Recently, a Business Times article wrote about how up to 20% of certain “hot” new condominium launches were bought up by property agents.
While the article was careful to state that this statistic was relevant to certain popular launches, it is still a surprising statistic that raises bigger concerns around fairness and transparency in private housing launches.
Not Illegal, But Worth Scrutinising
Importantly, nothing about this practice is illegal. There is no law preventing property agents from buying units in the projects they market. Neither is there “insider trading” in a legal sense, as property agents do not set prices.
But, as mentioned, legality is only part of the conversation. Knowing that 1 in 5 new condo launches in highly sought-after developments may be snapped up by agents before the broader public even steps into the showroom naturally raises eyebrows.
Moreover, housing is a deeply personal topic for Singaporeans. Not only do Singaporeans have one of the highest home ownership rates in Singapore, but private housing is an elusive aspiration for many. Any perception that one group gets preferential treatment or even be in a position to secure a significant portion of homes can trigger emotional responses.
Read Also: Should You Sell Your HDB Flat For A (Smaller) New Launch Condominium?
Not Quite “Insider Trading”, But Not Perfect Either
A home is likely the biggest financial decision Singaporeans have to make in their lives. One common comparison that we may make is another financial decision – in the financial markets.
For example, when a stock is preparing to IPO, stockbrokers and investment bankers do not get to front-run the public or gain any preferential early access. Strict rules exist precisely to prevent conflicts of interest and ensure market confidence.
To be clear, new-launch condos are not exactly comparable to IPO stocks. But condominiums are still housing meant for people living in Singapore. When viewed through this lens, it’s reasonable to expect higher standards of perceived fairness, not just legal compliance.
Lower Prices Just Because Of Their Jobs
One of the more uncomfortable realities is that agents buying units effectively get a better deal simply because of their vocation.
While buyers of new-launch condominiums do not pay commissions directly, developers do pay agents a commission. Obviously, these commissions have to come from the selling price. However, the exact commission structure is neither uniform nor transparent to buyers.
When agents buy units themselves, they can represent their own purchase and effectively reduce their true cost of purchasing a condominium.
In addition to this, agents also tend to enjoy early access through VIP launches or preview sales. This can offer them more attractive prices and access to the most sought-after units. So, they don’t just enjoy lower prices by representing themselves, but potentially also buy units at “early bird” prices that is only open to the developer’s network.
Manufactured Hype And FOMO
Again, these VIP launches or preview sales are not secret. They are common practice across almost all new developments. But the impact is worth examining.
By the time the public launch begins, buyers are often greeted with banners proclaiming “XX% sold on Day 1”. Prices may already have been adjusted upwards. The psychological effect is powerful – and very likely intentional.
This creates an even greater sense of urgency and people may start to feel FOMO. This runs counter to the Government’s broader efforts to cool the property market and encourage more measured decision-making.
It’s also quite surprising that the same Business Times article noted that the Urban Redevelopment Authority (URA) and the Council for Estate Agencies (CEA) declined to comment. Developers contacted for the article also did not respond. This silence only feeds greater public unease.
First Dibs Matter More in Property Than Stocks
Going back to the point that property agents enjoy early access, it’s also important to consider that unlike shares in an IPO, condominium units are not fungible.
The same unit type on the same floor can differ meaningfully in facing, noise exposure, proximity to facilities or lift lobbies. Units on higher floors, corner stacks or those with unblocked views are inherently more desirable.
Such early access allows insiders to cherry-pick the best stacks before the public gets to see the units.
Ultimately A Question of Perception, Not Legality
Finally, this article isn’t meant to accuse agents or developers of doing anything illegal. Property agents are market participants too – they are people with aspirations and families, and have to live somewhere and consider investments make sense for them.
But, the whole point of this article is to say that agents are also insiders. And, hence, there may be a perception that fairness and transparency is lacking in transactions that involve them.
As insiders in the property industry, they don’t just see showrooms earlier, but are likely also privy to pricing strategies as they are expected to sell the units when launched to the public too.
While this may not result in an unfair practice in a legal sense, in housing, perception also matters. When buyers don’t know how many units insiders have bought, what commissions are embedded in prices, or whether they’re entering a genuinely open market, information asymmetry erodes trust, even if the rules are followed to the letter.
Read Also: How Much Can You Earn As A Property Agent In Singapore
