]
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So of course, cluster houses can fall into freehold,

67[Melvin Lim]
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99 or 999-years.

68[Melvin Lim]
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And the key distinction

69[Melvin Lim]
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is that you’re not buying the land itself,

70[Melvin Lim]
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you’re buying by the strata space

71[Melvin Lim]
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as if you’re buying a condominium

72[Melvin Lim]
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or apartment status kind of property.

73[Melvin Lim]
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But of course, in exchange, you get the landed feel.

74[Melvin Lim]
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It usually populates over three storeys,

75[Melvin Lim]
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three and a half storeys,

76[Melvin Lim]
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usually it comes with a basement,

77[Melvin Lim]
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you can park your car.

78[Melvin Lim]
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There are some facilities,

79[Melvin Lim]
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bigger cluster houses have fabulous facilities,

80[Melvin Lim]
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pool, gym and stuff like that.

81[Melvin Lim]
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But of course, most cluster houses,

82[Melvin Lim]
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they perhaps will likely just have a lap pool

83[Melvin Lim]
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and perhaps a gym in the basement.

84[Melvin Lim]
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So it depends on what kind

85[Melvin Lim]
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of custom houses we are talking about.

86[Melvin Lim]
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But the older version of cluster houses, they are townhouses

87[Melvin Lim]
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so that was the townhouse era

88[Melvin Lim]
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whereby it’s also like landed properties in the development

89[Melvin Lim]
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or townhouses located within a condominium project.

90[Melvin Lim]
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Modern terms, there are more called cluster houses.

91[Melvin Lim]
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So why do we wanna talk about this

92[Melvin Lim]
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is because this we have seen some increase popularity

93[Melvin Lim]
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in terms of demand for cluster houses

94[Melvin Lim]
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and 99-years pure landed property over the last two months

95[Melvin Lim]
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ever since the start of 2021.

96[Melvin Lim]
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Why is that so?

97[Melvin Lim]
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Especially properties that are in the range of

98[Melvin Lim]
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$2 million to perhaps $2.3 million cluster houses

99[Melvin Lim]
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or even up to $2.5 million, $2.6 million cluster houses,

100[Melvin Lim]
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99-years landed, they have been snapping up.

101[Melvin Lim]
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I mean, buyers have been snapping them up

102[Melvin Lim]
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and we’ve seen an increased level of activity

103[Melvin Lim]
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and demand over these two months.

104[Melvin Lim]
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I think one of the core reasons is because last year

105[Melvin Lim]
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perhaps the pure landed, that is freehold

106[Melvin Lim]
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999 (years) in terms of the absolute quantum price,

107[Melvin Lim]
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they have risen by a significant amount.

108[Melvin Lim]
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So like last year, perhaps in June,

109[Melvin Lim]
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you can still find a freehold inter-terrace

110[Melvin Lim]
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landed for about $2.5 million.

111[Melvin Lim]
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Now, if you key in $2.5 million

112[Melvin Lim]
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into the property portals, you can find nothing.

113[Melvin Lim]
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There is technically nothing

114[Melvin Lim]
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for you to find at this price range

115[Melvin Lim]
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just for example,

116[Melvin Lim]
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we just had that Chit Chat Session

117[Melvin Lim]
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that I mentioned in episode one of our Nuggets On The Go

118[Melvin Lim]
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our friend Daniel, we secured

119[Melvin Lim]
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that freehold three and a half storey landed property

120[Melvin Lim]
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for him at around $2.5 million.

121[Melvin Lim]
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That was in perhaps a couple of months back.

122[Melvin Lim]
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Yeah, I think it was around June, July period.

123[Melvin Lim]
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Now that same area,

124[Melvin Lim]
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the cheapest one that you can find

125[Melvin Lim]
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perhaps it’s already about $2.8 million $2.9 million

126[Melvin Lim]
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for a similar house

127[Melvin Lim]
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and thus I think the price range in terms of a quantum

128[Melvin Lim]
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for entry level landed property has risen so significantly.

129[Melvin Lim]
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Just over the last six months

130[Melvin Lim]
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because the demand has increased

131[Melvin Lim]
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a lot of people want size

132[Melvin Lim]
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a lot of people wants to park their capital

133[Melvin Lim]
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in the landed property where they enjoy the space

134[Melvin Lim]
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and thus when this category moved up,

135[Melvin Lim]
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as in the freehold inter-terraces

136[Melvin Lim]
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to closer to $3 million range,

137[Melvin Lim]
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especially in let’s say District 19, District 28

138[Melvin Lim]
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or maybe in District 23.

