singapore property weekly issue 206.pdf

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CONTENTS

p2 3 Tips to Prepare For the Coming Property

Market Winter

p8 Singapore Property News This Week

p13 Resale Property Transactions

(April 15 – April 21 )

Welcome to the 206th edition of the Singapore Property Weekly.

Hope you like it!

Mr. Propwise

FROM THE

EDITOR

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SINGAPORE PROPERTY WEEKLY Issue 206

Page | 2Back to Contents

By Gerald Tay (guest contributor)

In a slowing property market, some experts

have shared why they think it is a good time

for investors to take action to invest in

Singapore properties “right now”.

The current property market is in hibernation

largely due to the Total Debt Servicing Ratio

(TDSR), but prices are not falling steeply due

to “fear”. In addition, other cooling measures,

still high property prices, falling rents and the

increasing supply – and the investment

numbers don’t make sense.

3 Tips to Prepare For the Coming Property Market Winter



Guru argument #1: Downtrend does not

last forever – buy now in preparation for

the recovery.

A lacklustre market is indeed the best time to

get into the property game. But is the current

market lacklustre enough?

A lacklustre market comes after a depressed

market when you see “blood” on the streets:

High levels of personal and corporate

bankruptcies

High repossession rates

Negative equity

High defaults on unsecured lending and

lenders suffer

Equity markets plunging

Highly leveraged borrowers being forced

to sell

This happens during a major financial crisis

similar to the likes of the Global Financial

Crisis and Asian Financial Crisis. The years

between 2003 and 2005 had a lacklustre

property market hit by a series of unfortunate

world events after the Asian Financial Crisis –

this was the best period to buy.

What we are seeing today does not warrant a

strong buy rating in my opinion. Equity

markets are still robust, interest rates are low

but rising and we are still seeing plenty of

expensive cars are on the roads.

The property market has indeed been on the

upward trend over the last 40 years. But

many investors suffer from short-term

memory loss.

The majority of the market gains were made

primarily during the rapid industrialisation

years of early Singapore from 1976 to 1996.



Thereafter, buyers who bought at the wrong

time could be sitting on negative real returns

after inflation.

Guru argument #2: The best time to

bargain hunt is during a quiet market

Let’s look at the property market since end

2009 using the analogy of a

clock.

9pm – 12am: Spring (Warm, 2009)

12am – 3pm: Summer (Hot, 2010 to 2012)

3pm – 6pm: Autumn (Cooling, 2013 to 2014)

6pm – 9pm: Winter (Cold, 2015 - ?)

Winter is coming

Due to the severe property cooling measures,

strict lending restrictions and a market stand-

off between buyers and sellers, we are likely

at the beginning of a possibly long winter, say

6.02pm now. Sellers have holding power and

Buyers are staying away.

There is no money to be made here. If you

own a property in a winter market and cannot

get out with a gain then you may experience

the following:

1. Having a property that is in negative

equity.

2. Having a property that is costing you

every month to own it.

I kind of hate to be the voice of doom, but I

think people have actually forgotten that

property prices have gone down that much in

the past. There’s this feeling that they just

won’t fall dramatically, but, of course, that’s

not true.

Property prices have only fallen 5% since last

year. This is only a small drop.



Don’t expect cooling measures to be removed

anytime soon by the government.

The best time to bargain hunt when the clock

hand is between 9pm to 12pm – not right

now. Historically, this is the period where

cooling measures may be removed to prop up

the market and economy.

When the market is hot or rising, developers

may hold on to some units to sell them at a

higher price later. But when the market is

cold, this strategy is going to backfire. Many

developers are currently under pressure to

sell off unsold units to avoid paying hefty

government fines.

Nevertheless, when one buys off-the-plan

properties only to make short-term profits, it’s

more of speculation and dumb-luck than

intelligent investing.

Guru argument #3: Invest in alternative

property sectors such as offices

To enter into an unfamiliar investment

because there is no Additional Buyer’s Stamp

Duty (ABSD) and Seller’s Stamp Duty (SSD)

is the same as telling Tiger Woods to switch

from playing professional golf to playing

football because it’s more lucrative.

Buying wine or art is not the same as buying

real estate. Buying real estate is not the same

as buying stocks and shares. Buying a

residential property is not the same as buying

a commercial property.

Buying into an alternative property segment

simply because prices are rising is irrational.

If you focus on the prospective price change

of a property, you are speculating.



For novice investors, get started first with a

mass market residential property. It’s easier

to understand, purchase and manage than

other types of property. If you’re a

homeowner, you’ve already got experience

here. Start close to home, so you can stay on

top of things.

Conclusion

I offer you my alternative 3 tips for investors

to capitalise on a property market in the

winter phase:

1. Liquidate any unproductive assets you

have

Sell or trade the car, jewellery, collections,

and other expensive items to raise cash for

future down payments.

