singapore property weekly issue 104

7/30/2019 Singapore Property Weekly Issue 104

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Issue 104Copyright 2011-2013 www.Propwise.sg. All Rights Reserved.
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CONTENTS

p2 The Truth About Buying a USAInvestment Property

p9 Property Renting Tip #8: Late Payment

from Your Tenant

p10 Singapore Property News This Week

p16 Resale Property Transactions

(May 1 May 7)

Welcome to the 104th edition of the

Singapore Property Weekly.

Hope you like it!

Mr. Propwise

FROM THE

EDITOR
mailto:[email protected]://www.propwise.sg/advertise/http://www.propwise.sg/advertise/mailto:[email protected]


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SINGAPORE PROPERTY WEEKLY Issue 104

Page | 2Back to Contents

By Gerald Tay (guest contributor)

The success of my overseas property

investments in the last three years is due to co-

investing with trustworthy foreign partners,

whom themselves have decades of property

investment experience in that particular country

both as a local and investor. I have never

bought an overseas investment property from

property seminars or exhibitions, simply

because I dont trust salespeople with hard-sell

tactics for investment advice. This article is

written to educate you how to invest in

overseas property safely, especially for those

of you keen to invest but would like an

independent third party view.

The context is specifically for the USA real

estate market which Im familiar,

The Truth About Buying a USA Investment Property


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thanks to three years of education and

experience from my USA partners, but I

believe these basic pointers should serve a

useful guide for other similarly mature real

estate markets like Australia, Western Europeor Japan.

Can I really buy a USA or Overseas

Property with No Money Down?

You have to understand what no money

down really means. It simply means that theproperty is 100% leveraged. In other words,

the purchaser has borrowed the entire

amount, including the down payment, to buy

the property. The term Seller Financing for

example is referred as financing offered by

the seller. From experience, seller financing orno money down is not the bed of roses most

people think, especially for foreign investors.

Just because its possible does not make it

probable.

The type and quality of the property offered

by sellers willingly to finance is rarely

mentioned. Quality properties in good

markets, rarely if ever, have motivated sellers.

Unfortunately, many local property gurus andexhibitions have made buying USA or other

overseas properties with no money down

more important than buying a quality property.

A property that will make a sound, long-term

investment will be a quality property in a good

neighbourhood. Even if its 100% financed, abad property is a bad property

What are the different USA properties and

how much do they cost?

There are two primary segments favoured by

experienced American investors:Residential

Single-Family Homes/Duplex/Triplex/4-plexes:

These are similar to Singapore landed


5/18



properties, but the key difference with

property valuation lies in the building structure

itself and not the land. Good quality SFH

investments in good middle-class markets

range between USD$100,000 toUSD$180,000 based on the current market.

Condominiums: Typically range between

USD$60,000 to USD$100,000 for two to three

bedroom unit.

Single-Family Homes are the stuff of whichthe American Dream is made of. More than

any other type of real estate, SFH are always

in demand, and are therefore the most liquid.

Again, this will depend heavily on the type of

property and location of market.

Commercial

Multi-Family Large Apartments (100 units &

above): Depending on market location, the

price ranges from as low as USD$500,000 to

USD$2 million. (And yes, just for the price of

a re-sale HDB flat or condo in Singapore, you

can boastfully tell your ignorant friends youre

also a property guru owning 100 properties

in ONE building that is!)

Large Commercial Buildings with one or

multiple business tenants: The tenants are

generally small to large-scale businesses.

Prices range from USD$1 million onwards

depending on the market.

Where should I buy or invest in overseas

markets like the USA?

Most novice property investors are told to

invest only within 30 minutes of the city or

train station when buying overseas properties

like in Singapore. This advice can be fatal! In

high priced markets, this doesnt make sense

especially when mortgage payments are

higher than your rental income.


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Unlike Singapore, experienced local investors

in the USA or other countries, seldom, if ever,

invest a property near the city or train station

especially in matured real estate markets.

Break the 30 minute rule and buy where itmakes sense to buy!

The 5 Essential Criteria of a Good

Overseas Property Market (Example: USA)

The importance of location cant be

overestimated. What is a good market?1. Big City

Economic diversity ensures investment

stability. Source large cities with multiple

employment sources to ensure rental

profitability.

2. A Good Rental Market Where the

Numbers Work

A good rental market in the USA has

properties that will yield a reasonable cash

flow. Note the word reasonable, and not

over-promised! Any number that seems

overly high should be questioned by any

savvy investor.

The rule-of-thumb used by USA investors for

good quality Single-Family Home is 1% rental

income a month versus the purchase price.

So, a USD$100,000 home should rent for

USD$1,000 a month.

