For the last two months, despite the ongoing economic crisis, Singaporeans have jumped into the property market because of several favorable conditions:
- The economy has stabilized
- The bank lending rates are low
- The returns on bank deposits are low
- The property market had took a dip to almost pre-2007 peak levels
- The rental yields are more than sufficient to cover for monthly interest (ie. Some properties become self financing after the 20% downpayment)
- The 2010 IR looks to bring property prices higher in the near future
For the same reasons, both Daddy and Mummy decided that it was probably a right time to invest in a property with the objective of securing higher returns for our deposits. However, it did not dawn to us that we did not commit our plans to God.
Along the way, we made several other mistakes as well. Being first timers in the property investment market, we lost time because we lost focus and prices caught up with our indecisiveness. Some of our mistakes include:
- We did not have a focus on what we really wanted. As such, targets changed from spacious 3 bedroom apartments to those near MRT, to those in nice residential areas, to those where there is good rental yield, from new launches to the resale market, etc.
- We did not stick fully to the budget we started out with. At a certain point in time, our budget very much exceeded the amount we had in mind to invest as we were following our hearts (nice showflats) rather than our minds.
- As prices were appreciating at $10,000 per week, we lost focus of our initial objective and became a slave to the chasing of prices and bullish market sentiments. This is dangerous as people can end up paying unreasonably high prices which is artificially propped up by the market frenzy.
- Most importantly, we almost lost sight of God as we start to shrug off biblical principles of contentment and affordability (from sermons and friends’ advices) as we sink deeper into the market frenzy.
For two months, we spent hours surfing the Internet for information on ideal properties and using our humanly analytical minds to try to understand, calculate and minimize the risks involved. Being accountants, we ran simulating models to weigh the risks and benefits. We relied more and more on ourselves and less and less on God in the search of a dream property.
Perhaps it is not in God’s plans that the timing is NOW because, by His saving grace, we encountered many obstacles and warnings along the way, each seemingly to suggest that we should act contrary to our humanly wisdom to invest now:
- Delays from HDB approving our request to invest in private property
- Warnings from sermons to invest within means
- Advice from friends/parents’ to stay off the overheated market
- Missing out on the possible closing of one deal
- Being delayed by an agent for 2 weeks and eventually losing a bid by $5000
- Potential changes in Mummy’s job situation
- Market dampening measures by the government
Despite all the obstacles, we continued to be caught up in search of that dream property that it eventually almost climaxed to the closing of a deal yesterday. As Mummy proceeded to execute the deal, Daddy (who is back in Shanghai) did not quite feel the peace in his heart. It suddenly dawned on us that we were paying a much higher price than our personal valuation of the place if not for the market frenzy. Deep inside, Daddy was hoping to call off the transaction, but was thinking that it was too late in the process.
By God’s grace, for some reason, there were some delay in the process and we managed to hold off the closing until today. (Our sincere apologies for all the inconvenience caused to Uncle Kit and the seller.)
Although it was a real struggle today to decide whether to proceed with the deal, God’s voice through close friends and daily devotion (which read “Letting Go”) appeared too strong for us to ignore. Though all our humanly analysis still points to this being a feasible deal, we decided not to proceed as we felt that God is not with us on this transaction.
Whilst we do not know at the moment whether this is the right decision (as prices could continue to escalate despite the dampening measures), we decided that God needs to be in the plans in order for things to work. Though our search did not materialize this time round, we benefited from other areas such as better understanding ourselves and each other (our risk adversity, our tolerance for investment losses and financial freedom) and most importantly to always commit our plans to God.
For now, we have decided to stay off the market until God gives the green light. All glory to God.
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