property market direction - april 2009 issue

MARKET

Issued in April 2009 bywww.update.sg MICA permit 239/06/2008

FREE Quarterly Magazine by Sam Gian The Independent Real Estate Sales Consultant

Property DIRECTIONin association with

In this April 2009 issue –

� Market Update – How Low will it go?

� Primary Sale market surprised everyone

� Sub-sale market poised to rise

� HDB resale market going strong

Time will TELL

� HDB resale market going strong

� Analysis of Price Trend and Market

Behaviours

� Policy Updates – New CPF rule, HDB Lease

BuyBack Scheme etc.

Sam Gian’s FREE “Rookies’ Survival Course” – specially

catered for New & Inexperienced agents in this Recession – will

be held on 4th May 2009 from 9.00am to 1.00pm at HDB Hub

Auditorium.[Details inside] Also look out for Sam’s Sub-Sales

Course in late May 2009

Singapore Property Market Review

1 | P a g e A Free Quarterly Magazine published by Sam Gian [Independent Real Estate Sales Consultant]

This magazine is titled: “Time will Tell” because no one in this age and circumstance will be able to say for sure what is going to happen next. What we really need is an OPEN MIND – Anything Is Possible!

However, this is not to say that an informed opinion is out of place. Quite the contrary, this is what I am attempting at this issue; and hope that with all the data and statistics that I am able to lay my hands on, I will be able to piece together a coherent story and hope that the crazy real estate market will turn out to be not too different from my projection. We are in a bizarre situation now with economic numbers and job statistics at an all-time low. But home buyers are out in full force snapping up new home units, as though on cue. Are they making the right decision? Well, only time will tell. But at this moment, all hard evidence is on their side. This means that we may be seeing the real support point, in terms of the basic unit price (i.e. psf) of mass market homes. What I mean is that home prices in the heartlands are not going to be any cheaper than now, give and take a few ten dollars psf. However, a variable factor, that is, sub-sale of TOP condo units may alter the equation altogether. Moreover, the euphoria in the mass market is isolated and cannot be found in the high-end home segment which is still in the doldrums, not just in Singapore but elsewhere in the world as well. How long is this imbalance going to last? It is still very uncertain at this moment for this particular home segment. How soon will the buyers from the richer nations come back here and splurge on us again? Only time will tell. I guess in the interim, we will have to make do with this ‘back to the basics’ market again. Sam Gian Independent real estate sales Consultant

Editor Sam Gian www.update.sg

TTaabbllee ooff ccoonntteennttss Two cents’ worth: A global city beset by global problems [page 3-6]

Market Update (1) X-file – Missing in Action of the RICH?

[page 7]

(2) How low will it go – While the rich

economises, prices go ‘limbo rocking’ [page 9]

(3) How bad will it be? – All is not well with

the world economy [page 11]

(4) A reality check or a wake-up call? – More

TOP of high-end condos may depress prices [page 12]

(5) Landed homes went into hibernation mode [page 14]

(6) Where have the Investors gone? [page 19]

(7) Secondary market sales overshadowed [page 20]

Issues in the News (8) Small is Beautiful – Smallness is the Next

Big Thing [page 22]

Policy Update (9) The Price Stabilizer – Lease Buyback Scheme

[page 24]

Tips on Selling (10) How to Advertise in a Recession -

by Jacob Tay [page 25]

FFRREEEE QQuuaarrtteerrllyy MMaaggaazziinnee iissssuueedd bbyy

Sponsored by

in association with



RRooookkiieess’’ SSuurrvviivvaall CCoouurrssee

SPEAKER Mr Sam Gian

DATE 4 May 2009 from 09.00 am to 1.00pm

VENUE HDB HUB AUDITORIUM

FREE Tickets can be collected at iPROPERTY.come.sg at TOA PAYOH

HDB HUB EAST WING #08-01

Alternatively, you may book the tickets online via

www.update.sg

Program highlight

� Preparing a Listing for COST-EFFECTIVE Marketing

in this RECESSION

� ‘What you MUST SAY’ to Sellers & Buyers so that you can

CLOSE FASTER

� The Power of INTERNET

� How to EDUCATE Customers on the Correct Price

� How to build a REFERRAL SYSTEM to ensure

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A Community Project by Sam Gian specially catered for new real estate

salespersons who are still clueless about the business. Absolutely FREE.

Just Bring your Heart!



Only time will tell the extent of damage this

global financial crisis will cause to the

Singapore economy as well as the real estate

market. As of now, my guess is as good as

yours.

But at least my earlier

statement on the ‘crisis of

epic proportion’ seems

prescient when

compared with the GIC

losses of $25 billion.

[And it pleases me

tremendously when my

students attributed their

recent successes in closing

to the new sales pitch that

I have designed for them,

i.e. ‘Mr buyer sir, you are buying at recession price

– when do you think the recession will be over?’]

In this smaller rendition in April 2009, I will

show the most current statistics and make an

informed guess as to how the demand and

supply (and prices) of real estate in Singapore,

including public flats, will evolve in the next

few months.

New THRESHOLD of $600 psf for mass market condos

First of all, I believe Singaporeans have already

accepted the $600 per square foot (psf)

threshold for mass market private

condominiums. It will become the new

psychological support point, which means,

anything below the threshold will cause a ‘mad

rush’ like the ones we saw in February/March

2009 period where the soft-launches of many

new home projects attracted droves of

potential buyers. Queue numbers had to be

issued at the waiting areas of these show rooms,

such as Caspian, Mi Casa and Domus.

On 11 April 2009, it was reported that a 72-

unit freehold luxury condominium, Illuminaire,

in District 9 Devonshire Road near Somerset

MRT station, achieved a 96% sell-out rate in a

matter of two days with the average price of

$1,700 psf.

It was ‘yesterday once more’.

Good MARKETING STRATEGIES

still work – Recession or not

The phenomena confirm an

established truth in real estate

sales and marketing, i.e.

buyers react to good selling

strategy. As long as the

strategy is able to appeal to

buyer’s emotion, the buyers

will react. On the other hand, what the real

estate salespersons need to do is to give the

buyers a little ‘push’ – by giving them a good

reason to justify the emotion.

The NEW ORDER in mass market condo PRICING

There are a number of reasons why the $600

psf threshold for mass market condos will be

the new order of the day.

Firstly, buyers in general hardly showed any

genuine resistance to the final proposition of

the absolute sale prices in recent months,

judging from the various degrees of successes at

developers’ soft-launches. Though the ‘per

square foot’ price may appear high by the usual

standard, the absolute sale prices were

considered ‘palatable’. Buyers in general have

snapped up new condos units at between

$600,000 and $750,000 without any qualms,

though the psf prices are way above the ‘$600

psf’ threshold.

For example, the majority of the 101 units sold

during the soft-launch of Mi Casa at Choa Chu

Kang were transacted at $610 psf (the lowest

Two cents’ worth

A global city beset by global problems

But real estate is the surest bet domestically



psf price being $578 psf and the highest $707

psf).

The majority of the 264 units sold at Double

Bay Residences at Simei St 4 were transacted at

$650 psf (the lowest psf price being $409 and

the highest $898).

The Singapore property market has come a

long way since the last market bull-run in

1994/95 period where ‘$600 psf’ was the

‘point of resistance’ for mass market condos. In

fact, in 1996, the market crashed when the psf

price for many mass market condos breached

the $600 psf level.

From the look of things in recent months,

buyers in general have accepted the $600 psf

price level as ‘affordable’ and ‘reasonable’ and

this is very significant for older private

residential properties as well.

The psychological support point for the new

home unit will provide a basis for older condo

projects to find their suitable price point,

perhaps between $400 psf and $500 psf –

anything lower than that the sellers might as

well sit tight and wait for ‘en bloc sale’

propositions when the ‘en bloc sale potential’

emerges from the project’s functional and

design obsolescence.

One must not forget that not only the human

population in Singapore is greying; the

property sector is also aging. This means that

up to a point, more and more old private

property projects will be ‘locked into’ en bloc

sale negotiations and taken out of the supply

equation for individual home buyers. And,

regardless of the tenure, the ‘older and uglier’

the project is, the ‘more attractive’ it will

become – when en bloc sale is concerned.

SMALL is the NEXT BIG THING

Secondly, the basis for the new support point is

also in the new ‘acceptable’ size of the new

apartment units that are recently introduced

into the market.

Most of the units sold in recent two months

were between 380 sq ft and 1,100 sq ft, with

the vast majority in the 500 sq ft to 600 sq ft

range, which is smaller than the size of a typical

HDB 3-room flat. By Singaporean standard,

anything that is smaller than a 3-room flat is

considered SMALL. Of course in Hong Kong,

the smallest unit is 140 sq ft; and only time will

tell whether houses in Singapore will go down

to that ‘small’. [Full article ‘Small is Beautiful’ at

page 22]

HDB resale prices will PROP UP mass market condo prices

Another reason why $600 psf will be the new

threshold is because of the HDB resale market.

Singapore is the only democratic country in the

world that has a huge public housing

programme – even China does not have a

public housing programme that takes up 86%

of all residential land. Due to the sheer size of

Singapore’s public flat segment, and the

tendency for the government to intervene

directly in the property market, home prices in

general (excluding the high-end segment) tend

to swing back and forth within a manageable

range.

Resale flat prices near $600 psf in some places

The recent HDB resale transactions in March

2009 have shown that buyers are paying prices

high enough to prop up the $600 psf threshold

for most mass market condo projects.