I believe you can safely apply this rule formost other mature overseas property

markets.

3. Not a booming Market

A booming market is NOT where you want to

invest, especially for overseas property.

Its IMPORTANT to buy in a market where

prices are only steadily going up, but not one

in which prices are escalating rapidly.

I dont just mean that prices are rising rapidly.


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Booming also implies a kind of frantic public

mind-set, in which buyers feel they must buy

right away, before prices rise higher. It also

implies inflated prices.

4. Low Median Price

High priced markets in USA such as San

Francisco, Los Angeles, New York or even

London, Tokyo or Manila may not be good

places to buy, especially for residential

properties. First, the investment numbersdont work: rental prices are too low in

comparison with the monthly mortgage

payments. And second, expensive properties

require jumbo loans, which means the down-

payment can be as high as 25% in the USA.

A good market in the USA for qualitySingle-

Family Home investments will have median

prices of USD$100,000 to USD$180,000.

5. Sun Belt

The Sun Belt is the fastest growing region in

the USA. With its warm weather, growing

employment and lower housing costs, it is an

attractive region for many USA investors.

Buying a property in the Sun Belt markets will

help ensure that your investment will continue

to grow over the long-term.

As foreign investors, AVOID properties that

are located in the cold northern regions ofUSA, namely Michigan, Detroit, Dakota, the

Niagara Falls region etc.

Some of the best residential markets in the

Sun Belt Region include:

Phoenix, Arizona

Orlando, Florida

Tampa, Florida

SINGAPORE PROPERTY WEEKLY I 104


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Jacksonville, Florida

San Antonio, Texas

The Truth about Buying Cheap Overseas

Property

Bargain overseas properties such as

foreclosures or those with little or no money

down, are the classic real estate lure. Go to a

couple of local popular property seminars and

you will see Own multiple properties with

little or no money down fever in action.

Instant wealth! Overnight Success! Ordinary

people can now realise their dreams to live

the life of the rich by simply owning many

properties at just a fraction of what it takes to

own one in Singapore. You have to think

logically. If you dive into this can buy cheap

mentality for overseas property, you may find

that instead of you plucking, youre the one

whos getting plucked!

Doesnt it stand to reason that iftheres really

a good deal out there, the savvy locals and

professional investors will get to it long before

you do as a foreign investor? Of course they

will! So whats left over for you, the busyforeign part-time investor? I can tell you

whats left over: the junk that no one else

wants.

Youve to be careful. Its too easy for more

experienced business people to manipulateand sway the ordinary guys on the streets.

You think you may have gotten a great

overseas property deal. You know what the

seller thinks? What a sucker! Ive been trying

to get this white elephant off my hands for two

years!

The pros are going to beat you to the best

stuff and youll get the leftovers.

SINGAPORE PROPERTY WEEKLY I 104


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Invest in foreign markets with partners, not

salesmen

Invest in unfamiliar markets with foreign

partners who understand the game well and

are willing to put their money in the deal with

you. Use a little common sense and invest only

when it makes sense.

Dont simply invest overseas because you think

the grass is greener there or you believe you

can buy cheap with high returns. From myexperiences, its often the I know it all investor

who buys on hearsay and takes investment

advice from experienced salespeople, and

guess whos getting plucked instead?

By guest contributor Gerald Tay, CEO ofCREI

Academy Group, who exposes widely-heldproperty investment myths that have proven

highly ineffective in creating wealth, and

prevent a comfortable retirement for the

ordinary investor.

http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/choose-to-invest-safely-profitably/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/


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It is important to know what you can and

cannot do when your Tenant is not able to

pay the rental on time.

First of all, convince your Tenant to use GIRO

(General Interbank Recurring Order) or a

Standing Order with the bank to transfer the

rental payment to your bank account monthly.

You can indicate this requirement in the

Tenancy Agreement (TA) and explain to them

that this will free them from the hassle of

having to do rental payment transactionsevery month, and they will not forget to pay

the rent when they are travelling.

Nevertheless, if your Tenant still chooses not

to pay on time and is late for more than seven

days, you can impose a late interest charge

of up to 12% annually and are also entitled to

enter the property and terminate the tenancy.

This should be indicated in the TA anddiscussed prior to entering into the contract.

By Eileen Tan and Ui Wei Teck, property

investors and authors of Enjoying Mid-Life

Without Crisis. This tip and dozens more are

from theirbook.

