singapore property weekly issue 241

8/20/2019 Singapore Property Weekly Issue 241

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Issue 241Copyright © 2011-2014 www.Propwise.sg. All Rights Reserved.

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CONTENTS

p2 5 Property Investment Pitfalls to Avoid

p7 Singapore Property News This Week

p11 Resale Property Transactions

(December 16 – December 22)

Welcome to the 241st edition of the

Singapore Property Weekly .

Hope you like it!

Mr. Propwise

FROM THE

EDITOR

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SINGAPORE PROPERTY WEEKLY Issue 241

Page | 2Back to Contents

By Tam Ging Wien (guest contributor)

Property investments are capital intensive

and highly leveraged – typically property

financing covers up to 80% of a property’s

purchase value, and can reach 90% in some

countries here in Asia. Investors need to saveup a substantial amount before making a

purchase.

A property investment that has gone sour

may take an investor several years to

recover. Besides the loss in capital, theopportunity cost is also high – the investor

would be priced out of any future investment

in years to come.

5 Property Investment Pitfalls to Avoid


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Therefore, learning from the mistakes others

have made is half the battle won!

In this article we will look at five common

property investment pitfalls that trapinvestors, and how to avoid them.

Pitfall #1 – Investing in “Future Value”

instead of “Undervalued”

Why would anyone buy a property at a higher

future price? Beats me.

Yet, numerous investors continue to flock to

swanky showrooms at new launches to buy

units that have not even been constructed

yet. They pay prices way above the

completed project in the surrounding areas.

This is clearly paying for future value.

The odds in new launches are stacked

against the individual buyer. The property

development industry within Asia is usually

dominated by a few large companies. They

benefit from economies of scale, strong

branding and lots of advertising dollars.

These industry giants are also well connected

and often collaborate in joint venture projects

and time their launches to avoid direct

competition. They also garner strong support

from banks and marketing agents to push

sales.

Purchasing a brand new launch provides zerocash flow to the investor for several years.

Brand new launches command a premium

simply because they are new. Developers sell

a lifestyle and a dream to home buyers to

justify those premiums.

Pitfall #2 – Investing due to Sentiment

instead of Evidence

Are you constantly making your investment

decision by relying on newspaper reports and


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and quotes from property experts? Do you

frequently attend new property launches and

seek the opinions of developers and sales

agents? Do you buy because you hear your

friends or family members buying? Do you

buy into the notion that property prices always

increase so you can just buy and hold? Do

you think anytime is a good time to buy

property?

If you have said yes to one or more of thequestions above, you may unknowingly be

investing due to sentiment.

Remember, you should never put your trust in

sources of information where the opinions

come with a conflict of interest. Developers,

agents and sales persons will always tell you

that anytime is a good time to buy and

property will always go up if you just hold long

enough.

Instead, look at the facts and figures.

Governments regularly publish statistics of

home sales, housing starts, developer

inventories, supply and demand data, and

prices indices. Study the micro and macro

economic factors in the region and country

that you intend to invest in. Understand the

property sectors and behaviours.

Property purchases are likely the largest

purchases we will make in our lives.Therefore are you spending a proportional

amount of time to learn and comprehend your

investment?

Pitfall #3 – Investing for Capital Gains

instead of Cash Flow

Like any other market, the property market

operates in cycles. Capital gains and losses

will occur during uptrends and downtrends.


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A full cycle from Bull to Bear and back to Bull

again can take anywhere from three to ten

years.

Therefore, there is little point in trying to

predict the market direction. Instead, a smart

investor will watch for signs of market stability

and search for properties that are

undervalued and that give a high and

predictable cash flow.

This sustainable cash flow will allow theinvestor to stay invested without having to

draw on their monthly salaries. Those with

positive cash flow will even be able to build

up cash reserves passively which can be

used for emergencies or the next investment.

Pitfall #4 – Investing in the Trend instead

of Counter-Trend

A contrarian investor only invests after the

property prices have been driven down due to

widespread pessimism in the economy and

markets. They take opportunity to bottom fish

and seek properties where sellers are

desperate and willing to sell below market

value. These investors use sustainable cash

flow to tide them through uncertain economic

situations.

When there is widespread optimism that

drives prices to unrealistic and unsustainablelevels, these investors will sell their properties

and reap the rewards. They then wait

patiently for the next cycle and start all over

again.

These investors always buy low and sell high.

They live and breathe the Warren Buffetmantra, “be fearful when others are greedy

and be greedy only when others are fearful.”