Flat buyers are paying between $250 psf and

$330 psf just to own a quarter-century old

HDB resale 3-room flats in suburban areas such

as Yishun, Woodlands and Hougang;

In Kim Tian Road, which is a short drive from

the Central Business District (CBD), buyers

would have to pay much higher psf prices such

as between $450 psf and $550 psf for a six-

year-old resale 5-room flats.

At Strathmore Avenue near the Redhill MRT

station, buyers have to shell out at least $530

psf in order to own a 5-year-old resale HDB 5-

room flat.



In fact, the highest resale price achieved in

Strathmore Avenue in March 2009 was $608

psf for a 5-year-old resale 5-room flat.

For resale HDB flats further afield, such as in

Sengkang, buyers still have to part with at least

$310 psf (highest being $364 psf) for five to six

years old resale flats (including 4-room, 5-room

and executive flats) in March 2009.

HDB resale Prices provide the STABILIZER

Thirdly, the newly introduced Lease Buyback

Scheme (LBS) will provide the stabilizer to the

new price point.

According to the latest news on 20 April 2009

200 flat owners have already applied to take

advantage of the HDB Lease Buyback Scheme;

and it appears that as long as the Singapore

population continues to age, more, rather than

fewer people, will opt for the scheme, which

provides stability and security for flat owners

who are above 62 years of age.

In fact, according to the same news, the

Singapore government is studying the feasibility

of extending the LBS in the future to owners of

larger flats including 4-room and 5-room flats.

While such a scheme provides the safety net for

the older folks and the lower income earners in

bad times, in good times flat owners in general

(who have not signed up for LBS) will have

more financial options. Some 3-room flat

owners will choose to sell their flats outright to

an ever growing pool of buyers and enjoy the

capital gain, rather than getting the annuity

payments over a long period of time. This

means that prices for mass market homes will

never crash, even at the depth of the worst

recession. [Full article on ‘The Price Stabilizer at page 24]

High-end market vulnerable to external factors

It is a different ball game altogether for the

high-end private home market, whose fate is

interwoven with the global financial market.

And as long as the current gloom in the global

financial market is not lifted and real economic

activities and productions are not resumed,

many offices and factories everywhere in the

world will continue to stay vacant, and

likewise, demand for high-end homes will

continue to be weak.

There are a number of underlying factors

affecting the demand/supply of the high-end

home market, including the following:

(1) The United States factor, which is the most

critical factor as the financial woes and the

resulting credit crunch in the US are

causing massive export slumps all over

Asia, and crippling growth and

developments in poorer countries in

general;

(2) The reluctant banks, which are frustrating

home sellers, home buyers and the

middlemen alike by being cautious in

lending (and not lending); and

(3) The Singapore economy, which does not

appear to be bottoming out yet. [Full article ‘How bad will it be - All is not right

with the world economy’ at page 8]

Outflow of funds hurting high-end homes

Unlike the situation in the mass market where

buyers buy homes for own use, the high-end

home market is where buyers buy for capital

gain (the fastest gain could come from

‘flipping’ of options), or positive cash flows. As

such, the economic factors weigh heavily on

buying decisions. A couple of such economic

factors include the following:

(1) The arrival of Direct Foreign Investments

(FDI), and thus expatriate tenants looking

for high-end comfort in homes;

(4) Conspicuous spending, which hinges on

the performance of the worldwide stock

market. [Full article ‘X-File – Missing in action

of the RICH at page 7]

In other words, buyers of high-end private

homes are more vulnerable to external market

especially the global stock market, which

remains highly volatile, to say the least.



Unfortunately, at the moment, the flow of

money is going the other way. There has some

conspicuous flight of capital back to the United

States and Europe. The Royal Bank of Scotland

(RBS) trying to offload its Asian asset is just one

case in point (reference: 19 March 2009

Business Times).

With the two most critical factors missing from

the high-end market, more supply in this

segment can only depress prices further. [Full article on ‘How low will it go – While the rich

economises, prices go ‘limbo rocking’ at page 9]

In fact, most of the soon-to-be-TOP projects

are in the mid- and high-end market where the

unit prices are above $2,000 psf. There could

be more severe price corrections in the mid- to

high-end segment in the next six months to a

year. [Full article on ‘A reality check or a wake-up call – more TOP of high-end condos may depress

prices at page 12]

When will the rich come back to invest in

Singapore? Only time will tell.

Landed home segment into hibernation mode

Landed home segment is one that will be the

last to feel the heat of the market sell-out,

which in my opinion, has not even begun.

In fact, the upcoming corporate reporting

season may turn out to be the most telling

season in many decades. Analysts expect

overall earnings of Corporate Singapore to fall

by as much as 35% over last year – with

almost all sectors experiencing sharp drop in

earnings. Corporate earnings may bottom out

only in the second quarter of the year.

On the other hand, with the Singapore

government artificially propping up the job

market with SPUR programme (where it foots

the absentee pay while employees go for re-

training), and the Job Credit Scheme (where it

picks up 12% of the payroll), many middle- to

high-income earners (dubbed the PMET which

stands for Professional, Managers, Executive

and Technicians) are still clinging to the lifelines,

which many reckon will not last long.

The sell-out in the landed home segment will

happen much later – after the condo segment

which is bracing itself for the great impact of

10,000 new condo units to be available on the

secondary market from later this year onwards.

The landed home segment may suffer a

delayed-action only when the recession has

bottomed-out and when the government

discontinues the financial hand-out to the

private sector companies. [Full article on ‘Landed home sales went into hibernation mode’ at page 14]

Landed home prices act as a BAROMETER of the larger economy

In fact, the cruelty of the current economic

recession is that it is dragging down honest

business as well – not just the speculative ones.

The chief cause of the problems with the

current down-turn is not corporate

mismanagement, but rather the complete lack

of demand by the richer countries for our

domestic exports.

Moreover, through no faults of business

consultancies, many companies diversify their

assets and keep very little cash. And what was

considered the soundest financial advice to

businesses for the past 10 years, i.e. ‘keep the

balance sheet light and leverage’, turns out to

the worst advice any business enterprise could

get. Many businesses are going down because

of the huge debts that they have chalked up

after placing their cash in stocks and borrowing

against the stocks for more cash. As it turns out,

nobody is spared in this global financial

tsunami.

The worst is definitely not over for the

Singapore economy; and the worst certainly

has not begun for the landed home market.



The economic bubble has burst; and the wealth

effect has all but disappeared not just in the

United States and Europe, but in

Asia as well. The rich in India,

Hong Kong and Singapore are

reeling from the fallout of the

global financial crisis which has left

some of them fending for their last

billion dollars.

According to Forbes magazine,

there were 1,125 billionaires in the

world at the same time last year.

But there are only 793 of them in

2009.

The combined net worth of Asian

billionaires plunged 55% to

US$357 billion; and the number of billionaires

in the region fell 38% to 130.

In Hong Kong, the 40 richest men have lost

over half their combined wealth as the global

economic meltdown intensifies. Hong Kong's

richest man Li Ka-shing has lost almost half his

wealth and is presently worth US$16.2 billion

(S$24.4 billion).

A survey on wealthy individuals conducted by

the Forbes magazine revealed that about

45.81% of the combined wealth of Hong

Kong's top 40 richest was wiped out in the

meltdown and they are now left with $82

billion from $179 billion a year ago. The

number of billionaires also shrank from over

40 to 19.

The second richest family, who owns Sun Hung

Kai Properties, saw 55% of their wealth

evaporated and the family is now worth $10.8

billion.

Tycoon Lee Shau-kee, 81 famed for his stock

market killings took the full brunt of the stock

market crashes and lost a whopping $14 billion.

He is now worth $9 billion.

Macau casino boss Stanley Ho, 87, is worth $1

billion and ranked the 19th richest person in the

territory.

The Singapore RICH LIST gets

SHORTER

In Singapore, only two

persons made it to the

billionaire list – Far East

Organization's Mr Ng Teng

Fong and UOB's Mr Wee Cho

Yaw. Last year, there were

five Singaporean billionaires.

Mr Ng and his family are now

worth US$5.5 billion, down

from US$7 billion a year ago.

Likewise, Mr Wee and his family have seen

their net worth shrink to US$1.9 billion, from

US$2.9 billion.

The Indians feel it too

The richest person in Asia - and the 7th richest

in the world - India's Mukesh Ambani, who

heads 'Reliance Industries’ is poorer by

US$23.5 billion. He is now worth US$19.5

billion.

Last year's richest Asian Lakshmi Mittal, who

lost US$25.7 billion is one place behind Mr

Ambani with US$19.3 billion.

Fewer big-ticket transactions in 2008/09

No small wonder there was only one luxury

apartment transaction here that exceeded

$10,000,000 so far this year.

A search with the SISVREALINK system

revealed that in 2009, there were no property

transactions recorded for private homes in the

price range of between $6 million and $10

million.

Market Update

X-File – Missing in Action of The RICH

Those with $10 million to spare – please show up

Only�ALIVE��



This is a far cry from the 2007 market

buoyancy where there were 38 transactions of

luxury apartments that were well above $10

million. In all, there were 1,004 property

transactions that year that crossed the $3

million mark.

2008 wasn’t that bad

Even though 2008 was considered a ‘recession-

year’, there were 143 property deals above the

$3 million mark throughout the island.

Out of these transactions of high-end private

home, there were 79 transactions in District 10

that were above the $10 million mark, with

majority of the sales occurring at Nassim Park

Residences, where prices

range from $10-$26 million.

