The dynamic nature of Singapore’s real estate market often translates into complexities that homebuyers, sellers, and investors must navigate. Given the array of influencing factors — ranging from economic trends, government policies, market sentiments, to property-specific characteristics — it is clear that property decisions extend far beyond simple considerations of location and price.
For those looking to buy, sell, or invest in Singapore’s property market, a thorough understanding of these influencing factors becomes paramount. Whether it’s the future development plans for a region, the proximity to essential amenities, the history of property prices in an area, or the broader economic and policy environment — each of these aspects can significantly impact a property’s attractiveness and value. In a market where seemingly minute details can translate into substantial differences in investment returns or property values, a comprehensive evaluation becomes an essential precursor to any property decision.
That is where our proprietary PLB MOAT Analysis comes as a breath of fresh air, offering a systematic approach to evaluating properties in a comprehensive manner. In this article, we will delve into how we use the PLB MOAT Analysis to help our clients make their property decisions.
Understanding the MOAT Analysis
Derived from the term ‘economic moat’, which represents a company’s competitive advantages, the PLB MOAT Analysis was designed as a robust method for determining the value of a property. It compares the property with others based on ten significant aspects, offering an impartial evaluation of its appeal to the broader Singaporean market. These ten key dimensions provide a holistic picture, accounting for not just the physical characteristics of a property, but also its location, the future growth prospects of the area, and other socio-economic factors.
The caveat here is that the MOAT Analysis can only be used for condominiums and apartments, and it does not take into account physical characteristics such as the renovation, facing, and layout orientation of a specific unit within the development. It analyses the project as a whole based on the ten parameters.
These ten parameters include:
- Quantum Effect
- Volume Effect
- Bala’s Curve Effect
- MRT Effect
- Rental Demand
- Exit Audience
- Landsize Density Effect
- District Disparity Effect
- Region Disparity Effect (previously named Value Effect)
- Parents’ Attraction Effect
We have previously written an introduction to the PLB MOAT Analysis and also how it can help to level up the property search process.
Advantages of Using MOAT Analysis in Property Transactions
Instead of personally conducting extensive research, our PLB MOAT Analysis takes on the heavy lifting (private investigation and computation) for you. This approach frees up your time, allowing you to focus more on other important aspects of the process.
When selling a property, understanding its value is critical. The MOAT Analysis can help sellers accurately gauge their property’s worth, thus ensuring they do not undervalue or overvalue their home, both of which can lead to lost opportunities. By highlighting the property’s strengths across different parameters, sellers can strategically market their homes to potential buyers.
Furthermore, this comprehensive analysis gives sellers a competitive edge by arming them with objective data and a detailed understanding of their property’s standing in the market. Such knowledge can be instrumental during negotiation phases and can lead to better deal outcomes.
For buyers, the MOAT Analysis is equally beneficial. It can assist buyers in comparing different properties and deciding which one aligns best with their needs and financial goals. This approach reduces the risk of making impulsive decisions based solely on surface appeal and enables more informed, strategic property purchases.
It also allows buyers to evaluate potential properties objectively, ensuring they get the best value for their investment. By providing a comprehensive evaluation, buyers can better understand what they will be getting out of the investment, as well as the property’s appeal and potential for future appreciation.
Case Study: How We Help Clients Invest In Properties With High Appreciation Potential Using PLB MOAT Analysis Tool
Last year, a client reached out to one of our consultants with the intent to buy a property. They were focusing on properties in the central region, specifically the Bishan or Ang Mo Kio area. After understanding their needs and preferences, the team conducted a thorough research and analysis into properties that might fit the bill for them, shortlisting projects that had high potential to appreciate in the future with the help of the PLB MOAT Analysis.
From there, several units that were listed on the market were shortlisted and among them was a high-floor unit at Centro Residences. The team then made a research deck to present the findings to the buyers, including information such as the MCST fees, floor plan, and payment breakdown. Through the research, Centro Residences became the top choice as it came back with a MOAT score of 80%. Typically, projects with a MOAT score of 70% and above have a higher appreciation potential as they would have generally scored well across the ten parameters of the MOAT Analysis.
Further analysis of the upcoming developments in the area provided even more assurance – AMO Residences was slated to be launched at that time, and after doing an estimate of the launch price based on the developer’s estimated breakeven price, the team estimated a close to $800 PSF safety margin if the buyers were to enter into Centro Residences. This solidifies its potential to appreciate greatly in the future, convincing the buyers to make the move.
Another case study that comes to mind was when we helped a client who was looking for an investment property to expand his property portfolio last year. He first reached out in December 2021, but did not have a specific project, location, or even district in mind. Nevertheless, the team gathered all his requirements and curated a list of potential investment properties to present to him.
Using the MOAT Analysis, the research deck was filled with well-researched and comprehensive information which included the project information, site plan analysis, unit distribution, available floor plans and facilities, as well as comparisons with other projects and future developments in the area. This allows the client to make an informed decision on which project best fits their needs and requirements.
The client eventually picked from our curated list and went with The Calrose, a freehold property located next to Lentor MRT station, to capitalise on its exceptional value retention and potential for capital appreciation due to the upcoming developments around the Lentor area. Because of the intensive research, it was discovered that there was a change of zoning in the area from a reserve site to residential zoning, meaning that a future injection of residential supply will further contribute to the upward trend of prices in the Lentor area. Not to mention that the bulk of the surrounding developments are leasehold properties facing lease decay, which made freehold properties in the area stand out more.
Closing Thoughts
By providing a clear, unbiased, and comprehensive evaluation of a property’s value, the MOAT Analysis not only builds trust between our consultants and clients, it empowers individuals to make informed decisions that align with their real estate objectives and financial plans. Whether you’re looking to buy your dream home or to market and sell a property to its highest potential, leveraging the MOAT Analysis can pave the way for you to navigate the market.
If you wish to stay updated with the recent trends in the Singapore property market, we invite you to explore our educational YouTube channel, NOTG, and our webinar series. These platforms offer insights and expert breakdowns on diverse facets of the property market.
For individuals seeking bespoke consultancy services, our team of seasoned real estate consultants is always ready to offer professional counsel, customised to align with your unique needs. Feel free to reach out to us here and we will be in touch shortly. Thank you for reading and following PLB, see you in the next one.