Property Renting Tip #8: Late Payment from Your Tenant

http://aktive.com.sg/store/enjoying-mid-life-without-crisis/http://aktive.com.sg/store/enjoying-mid-life-without-crisis/http://aktive.com.sg/store/enjoying-mid-life-without-crisis/http://aktive.com.sg/store/enjoying-mid-life-without-crisis/http://aktive.com.sg/store/enjoying-mid-life-without-crisis/http://aktive.com.sg/store/enjoying-mid-life-without-crisis/http://aktive.com.sg/store/enjoying-mid-life-without-crisis/http://aktive.com.sg/store/enjoying-mid-life-without-crisis/http://aktive.com.sg/store/enjoying-mid-life-without-crisis/http://aktive.com.sg/store/enjoying-mid-life-without-crisis/http://aktive.com.sg/store/enjoying-mid-life-without-crisis/http://aktive.com.sg/store/enjoying-mid-life-without-crisis/http://aktive.com.sg/store/enjoying-mid-life-without-crisis/


11/18


Singapore Property This Week


ResidentialLuxury home markets hit by cooling

measures

According to JLL, the average capital values

for luxury homes fell by 0.6% in Q1 as a

result of cooling measures such as a higher

ABSD and a tighter LTV ratio. This is

compounded by the slower slower population

and economic growth. Similarly, a CBRE

report stated that despite a 1.8% increase in

prices of luxury homes to US$2,297 psf,

transaction volumes have fallen as a result of

the cooling measures. Looking ahead,demand and prices are expected to remain

stable, with capital values falling by up to 5%.

(Source: Business Times)

Developer sales of private homes fell by50% to 1,375 units in April

Developer sales of private homes excluding

ECs fell by 50% from 2,793 units in March to

1,375 units in April as a result of the fall in

launches from 3,489 units in March to 1,158

units in April. Most of the sales were fromearlier launches and it was also noted that

developers has lowered their prices in April

when compared to March in response to

increased competition from increased

completions as well as lower demand as a

result of the cooling measures. Meanwhile,172 EC units were sold in April down from

279 units in March. There were no new EC

projects were launched in April. The resale

market also saw only 539 transactions.



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Looking ahead, sales volume is expected to

stabilise at 1,500 to 2,000 units (excluding

ECs) each month, with a full-year total of

15,000-18,000 private homes, compared to

22,197 units in 2012.


Five 99-year plots yielding 2,700 homes

released under GLS programme for H1

2013

The first is a plot at Tampines Avenue 10which is under the confirmed list. The site

with a maximum GFA of 515,000 sq ft that

can yield 530 units is expected to draw three

to six bidders with a top bid of $400-470 psf

ppr. It is considered less attractive than the

other four sites on the reserve list since it isnot near an MRT station, and faces

competition from nearby Q Bay Residences

and another six other nearby sites which have

yet to be launched. The tender will close at

noon on July 2.

The second is the Toa Payoh Lorong 6 site

which has a maximum GFA of 458,000 sq ft

that can yield about 550 units is expected to

draw five to 12 bidders with a top bid of $680-

920 psf ppr if triggered for sale since it is near

Braddell MRT station and schools such as

CHIJ Toa Payoh and Pei Chun Primary

School in addition to being located in a

mature estate.

Next, the Siglap Road site which has a

maximum GFA of 737,000 sq ft that can yield

around 780 units is expected to attract at

least seven bids with a top bid of $550-860

psf ppr if triggered for sale given its proximity

to East Coast Park and Victoria School.The Geylang Avenue 1 site which has a

maximum GFA of 188,000 sq ft that can yield

215 units is expected to attract seven bids

with a top bid of $570-690 psf ppr since it is



13/18



located near Aljunied MRT station and there

are few private developments in the area.

Lastly, the site at Prince Charles Crescent

with a maximum GFA of 564,000 sq ft that

can yield 650 homes is expected to attract

three to five bidders with a winning bid of

$850-1,070 psf ppr since it faces competition

from other GLS sites in the region which has

been recently sold as well as another

Alexandra View site available on the reserve

list.


Corals at Keppel Bay to be launched at

$1,800-3,000 psf

The first 100 units at Corals at Keppel Baycondo, a 99-year leasehold 366 unit

condominium project, is said to be priced at

$1,800-3,000 psf. It will consist of one, two,

three and four-bedroom units (600-3,600 sq

ft) and eight penthouses (4,800-7,800 sq ft) in

11 four-to-ten-storey blocks. The first two unit

types constitute 45% of the units in the

project. Absolute prices start from $1.31

million for a 624 sq ft one-bedroom unit to$10.7 million for a four-bedroom unit around

3,600 sq ft.