There were five transactions

in District 9 ranging from $10

million to $14 million at

Grange Infinite at Grange

Road and a unit at The

Hamilton Scotts at Scotts

Road for $10,128,500 or

$2,756 psf.

A 5,834 sq ft unit on the 63th level of The Sail

@ Marina Bay went for more than $15 million

or 2,650 psf in August 2008.

Year of the Zero and Cross – O X

However, in 2009 there are so far SIX property

transactions worth more than $3mil in District

9. Only one transaction in January 2009 at The

Ritz-Carlton Residences was above the $10

million mark and over $3,709 psf.

Table [1] – Transactions of high-end properties in Q1

2009 Project Name Floor

Area

(sq ft)

Floor

Rate

($ psf)

Sale price

Cairnhill Crest 1,970 1,600 3,152,000

Yong An Park 3,434 1,025 3,520,000

Yong An Park 4,639 925 4,290,000

The Claymore 3,348 1,703 5,700,000

The Tate Residences 3,208 1,850 5,932,950

The Ritz-Carlton Res 2,831 3,709 10,500,000

Source of data: SISVREALINK & URA

This underscores the importance of foreign

investors in the Singapore property market. If

they do not come back, the luxury market in

Singapore will continue to slide.

FEWER foreigners buying homes here

Likewise, the foreigners’ share of private home

purchases in Singapore has gone down to 24%

in 2008 from the high of 26% in 2007,

according to a recent DTZ research paper.

Non-permanent residents (PR) foreigners

accounted for 11% of total caveats lodged for

private homes last year, down from a 13%

share in 2007.

Singapore PRs' share was 13%,

supported by the higher arrival

of PRs in recent years.

Like the locals, PRs prefer the

mass-market condos, including

projects include Melville Park

in Simei, Livia in Pasir Ris, The

Lakeshore in Jurong Lake

District and Clover by the Park

in Bishan.

The most popular projects among non-PR

foreigners were The Lakeshore, Citylights, Icon

and Costa Del Sol.

Districts 9, 10, 15 and 16 were the most sought-

after addresses by foreigners (including PRs) last

year.

Malaysians top foreign buyer chart

Among the foreign buyers, the Malaysians take

the top spot with 20% ownership among all

foreign owners in Singapore, followed by the

Indonesians who have a 19% share of the total

private houses owned.

Indians come in third with 12% share of the

purchases, with PRC Chinese following hot on

the heel with an 11% share of the market. UK

citizens take 8% share of the purchase with

Koreans having 4% share.



Transacted prices of luxury condos in the prime Orchard

Road belt have fallen by a big margin from their peaks in

the second half (H2) of 2007 to the first quarter (Q1)

2009. This article seeks to examine the extent of the price

fall by analysing some past transactions of mid-market to

high-end private homes across the island.

Both sales volume and prices of luxury

apartments, such as St Regis Residences and

Ardmore II, have been heavily battered in Q1

2009.

Reportedly, sale price of St Regis Residences

has fallen 38% from $3,411 psf in H2 2007 to

$2,099 psf in Q1 2009. Likewise, at Ardmore

II, the average transacted price has slipped

43%, from $3,073 psf in H2 2007 to $1,761

psf in Q1 2009.

According to data from SISVRealink, the

transaction volume of luxury apartments had

also receded. In H2 2007, there were 15 sub-

sale deals in St Regis. However, in Q1 2009,

only four sub-sale deals were done at St Regis.

The situation in Ardmore II is similar in H2

2007 with 28 sub-sale deals in H2 2007, but

only six deals in Q1 2009.

Over the same period, Cairnhill Crest's average

price declined 36% to $1,430 psf in Q1 2009;

while resale transactions fell to only three in Q1

2009.

The transactions of two similar 1,733 sq ft

apartment units at Cairnhill Crest have been

used to determine the difference in prices in the

two time period, i.e. between Nov 2007 and

March 2009.

Table [2] – Price comparison between units in CAIRNHILL CREST between H2 2007 and Q1 2009 Unit

Level

Floor

Area

(sq ft)

Floor

Rate

($psf)

Contract

Date

Sale Price

($)

05 1,733 2,279 Nov 07 3,950,000

11 1,733 1,373 Mar 09 2,380,000 Source of data – SISVRealink

Though the latest transaction involved a higher

floor unit (as there were very few transactions

in the price range), the sale price was still about

40% cheaper last month when compared with

the transacted price more than a year ago, in

November 2007.

On average, condo prices in Sentosa Cove in

Q1 2009 were about 30% below H2 2007.

For example, a third-storey 1,701 sq ft unit at

The Azure bought in February 2009 was

29.56% cheaper than another second-storey

unit at the same condo project which was

bought in July 2007.

Table [3] – Price comparison between units in THE AZURE between H2 2007 and Q1 2009 Unit

Level

Floor

Area

(sq ft)

Floor

Rate

($psf)

Contract

Date

Sale Price

($)

02 1,701 2,070 Jul 07 3,521,070

03 1,711 1,449 Feb 09 2,480,000 Source of data – SISVRealink

Likewise, a 1,658 sq ft apartment unit at The

Berth @ Sentosa Cove was transacted at $2

million in January 2009, while a similar unit

was sold for $3,191,650 in late 2007. This is a

37.33% drop in the capital value.

�� MMaarrkkeett UUppddaattee

How Low will it go? While the rich economises, prices go ‘limbo rocking’



Table [4] – Price comparison between units in THE BERTH @ SENTOSA between H2 2007 and Q1 2009 Unit

Level

Floor

Area

(sq ft)

Floor

Rate

($psf)

Contract

Date

Sale Price

($)

05 1,658 1,925 Dec 07 3,191,650

04 1,658 1,206 Jan 09 2,000,000 Source of data – SISVRealink

Units at other popular projects were also taken

as samples to determine the difference in price.

One of the favourite projects was The Sail @

Marina Bay which recently received TOP. Two

similar units were taken for analysis and it was

found that a 1,184 sq ft 58-storey unit went for

$2,070,000 in January 2009, while a similar

36-floor unit was transacted at $3,182,592 in

October 2007. That was a 35% drop in value.

Table [5] – Price comparison between units in THE

SAIL @ MARINA BAY between Oct 2007 and Jan 09

Unit

Level

Floor

Area

(sq ft)

Floor

Rate

($psf)

Contract

Date

Sale Price

($)

36 1,184 2,688 Oct 07 3,182,592

58 1,184 1,748 Jan 09 2,070,000 Source of data – SISVRealink

Units at other popular projects taken for the

study include the following:


METROPOLITAN between Jul 2007 and Mar 2009

Unit Level

Floor Area (sq ft)

Floor Rate ($psf)

Contract Date

Price ($)

23 1,033 950 Jul 07 981,350

23 1,033 828 Mar 09 856,000 The price difference of comparable units at The

Metropolitan was obvious. There was a drop

of 12.8% in value.


ESTA between Jul 2007 and Jan 2009

Unit Level

Floor Area (sq ft)

Floor Rate ($psf)

Contract Date

Price ($)

03 1,130 938 Jul 07 1,060,000

16 1,130 850 Jan 09 960,500 There was a moderate drop of 9.4% in value in the two units that were used for analysis.

Table [8] – Price comparison between units in ONE

AMBER between Jul 2007 and Mar 2009

Unit Level

Floor Area (sq ft)

Floor Rate ($psf)

Contract Date

Price ($)

19 1,335 1,180 Jul 07 1,575,300

17 1,335 840 Mar 09 1,121,400 The price drop of comparable units at One Amber was 28.8% in value. Table [9] – Price comparison between units in ONE

SHENTON between Aug 2007 and Feb 2009

Unit Level

Floor Area (sq ft)

Floor Rate ($psf)

Contract Date

Price ($)

12 1,184 1,767 Aug 07 2,092,500

13 1,184 1,598 Feb 09 1,892,520 The price difference of comparable units at One Shenton was moderate. There was a drop of 9.6% in value. Table [10] – Price comparison between units in

MARINA BAY RES. between Jul 07 and Mar 09

Unit Level

Floor Area (sq ft)

Floor Rate ($psf)

Contract Date

Price ($)

42 1,959 3,073 Jul 07 6,020,850

40 1,959 1,700 Mar 09 3,330,300 Source of data – SISVRealink

The price difference of comparable units at Marina Bay Residences is stunning. There was a drop of 44.6% in value.



The Ministry of Trade and Industry (MTI) said

on 13 April 2009 that the Singapore economy

contracted by 19.7% compared to the previous

quarter. This was far below analyst

expectations for a 9.0% decline following the

16.9% fall in the previous quarter.

The manufacturing sector tumbled 29% year-

on-year, while the services producing industries

fell 5.9%. The only sector that is still going

strong is the construction sector which was up

25.6%.

The MTI said in its statement that "falling

external demand in late 2008 and early 2009

has severely affected domestic manufacturing

output. And with most of Singapore's key

trading partners still in recession, the

manufacturing sector will continue to remain

weak for the rest of the year." It added that

there have been no clear signs of a likely

turnaround in the US economy this year.

Following MTI’s statement, the Monetary

Authority of Singapore (MAS) lowered its GDP

forecast for 2009 to between –6% and –9%,

far worse that its earlier estimate of between –

2% and –5%.

MTI added that the global economy is

expected to remain weak in the coming

quarters.

Export slump in Singapore continued

According to figures released on 16 March

2009 by trade promotion agency International

Enterprise (IE) Singapore, Singapore’s non-oil

domestic exports (NODX) tumbled 23.7%

from a year ago to $9.73 billion in February

2009.

