When you think of property valuations in Singapore, the name David Ng comes to mind. As a veteran valuer, he has come a long way in the local real estate scene.
To many of us, the word ‘valuation’ is commonly associated with properties, be it residential, commercial or industrial. Yet there’s more to it than that. Valuations can be carried out on something as small as a drain – more colloquially known to us as a longkang – or as large as an entire place of interest in Singapore. (Bet you didn’t know that, right?)
We spoke to David on a Wednesday afternoon, with the possibility of post-lunch food coma kicking in, yet there was never a dull moment. David is extremely down-to-earth, as he spoke fondly of the mentors who have inspired him to be the man he is today, and very ironically, for someone so immersed in the real estate industry, he hasn’t involved himself much when it comes to property investment in the past decade.
In this interview, we find out more about the man who has amassed years of knowledge in the real estate and valuation business.
The Redbrick Team (RB): What does your role as a valuer consist of?
David (D): I am in charge of the valuation business as well as corporate services. We attend to corporate clients and look at their assets. Some companies also need annual valuations, so we do a yearly audit of their properties.
RB: What is a typical day at work like for you?
D: The first order of the day is to meet up with clients. These clients usually spill over from the day before and they want to meet with me to either see the property they are planning to finance, help them close a client or see a company which needs some advice. Later on in the afternoon I’ll come back, answer my indications (i.e. your valuations from the banks), prepare and vet reports, talk to my staff about the inspections they did, look at pictures and question them on the finishes, making sure it comprehends what I have given value to. Once the evenings come, I’m off to meet clients again.
Given how easy it is for people to reach me nowadays, I even have to answer calls and texts during the weekends, so there isn’t really much rest time as compared to when I first started out when everything went through fax.
RB: What are the most interesting encounters you have come across as a valuer?
D: I guess it would be all the specialised valuations we do for the government. These government installations have a lot of interesting things I didn’t know were there, and I didn’t know what I was valuing. There was an incident where I thought it was just a hill I was valuing, but it’s more than that. We also did valuations for various places of interests. Places of interests that had no comparables with anything else we have done, so we had to look at things such as ticket sales and traffic.
What makes it interesting is that you see the different facets of businesses you are dealing with, and how your valuation affects their proposals. We know that for an owner who is financing their property, our value is important for them to get the financing. They know where the parameters are. But for the big projects and government projects, we see more of how the businesses work.
RB: What are the differences in valuation today as compared to 20 years ago?
D: When I first became a valuer, every valuation report was about $1000-$1500. Now, it’s about $500 or less, and it’s been going down. I guess it’s the same in every service line, and I can’t blame anyone because it’s a natural trend. The business is still the same, the way we value and how do our work is the same, although there have been some improvements over the years, because of the Internet.
Now a lot of things are online and the information flow is better. For example, when we used to do valuations for machinery, we had to call the UK manufacturer to get the price. The research back then was huge. Now you can just Google and you’ll know the price, so that has made the job easier. Also, if we’re valuing a Malaysian property, both in the past and even until today, the Malaysian property market is a very closed market and they are not open to foreign transactions. So because of the Internet, we know what people are asking for a certain property. We still have to verify if the information is true, but at least there is information available and accessible to us.
What makes it interesting is that you see the different facets of businesses you are dealing with, and how your valuation affects their proposals.
RB: Will technology be a threat to valuers?
D: The nature of the business is bound to evolve. Everybody has to make money to survive. But that is one of the things that is an issue with technology. We have become very concerned, and everything we do now is in-house and won’t be shared or divulged. We have so much personal data in our systems that it can be very scary if it gets leaked, so we cannot compromise on that.
RB: How would you value a property? What are the criteria you look out for?
D: It’s always been the same. The first thing I ask for is the address. From there I have an understanding of a value, roughly how much it costs per square foot. Then I pinpoint the quality of the building, what is on the side, and what it is used for. I segmentalise it based on what I know. Check for comparables that contribute to your knowledge.
Because we have past transactions on hand in our phones, we can access them once we pinpoint the location, the building we’re valuing, the actual usage of the property. From those comparables we will make adjustments for the size of the unit, location, level, where it faces, etc. So you always start with the macro perspective, the location, then you zoom in from there.
RB: Can you describe the current property market in 3 words?
D: Hard to predict. It doesn’t look good. The way I see the government’s outlook on it, they are looking at going down a bit more. How much more I don’t know, but I think they are still going to prevent foreign money from coming in. If that doesn’t happen, the local market’s going to die. I’m particularly concerned about the retail and residential sector, which I think is going to be very challenging, especially so for retail. They are going to be under a lot of pressure, especially the ones under REIT, it will definitely be hard to maintain the rent. They have a shortage of good tenants, so it’s going to be a challenging year.
