Singapore Property Weekly Issue 85

7/30/2019 Singapore Property Weekly Issue 85

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Issue 85Copyright 2011-2012 www.Propwise.sg. All Rights Reserved.
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CONTENTS

p2 3 Property Investment Myths the

Experts are Telling You

p9 Singapore Property News This Week

p16 Resale Property Transactions

(December 19 December 25)

Welcome to the 85th 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 85

Page | 2Back to Contents

By guest contributor Gerald Tay

Singapores private residential property index

continued to climb to 211.9 in Q4 2012 from

208.2 in Q3. This is a hike of 1.8 percent

compared to the 0.6 percent increase in the

previous quarter. HDB re-sale prices have hitan all-time high and Executive Condominiums

(ECs) have reached a record-selling price of

S$2million dollars. The statistics are already

well-known to you so Im not going to further

bore you with it in this article.

STOP telling fairy tales to propertybuyers!

While writing this article, my frustration with

the current situation has made me bang the

3 Property Investment Myths the Experts are Telling You


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table and scream, STOP telling fairytales to

property buyers!

Listening to the property experts, youd

never guess it was the twenty-first century.They all seem to be teaching the same old

strategies for property investing and telling

unwitting buyers that beautiful fairy tale

endings are a reality, financial crises only

belong to pre-historic times, and property

downturns are just myths and legends!

Too many investment myths have gone

unchallenged lately. And we love to believe

that tomorrow will be like today. So the best

thing to do is relax, drink Teh-Tarik, and talk

about how easy it is to make money buying

properties now.

With our property landscape changing all of

the time, largely as a result of the influence of

global economic forces, savvy

investors/buyers have to keep up and realise

that everything is changing rapidly.

Here are three investment myths circulatingright now from property experts that annoy

me. Lets look at these myths, which are

perpetuated by so-called investment experts,

whose interests lie in selling dreams.

I believe these investment myths have kept

many ordinary people from creating wealth, or

even a comfortable retirement.

The great enemy of the truth is very often not

the lie deliberate, contrived, and dishonest

but the myth persistent, persuasive, and

unrealistic.

John F. Kennedy


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Myth 1: Expert Investment

Opinions/Comments in the Media Are

Always Right

Its puzzling why journalists often get buyingand investment advice from the very people

who have a vested interest in the market -

property developers, agencies, salesman,

investment companies etc.

The press tends to sensationalize

developments for the sake of creating news in

todays noisy media circus.

Lately, Ive heard some interesting media

comments from propertyexperts:

By 2014, projected prices would not differ

substantially; however, rent on investment

may provide a healthy gross yield, caveated

between four to six percent per year for

astute investors. (Expert with a large well-

known local property agency, marketing a

recently new launched condo)

On another recent new launch property:

The strong demand for XXX is reflective of

its premium location., which demonstrates

the value and potential price appreciation of

this locale and its surroundings. (Property

Developer who sells the project).

It is expected that the trend will continue in2013 with OCR prices likely to surpass 2012s

increment attaining close to 10 percent price

increment. (CEO of a large well-known local

property agency)

And again, the same CEO should be awarded

the years Oscar-award for Best Acting

Fortune Teller (He made similar euphoric

comments back in late 2007):


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Its almost a given that if you buy an EC

today and wait 10 years, you could make a

quarter of a million dollars in profit.

These experts made similar euphoric

comments in the media before the panic of

2008s Global Financial Crisis, right before

property prices plunged:

We expect the office sector to remain

resilient. Investment sentiment to remain

positive in 2008, given continued economicgrowth.

Prices unlikely to fall yet

Private residential property sector for 2008

will continue to perform well.

The price index for 2008 is predicted to grow

in the region of 15 to 18 per cent.

If you look back to the previous years, hardly

any (in fact none!) of these experts

predicted any financial crisis and property

downturns. Their predictions were always up

and positive!

Don't believe the fortune-telling media hype.

A delusion of rising property prices is that

prices will keep going up foreverand they

never do!