A month ago, Singapore's NODX plunged a

record 34.8% from a year earlier, along with

other Asian exporters such as South Korea and

Taiwan. The two months’ figures effectively

mean that the recession in Singapore has

deepened.

Singaporeans are not spending like before

According to the Department of Statistics

(DOS), retail sales in Singapore slide 12.2%

year-on-year (y-o-y) for March 2009.

The last time retail sales tumbled 12.3% y-o-y

was in September 2001 during the technology

bubble bust. However, the worst slump in

retail sales was seen in May 1998 during the

Asian financial crisis where sales crashed 26%

y-o-y, and sales in January 1999 plunge 20.7%

y-o-y.

Sales of discretionary items, including watches

and jewellery, furniture and household

equipment, and telecommunication apparatus

and computers, all fell between 12.4% and

28.2% from December 2008. When compared

to the same month the year before, sales at the

same categories of retailers were down

between 14.5% and 31.7%.

What can one make of the statistics? Very

obvious, the recession is taking a deeper and

harder bite into consumer’s pockets.


How bad will it be? All is not right with the world economy



The first crack has appeared – and it is a huge one! A Business Times report on 21 April 2009 revealed that a China investor that bought 20 units at MCL Land’s The Fernhill condo has failed to pay about $30 million that was due more than two weeks ago when the project received Temporary Occupation Permit (TOP). Like many other foreign investors, this particular one has taken advantage of the now defunct Deferred Payment Scheme (DPS) when he booked 25 units in January 2007. Five of the units were later flipped later that year for 30% gain each.

Will this episode be the harbinger of things to

come? Only time will tell.

Right now, let’s look at some numbers and

extrapolate. An estimate of some 10,448

private homes under construction (comprising

both landed and non-landed units) will be

completed by the end of 2009.

In this current economic climate, some private

condo owners may not be able to secure the

home financing that they require and may be

forced to offload their units in an untimely

manner.

Unfortunately, most of the recent sub-sale deals

at soon-to-be-TOP projects were done at prices

lower than those at the height of the property

bull-run in mid-2007. (See previous article for

the statistics)

As such, the upcoming supply of TOP-projects

is not really very good news for property

sellers in general. This year, the bigger projects

that are expected to obtain TOP include The

Centris in Jurong West and Casa Merah in

Tanah Merah.

In the Amber Road area where many new

developments were launched in the past few

years, One Amber will obtain TOP by year

end. It will join two recently completed big

condos, The Esta and The Sea View, and

‘flood’ the Amber Road vicinity with more

than 1,200 brand new condo units.

In District 12 Balestier road area, the 180-unit

Pavilion 11 in Minbu Road will obtain TOP in

the second half of the year, along with the 53-

unit The Centrio in Irrawaddy Road and a

nearby project, the 151-unit Montebleu which

will be ready early next year.

In District 9, the 46-unit Cuscaden Royale, the

175-unit The Orchard Residences, the 120-unit

The Inspira, the 228-unit The Cosmopolitan,

and the 545 Rivergate will add another 1,100

brand new units onto the prime area from now

to early next year. (See table for more details)

Nearer to the Central Business District (CBD),

Southbank in North Bridge Road will obtain

TOP next year. So will The Riverine by the

Park nearby.

Fewer POSITIVE sub-sale after Lehman Bros

According to Savills Singapore, there were

more negative sub-sales after the Lehman

Brothers fallout in September 2008 and the

global stock market meltdown in October

2008.

Sub-sale deals are secondary market deals in

projects that have yet to receive their Certificates of

Statutory Completion. This may be anywhere from

three to 12 months after the project receives

Temporary Occupation Permit (TOP).


A reality check or a wake-up call? More TOP of high-end condos may depress prices



The number of negative sub-sales rose from 24

in the first-half (H1) of 2008 to 52 in second-

half (H2) of the same year.

The average loss per unit rose from about

$138,000 or 7% in H1 2008 to $188,000 or

12% in H2 2008.

The number of positive sub-sale deals fell

16.8% from 757 in H1 to 630 in H2. The sub-

sellers are also making lesser and lesser money

through the year, with average gain falling

from $425,000 or 37% in H1 to $288,000 or

28% in H2.

Most sub-sale losers bought units in 2007

Around 90% of the 76 investors who suffered

a loss in the sub-sale market for the whole of

last year had bought their units in 2007 during

the market peak.

Projects with the highest number of sub-sale

transactions for 2008 were The Sail (78 units),

Citylights (77 units), Varsity Park Condo (59

units), City Square Residences (57 units), The

Sea- view (52 units), The Esta (49 units) and

Park Infinia at Wee Nam (48 units). With more

TOP expected in the later part of 2009 and

beginning of 2010, more sub-sales deals are

expected; and by the natural extension of the

same argument, more sellers are expected to

suffer losses this time round.

Condo projects to get TOP in late 2009

Below is a list of 20 condo/apartment projects

that will receive their Temporary Occupation

Permit (TOP) either in late-2009 or very early

2010. More sub-sales are expected to take

place in these projects.

Table [11] – Project with at least 100 units and about

to receive TOP by end-2009

Project Name Total

Units in

Project

1 D3 The Metropolitan 382

2 D4 The Coast @ Sentosa 249

3 D5 ClementiWoods 240

4 D5 The Infiniti 315

5 D5 Botannia 493

6 D8 Mera Springs 129

7 D9 The Orchard Res 175

8 D9 The Inspira 120

9 D9 The Cosmopolitan 228

10 D9 RiverGate 545

11 D12 One St Michael's 131

12 D12 Montebleu 151

13 D13 Tierra Vue 129

14 D14 Atrium Residences 142

15 D15 Grand Duchess 121

16 D15 Imperial Heights 100

17 D15 One Amber 562

18 D15 The Esta 400

19 D17 Ferraria Park 472

20 D23 YewTee Residences 139 Source: information culled from Straits Time news reports

and classified advertisements over February and March

2009

Note: smaller projects of less than 100 units are

not featured in the list due to space constraint;

and also because individually they have less

impact on the market situation. However,

collectively, they do contribute to a downward

pressure on the resale prices.



The situation in the landed home segment is at

best uneven, with terrace houses selling

reasonably well, but not semi-detached and

detached houses which appear to have gone

into a hibernation mode with minimal sales.

In fact, I have deliberately listed out all landed

home transactions in this issue of the magazine

just to prove a point, i.e. there were so few

transactions that I could count each and every

one of them.

And here is the finally tally:

Detached house transactions in Q1 2009

There were EIGHT transactions of detached

houses in January 2009; SIX in February 2009;

and SEVEN in March 2009.

The total detached house transactions for the

first quarter (Q1) of 2009 were 21.

When compared with the 72 detached house

transactions in Q1 2008, there was a 70.5%

drop in sales volume.

Table [12] – Transaction figures of Detached houses in

January 2009

Street Name Type Land

Area

(sq ft)

Land

Rate

(psf)

Price

($,000)

D8 Truro Rd 1-storey 3,389 870 2.95 mil

D11 Olive Road 1-storey 15,055 452 6.8 mil

D15 Ettrick Terr 1-storey 4,400 500 2.2 mil

D16 Jln Haji Salam 1-storey 5,000 678 3.38 mil

D17 Toh Close 2-storey 6,669 300 2.0 mil

D19 Rosyth Rd 3-storey 4,820 446 2.15 mil

D28 Jln Rengas 3-storey 3,673 403 1.48 mil

D11 Barker Rd 4-storey 4,805 1,020 4.9 mil

Source of data – SISVRealink


February 2009


Area

(sq ft)

Land

Rate

(psf)

Price

($,000)

D19 Farleigh Ave 1-storey 4,219 396 1.67 mil

D27 Jln Mata Ayer 1-storey 3,274 422 1.38 mil

D10 Queen Astrid

Gn

2-storey 15,918 716 11.4 mil

D10 Namly Dr 2-storey 3,420 1,126 3.85 mil

D10 Jln Haji Alias 3-storey 8,782 478 4.2 mil

D27 Jln Kemuning 3-storey 4,526 398 1.8 mil



March 2009


Area

(sq ft)

Land

Rate

(psf)

Price

($,000)

D20 Marigold Dr 1-storey 3,637 825 3.0 mil

D11 Trevose Cres 2-storey 6,412 780 5.0 mil

D23 Almond St 2-storey 5,921 419 2.48 mil

D19 Jln Arif 3-storey 7,891 485 3.82 mil

D28 Ponggol 17th

Ave

3-storey - - 2.0 mil

D4 Bt Teresa Rd 4-storey - - 2.7 mil

D11 Trevose Cres 4-storey 9,408 478 4.5 mil Source of data – SISVRealink

Price Comparison of detached house between 2008 and Q1 2009

� 1-storey detached houses

The Q1 2009 psf prices of 1-storey detached

houses have held their ground. The ‘median’

price actually went up, though overall

transactions were thin.

For the whole of 2008, the psf price range of 1-

storey detached houses throughout the country

was from $318 to $982 psf. The median psf

price of 1-storey detached house was $413 psf

for the whole of 2008.

The psf price range of 1-storey detached houses

sold in Q1 2009 was from $396 to $870 psf.

The median psf price of 1-storey detached

houses in Q1 2009 was 500 psf.


Landed home sale went into hibernation mode Sales of all house types fell by more than 65%





houses have dropped ‘just a little bit’.

