How Singaporean professionals Are Amassing Wealth In Real Estate [Chills 162 ft Justin Quek]

Real Estate Insights from Industry Insiders

Welcome back to Chills with TFC! In this episode, host Reggie sits down with Justin Quek, CEO of Orange Tea Thai, and Rakaesh from TFC to discuss the ins and outs of Singapore’s private property market.

Justin has climbed the ranks over the years to become CEO, giving him unique insight into both the agency and development sides of real estate. Rakesh works closely with property investors at TFC.

What are HENRYs?

We starts with defining the target audience – “Henry’s” as Justin explains, “They make definitely more than median, you know, household income doing well…around 25 percent is like 20,000 and above.”

Our target audience comprises working-class professionals who earn above the median household income, typically around 20,000 SGD and above. These individuals, often referred to as “Henrys” (High Earners, Not Rich Yet), have good income but may not possess traditional generational wealth. They seek financial growth and are keen to explore investment opportunities. This group, though lacking traditional generational wealth, possesses good incomes and a desire to accumulate wealth for the future.

The Role of a CEO in the Real Estate Industry:

Our guest for this discussion is Justin, the CEO at Orange Tea Thai. As a former agent-turned-CEO, Justin shares his journey and highlights the key drivers behind individuals entering the real estate industry. He emphasises that besides the financial aspect, the freedom and flexibility associated with being an agent are major attractions. However, as one matures, a sense of purpose becomes pivotal, leading to a shift in focus towards the greater good of the company and its people.

Importance of Being Purposeful:

Justin stresses the importance of being purposeful in one’s career. He acknowledges that our productive years are limited and encourages individuals to make the most of them. While financial stability is essential, finding meaning and contributing to society become driving forces beyond a certain age.

Navigating the Regulated Singapore Property Market:

The Singapore property market is unique in its regulations and policies aimed at maintaining stability. The government consistently intervenes with measures to moderate market performance whenever necessary. This approach has its advantages, as it ensures a balanced and predictable market environment. However, it also poses challenges for real estate agents, as they need to innovate, deliver more value, and remain relevant in a competitive industry.

Impact of Government Policies:

The conversation delves into the impact of government policies on the property market. Justin explains that the government’s approach has often been reactive rather than proactive. For instance, when the market shows signs of overheating, the government introduces measures to moderate it. The hosts discuss the example of the Additional Buyer’s Stamp Duty (ABSD), which has had a significant impact on foreign transaction volume in the market.

Foreign Buyers and Policy Changes:

Justin provides insights into the fluctuating trends in foreign buyer activity. He explains that foreign transaction volume accounted for 15-17% of the market before 2013 but dropped to 2-4% after the implementation of ABSD. However, in early 2020, there was a noticeable increase, prompting the government to react with policy changes to maintain market stability.

What do you think of the viability of real estate investing long term?

Justin acknowledges the cultural mindset ingrained by previous generations who saw huge growth. However, he notes “Singapore’s market is always a regulated one and the policies are in place to keep market performance moderated.”

The Importance of Purposeful Policy:

Both the hosts and Justin highlight the gravity of policy-making and its implications on the lives of individuals and the overall economy. They emphasize that policies are not made for mere amusement but are intended to shape the market and ensure stability.

Understanding Market Moderation:

Justin dives deeper into what “moderated” means. “Every time a measure comes in, you see there’s also a knee jerk reaction in the market. And we also get hit the most when it comes to that.” He cautions listeners that investing carries more responsibility than in less regulated markets.

Moderation in the property market refers to the government’s proactive measures to regulate and control the market’s performance. These measures are implemented whenever there is excessive growth or speculation, ensuring a stable and sustainable market. These policies have a direct impact on the number of transactions in the market and require agents to adapt and find new avenues for business.

Five Real Estate Investing Tips for Singapore’s Moderate Market:

1. Treat your primary home as a forced savings plan, not an investment
2. Consider starter homes further from the core central area to get your foot in the door
3. Have realistic return expectations given the market focus on stability over growth
4. Consider your age and timeline – the earlier you enter, the more time for equity growth
5. Diversify your portfolio and savings beyond just real estate for a balanced approach

Justin agrees the cultural mindset of buying early still holds value if you accept it as a long-term savings vehicle versus expecting overnight gains. Government policies aim to sustain employment and protect homeowners, which supports continued viability, in his view.

The Need for Innovation and Relevance:

Given the dynamic nature of the real estate industry, agents must constantly innovate and push themselves to provide more value to clients. Remaining relevant is crucial in a market with 35,000 agents vying for transactions. By staying informed, understanding market trends, and adapting to changing circumstances, agents can continue to thrive and serve their clients effectively.

For those struggling to qualify yet, exploring newer BTO or resale options further from the core that offer good value. The professionals agree patience and moderation remain key watchwords in this interesting, evolving market.

You can check their full interview on Chill with TFC, Episode 162 on Spotify, YouTube, Google podcast or Apple podcast for valuable insights into Singapore’s moderated property market. It highlights the challenges faced by working professionals, the impact of government policies, and the importance of purposeful work. As the property market continues to evolve, professionals in the industry must navigate the regulatory landscape and stay relevant to meet the needs of their clients.

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