Myth 2: The Long-Term Capital Gains on

Your Investment Property Will

Compensate for the Fact You Bought at aHigh Price and Its Cash Flow is Negative,

Marginal or Even Non-Existent

I believe it is getting harder to justify the

dream of strong capital growth as during the

previous years, particularly with properties

bought in the higher price brackets. My view

is that in the coming years, with an already

mature and peaking Singapore economy,

property investors and home buyers who buy


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at a high price today, could be disappointed

by the capital growth of their properties in the

years ahead.

If you buy a property that has positive cash-

flow from day one, it doesnt matter whether

theres any capital gain. Why? Because rents

will rise over time and you can then use those

rents to pay down the principal on your loan,

and eventually you will own all or a large

percentage of the property outright. You couldstill get some capital gains, and youll be

miles ahead of the investor/buyer who is

betting solely on capital gains.

Over the years, property has gone up in value

everywhere. However, buying property at a

super inflated price is not a good idea. It willtake a long time for you to make money out of

that investment, if you ever do, and in the

meantime you will be in a risky situation if the

market goes down.

Myth 3: Property Speculators are

Investors

Do you buy lottery tickets as an investment?

The people who gamble in real estate lose

money all the time. The people who investin

real estate rarely do, if ever. Even if they do

lose money, most of the time its just a

temporary paper loss. In all the years Ive

owned property, Ive never lost money. I may

not have made all that I should have (Ive hadtenants not pay rent, damaged property,

etc.) but by making the right purchases up

front, theyve always produced a profit for

me, not to mention capital gains. The

difference, I invest in properties, meaning

I pick a property with good cash-flow.Dont confuse successwith investingeither.

There was a time, not long ago, where you

could buy a property and resell it for a profit a

month or year later.

SINGAPORE PROPERTY WEEKLY I 85


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Just because you made money in a crazy

economy, doesnt mean you can make a

sustainable profit later. People who bought

Facebook, Enron, WorldCom, and waste

lands from Profitable Plots were not

investorsinvestors were the ones who did

their research and avoided them. You can

make money sometimes buying stupid

things, but that doesnt make you an investor.

Are You Wearing the Emperors NewClothes?

I hope not.

The Emperor had no clothes on but everyone

told him how fantastic he looked in all his

robes and crowns, only to realize the truthlater. Just because someone says so and

everyone is doing it doesn't make it true.

Unfortunately, the truth is usually unpleasant

and most people prefer to pay thousands to

listen to half-truths and untruths which make

them feel good.

For savvy investors, you should raise the

question: which other myths do I believe in

that keep me from achieving my financial

goals?

Be sure you KNOW what you believe in to be

true.

By guest contributor Gerald Tay, CEO of

CREI Academy Group, who exposes widely-

held property investment myths that have

proven highly ineffective in creating wealth,

and prevent a comfortable retirement for theordinary investor.

SINGAPORE PROPERTY WEEKLY I 85
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/http://www.crei-academy.com/


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http://www.buybyeproperty.com/


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Singapore Property This Week


Residential

EC market may see review

The Forestville EC project was stopped from

selling its units after its launch, a sign that the

authorities are reviewing or revising

measures that will result in the developer

having to make changes to the proposed

development plan. It was launched for

balloting without URAs approval to sell. The

developer, Hao Yuan Investment, claimed

that there were no sales bookings but instead

Express of Interests for potential buyers and

that no cheques were collected. URA was

said to be concerned over the proposed size

of the penthouses in the development and

has yet to give approval to proposed changes

in the development plans before Forestvilles

launch. The Forestville plan includes 29

penthouses ranging from 1,550 sq ft to 2,756

sq ft. Large ECs (2,000 to 2,500 sq ft) are

often sold at lower psf prices which is

problematic since large units are not suitable

for ECs (given that the buyers usually have

higher incomes) especially since it is a form

of subsidised housing. Furthermore, a larger

proportion of such large units could potentially

push up the prices of normal units. Possible

measures that the authorities may introduce

include a cap on number of EC units

exceeding 2,000 sq ft in size and an extended

family income ceiling for ECs.