For the whole of 2008, the psf price range of

2-storey detached houses throughout the

country was from $399 to $1,298 psf. The

median psf price of 2-storey detached house

was $736 psf.


sold in Q1 2009 was from $300 to $1,126 psf.

The median psf price of 2-sotrey detached

houses in Q1 2009 was $716 psf.



houses have dropped significantly from the

average of over $700 psf to as low as $446 psf.


3-storey detached houses throughout the

country was from $207 to $1,217 psf. The

median psf price of 2-storey detached house

was $709 psf.



The median psf price of 2-sotrey detached


Semi-detached house transactions in Q1 2009

There were 13 transactions of semi-detached

houses in January 2009; 11 in February 2009;

and 12 in March 2009.

The total semi-detached house transactions for

Q1 2009 were 36.

When compared with the 122 semi-detached

house transactions in Q1 2008, there was a

70.5% drop in sales volume.

Table [15] – Transaction figures of Semi-detached

houses in the January 2009


Area

(sq ft)

Land

Rate

(psf)

Price

($,000)

D15 Yarrow

Garden

1-storey 2,900 517 1.50 mil

D19 Serangoon

Gdn Way

1-storey 4,180 84 350,000

D19 Bodmin Dr 1-storey 2,800 29 80,000

D28 Jin Sindor 1-storey 2,790 645 1.8 mil

D28 Jln Antoi 1-storey 3,356 620 2.08 mil

D05 Chwee Chian

Rd

2-storey 4,551 367 1.668 mil

D10 Sixth Ave 2-storey 3,278 869 2.85 mil

D14 Lengkok Dua 2-storey 4,274 550 2.35 mil

D13 Jln Anggerek 3-storey 3,610 526 1.9 mil

D16 Kew Ht 3-storey 2,401 505 1.213 mil

D19 Berwick Dr 3-storey 3,122 631 1.97 mil

D23 Pavilion Circle 3-storey 2,337 612 1.43 mil

D14 Jln Paras 4-storey 2,248 805 1.81 mil Source of data – SISVRealink


houses in the February 2009


Area

(sq ft)

Land

Rate

(psf)

Price

($,000)

D16 Harvey Cres 1-storey 3,200 688 2.2 mil

D05 Faber Ave 2-storey 5,717 434 2.48 mil

D15 Goodman Rd 2-storey 6.600 61 400k

D16 Jln Pokok

Serunai

2-storey 2,254 701 1.58 mil

D26 Springleaf Walk 2-storey 4,986 538 2.68 mil

D26 Springleaf Cres 2-storey 3,672 408 1.5 mil

D05 Jubilee Rd 3-storey 3,298 743 2.45 mil

D10 King’s Dr 3-storey 2,553 1,136 2.9 mil

D10 Holland Grove

View

3-storey 2,633 741 1.95 mil

D19 Brighton Cres 3-storey 3,886 463 1.8 mil

D23 Burgundy Cres 3-storey 2,260 573 1.29 mil




houses in the March 2009


Area

(sq ft)

Land

Rate

(psf)

Price

($,000)

D19 Walmar Drive 1-storey 5,712 315 1.8 mil

D13 Mulberry Ave 2-storey 3,570 412 1.47 mil

D20 Jln Binchang 2-storey 4,616 849 3.92 mil

D28 Dedap Rd 2-storey 3,707 405 1.5 mil

D28 Upp Neram Rd 2-storey 4,167 437 1.82 mil

D10 King’s Rd 3-storey 2,281 1,078 2.46 mil

D16 Jln Pergam 3-storey 2,368 633 1.5 mil

D20 Mayflower Cres 3-storey 2,199 614 1.35 mil

D20 Casuarina Walk 3-storey 2,409 490 1.18 mil

D21 Jln Jambu Ayer 3-storey 2,937 943 2.77 mil

D26 Springleaf Ave 3-storey 3,542 531 1.88 mil

D16 Kew Walk 4-SD 2,426 453 1.1 mil

Price Comparison of Semi-D house between 2008 and Q1 2009

� 1-storey Semi-D houses

The Q1 2009 psf prices of 1-storey Semi-D

houses have ‘more or less’ held their ground

with a significantly lower ‘highest’ price.

However, the median price of Q1 2009 did

better than last year’s.


storey semi-D houses throughout the country

was from $299 to $1,434 psf. The median psf

price of 1-storey semi-D house was $455 psf for

the whole of 2008.

The psf price range of 1-storey semi-D houses






houses maintained the median price but not

the ‘highest’ price. It means that buyers are

getting more cautious for more ‘expensive’

semi-detached houses.


2-storey semi-D houses throughout the country


price of 2-storey semi-D house was $547 psf








houses have dropped in the ‘highest’ and

‘median’ categories but rose in the ‘lowest’

category. It may mean some desperate selling

and on the other hand, more cautiousness

when it comes to big-ticket semi-d houses.


3-storey semi-D houses throughout the country


price of 3-storey semi-D house was $636 psf






Terrace house transactions in Q1 2009

There were 42 transactions of semi-detached

houses in January 2009; 33 in February 2009;

and 43 in March 2009.

The total transactions of Terrace houses in Q1

2009 were 118.

When compared with the 336 terrace house

transactions in Q1 2008, there was an almost

65% drop in sales volume.



Table [18] – Transaction figures of Terrace houses in

the January 2009


Area

(sq ft)

Land

Rate

(psf)

Price

($,000)

D15 Onan Rd 1-storey 1,888 861 1,625

D15 Duku Place 1-storey 1,774 521 925,000

D19 Bloxhome Dr 1-storey 3,646 192 700,000

D19 Bridport Ave 1-storey 2,157 554 1,195 mil

D19 Bridport Ave 1-storey 2,157 139 300,000

D19 Blandford Dr 1-storey 2,800 536 1.5 mil

D20 Jln Gelenggang 1-storey 2,564 402 4.03 mil

D20 Jln Lanjut 1-storey 1,999 465 930.000

D14 Lor 28

Geylang

2-storey 1,407 853 1.2 mil

D15 Jln Tua Kong 2-storey 2,283 561 1.28 mil

D15 Jln Keris 2-storey 1,875 736 1.38 mil

D18 Pasir Ris Ht 2-storey 5,737 340 1.95 mil

D19 How Sun Ave 2-storey 1,281 679 870,000

D22 Yunnan Cres 2-storey 4,427 396 1.68 mil

D22 Yunnan Cres 2-storey 3,653 422 1.54 mil

D26 Iqbal Ave 2-storey 2,102 514 1.08 mil

D28 Lilac Dr 2-storey 2,076 520 1.08 mil

D28 Lilac Dr 2-storey 2,125 494 1.05 mil

D15 Everitte 3-storey 1,198 768 920,000

D15 Elite Terrace 3-storey 1,776 658 1.168 mil

D16 Jln Kathi 3-storey 2,886 582 1.68 mil

D16 Eastwood Dr 3-storey 2,602 423 1.1 mil

D16 Minaret Walk 3-storey 1,615 743 1.2 mil

D16 Bedok Place 3-storey 1,767 831 1.468 mil

D16 Upp Changi

Rd East

3-storey 0 0 970,000

D17 Loyang Rise 3-storey 1,615 464 750,000

D17 Jln Sinar

Bulan

3-storey 2,322 568 1.32 mil

D17 Loyang View 3-storey 2,153 418 899,000

D18 Pasir Ris Ht 3-storey 2,573 311 800,00

D19 St Helier’s

Ave

3-storey 2,200 631 1.38 mil

D19 Lowland Rd 3-storey 1,664 214 356,700

D19 Chuan Dr 3-storey 2,431 527 1.28 mil

D19 Lange Rd 3-storey 0 0 1.188 mil

D19 Parry Terrace 3-storey 1,680 655 1.1 mil

D19 Lange Rd 3-storey 0 0 1.122 mil

D19 Simon Place 3-storey 0 0 1.425 mil

D20 Binchang Rise 3-storey 3,858 539 2.08 mil

D22 Yunnan Dr 1 3-storey 3,653 493 1.8 mil

D23 Verde Cres 3-storey 2,187 494 1.08 mil

D26 Springside

Green

3-storey 2,542 570 1.45 mil

D27 Miltonia

Close

3-storey 0 0 1.19 mil

D28 Mimosa View 3-storey 2,190 617 1.351 mil


the February 2009


Area

(sq ft)

Land

Rate

(psf)

Price

($,000)

D15 Crane Rd 1-storey 1,617 1,119 1.81 mil

D19 Highland Rd 1-storey 1,265 553 700,000

D13 Jln Mulia 2-storey 885 757 670,000

D13 Jln Setia 2-storey 885 881 780,000

D14 Lor 3 Geylang 2-storey 725 200 145,000



D15 First St 2-storey 1,642 719 1.18 mil

D16 Limau Grove 2-storey 1,854 13 25,000

D16 Harvey Ave 2-storey 2,118 604 1.28 mil

D19 Jln Limbok 2-storey 2,347 408 958,000

D20 Fulton Rd 2-storey 1,850 484 895,000

D20 Jln Isnin 2-storey 1,821 653 1.19 mil

D20 Jln Kuak 2-storey 885 814 720,000

D16 Seagull Walk 3-storey 1,615 774 1.25 mil

D17 Loyang View 3-storey 1,615 520 840,000

D18 Elias Terrace 3-storey 3,734 396 1.48 mil

D19 Tai Hwan Cres 3-storey 1,704 646 1.1 mil

D22 Corporation Walk 3-storey 1,616 529 855,000

D22 Westwood Ave 3-storey 1,634 557 910,000

D22 Westwood Cres 3-storey 1,615 551 890,000

D23 Verde View 3-storey 1,615 557 899,000

D23 Verde View 3-storey 1,615 557 900,000

D23 Hazel Park

Terrace

3-storey 2,034 590 1.2 mil

D23 Verde View 3-storey 2,067 484 1.0 mil

D26 Springside Ave 3-storey 2,210 566 1.25 mil

D28 Saraca Terrace 3-storey 9,857 206 2.03 mil

D28 Mimosa View 3-storey 2,190 617 1.351 mil

D15 Lor Stangee 4-storey 3,520 517 1.82 mil



D26 Yio Chu Kang

Dr

4-storey 0 0 1.42 mil

D27 Sembawang

Walk 4-storey 0 0 928,000



the March 2009


Area

(sq ft)