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Pitfall #5 – Investing without an Entry or

Exit Strategy

As a final pitfall, many investors enter into an

investment with no clear entry, hold and exit

strategy. They have not considered the

question of who their potential tenants are or

who they can sell their properties to. They

have not calculated their recurrent expenses

versus rental yield. They have no clear

investment goals.For most average investors, we usually only

have one shot in property investment, so

make that bullet count!

By guest contributor Tam Ging Wien, an avid

investor and blogger who spends his time

empowering the masses in financial

education.

SINGAPORE PROPERTY WEEKLY I 241

http://www.propertyconnectionasia.com/http://www.moneymatters.sg/http://www.propertyconnectionasia.com/http://www.propertyconnectionasia.com/http://www.propertyconnectionasia.com/http://www.propertyconnectionasia.com/http://www.propertyconnectionasia.com/


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Singapore Property This Week


ResidentialPrices of completed small condos fall by

1.2% month-on-month in Nov

According to the Singapore Residential Price

Index, prices of completed small condo units

and apartments that are no larger than 506

sq ft have fallen by 1.2% in November from

October. In October, a 0.4% month-on-month

fall in prices was seen in the same category.

Year-to-date, prices of small units islandwide

have fallen by 4.1%. Ong Kah Seng from

R’ST Research said that owners of smaller flats may be more willing to let go of their

flats at lower prices as the units may be too

small for their families and the demand for

such units may also be weak in the leasing

market.

(Source: Business Times)

GCB transactions completed in 2015

totals $730 million

In 2015, at least 34 transactions totalling

$730 million were completed in the GoodClass Bungalow (GCB) area. This is up from

the 28 transactions totaling $626 million in

2014. According to the Business Times, this

is the best showing since 2012 when 54

properties in the GCB areas were sold for

$1.17 billion. William Wong from Premier Group estimated that GCB prices have fallen

by 10 to 15% in 2015 due to weaker

economic sentiments.

SINGAPORE PROPERTY WEEKLY I 241


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Not only so, he believes that overall GCB

prices have fallen as there were several

transactions that were below $20 million in

2015. Samuel Eyo from Singapore Christie’s

International Real Estate also predicts thatprices have fallen about 10% in 2015. He

added that senior homeowners whose

children have moved out may wish to

downsize to a smaller home, thus contributing

to sales in 2015. He predicts that GCB prices

would ease by around 5% in 2016 if interest

rates continue to increase and if the

government does not lift the property cooling

measures.


Market experts: more see ECs asinvestments rather than homes

Executive Condominiums (ECs) may be

losing their relevance as more homeowners

are seeing them as investments rather than

residential units. According to market experts,

demand for ECs have not increased despite

the increase in income ceilings to $14,000

from $12,000. Not only so, some eligible ECbuyers find it more worthwhile to purchase

mass market condos as the price gap

between ECs and those condos narrows.

Furthermore, ECs face competition from

better-quality and well-located BTO HDB

projects. In Q3 of 2015, EC vacancy rates

stood at 10.5% according to URA, which is

higher than from 2012 to Q2 2013 where

vacancy rates were less than 1%. Based on

data from URA, 3,435 EC units were left

unsold at the end of Q3 last year. Combined

with the 3,780 units to be launched this year,

there will be a supply of about 7,000 EC units

in the market.




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Two EC sites launched under GLS

Under the Government Land Sales

programme, two EC sites were launched -

one at Yio Chu Kang under the confirmed list

and another at Sumang Walk under the

reserve list. The Yio Chu Kang site is

18,422.9 sq m large and has a permissible

gross floor area of up to 51,584.12 sq m.

According to HDB, the site may generate

about 520 units and its tender will close in

Feb 2016. Market experts predict that there

may be between 5 to 14 bidders with the

winning bid ranging from $260 to $340 psf

ppr. As EC land prices have fallen in 2015,

Ong Teck Hui from JLL believes that bidding

would be cautious. On the other hand, theSumang Walk site is about 27,056.4 sq m

and has a maximum permissible gross floor

area of 81,169.2 sq m and is able to yield

about 820 units.


Minister Wong: too early for government

to lift cooling measures

Minister for National Development, Lawrence

Wong said that the housing market is healthy

and stabilised thus it is still too early to lift

cooling measures. He added that the

government will continue to monitor the

market and adjust its policies accordingly.

According to the Business Times, both public

and private housing prices are stabilising as

the rate of declines is levelling off. Mohd

Ismail from PropNex predicts that HDB prices

may remain flat or drop 1% in 2016 while

private home prices may fall by 3 to 4%.