(Source: Business Times)



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Private home prices rose 1.8% in Q4 2012

The 1.8% increase in URA's overall private-

home price index in Q4 is the highest since

the 2% increase in Q2 2011, bringing the full-

year increase to 2.8%. This was largely due

to the increased prices of mass-market

homes, which was in turn a result of the high

resale prices of HDB flats. The OCR saw a

3.4% increase which could be due to the high

prices for projects near MRT stations or the

increase in prices of older completed projects.

The RCR saw a 0.9% increase while the CCR

saw a 0.8% increase. While the ABSD and

the cap on loan tenures have helped to

control the increase in prices, the low interest

rates and liquidity have led to muchinvestment demand. This, coupled with the

increased land prices, will also result in an

increase of private home prices.

Nevertheless, the lacklustre economy and the

increase in supply would help to control price

increases, resulting in an overall increase of

2-3% at most. Sales volume is also expected

to be no more than 20,000 units in 2013. An

estimated total of 21,600 units were sold inthe primary market last year, with another

12,566 units sold in the secondary market.

There were also an estimated 2,269 sub-sale

transactions in 2012. These figures (all

excluding ECs) are expected to increase

once all the caveats in Q4 are tallied.


HDB resale flat prices hit historical high in

2012

HDBs latest flash estimates Resale Price

Index (RPI) reflected a 2.5% increase to

202.9 in Q4 2012 from Q3 2012, a 6.6%

increase from 2011s figure. This is despite

the record number of 27,084 BTO flats and



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7,153 Sales of Balance flats launched in the

2012. This is attributed to the bias of the new

flat programme towards first-timers, leading

to demand for resale flats from non-first-

timers and first timers in urgent need ofhousing (since it takes three years for

completion). Meanwhile, HDB has announced

its intention to launch at least 23,000 BTO

flats, up from the earlier announcement of at

least 20,000. 3,346 such units will be

launched in January in Choa Chu Kang,Yishun, Hougang, Tampines, Kallang

Whampoa and Ang Mo Kio. The high prices

was attributed to the limited supply of resale

flats caused by the extension of the Minimum

Occupancy Period, the increase in the

number of BTO flats and ECs allocated tosecond-timers and the requirement that

private home owners sell their private

residences if they purchase HDB flats. The

high demand for resale flats as a result of

buyers fearing further increases in COVs

(median: $34,000 in Q4 2012) bringing

forward their purchases is also another factor.

Looking ahead, resale prices are expected to

increase by 4-8% in 2013 despite the

increased supply of BTO flats since the effect

will only be felt in H2 2013. Even then, prices

are unlikely to fall unless there is a recession.


Hao Yuan Investment optimistic about

reopening Forestville EC showroom

Hao Yuan Investment, the developer of the

Forestville EC, claimed that the closure of its

showroom until further notice was not due to

URAs instruction to not sell any units but wasfor "general maintenance work". However, it

also stated that even when the showroom

reopens, the units will only be available for

viewing but not for purchase.



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URA had stopped Hao Yuan from selling the

units as it was found to have launched the

project without having gotten URAs go-ahead

on proposed changes in the development

plans, in particular, the size of thepenthouses, which ranges from 1,550 sq ft to

2,756 sq ft. While Hao Yuan had launched the

project, sales were not booked but rather,

non-binding Expression of Interests were

signed instead. The developer also stated

that agents were told not to collect chequesand to return any cheque collected.


Kismis Lodge back on the collective sale

market

Kismis Lodge, a 64- unit walk-up-apartment

development which sits on a 70,283 sq ft site

located off Toh Tuck Road is back on the

market with an indicative pricing of at least

$90 million, compared to the earlier asking

price of $90-95 million. Zoned for "three-

storey mixed landed housing", the site can

potentially yield 43 strata terraces which can

fetch $3.5-4 million per unit, or othercombinations of landed housing subject to

approval. The site is expected to be fairly

popular given the limited supply of landed

residential site under the GLS. No

development charge is payable for the site

which tender closes on Jan 24 at 2.30pm.