2. Increase your income and save more of

what you earn

There are really only two ways of saving

money:

a. Going without i.e not spending

b. Cutting costs i.e spending less

I can already hear you – how do I increase

my income? Well this depends on you. You

need to be assertive, hardworking and just

that little bit cleverer than the rest! Work extra

hours, ask for a pay raise, increase

profitability, take on another job, etc.

3. Avoid the property market currently and

start educating yourself on real estate

If you’re about to make the biggest purchase

of your lives, you need to understand the



basic concepts of real estate. It’s not easy but

if you are patient and hardworking enough,

great opportunities lie ahead for you to

capitalise on them.

Relying on industry “expert” opinions is never

going to get you anywhere in your pursuit of

wealth.

By guest contributor Gerald Tay, who is the

founder and coach at CREI Academy Group

Pte Ltd, an organization dedicated to

empowering retail property investors with

smarter investing philosophy and strategies.

He is a full-time investor with over 13 years of

solid experience in building his wealth

through Property Investment and is financially

wealthy today.

http://www.crei-academy.com/









http://www.anthonyrobbinssg.com/propwise


Singapore Property This Week


Residential

5,000 ECs to be launched this year

According to the Business Times, about 5,000

executive condominium (EC) units will be

launched this year. Market experts believe

that this surge in supply may increase the

number of unsold inventory. According to

market experts, developers may not be able

to lower the prices of the upcoming EC units

as the EC sites were bought at high prices.

Data from the Urban Redevelopment

Authority showed that the vacancy rate of

available and completed EC units have

increased to 15.1 percent in Q1 this year,

from 11.5 percent in Q4 last year. Nicholas

Mak from SLP International said that the

mortgage servicing ratio restriction and strong

competition from the HDB market may have

negatively affected the demand for EC units.

Market experts believe that it will take two to

three years for the market to absorb the

estimated 7,100 units from the unsold

inventory and upcoming launches.

(Source: Business Times)

Executive flat at Bishan sold for $1.05m

An executive flat at Bishan has been sold for

$1.05 million. The executive maisonette,

which is 149 sqm large, was built in 1987. It

occupies the 22nd to the 24th storey and has

71 years left on its 99-year lease.



Last year, a maisonette that was located in

Bishan also sold for a high price of

$1,088,888. According to the Business Times,

while HDB units within Bishan are known to

fetch high prices, they face strong competition

from the Pinnacle @ Duxton. This year, all

five-room flats at the Pinnacle @ Duxton

have been sold for more than $900,000.

While the resale price index for HDB flats has

fallen according to SRX, the price of larger

executive flats have increase by 1 percent in

Q1 this year from the previous quarter. The

Business Times added that the location of the

executive flats could be a deciding factor for

its resale price. For example, an executive flat

in Bedok that was 143 sqm, was sold for

$570,000. This is significantly lower than the

executive flat that was sold in Bishan, despite

the similarities in unit sizes.


March resale condo prices increase by

0.2%

The National University of Singapore index

showed that prices of completed non-landed

private homes increased by 0.2 percent in

March from February this year. According to

market experts, February is typically a lull

period as developers tend to cut back sales

due to the festivities. Ong Kah Sengfrom

R’ST Research added that the price increase

in March was subtle. Nicholas Mak from SLP

International said that the overall decline in

prices in the price index has been slowing.

However, Mak believes that there is still a

need to monitor price changes in the coming

months, in order to conclude that prices have

stabilised. Based on the NUS resale price

index, the sub-index for the central region has

increased by 0.1 percent in March from

February.



Ong believes that this increase in resale

prices for prime homes was an anomaly.

According to the Business Times, the

implementation of loan limits has resulted in a

surge in demand for smaller non-landed

private homes. This could have resulted in

the 0.3 percent increase in the resale price

sub-index for the non-central region, said the

Business Times.


Two land parcelsup for tender

Under the Confirmed List of Government

Land Sales Programme for H1 this year, two

land parcels will be released for tender. Of the

two sites, market experts believe that the site

located at Toa Payoh will attract more interest

than the other site at Dundee Road. Both

sites have a 99-year lease and will yield

about 1,180 residential units in total. Ong

Teck Hui from JLL believes that the limited

supply of residential land parcels may create

an upwards pressure on the demand for such

sites. Therefore, market experts believe that

there will be an increase in the number of

bids for each residential site. However,

market experts added that the bid prices may

not increase significantly as developers

anticipate a shrinking market. Nicholas Mak

from SLP International predicts that the Toa

Payoh site will draw up to 25 bids and he

believes that the winning bid will be around

$680 to $725 psfprr. Mak believes that the

prime location of the site will be a key selling

point. Other experts predict that the land

parcel at Dundee Road will attract up to 10

bids and the winning bid will be around $700

to $851 psfppr.