Minister Wong said that 18,000 HDB flats will

be launched in 2016.



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This is 20% more than in 2015.


Commercial

H1 2016 Industrial land supply the lowest

in 8 years

6 industrial land site have been released in

H1 this year, the lowest in 8 years. Under the

H1 sale this year, 4.04 ha of industrial land

was released, this was reduced from the 6.12ha released in H2 last year. B1 spaces for

light industrial use was also not released in

the government land sale programme for H1

this year under the confirmed list. Market

experts believe that this reflects that there is

an oversupply in land for B1 uses. NicholasMak from SLP International noticed that all 6

plots have 20-year lease terms, which may

not appeal to industrial property market and

mortgage lenders. Mak added that as

industrial land supply was reduced and by

there are no B1 sites on the confirmed list,

there is more time for the market to absorb

the oversupply of industrial land space.



http://propertymarketinsights.com/


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Non-Landed Residential Resale Property Transactions for the Week of Dec 16 – Dec 22

NOTE: This data only covers non-landed residential resale propertytransactions with caveats lodged with the Singapore Land Authority.Typically, caveats are lodged at least 2-3 weeks after a purchasersigns an OTP, hence the lagged nature of the data.

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

3 QUEENS 1,184 1,400,000 1,182 99

4 THE COAST AT SENTOSA COVE 2,024 3 ,300,000 1,631 99

4 THE INTERLACE 1,873 2,238,000 1,195 99

4 THE INTERLACE 4,478 3,524,100 787 99

5 ONE-NORTH RESIDENCES 1,324 1,800,000 1,360 99

8 CITYLIGHTS 1,938 3,180,000 1,641 99

9 RICHMOND PARK 1,259 2,880,000 2,287 FH

9 THE BOTANIC ON LLOYD 2,594 4,750,000 1,831 FH

9 CASA CAIRNHILL 1,636 2,780,000 1,699 FH

9 8 @ MOUNT SOPHIA 1,033 1,580,000 1,529 103

10 ARDMORE THREE 1,776 5,442,550 3,064 FH10 CUSCADEN RESIDENCES 1,442 2,800,000 1,941 FH

12 PRESTIGE HEIGHTS 344 550,000 1,597 FH

12 BALESTIER POINT 883 880,000 997 FH

14 MERA EAST 1,141 1,250,000 1,096 FH

14 GROSVENOR VIEW 1,249 1,260,000 1,009 FH

14 CAMELLIA LODGE 1,249 1,000,000 801 FH

15 SILVERSEA 1,528 2,600,000 1,701 99

15 38 I SUITES 506 815,000 1,611 FH

15 TIERRA VUE 947 1,280,000 1,351 FH15 MANDARIN GARDEN CONDOMINIUM 3,068 2,925,000 953 99

16 BEDOK RESIDENCES 549 840,000 1,530 99

16 COSTA DEL SOL 1,561 1,900,000 1,217 99

16 AQUARIUS BY THE PARK 1,227 1,080,000 880 99

16 BEDOK COURT 2,411 1,550,000 643 99

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

17 FERRARIA PARK CONDOMINIUM 1,302 1,210,000 929 FH

17 ESTELLA GARDENS 936 803,000 857 FH

19 KENSINGTON PARK CONDOMINIUM 1,249 1,380,000 1,105 999

19 THE QUARTZ 1,195 1,168,000 978 99

19 KOVAN GRANDEUR 915 700,000 765 99

20 SKY HABITAT 1,464 2,480,400 1,694 99

20 RAFFLESIA CONDOMINIUM 915 1,080,000 1,180 99

21 THE CASCADIA 1,507 2,280,000 1,513 FH

21 MAPLEWOODS 1,507 2,200,000 1,460 FH

21 KISMIS VIEW 1,432 1,080,000 754 99

21 KISMIS VIEW 2,433 1,600,000 658 9923 HILLVIEW PARK 1,324 1,310,000 989 FH

23 HILLVIEW REGENCY 1,152 940,000 816 99

26 MEADOWS @ PEIRCE 915 1,118,000 1,222 FH

26 BULLION PARK 807 820,000 1,016 FH

26 BULLION PARK 1,238 1,065,000 860 FH

27 THE MILTONIA RESIDENCES 2,034 1,880,000 924 99

28 SELETAR SPRINGS CONDOMINIUM 2,067 1,420,000 6 87 99

singapore property weekly issue 241

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