I’m particularly concerned about the retail and residential sector, which I think is going to be very challenging, especially so for retail.
RB: What are some common mistakes people make when buying properties?
D: I find that recently, a lot of people ask me to value cluster houses. One thing that buyers do not realise is that developers usually charge for void areas. When they put it on a brochure or a floor plan, 1/3 of it could be void. You cannot occupy or use it, but you pay for it and it’s not cheap. Then they would ask me to go and measure it, and I measure less than what’s stated in the title and I tell them that it’s not wrong, because you have this void area. And you cannot sue the developer because it’s his right to sell it to you. You did not see the space, you bought it off the floor plan so it can look big, but it’s not. You are practically paying for air. And you can go to court, but I will be a detriment to you because I will have to say that the developer is correct and the price he charged you at includes the void area.
RB: Is it necessary to engage a valuer to check on valuation before making a purchase?
D: I think the market is quite knowledgeable. People roughly know the price they are paying, whether it’s way above or way below. You don’t really need a valuer, unless you’re talking about very specialised properties. For those who want to buy temples or petrol stations, they will call us. But if for those buying an apartment, nobody calls us, unless it’s a friend who will ask us whether it’s suitable to buy. They just want to check with us as a valuer, but they won’t ask for a report. They are just asking for opinion.
RB: What is your view on the Singapore property market in the next 10 years?
D: I think the goal of Singapore is to be like Hong Kong or Tokyo, as one of the major cities where you have buildings with very high quality and are well maintained. People coming to Asia for a safe haven will probably go to Hong Kong and Singapore, not so much KL, so I don’t think they will go in there too much. Even the Philippines, Myanmar and Cambodia are still developing, so Singapore is considered advanced. Our economy is strong, our currency is strong, which is a good thing, and it may attract people to us. If they keep the money here, it will be good for us. As for property, everyone who comes here will definitely buy property. Once we open to foreigners, we will grow again.
Given the current market, I feel it’s a bit heavy to play. Also, if I were to go in now, I won’t borrow so much either. It has to be a price where I go in comfortably, and I also won’t want to do it with anybody because of bad experiences.
RB: Care to share with me about your property portfolio?
D: I still have my HDB flat [5-rm in Ghim Moh] although I don’t live there. I bought that first and I may want to go there to retire because it’s very convenient. I basically buy properties to stay, and if there’s a chance to rent it out then I will, if not I will sell it. To make money, you have to sell to take back your capital. It’s just that I haven’t had luck with timing because I always sell at the wrong time, so now I tend to stay away. I haven’t invested in anything in the last 10 years, but I used to invest a lot more when I first started this business. It was much easier at that time; no minimum amount, and you just had to put the $5000 deposit. And when I was with Colliers, we launched properties and had first choice of the units before they were launched. I’m very happy with my condo, and don’t really want to move out. I also bought a few commercial spaces hoping for en bloc, but it hasn’t happened so far. Given my luck, even my agent says that the moment I sell it will go up, so I’ve decided to just keep it.
I don’t really invest. Maybe it’s the fear; maybe I don’t want the extra stress [that comes with investing]… And I don’t really want to commit to loans at the moment.
RB: What are your best and worst investments?
D: My best investments are at Limau Purut and Saraca Road. Worst investment would have to be at Toh Tuck Road. Given the current market, I feel it’s a bit heavy to play. Also, if I were to go in now, I won’t borrow so much either. It has to be a price where I go in comfortably, and I also won’t want to do it with anybody because of bad experiences.
RB: Who are your role models?
D: I was previously from Chesterton, and it was bought over by Suntec. The shareholders were the big bosses there. One of them was Frank Chow, the guy running Suntec City. He was pretty humble. Lee Ka Shing was also very humble, which we found out when we did some work for him. Even at that age, he was willing to learn, and I was very impressed by the way he spoke. Those are the guys who made an impression on me. As for the people I look up to, they are the mentors who taught me the business. They have helped and taught me a lot, and I look up to them.
RB: What are your hobbies?
D: I like music, both listening and playing it. It comes from my days drinking in the pubs while listening to live bands. I like learning how to play music, and I play the guitar leisurely. I’m into blues, rock & roll, that kind of genres.
I also spend time in church and try to get a little bit more involved spiritually, to contribute and pay my dues. I spend a lot of time [serving in church], and if you ask me, the best role model is my Lord. I want to do what is right in His eyes and that is important to me.
RB: What is one interesting fact about you that people don’t usually know?
D: I’m involved in the grassroots organisation at the community centre. Usually, I volunteer in organising functions and events, overseeing the music, doing charity work, etc. I’ve been with them for quite awhile now, but I’ve never seen the need to advertise it.
