Levelling up your Property Search with MOAT Analysis

PLB Editorial Team

November 29, 2022

Table of content

Have you ever felt lost when searching for your next home? Where do you even start in this long and daunting process? It is not only the process of searching itself. You know for a fact that this decision is probably going to cost you millions of dollars. And you would have to live with the outcome of your decision for at least a few years.

The gravity of the decision creates a heavy yoke for home buyers especially amidst the tough economic conditions we are facing at the moment. On top of this, home buyers who are working full-time will also find the process long and effortful, taking up their precious weekends and leisure time. However, needs are needs and getting the right roof over your head is important.

In this article, we will introduce how the MOAT Analysis can help you speed up your property search (Condos & Apartments) while covering more blindspots and aspects that you might not have considered before. This high-quality search process can help you breeze through your property search journey and keep your back covered even when you exit the property down the road.

Why can property search be overwhelming?

Where do you want to stay? What are your budget constraints? Are you getting a good deal? These are the three top concerns people have when searching for a new property. The problem is, where should you start? Most people often start with a location that they really want to stay in because it is close to where their parents stay. Others try to find as big a property as they can buy within their budget constraints.

There are so many ways to go about finding your future home. Where should you start? Before you begin, you should start by asking yourself what features of the home are most important to you. What is so special about this home that you’ll love it and look forward to moving in? The home purchase isn’t something that people take lightly. After all, it is probably the most expensive thing they buy in their lives. Imagine having buyer’s remorse over a million dollar purchase. Ouch.

The journey of finding the right property is kind of like finding your significant other. Is this person the right one? What if there is someone more compatible down the road? What if there are issues that I only discover down the road? It will become dicey once we start comparing one option to another.

Property search easily overwhelms an ordinary human simply because there is information overload. There is so much information to digest, interpret, analyse, and compare. Making a decision based on this many dimensions of information gives us decision paralysis. Just to state a few dimensions: location (in itself already complex), price, size, amenities, number of bedrooms, and relative value. Comparing these many dimensions across multiple properties can already give us a messy table.

So if you are feeling overwhelmed by all the different things to look out for, (not to mention all the regulations on borrowing and the stamp duties to be aware of), don’t worry. Most people have gone through the process and it is normal to feel that way. We will share more later on how you can get through this with a lesser degree of pain.

What are some areas that are easy to overlook?

When it comes to the information overload, we usually go back to basics. In the end, most people tend to focus purely on the basics. Generic location, price quantum of the property, and the size (square feet). Some go a step further and look at price per square foot. Going back to basics is a good move to deal with the huge amount of information.

However, we should not base our property decisions (probably going to be over 1 million, mind you) on these small amounts of metrics. Tunnel vision on these simple metrics and making our decision based on these limited information may introduce blindspots into your search process.

What seems like a good deal purely based on price, might not actually mean it has good value. It might not have as much upside potential as you think it has. Covering these more complicated factors has its payoffs but it is much more difficult to filter out noise from real information when we are talking about what makes a property valuable.

There are some issues that are not transparent in the search process. Meaning to say that we can’t readily get these pieces of information on property search platforms like PropertyGuru and 99.co. Some issues like this refer to value, such as the price performance of the condo relative to comparables.

Other indicators of value require some thought and computation. As a result, the important metrics will take some additional time and effort to interpret. But be assured that this will be well worth your time when you see how your property performs over the next few years.

How does MOAT Analysis help you?

The MOAT Analysis helps with the information overload and simplifies 10 aspects of property value into an easy to understand visual chart. These 10 aspects are related to their present and future value. We examine the Volume Effect, Region Disparity Effect (previously named Value Effect), Rental Demand, Quantum Effect, Parents Attraction Effect, MRT Effect, Exit Audience, District Disparity Effect, Landsize Density Effect, and Bala’s Curve Effect.

Rather than having to do all the research yourself, our MOAT Analysis does all the private investigation and computational work for you. This helps to reduce the time spent on researching, and more time on the discussions and decisions before the big move.

The core benefit of the MOAT Analysis is that information is appropriately visualised and overcomes the information overload problem. In addition, metrics on value are computed to make sure that the blindspots on more complicated comparisons are covered.

The real perk comes when you can easily compare multiple projects on these 10 dimensions. Rather than painstakingly compare them with a table, the chart offers an easy way to compare and analyse the differences between your shortlisted projects. This is a visual solution that our clients love and that our team is proud of.

If you have not shortlisted a project yet, and you are earlier in your search process, fret not. We have included a new search feature for you. You can now filter the properties according to your budget based on price quantum. You can also filter based on PSF and Size. These features will help you streamline your search for properties that suit your needs and have a great MOAT profile that you want.

For example, let’s say we are looking for a property within our budget (maximum $1.5M quantum, $1,500 psf) and size we are looking for (1,000 to 1,200 sqft). We also want a MOAT score of at least 80% and a Bala’s Curve, Region Disparity and MRT Proximity of at least 4 points. The result of our search will land us at Yewtee Residences and Sant Ritz. Based on how broad your search is, more projects will be in the list.

Next, you can return to the MOAT Analysis to compare how your shortlisted properties perform on the MOAT Analysis. In this example, Sant Ritz performs relatively better than Yewtee Residences in Volume Effect and Rental Demand. On the other hand, Yewtee Residences does better in Landsize Density, District Disparity Effect, and Parents Attraction Effect. This gives us finer insight into which properties might be appealing to different demographics of buyers.

With this new feature you can filter for Condos and Apartments across Singapore on both simple and complex metrics. This will help you identify the needles in the haystack that you are looking for. Many of the projects might not be in your original shortlist, but keep an open mind as there may be more gems than you might think!