Commercial

Industrial property prices to grow at a

more moderate pace

Despite the governmental measures such as

halving the maximum industrial land tenure to

30 years, and introducing restrictions on

subdivision in selected sites and requiring



14/18



strata units to be at least 150 sq m, prices of

industrial properties continued to rise rapidly,

with the industrial property prices increasing

by 26.7% from Q1 Q3, and rents increasing

by 6% in the same period. The averagecapital values of ground and upper floor prime

freehold conventional factory space increased

by 15.7% and 19.5% to $699 psf and $636

psf respectively from Q1 to Q3 while the

average capital values of prime freehold

conventional warehouse space, ground andupper floor space grew by 8.4% and 10.1%

respectively in Q1 to Q3.

While the shorter tenure of GLS sites is

intended to make land more affordable for

industrialist to build their custom facilities, the

objective would not be achieved if the

developer succeeded in bidding for the site

and strata-subdivide the development to

attract investors instead of building facilities

more suited to industrial needs. This may

eventually lead to a lack of supply of suitable

premises which will cause rents to increase

while the unsuitable premises are rented out

for unauthorised uses or left vacant.

Sales volume rose 10% from 2,871 units last

year to 3,160 units in 2012, as a result of

increase in investment purchases from both

foreign and local investors, as well as an

increase in purchases by companies (10.5%

increase in 2012).

Looking ahead, the increase in industrial

property prices is expected to slow, as a

result of factories relocating overseas, the 16

million sq ft supply of industrial space to be

completed in 2013, though the marketliquidity will continue to ensure demand.

Industrial properties with attractive aspects

such as good locations, facilities and longer

tenures may see a price increase of 10-15%



15/18



in 2013. Rents are also expect to increase by

3-5%.


Two-thirds of the 61 available NationalStadium hospitality suites sold

The 55,000-seater $1.33 billion Singapore

Sports Hub's National Stadium which will

open in April 2014 has sold two-thirds of the

61 released luxury hospitality suites. There

are a total of 62 such suites, one of which hasbeen set aside for VVIPs. The suites range

from 25 to 89 sq m and can accommodate

eight to 30 people each. There is a minimum

commitment of three years for the suites,

which annual fees are in the range of $72,000

to $272,000. Facilities and amenities include

in-suite catering, a members-only carpark and

priority event booking. New owners of these

suites include ANZ Singapore and DBS Bank.

Companies from the financial services,

construction and insurance industries make

up 40%, 15% and 10% of the owners of the

sold suites so far.


Freehold Paya Lebar industrial white site

on the collective sale market

20-unit Guang Ming Industrial Building which

sits on the 19,789 sq ft freehold white site in

Tai Seng Industrial Estate in Payar Lebar isasking for at least $58 million, or $837 psf

ppr. It has a 3.5 maximum GPR and a 70,000

sq ft GFA, including 20,000 sq ft of retail and

commercial space. It is likely to be popular

since it is located near Tai Seng MRT station

and the Ang Mo Kio, Toa Payoh and the East

Coast residential areas. The tender closes on

Feb 5.




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S G O O ssue 85


Tuas industrial plots saw much interest in

recent bidding

The 30-year leasehold 2.74-ha plot zoned for

Business 2 development at Buroh Street

attracted seven bids, with the top bid of $82.1

million or $111.35 psf ppr from Capital

Development and ZACD Investments. This is

within the expected five to nine bids of

between $40 to $105 psf ppr. The two plots at

Tuas South Street 6 are both 22.5 year

leasehold 0.86-ha plots. Plot 30 attracted 14

bids with the highest of $6.6 million or $70.99

psf ppr from Koh Brothers Building & Civil

Engineering Contractor while plot 32 attracted

18 bids with the top bid of $6.7 million or

$70.75 psf ppr from SH Design & Build.


http://propertymarketinsights.com/


17/18


Non-Landed Residential Resale Property Transactions for the Week of Dec 19 Dec 25