99-year Stratum condo at Pasir Ris

launched for sale

170 units of the 380 units at the 99-year

leasehold Stratum condo project at the corner

of Elias Road and Pasir Ris Drive 3 has been

launched at $900 psf, with absolute prices

starting from $540,000 to $550,000 for a

studio unit. The five-storey condo project

consists of studio units, one to five-bedroom

apartments, penthouses with three to five

bedrooms and four-bedroom dual key units in



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14 blocks. Sizes range from 432 sq ft for a

studio unit to 2,446 sq ft for a five-bedroom

penthouse.


Commercial

Reits not the sole reason for increasing

retail rents

While increasing retail rents have often been

attributed to Real estate investment trusts(Reits) in the retail sector given their

ownership of many prime malls in Singapore,

market demand may be another reason for

the increasing retail rents. Furthermore, it is

not only malls owned by Reits that have seen

increased retail rents. Reits can also offertenants benefits in doing promotions or

upgrading facilities.

Looking ahead, the retail Reit sector may be

affected by the fall in retail sales by 2.7% in

February despite the growth in tourist arrivals

by 9.1% in 2012 from 2011, the growth in

consumer price index by 3.5% from February

2012 and the growth in population by 2.5% in2012. This can be seen in how the retail and

office property prices increase are not

matched by corresponding increase in rents.

Other factors that may affect the sector is

also an increase in supply of malls, and retail

problems of labour given the tighter foreignmanpower policies.


Marina Bay Financial Centre, the first

integrated development in the CBD sees

success

Being the first integrated development in the

CBD which offers a work-live-play

environment, MBFC sees success with its



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Towers 1 and 2 being 100% pre-let upon

completion, and its Tower 3 over 85% leased.

48.9% of Tower 3s total NLA is taken up by

financial institutions, 14.9% by legal firms and

7.5% by energy and natural resources firms.Its anchor tenant DBS which occupies 18 of

Tower 3s 46 storeys is also a stakeholder in

the tower. The residential component is also

successful with all 428 units at Marina Bay

Residences and 88% of the 221-unit Marina

Bay Suites sold. MBFCs success can beattributed to MAS's liberalisation of the

banking sector, its waterfront location, the

179,000 sq ft retail component of MBFC as

well as its proximity to attractions such as the

Singapore Flyer, Esplanade-Theatres on the

Bay and the Marina Bay Sands integratedresort.


Net allocation of JTC land and facilities

falls in Q1

JTCs net allocation of prepared industrial

land (PIL) fell by 51% in Q1 2013 to 29.8ha

from 61.1 ha from Q4 2012. The fall in net PIL

allocation is accompanied a 22% fall in gross

allocation to 62.1 ha and a 77% increase in

returns to 32.3 ha. The logistic sector makes

up the biggest proportion of gross allocation

in PIL in Q1, with 30% or 18.9 ha while

manufacturing sector make up12.5 ha of land

of 39% in returns.

Meanwhile, the net allocation of ready-built

facilities (RBF) fell from -3.3 ha in Q4 2012 to-

3.8 ha in Q1, accompanied by a fall in

occupancy rates by 0.2% to 95.3%. Gross

allocation saw a 65% increase to 16.1 ha in

Q1 while returns rose by 52% to 19.8 ha.



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S G O O ssue 0


The net allocation for the flatted factory

segment fell to -0.47 ha from 0.4 ha in Q4

2012 while the standard factory segment saw

an increase to 0.17 ha from -0.83 ha in Q4

2012.


49-room Berjaya Hotel in Duxton Road

sold at $50m

The property at Nos 80-87 Duxton Road,

which includes the 49-room Berjaya Hotel, anoffice and a restaurant housed in eight

adjoining three-storey-plus-loft conservation

shophouses with a total GFA of 32,000 sq ft,

has been sold with vacant possession at $50

million. The 9,558 sq ft site has remaining

lease tenure of 74 years.

There has been increase in shophouse

transactions by 34% from Q4 2012 to $460.1

million in Q1 2013 as a result of the January

cooling measures which targeted the

residential and industrial sector. This is likely

to continue in Q2 2013, with four shophouses

with a 12,000 sq ft GFA sitting at Nos 97, 98,

99 and 100 Duxton Road on a 4,000 sq ft sitebeing sold for $21.6 million and 999-year

leasehold three-storey-plus attic 82 Amoy

Street with a 8,200 sq ft GFA sitting on a

2,770 sq ft site being sold for $16 million.


http://www.moneymatters.sg/


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Non-Landed Residential Resale Property Transactions for the Week of May 1 May 7