Land

Rate

(psf)

Price

($,000)

D15 Onan Rd 1-storey 1,928 830 1.6 mil

D19 Hemsley Ave 1-storey 2,983 674 2.01 mil

D19 Bodmin Dr 1-storey 2,800 425 1.19 mil

D28 Jln Keruing 1-storey 2,160 463 1.0 mil

D10 Ming Teck Park 2-storey 1,753 799 1.4 mil

D12 Jln Taman 2-storey 1,595 627 1.0 mil

D13 Jln Gemira 2-storey 883 793 700 mil






D19 Jln Gotong

Royong

2-storey 1,297 748 970,000

D19 Tai Hwan Ht 2-storey 2,019 579 1.17 mil

D19 Jln Lepas 2-storey 2,093 454 950,000

D20 Jln Khamis 2-storey 1,370 693 950,000

D05 West Coast Rd 3-storey 0 0 1.215 mil

D10 Ming Teck Park 3-storey 2,175 736 1.6 mil

D13 Jln Setia 3-storey 884 928 820,000

D14 Lor Mydin 3-storey 2,372 585 1.388 mil

D15 Wilton Gdn 3-storey 1,718 844 1.45 mil

D15 Jago Close 3-storey 2,028 624 1.265 mil

D15 Kurau Grove 3-storey 1,615 731 1.18 mil

D16 Taman Bedok 3-storey 2,265 517 1.17 mil

D16 Bayshore Rd 3-storey 2,250 489 1.1 mil

D16 Seagull Walk 3-storey 1,615 669 1.08 mil

D16 Jln Angin Laut 3-storey 2,115 624 1.32 mil

D17 Mariam Walk 3-storey 1,628 609 991,000

D17 Mariam Walk 3-storey 2,799 518 1.45 mil

D17 Loyang Rise 3-storey 1,674 448 750,000

D17 Jln Sinar Bulan 3-storey 2,507 519 1.3 mil

D18 Riverina Cres 3-storey 2,650 404 1.07 mil

D18 Pasir Ris Ave 3-storey 2,400 542 1.3 mil

D19 Tai Hwan Dr 3-storey 1,701 776 1.32 mil





D26 Springleaf Ave 3-storey 2,210 624 1.38 mil

D26 Springleaf Dr 3-storey 1,847 650 1.2 mil

D13 Lichi Ave 4-storey 1,704 898 1.53 mil

D27 Miltonia Close 4-storey 0 0 1.1 mil

D27 Miltonia Close 4-storey 0 0 1.08 mil

D27 Miltonia Close 4-storey 0 0 950,000

D27 Miltonia Close 4-storey 0 0 1.04 mil Source of data – SISVRealink

Price Comparison of Terrace house between 2008 and Q1 2009

� 1-storey Terrace houses

The Q1 2009 psf prices of 1-storey Terrace held

their ground when compared to last year’s psf

prices of all 1-storey terrace houses transacted.


storey terrace houses throughout the country


price of 1-storey terrace house was $544 psf for

the whole of 2008.

The psf price range of 1-storey terrace houses


The median psf price of 1-storey terrace houses

in Q1 2009 was $493 psf.


The Q1 2009 psf prices of 2-storey Terrace was

no match with the whole of last year’ due to

one rare transaction in Emerald Hill road which

went for more than $5.8 million. But,

nonetheless, the median price of 2-storey semi-

D house in 2009 dropped slightly.


2-storey terrace houses throughout the country

was from $199 to $4,382 psf (for a conserved

house in Emerald Hill Road). The median psf

price of 2-storey terrace house was $651 psf for

the whole of 2008.




in Q1 2009 was $561 psf.


The Q1 2009 psf prices of 3-storey Terrace

houses have dropped in all ‘lowest’, ‘highest’

and ‘median’ categories, with the drop in the

‘highest’ price being more pronounced. It

probably means buyers are more cautious in

this segment.


3-storey terrace houses throughout the country


price of 3-storey terrace house was $636 psf





in Q1 2009 was $557 psf.



Investment sales refer to major investment

transactions like office buildings and shopping centres,

as well as sites bought for development including

collective sale deals. They do not cover purchases of

single property units by individuals. Such sales are

considered a barometer of developers' and big

investors' mid-to-long-term confidence in the market.

Property investment sales in Singapore have

dropped to $184.6 million in the first quarter

(Q1) of 2009. It is a 56.4% drop when

compared with the previous quarter.

The new figure is the lowest since 1988 when

investment sales were $49.28 million and

$110.62 million in Q1 1998 and Q3 1998

respectively.

Sales from the residential sector accounted for

51.5% of the quarter's total investment sales or

$95.1 million in transacted value.

The sales volume was 60.7% lower than the

$241.79 million residential investment sales

recorded in the last three months of 2008.

This time round, the investment sales included

three GCBs, at 28A Olive Road, 39 Cornwall

Gardens and 8 Queen Astrid Gardens, which

sold for a combined total of $18.2 million.

They accounted for almost 20% of the total

residential sales.

There were no collective sales in Q1 2009.

The commercial investment market accounted

for $77.3 million or 41.9% of total investment

sales in Q1 2009. The only major sale was for

Le Mercier House at 65 Mohamed Sultan Road

for $35.8 million or about $900 psf on 39,000

sq ft of gross floor area.

There was only one sale in the industrial sector

- 29 Loyang Crescent, with a site area of

83,367 sq ft, which was sold in February for

$6.2 million or $74 per square foot on land.

This contributed to 3.4 % of total investment

sales.

The investment market is expected to remain

dormant for a long while before the entire

global economy is nursed back to health.

The table below shows the yearly property

investment sales since 2000 and the severity of

the current slowdown.

Table [21] – Investment sales volume from 2000

onwards

Year Total Investment

Transactions

($billion)

2000 6.89

2001 5.46

2002 4.92

2003 4.16

2004 7.92

2005 14.19

2006 30.57

2007 50.78

2008 15.8 Source: Sam Gian’s own compilation since 2006 from Straits

Times and Business Times

Moreover, the government has already

suspended the government land sales (GLS)

program and there will be no land sales

through the confirmed list for at least this entire

year.

There was also no major office deal in the

second half of 2008 and the supply gut in this

particular segment is expected to be worse than

earlier expected, given the magnitude of the

current worldwide financial crisis.


Where have the INVESTORS gone? Property investment sales fall to 10-year low



The uplifting sales figures in the mass market

new home segment have failed to lift the other

housing segments, including the secondary

condo/apartment segments, which has shown a

shade of better performance but not significant

enough to be called a revival.

In other words, there is not much different

calling the performance of the resale market

‘near death’ or ‘half-dead’. Either way, it

means there is little ‘life’ in that segment.

The secondary sales of condo/apartment in Q1

2009 were as follows:

Table [22] – Secondary condo/apartment sales in Q1

2009

D1 39 D11 47 D21 50

D2 17 D12 26 D22 217

D3 56 D13 7 D23 98

D4 14 D14 45 D24 0

D5 74 D15 173 D25 17

D6 0 D16 68 D26 21

D7 8 D17 20 D27 15

D8 82 D18 33 D28 13

D9 96 D19 102

D10 78 D20 33 Total = 1,449

Source of information: SISVRealink

Note: There were 151 transactions at a new

project called Caspian @ Jurong Lake. If the

new home sales were taken out, there would

only be 66 transactions at District 22.

Table [23] – Secondary condo/apartment sales in Q4

2008

D1 32 D11 53 D21 37

D2 26 D12 36 D22 43

D3 38 D13 13 D23 84

D4 14 D14 54 D24 0

D5 89 D15 184 D25 17

D6 0 D16 55 D26 14

D7 35 D17 30 D27 36

D8 48 D18 54 D28 9

D9 98 D19 77

D10 88 D20 36 Total = 1300

Source of information: SISVRealink

On the surface, there was a slight improvement

in the secondary market sales when the figures

are compared on a quarterly basis.

However, when compared to the same period

in 2008, the performance of Q1 2009 was

46% lower than the 2,666 transactions

recorded in Q1 2008.

The sudden surge of new home market sales in

February and March 2009 has managed to

overshadow the poor performance in the

secondary market.

The fact is that buying sentiment at the

secondary market has taken a severe hit after

the Lehman Brothers saga and the subsequent

worldwide stock market crash on 10 October

2008.

HDB upgraders the only hope for private secondary market sales

The only hope for the private secondary

market is the consistent performance of the

HDB resale market where valuation prices are

still holding up strongly. Of late, there has been

signs of ‘flight to quality’ where HDB flat

owners are seen snapping up ‘reasonably

priced’ mass market condominiums in

heartland areas, such as Choa Chu Kang,

Jurong West, Hougang/Buangkok area, and

Balestier Road areas.

