woensdag 27 augustus 2014

Singaporeans do things differently: Discounts

Never ever buy anything without a discount, my colleagues told me. Shoes, clothes, washing machines, houses. There is always room for negotiation. And Singaporeans are masters of the art.

Take for instance the property market. Right now is supposed to be a renters' market in Singapore. There's lots of units for rent, lots of landlords desperately looking for nice tenants, there are apparently even short term leases on offer!

But if you go on PropertyGuru, our local funda with all the properties listed for rent or for sale, you won't find any bargains. On the contrary, over the last few months we have steadily seen the advertised rents rise and rise again. 

Then a friend alerted me to this nifty little website, which has a listing of all the ACTUAL rental contracts for units in condo's and properties in Singapore. It's run by the URA, the Urban Redevelopment Authority, also responsible for the Singapore Masterplan of building (you can go and have a look at Singapore's future in the Singapore City Gallery near Chinatown).

By now, the prices listed for the units in our condo on propertyguru and the prices actually agreed upon in contracts are roughly a third different, i.e.: what you actually end up paying is two-thirds of what the agent is asking for publicly. 

So, when supply goes up, the price goes up - only to come down again after a discount. The tenant is happy, because they got a discount, the landlord is happy because the discount is less than it could have been. Everybody happy! 

This is in fact a classic negotiation tactic called 'anchoring'. The agent puts up a price, and all discussion from that point onwards will be starting from that anchorpoint. This means that if the original anchor/price on a unit it 5.500 SGD per month, I will feel I have gotten a good deal when the agent drops it to 5.000 SGD per month. Even though I know that similar units have gone for 4.500 SGD! 

Singapore is an expensive city to live in. There are many reasons for this, chief among them land scarcity and a lack of resources. But you shouldn't get your wallet out too soon! 

Being Dutch, we pride ourselves on being sensible with money - but that also means that if we do need something, and if it is good quality, we are prepared to pay the sticker price. We still have this icky feeling about spending too much time and effort on shopping, on something so materialistic, on pure consumerism.

But for Singaporeans, it is quite the opposite. Pure consumerism is the non-thinking way of buying. The Singaporean way of shopping is to go to great lengths to get as much value out of a dollar as possible. Shopping is performance art, and getting the right price an exact science. 

Paying the sticker price - that's for expats. 

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