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

1 MARINA BAY RESIDENCES 1,625 4,800,000 2,953 99

3 TWIN REGENCY 1,442 2,307,200 1,600 FH

3 RIVER PLACE 1,281 1,830,000 1,429 99

4 CARIBBEAN AT KEPPEL BAY 893 1,510,000 1,690 99

5 CARABELLE 947 1,200,000 1,267 956

5 HERITAGE VIEW 1,324 1,400,000 1,057 99

5 BLUE HORIZON 1,001 1,045,000 1,044 99

5 VARSITY PARK CONDOMINIUM 1,615 1,620,000 1,003 99

8KERRISDALE

990 1,200,000 1,212 999 LEONIE PARC VIEW 2,013 5,000,000 2,484 FH

9 LUMA 1,173 2,300,000 1,960 FH

9 GAMBIER COURT 1,485 1,900,000 1,279 99

10 FOUR SEASONS PARK 2,874 8,300,000 2,888 FH

10 THE MONTANA 700 1,160,000 1,658 FH

10 VIZ AT HOLLAND 1,259 2,010,000 1,596 FH

10 DUET 1,744 2,700,000 1,548 FH

11 PARK INFINIA AT WEE NAM 850 1,700,000 1,999 FH

11 NINETEEN SHELFORD ROAD 915 1,326,000 1,449 FH11 M21 1,066 1,525,000 1,431 FH

11 GLOUCESTER MANSIONS 2,045 2,863,000 1,400 FH

11 PASADENA 1,389 1,710,000 1,231 FH

11 WATTEN ESTATE CONDOMINIUM 2,594 2,900,000 1,118 FH

12 THE ARTE 1,873 2,520,000 1,345 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

12 ECOVILLE 1,184 1,418,000 1,198 FH

13 CASA MEYA 1,561 1 ,330,000 852 FH

14 DAKOTA RESIDENCES 1,292 1,848,000 1,431 99

14 WINDY HEIGHTS 2,476 2 ,300,000 929 FH

15 ONE AMBER 1,335 1,888,888 1,415 FH

15 TEMBELING RESIDENCE 1,023 1,300,000 1,271 FH

15 WATER PLACE 1,216 1,540,000 1,266 99

15 COSTA RHU 1,399 1,480,000 1,058 99

15BUTTERWORTH 8

1,658 1,750,000 1,056 FH15 COSTA RHU 1,399 1,426,980 1,020 99

15 SUNSHINE RESIDENCE 1,249 1 ,200,000 961 FH

15 ESPIRA RESIDENCE 2,067 1 ,600,000 774 FH

16 RIVIERA RESIDENCES 1,281 1,588,000 1,240 FH

16 THE TROPIC GARDENS 1,249 1,335,000 1,069 FH

17 AZALEA PARK CONDOMINIUM 1,313 1,030,000 784 999

19 AROOZOO CENTRE 1,206 1,500,000 1,244 FH

19 YI KAI COURT 1,055 970,000 920 FH

19 THE QUARTZ 1,518 1,300,000 857 9919 REGENTVILLE 1,152 928,000 806 99

19 CASA ROSA 2,174 1,590,000 731 99

21 CLEMENTI PARK 818 1,100,000 1,345 FH

21 SUMMERHILL 1,206 1,350,000 1,120 FH

21 SOUTHAVEN II 1,744 1,650,000 946 999



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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

23 GLENDALE PARK 1,033 1,055,000 1,021 FH

23 CHANTILLY RISE 1,206 1,230,000 1,020 FH

23 HILLVIEW REGENCY 1,119 1,100,000 983 99

23 YEWTEE RESIDENCES 1,184 1,100,000 929 99

23 HILLVIEW REGENCY 1,119 1,025,000 916 99

26 CASTLE GREEN 947 880,000 929 99

27 ORCHID PARK CONDOMINIUM 1,206 890,000 738 99

27 ORCHID PARK CONDOMINIUM 1,152 810,000 703 99
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Singapore Property Weekly Issue 85