For example, at Mi Casa in Choa Chu Kang,

upgraders accounted for 80% of its 120 buyers

so far.

HDB dwellers also bought many units at The

Caspian, beside Lakeside MRT station, Double

Bay Residences in Simei and The Quartz in

Buangkok.

In response to this, developers have rolled out

some more mass-market private condos such as

Woodleigh Close by Frasers Centrepoint, and


Secondary market sales overshadowed Slight improvement in Q1 sales can’t lift gloom



UOL's 646-unit condo at Simei Street 4 called

Double Bay Residence.

Some more private condo launches can be

expected including Oasis @ Elias, The Gale on

Flora Road in Upper Changi, Ascentia Sky on

Alexandra Road, and a 571-unit condo by

NTUC Choice Homes at Lor 2/3 Toa Payoh

near Braddell MRT Station.

All these new home units are expected to be

priced between the $600-650 psf range on

average.

Developers slashed price to boost sales of leftover units

For unsold condo units that are still available

on the new home market, developers are

slashing prices on the quiet to try to offload

them.

For example, the average price at Waterfront

Waves in Bedok was reduced from $800 psf to

$600 psf, while at Kovan Residences near

Kovan MRT station prices were cut from $880

psf to $750 psf.

Private home rents fall in Q1 2009

The official URA rental data is not yet available

when this magazine goes for print. However,

according to a private research done by DTZ,

the average monthly rent for luxurious non-

landed homes in Singapore's prime districts 9,

10 and 11 slid 18.8% quarter on quarter (q-o-q)

to $5.20 psf in Q1 2009, a level last seen in Q3

2006.

Meanwhile, the average rental value of non-

landed homes in the prime districts fell 16.2%

q-o-q to $3.65 psf per month in Q1 2009.

Office rents set to fall in Q1 2009

Shadow space, or excess space that is being put

up by existing tenants for sub-letting, is set to

soar from this point on.

This is because demand for office space in

Singapore is easing for the whole year in 2009,

in tandem with the economic recession.

Moreover, there will be a supply glut in the

office space sector from later part of this year.

Another 2.9 million sq ft of office space is

estimated to come on stream later this year, on

top of the bumper crop of net new completion

amounting to 1.4 million sq ft seen in 2008.

On top of that, there will be fresh supply of

2.5 million sq ft of new hi-spec industrial space

due for completion in 2009.

Furthermore, to cope with the current

economic downturn, many companies have

downsized their operations or relocated to

cheaper premises prior to lease expiry.

Where the shadow space will be

� Macquarie is reportedly prepared to sub-let

some of the space it has signed up for at

Marina Bay Financial Centre's (MBFC)

Tower 2 under the project's first phase,

which is slated to be ready in Q2 2010.

� DBS Group may also sub-let part of the

700,000 sq ft it has leased at MBFC's Tower

3, in the project's second phase.

� Citibank is said to be offering over 100,000

sq ft of shadow space at various locations,

including Capital Square, Marsh &

McLennan Centre and Millenia Tower.

New malls offer rent rebates to get tenants

Likewise, rents for retail space are taking the

same trajectory. New malls are taking the tried-

and-tested route of ‘cutting rents to get tenants’.

For example, Orchard Central which is above

Somerset MRT station, has cut rents as much as

30% so as to push up tenancy by 75% when it

opens for business in June 2009. Prior to that,

Ion Orchard had offered rental rebates of up to

30% for stores even before it opens for

business in July 2009.

Other new malls which have offered rent cuts

or rebates include Tampines 1 and Iluma, at

Bugis.



Small is beautiful!

Smallness is back. Smallness is here to stay for

as long as foreign investors are kept at bay.

What coincides with smallness in size is the

smallness in price which is very palatable to

small-cap investors who covet good location

such as Orchard Road.

The recent successes in the new home market

owe much to the small-size apartments as well

as their smallness in price.

This may put a downward pressure on prices of

properties at the fringe of the core areas,

though the unit psf price appears quite

respectable.

Just how small is small?

Property experts attributed the success of

Illuminaire, a 72-unit freehold luxury

condominium in District 9 Devonshire Road

near Somerset MRT station, to the small size of

the units.

The project consists entirely of one- and two-

bedroom apartments. One-bedroom units,

which are 441 sq ft or 463 sq ft, all cost less

than $800,000. And all the two-bedroom

apartments, which are 635 sq ft or 721 sq ft,

sold for under $1.25 million.

The project achieved a 96% sell-out rate in a

matter of two days in early April 2009. What

was more spectacular was the average price of

$1,700 per sq ft.

Double Bay sold 264 units in 2 weeks

Most of the units sold at the new 646-unit

project Double Bay Residences at Simei Street 4

were smaller apartments. The majority of the

264 units sold were priced correctly at around

$650 psf.

Small units at Alexis sold out in two weeks

Most of the 293-unit project, Alexis @

Alexandra, at the corner of Alexandra Road

and Commonwealth Avenue were sold at

prices between $850 and $1,100 per sq ft (psf)

or between $450,000 and $650,000 in

absolute sale price for the one-bedroom and

two-bedroom units.

Most units there are between 366 sq ft and

527 sq ft.

At least 80% of Alexis are one- to two-

bedroom units. And the smaller units which

average about 400 sq ft were sold for around

$450,000 in absolute price.

The two-bedroom units which average about

600 sq ft were sold for around $650,000. The

developers had adjusted the mix to include

more affordable units because of the weak

market, and to maximise profit as the site is

only 50,838 sq ft.

More condo projects with small units

More developers are ready to emulate the

success of the smallish developments.

Sing Holdings withdrew the building plan of

The Laurels at Cairnhill Road and reconfigure

the original 150 larger units to comprise 290

smallish units.

In mid-March, a freehold project, Kembangan

Suites at Jalan Masjid was launched with

starting prices from $300,000 for the one-

bedroom units, which range from 344 sq ft to

527 sq ft.

On the first day of the preview, the developer

sold out 60 units of mostly one- and two-

bedders, ranging from 344 sq ft to 581 sq ft in

size.


Small is Beautiful! Smallness is the Next Big Thing



It proves that the success achieved by Alexis at

Alexandra Road was definitely not a fluke. All

of a sudden, new home units started to sell like

hot cakes due to their affordability and the

Singaporean’s aspiration of owning a piece of

real estate in a good location. Other new home

projects with smallish units started to catch on

the craze.

The 104-unit Domus in Irrawaddy Road was

launched with starting prices from as low as

below $500,000 for the 25 studios of 474 sq

ft.

The 127-unit Mezzo on the site of the former

Ruby Plaza along Balestier Road was released

with 20 one-bedders of 560 sq ft with starting

prices of about $540,000.

Other new launches like Mount Sophia Suites in

Sophia Road, Nova 88 in Bhamo Road and

Zenith in Zion Road are offering studio

apartments or one-bedders from 366 sq ft to

484 sq ft.

UOL Group may also jump on the bandwagon

and resize the units of its Green Meadows

project in Upper Thomson.

Update on Collective Sales

Horizon Towers deal falls through

After almost two-and-a-half years, the minority owners of Horizon Towers have finally succeeded in

blocking the $500 million collective sale of their homes at Horizon Towers. The minority owners had

argued that the deal was done in bad faith as a higher $510 million offer from Hong Kong firm

Vineyard Holdings was not taken seriously. The Court of Appeal agreed with the minority owners that

the sales committee did not secure the best price obtainable for the property.

Justice V K Rajah also ruled that a Sales Committee is expected to follow up all expressions of interest

and offers, and carry out sufficient investigations and due diligence to determine their genuineness. A

Sales Committee is also tasked with creating competition between interested purchasers and 'waiting

for the most propitious timing for the sale in order to obtain the best price'.

Likewise, Justice Rajah said that Strata Titles Board (STB) must play a pro-active role when it comes to

disputed cases, rather than simply listening to the evidence and arguments of both sides and then

ruling on their differences.

'Despite the reference to its 'mediation-arbitration' function, STB has a significant inquisitorial role to

play,' he said. 'It is not confined to what is presented to it by the contending parties, but must seek out

the facts whenever there is evidence that the SC (sales committee) has not disclosed everything about

the transaction to STB.'

In July 2008, the High Court ruled in favour of the majority owners and ordered the sale of the

property to Singapore-listed Hotel Properties Ltd (HPL) and its partners Morgan Stanley Real Estate

and Qatar Investment Authority.



Background information on LBS

From 1 March 2009, Singaporeans who are at

least 62 years of age can sell back the tail end

of the lease period of their HDB 3-room (or

smaller) flats to the Housing Development

Board (HDB) and continue to live in their own

flat.

The HDB will top up an additional $10,000 in

the sale proceeds of the remaining lease and

pay out $5,000 cash to the flat owners. The

difference in the sale proceeds will be

converted to an annuity and the flat owners

will receive a monthly cash payment for the

rest of their life.

LBS is available to Singapore citizens owning 3-

room or smaller flats where the outstanding

mortgage loan is $5,000 or lower. They must

also meet the following criteria:

� Age of youngest lessee is 62 years or older;

� Household income of $3,000 or less;

� Have not previously owned a 4-room or

larger flat or private property;

� Have only enjoyed one housing subsidy;

� Have owned the existing flat for 5 years or

more.

How it will act as price stabilizer

The most important implication of the LBS is

that the new scheme will shore up prices of

larger flats as well as mass market

condominiums.