139[Melvin Lim]
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Then, now the entry level cluster houses,

140[Melvin Lim]
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it can be a freehold or 99-years

141[Melvin Lim]
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and 99-years landed property

142[Melvin Lim]
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that’s between $2 million to perhaps $2.6 million,

143[Melvin Lim]
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$2.7 million they then became favorable

144[Melvin Lim]
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because there is always a disparity effect

145[Melvin Lim]
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that we have talked about

146[Melvin Lim]
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meaning that when one category increases in price

147[Melvin Lim]
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and it’s out of reach for a certain category of buyers

148[Melvin Lim]
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with this range of budget.

149[Melvin Lim]
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They will then move to the next available category.

150[Melvin Lim]
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And of course now even like townhouses,

151[Melvin Lim]
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I mean in Tanah Merah, there are a couple of townhouses

152[Melvin Lim]
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developments which are the older from of cluster house.

153[Melvin Lim]
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They are also being snapped up pretty quickly.

154[Melvin Lim]
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So that is actually the few on the ground right now.

155[Melvin Lim]
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So just so that you will at least have a pulse

156[Melvin Lim]
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of what’s happening right now.

157[Melvin Lim]
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So we’ve also seen last year, all the way until right now,

158[Melvin Lim]
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four-bedroom properties, they are also in hot demand

159[Melvin Lim]
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especially if they fall into the range of let’s say

160[Melvin Lim]
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$1.6 million to $2 million, especially in the OCR region.

161[Melvin Lim]
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These are all in very high demand

162[Melvin Lim]
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and thus perhaps you might want to know

163[Melvin Lim]
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what should be the size and number of bedroom type

164[Melvin Lim]
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for the next property that you might wanna buy.

165[Melvin Lim]
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Because buying is always very easy

166[Melvin Lim]
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and every time we buy something,

167[Melvin Lim]
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we want to just do a personal forecast with our family

168[Melvin Lim]
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to see, “hey, what is the likely number of years

169[Melvin Lim]
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that we will be staying at this particular property?”

170[Melvin Lim]
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Is it gonna be five years?

171[Melvin Lim]
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Is it gonna be eight years?

172[Melvin Lim]
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Is it gonna be 10 years?

173[Melvin Lim]
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And then we do a projection forward

174[Melvin Lim]
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to see that, “hey, in five, eight years’ time,

175[Melvin Lim]
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will there be a buyer audience for my property?”

176[Melvin Lim]
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and who will be the buyer audience?

177[Melvin Lim]
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What would be the profile type?

178[Melvin Lim]
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And all these are very good questions that we ask ourselves

179[Melvin Lim]
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because this will then help us to make a decision

180[Melvin Lim]
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to see whether should we buy this property.

181[Melvin Lim]
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Should I go for a three-bedder or four

182[Melvin Lim]
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or maybe just stretch a little bit to a four-bedder.

183[Melvin Lim]
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Just to have a little bit more future proof

184[Melvin Lim]
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so that in future, when I wanna exit,

185[Melvin Lim]
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I don’t face too much of an obstacle

186[Melvin Lim]
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to reach a wider buyer audience in a sense.

187[Melvin Lim]
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And I think COVID-19 has really tweaked our behaviour

188[Melvin Lim]
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because we have seen such an increase and spike in demand

189[Melvin Lim]
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especially for ground floor properties

190[Melvin Lim]
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and of course, for penthouses.

191[Melvin Lim]
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A lot buyers have feedback to us

192[Melvin Lim]
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that hey, you know, after COVID, everybody just feel

193[Melvin Lim]
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that having a little bit of outdoor space,

194[Melvin Lim]
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patio space, roof terrace seems very pleasant

195[Melvin Lim]
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because now, everybody spends so much time at home,

196[Melvin Lim]
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You just want to have a bit more space for the kids,

197[Melvin Lim]
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for the dogs, a bit of breathing space.

198[Melvin Lim]
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And it feels good to have a little bit more space

199[Melvin Lim]
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or maybe just one extra bedroom

200[Melvin Lim]
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instead of three-bedder to a four bedder

201[Melvin Lim]
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if the affordability is there.

202[Melvin Lim]
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So yeah, just so that you might know

203[Melvin Lim]
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as to what is happening right now.

204[Melvin Lim]
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So we’ll talk more about such matters in the upcoming episodes.

205[Melvin Lim]
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And of course, I think it’s time to end off today’s session

206[Melvin Lim]
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I’ll see you on episode three,

207[Melvin Lim]
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and in the meantime, take care.