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

1 THE SAIL @ MARINA BAY 861 1,650,000 1,916 992 ICON 904 1,552,000 1,716 99

3 QUEENS 1,184 1,610,000 1,360 99

4 CARIBBEAN AT KEPPEL BAY 1,335 2,183,000 1,636 99

4 TERESA VILLE 1,959 2,275,000 1,161 FH

5 THE GRANDHILL 1,841 2,340,000 1,271 FH

5 BLUE HORIZON 1,163 1,315,000 1,131 99

7 BURLINGTON SQUARE 732 1,028,000 1,404 99

8 CITYLIGHTS 560 988,000 1,765 99

9 ILLUMINAIRE ON DEVONSHIRE 721 1,700,000 2,357 FH

9 THE PIER AT ROBERTSON 678 1,461,000 2 ,154 FH

9 GRANGE INFINITE 2,368 4,980,000 2,103 FH

9 THE IMPERIAL 3,918 7,700,000 1,965 FH

9 CAIRNHILL CREST 1,733 3,098,000 1,788 FH

9 MACKENZIE 138 807 1,268,888 1,572 FH

9 PACIFIC MANSION 1,528 2,100,000 1,374 FH

10 THE SOLITAIRE 1,561 3,120,000 1,999 FH

10 GALLOP GABLES 1,141 2,100,000 1,841 FH

10 ONE JERVOIS 990 1,800,000 1,818 FH

10 PALM SPRING 1,862 3,000,000 1,611 FH

10 STUDIO 3 1,302 1,750,000 1,344 FH

10 GLENTREES 1,345 1,716,800 1,276 999

10 GLENTREES 3,412 4,100,000 1,202 999

10 CORONATION SHOPPING PLAZA 1,109 1,263,000 1,139 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

11 NEWTON SUITES 797 1,550,000 1,946 FH11 PARK INFINIA AT WEE NAM 1,001 1,830,000 1,828 FH

11 THE TREVOSE 1,841 2,775,000 1,508 99

11 APLETON VIEW 1,206 1,750,000 1,452 FH

11 SKY@ELEVEN 5,490 7,850,000 1,430 FH

13 CLYDESWOOD 1,249 1,140,000 913 FH

14 GROSVENOR VIEW 1,313 1,400,000 1,066 FH

15 ONE AMBER 1,658 2,400,000 1,448 FH

15 TIERRA VUE 1,055 1,480,000 1,403 FH

15 COSTA RHU 1,012 1,300,000 1,285 99

15 ST PATRICK'S LOFT 1,324 1,670,000 1,261 FH

15 MARINE MEADOWS 1,690 2,080,000 1,231 FH

15 EAST GROVE 1,033 1,000,000 968 FH

16 RIVIERA RESIDENCES 1,593 2,000,000 1,255 FH

16 BLEU @ EAST COAST 1,216 1,350,000 1,110 FH

16 THE SUMMIT 1,249 1,380,000 1,105 FH

16 CASAFINA 1,270 1,238,888 975 99

17 AVILA GARDENS 1,324 1,100,000 831 FH

17 WATERCREST 1,324 1,030,000 778 999

18 EASTPOINT GREEN 1,130 1,060,000 938 99

18 MELVILLE PARK 969 800,000 826 99

18 ELIAS GREEN 1,518 1,100,000 725 99

19 KOVAN MELODY 1,292 1,400,000 1,084 99

19 CHUAN PARK 1,173 1,160,000 989 99



18/18


NOTE: This data only covers non-landed residential resale property

transactions with caveats lodged with the Singapore LandAuthority. Typically, caveats are lodged at least 2-3 weeks after apurchaser signs an OTP, hence the lagged nature of the data.

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

19 CHILTERN PARK 1,518 1,450,000 955 99

19 REGENTVILLE 1,152 990,000 860 99

20 FABER GARDEN CONDOMINIUM 2,766 2,920,000 1,056 FH

21 THE CASCADIA 990 1,796,000 1,814 FH

21 GOODLUCK GARDEN 1,701 1,880,000 1,105 FH

21 SOUTHAVEN I 1,539 1,388,888 902 99

21 SHERWOOD TOWER 1,561 1,083,000 694 99

22 THE LAKESHORE 1,173 1,345,000 1,146 99

23 REGENT HEIGHTS 1,023 958,000 937 99

23 CASHEW PARK CONDOMINIUM 1,475 1,380,000 936 999

23 THE WARREN 1,066 958,000 899 99

23 NORTHVALE 1,033 880,000 852 99

23 HILLTOP GROVE 1,184 948,000 801 99

26 THE CALROSE 1,238 1,570,000 1,268 FH

26 CASTLE GREEN 1,152 1,000,000 868 99

28 SERENITY PARK 1,109 1,100,000 992 FH
http://propertymarketinsights.com/

singapore property weekly issue 104

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