Tampines land parcel won for $227.8m

A 99-year private residential site at Tampines

attracted 12 bids. Despite its mediocre

location, the site attracted bids as high as

$227.8 million, or $485.29 psfppr. The land

parcel is located near large industrial

Business 2-zoned areas. According to the

Business Times, this reflects developers’

strong demand for residential sites. The high

demand could be caused by a lack of supply,

said market experts. The Tampines land

parcel, which was won by MCC Land, will be

developed into a 500 unit condominium

project. According to market experts, the

break-even cost for the Tampines site would

be between $920 to $950 psf.


GCB at Binjai withdrawn from auction due

to lack of bids

A Good Class Bungalow located at Binjai

Rise was not well received at an auction held

by Colliers International. The bungalow was

priced at $19.5 million and comprises of

about 17,035 sqft of land. While there were

no bids for the bungalow, it is believed that

potential buyers will be negotiating the sale of

the bungalow privately with Colliers. The

bungalow has been approved for

redevelopment up to 13,378 sqft gross floor

area. It is located near the Pan Island

Expressway and is partially renovated. To

complete the renovations, market experts

believe that it would cost another $1 to $2

million.




Commercial

Shophouse at JooChiat sold for $16.8m

Located at JooChiat Road, a freehold

shophouse block has been sold for $16.8

million, or $1,357 psf. The shophouse block

has a lettable area of 12,382 sqft and has

been zoned for commercial use. This

shophouse block was previously made up of

5 separate units. Currently, it has a gross

floor area of 15,800 sqft and is partially

leased. According to the Business Times, only

the front part of the building has to be

conserved. That section of the building

comprises of two storeys and an attic. The

rear of the building, which is four storeys high,

may be redeveloped.


http://propertymarketinsights.com/



Non-Landed Residential Resale Property Transactions for the Week of Apr 15 – Apr 21

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

transactions with caveats lodged with the Singapore Land Authority.

Typically, caveats are lodged at least 2-3 weeks after a purchaser

signs an OTP, hence the lagged nature of the data.

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

2 76 SHENTON 592 1,150,000 1,943 99

2 THE ARRIS 980 1,700,000 1,736 FH

4 CARIBBEAN AT KEPPEL BAY 1,270 1,790,000 1,409 99

5 THE VISION 1,302 1,700,000 1,305 99

5 HUNDRED TREES 915 1,150,000 1,257 956

5 THE VISION 1,313 1,641,250 1,250 99

5 DOVER PARKVIEW 969 1,000,000 1,032 99

9 URBAN RESORT CONDOMINIUM 4,941 11,680,000 2,364 FH

9 THE PIER AT ROBERTSON 1,044 1,950,000 1,868 FH

10 D'LEEDON 635 1,080,000 1,701 99

10 VENTUNO BALMORAL 1,313 1,990,000 1,515 FH

10 D' DALVEY 1,711 2,280,000 1,332 FH

10 SOMMERVILLE PARK 2,325 2,938,000 1,264 FH

11 PARK INFINIA AT WEE NAM 1,464 2,630,000 1,797 FH

12 PRESTIGE HEIGHTS 344 580,000 1,684 FH

12 PINNACLE 16 592 890,000 1,503 FH

14 COSMO 710 970,000 1,365 FH

14 EUNOSVILLE 1,733 1,150,000 664 102

15 THE ESTA 1,561 2,232,230 1,430 FH

15 THE WATERSIDE 2,142 2,910,000 1,359 FH

15 BUTTERWORTH 8 1,313 1,580,000 1,203 FH

15 SANTA FE MANSIONS 1,076 1,285,000 1,194 FH

15 KING'S MANSION 1,808 2,118,000 1,171 FH

15 COSTA RHU 1,776 2,050,000 1,154 99

15 FERNWOOD TOWERS 1,636 1,725,000 1,054 FH

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

15 THE VESTA 1,582 1,438,000 909 FH

16 COSTA DEL SOL 1,313 1,570,000 1,196 99

16 BAYWATER 1,410 1,115,000 791 99

17 BALLOTA PARK CONDOMINIUM 1,399 860,000 615 FH

19 KOVAN MELODY 904 1,030,000 1,139 99

19 SUNGLADE 1,152 1,220,000 1,059 99

20 RAFFLESIA CONDOMINIUM 1,195 1,225,000 1,025 99

21 THE RAINTREE 1,270 1,200,000 945 99

21 PARC PALAIS 1,582 1,465,000 926 FH

22 THE LAKESHORE 1,109 1,200,000 1,082 99

22 CASPIAN 1,399 1,470,000 1,051 99

22 THE CENTRIS 1,259 1,313,000 1,043 99

23 FORESQUE RESIDENCES 1,518 1,620,000 1,067 99

23 GLENDALE PARK 1,206 1,200,000 995 FH

23 HILLVIEW REGENCY 1,130 975,000 863 99

23 PARKVIEW APARTMENTS 1,163 805,000 692 99

28 H2O RESIDENCES 1,389 1,500,000 1,080 99

28 SUNRISE GARDENS 1,281 940,000 734 99

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