As it is, there is already a healthy price buffer

between the various different typical flat types;

for example, no matter how high the price of a

resale 3-room HDB flat goes up, it will not

exceed the median price of resale 4-room flats.

The buffer will then prevent prices of 4-room

flats from falling below the highest 3-room flats.

Likewise, such a price buffer will prevent resale

prices of HDB flats in general from going

beyond reasonable price points. Moreover, by

sucking a few hundred 3-room flats out of the

supply equation, the HDB resale prices will be

boosted when demand increases. Let’s look at

the following illustrations.

Using the March 2009 HDB resale prices at

Ang Mo Kio as a gauge, one will see that the

stabilising of 3-room resale prices will shore up

the value of other larger flats, including mass

market condos.

Mass market

condos

[$600k-$700k] 5-room flat

highest price

[$610k]

4-room flat

highest price

[$505k]

E-flat

median price

[$595k]

5-room flat

median price

[$480k]

4-room flat

median price

[$328k]

3-room flat

highest price

[$315k]

Simply put, it means that prices of 5-room

resale flats will be supported by the highest

price range of 4-room resale flats. (Quality

resale 4-room flats, such as one on high floor

and with sea view still command very good

premium over low- or mid-floor 5-room flats.]

Conversely, when the prices of 3-room resale

flat appreciate due to constraints in supply,

prices of larger flat types will likewise be

increased, especially when more and more 3-

room flats are being sucked out of the supply

chain because of the LBS.

� Government Policy Update

The Price Stabilizer – Lease Buyback Scheme Why prices for heartland properties will not crash



[SAM GIAN] Do you cut back on advertising

because of recession? The answer is: “that will

be the dumbest thing to do!” In fact, when the

times are bad, you should advertise more

intelligently; because if you don’t – you will be

out of business when the recession is over.

But how does one make do with a very small

advertising budget?

In this issue, I have again invited our online

marketing guru, Mr Jacob Tay a.k.a Mr Info-

Tool, to share with us some tips on effective

online marketing.

SMART & EFFECTIVE ONLINE MARKETING for REAL ESTATE SALESPERSONS – by JACOB TAY

In recent times, the Internet has rapidly grown

to become the most effective and cost-efficient

medium for marketing property. In matured

markets like the US and Australia, it has

overtaken traditional mediums like

newspapers, with almost 100 per cent of agents

using the Internet to advertise their properties.

This phenomenon is currently taking Asia and

Singapore by storm therefore, it is not just

important but also absolutely crucial to learn

and adopt this medium in order to stay

relevant and prosper in today’s market place.

There are several online products available in

the market place. It is important to know how

to select the right products, as well as utilise

them to maximise returns. Take a look at all

the different offerings available and compare

the features and costs to find out what best

suits you.

Effective online marketing essentially means

generating the highest number of quality leads

in the most cost-efficient manner possible. How

do you achieve this? Select the right property

portal. The best ones will help you reach the

largest and most targeted audience possible;

and generate the most number of quality leads

for you.

You also need to know what to include and

how to optimise your listings in order to reach

as many prospective buyers as possible and

then getting the most number of leads.

What are the things property BUYERS look for?

Listings that catch the eyes of property buyers

are those that provide more than enough

information for the buyer. If you have scant

information and less visuals, it is difficult for the

viewer to imagine how the property looks like.

Likewise, a listing packed with accurate,

detailed and useful information as well as good

quality photos and videos will help the

prospective buyer visualise the property and

will more likely contact the agent to find out

more.

Below are the few key things to consider when

putting up listings:

TRAFFIC – high traffic comprising serious

property buyers would generate more leads for

agents, therefore it is important to choose a

property portal that enjoys good quality high

traffic. A user-friendly interface, quality content

and listings, comprehensive information, useful

data and links are some of the qualities of a

good property portal which would attract high

traffic.

iProperty.com Singapore

(www.iproperty.com.sg) is an example of a

property portal that attracts not just high

traffic. Its website visitors include serious local

and expatriate property buyers, majority of

which belong to high income groups.

Moreover, the iProperty.com Group has a

network of regional websites in six countries

across Asia, which channels property buyers

from all over Asia to the Singapore site.

LISTINGS – property buyers seek good quality

listings that provide a lot of information about

the property and high numbers of listings to

� Tips on Internet Advertising

How to Advertise in a RECESSION Smart and Effective Online Marketing



give them more options. A good quality listing

should have the following:

� Accurate and detailed information on

the property e.g. address, name of

development, number of bedrooms and

bathrooms, built-up size and etc.

� Descriptions of the property, inside and

outside, as well as the surrounding

neighbourhood with information such as

facilities and amenities, schools, and

conveniences nearby.

� Clear visuals such as photos of the

interior and exterior of the property, and the

surrounding area. A video would further help

property buyers understand the location and its

surroundings better. Agents using

iProperty.com Singapore are allowed to

upload up to 20 photos per listing. For agents

who don’t have enough photos or would like

to enhance their listings with more photos, we

have also built a photo library with over

11,000 photos and panoramic views of

condominiums, HDB and private estates.

Agents can use these photos for free.

� Google map to show where the

property is situated. This will also show access

points to the property and what types of

highways and major roads it is connected too.

Getting CONNECTED with prospective BUYERS

Once the property buyer has decided that he is

interested enough to find out more, he would

want to know how to get in touch with the

agent. A good property portal would have all

the necessary information at hand. At

iProperty.com Singapore, the respective agent’s

details and contact information is readily

available on the same page as the listing. There

are also multiple ways of contacting the agent,

effectively building a strong link between the

buyer and the agent.

Besides the usual phone call that prospective

buyers make to the agents, iProperty.com

Singapore also provides a free SMS enquiry

service where interested buyers may send an

SMS to the agent, from their computer to the

agent’s mobile. Simultaneously, an email will

be sent to the agent to inform them of the

potential lead. The cost of the SMS is borne by

iProperty.com Singapore. That way, agents will

never miss out on potential leads again, even if

they are engaged on the phone or are unable

to check their emails often.

‘Property wanted’ feature: Property buyers are

allowed to advertise too, by putting up wanted

advertisements to let agents know what type of

property they are looking for. If you have a

property that matches the buyer’s criteria, give

them a call. This opens up the avenue in which

buyers and agents are connected.

iProperty.com – Singapore’s No. 1 Property Website Gets you Maximum Leads at Minimum Cost

iProperty.com Singapore, Singapore’s No. 1

property website, offers you all the above and

more.

We offer a wide range of products and services

to cater to all your needs, with frequently

updated and improved features to enhance

your property listings. Its traffic and leads have

grown tremendously with the amount of

website visitors increased by over 250% in the

last 6 months and almost 500% over the past

year!

You can reach Mr Jacob Tay or his other MLS

consultants at Tel: 6255-4411 / email:

[email protected]; or visit his office at

#08-01 HDB HUB East Wing, Toa Payoh Lor 6



Advanced Selling TECHNIQUES

How to Transact Sub-Sale Deals (including ‘flipping’ in this Recession)

Lesson plan – First Day 21 May 2009 (09.00am – 3.00pm)

1. The basics of new home sale (Before you know how to ‘flip’ what you need to know about new home sales)

2. The critical success factors – The different Skill sets required in both types of sales (Different approaches in conducting new home sales, sub-sale and resale deals)

3. Check-list to your first $1 million dollar in Commission (Step-by-step guidance in closing new condo deals)

4. Show and Tell component (Sam Gian and co-trainers will point out your mistakes in the ‘show-and-tell’ segment)

Lesson plan – Second Day 22 May 2009 (09.00am – 12 noon)

5. Different types of sub-sales in this recession

6. Difference between ‘flipping’ and ‘assignments’ (Step-by-step guidance in closing both types of transactions)

7. The workflow of sub-sale deals (Detailed explanation)

8. The Paperwork in sub-sale deals (Detailed explanation)

Sam Gian is the only real estate sales consultant in Singapore who has written and

published SEVEN books in selling skills and real estate brokerage know-how. He also

provides the following research materials FREE OF CHARGE to real estate salespersons of

all creeds and persuasions: FREE Monthly Property Market Updates via his website, FREE

Quarterly Magazine titled ‘PROPERTY MARKET DIRECTION’, and FREE half-yearly

seminar titled ‘Where is the market heading’.

Sam’s teaching provides the Critical Winning-edge needed by salespersons to beat their

competitors and outsmart today’s more sophisticated customers. Many salespersons who

have attended Sam Gian’s programmes have tripled their income as they are now able to

close effectively & quickly, and get paid a higher commission.

This time around, Sam is tying up with Mr Benson Ong and Mr Douglas Lee, both

government certified trainers and Toastmasters, to bring you the new selling skill course.

Sign up early to enjoy the Early Bird Price

Call Ruth at 9187 8072



Keep a date with Sam Gian’s upcoming FREE Seminar

Where is the Market Heading?

27 July 2009 9.30am to 1.00pm

Venue: To Be Confirmed

Free tickets will be available for collection from 20 July onwards at iProperty office at #08-01 HDB HUB East Wing

Seminars are Organised by

Sam’s Free Magazines / Free Monthly Reports / Free Seminars / Free workshops are being funded by the sales of his BOOKs.

If you Support Professionalism, tell your friends about how Sam’s Books can help improve their selling skills and their sales income.

And Ask Them to BUY Sam Gian’s Books.

property market direction - april 2009 issue

Documents

basics market

hdb resale market

subsale market

crazy real estate market

primary sale market

issue market update

prices page

psf of mass market homes