Singapore Property Weekly Issue 95

7/29/2019 Singapore Property Weekly Issue 95

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Issue 95Copyright 2011-2012 www.Propwise.sg. All Rights Reserved.
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CONTENTS

p2 Feb Sales Plunge Has the Storm Arrived?

p7 Property Buying Tip # 11: Concurrent

Ownership of HDB and Private Property

p8 Singapore Property News This Week

p13 Resale Property Transactions

(February 27 March 5)

Welcome to the 95th edition of the

Singapore Property Weekly.

Im glad to announce that the 2012Q4

URA data has been updated for

PropertyMarketInsights.com members.

>> Click here to find out more


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SINGAPORE PROPERTY WEEKLY Issue 95

Page | 2Back to Contents

By Mr. Propwise

By now youve read the scary headlines

new home sales in February plunged by

65% on a month-on-month basis to 708 units

(excluding Executive Condominiums), versus

the 2,013 units sold in January. Sounds like a

big drop doesnt it?

Looking more closely at February sales

But when you start drilling down deeper into

the numbers, a somewhat different picture

emerges.

For one, developers only launched 261 unitsin February. In other words, they sold 271

percent more units than they launched.

Otherwise known as the Developer Monthly

Sell-Through Rate,

Feb Sales Plunge Has the Storm Arrived?


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the ratio of units developers sold versus what

they launched is a gauge of how quickly

developers are selling their launches and of

how hot the market is. You can see this

statistic tracked over time in the chart below(courtesy ofPropertyMarketInsights.com).

Figure 1 Developer Monthly Sell-

Through Rate till February 2013 (from

PropertyMarketInsights.com)

From this perspective, things dont look so

gloomy (at least from the developers

perspective). Likely due to the combination ofthe Chinese New Year holidays and the

seventh round of cooling measures

announced by the government in January,

developers held back on their launches in

February, not wanting to be the victims of

poor sentiment.But yet they managed to sell many more units

than they launched. A Sell-Through Rate of

above 100 percent means that developers

are de-stocking their inventory (i.e. have

fewer units in total to sell), which will likely

lead them to be more bullish. Indeed, if we

look at developer inventory levels, they have

fallen for nine months in a row to 4,878 units

from a peak of 7,312 units in May 2012.
http://propertymarketinsights.com/http://propertymarketinsights.com/http://www.propwise.sg/7th-round-of-cooling-measures-the-anvil-to-smash-the-camels-back/http://www.propwise.sg/7th-round-of-cooling-measures-the-anvil-to-smash-the-camels-back/http://www.propwise.sg/7th-round-of-cooling-measures-the-anvil-to-smash-the-camels-back/http://www.propwise.sg/7th-round-of-cooling-measures-the-anvil-to-smash-the-camels-back/http://www.propwise.sg/7th-round-of-cooling-measures-the-anvil-to-smash-the-camels-back/http://www.propwise.sg/7th-round-of-cooling-measures-the-anvil-to-smash-the-camels-back/http://www.propwise.sg/7th-round-of-cooling-measures-the-anvil-to-smash-the-camels-back/http://www.propwise.sg/7th-round-of-cooling-measures-the-anvil-to-smash-the-camels-back/http://www.propwise.sg/7th-round-of-cooling-measures-the-anvil-to-smash-the-camels-back/http://www.propwise.sg/7th-round-of-cooling-measures-the-anvil-to-smash-the-camels-back/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/


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Figure 2 Developer Inventory Levels till

February 2013 (from

PropertyMarketInsights.com)

Imagine you are a developer. Despite all thescary policy noise the government is making,

your units are still selling like hotcakes, you

dont have that much debt on your balance

sheet, and the number of units you have left

to sell (i.e. your inventory) is falling to

relatively low levels. You wouldnt feel too

bearish on the market, would you? In fact,

you might even want to go out and bid and

pay a fairly high price for a new piece of land

so you will have more property to sell.

Yet a chill has descended on the resale

market

However if we look at the resale market,

things are indeed gloomy. As an aside, I

believe the resale market is mainly driven by

buyer sentiment, whereas the primary market

can often be powered along in a different

direction by the sales and marketing

machines of developers and property agents,

using various gimmicks (e.g. discounts,

smaller unit sizes etc)
http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/


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and hype (e.g. playing up the 6.9 million

population target etc) to create a buying

frenzy among unsuspecting buyers.

Resale transactions, which do not benefit

from this, were down an estimated 68% in

February. Of course, this fall is exacerbated

by the Chinese New Year holiday and shorter

month of February.

But theres no doubt a chill has descended on

the resale market, and is not likely to go awayanytime soon. Egged on by government

pronouncements of how prices must stop

going up, buyers expectations for a

correction have increased, and the bid-ask

spread between what sellers want to sell for

and what buyers are willing to pay haswidened.

Ive been looking up asking prices of some

projects and theyre still sky high, 10 to 15

percent above the last transacted prices.

Perhaps Cyprus and the potential knock-on

effects might help to moderate seller

expectations?

March Madness and the heavy hand of the

government

As of now it looks like new home sales will

rebound strongly in March. Anecdotally, just

from strong sales at the launches of projects

like Sennett Residences, dNest and Urban

Vista, March numbers will easily surpassFebruary by a large margin. These projects

mainly appeal to local mass market buyers

and investors, where demand for property is

still strong.

The fundamental cause of the current

continued bullishness in the market is thesustained low interest rate environment.

Versus close to zero percent interest in the

bank, the promise of high rental yields in the

range of four percent for the one to two


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bedroom units in these projects has proved

too alluring for people who are looking to put

their cash to work.

It remains to be seen whether this siren song

of attractive yields sung by the developers

and property agents will lure unsuspecting

buyers to crash upon the rocks of financial

hardship if and when the market corrects.

Meanwhile, given how strongly the

government has come out to talk down theproperty market since the January measures

(including the Budget 2013 measures to

discourage high end property investment),

and have thus put their credibility on the line

to show that they have control over the

situation, the continuing bullishness in thesector will be a source of embarrassment for

them. Watch out for more measures rocky

coasts ahead!

By Mr. Propwise, founder of Propwise.sg, a

Chartered Financial Analyst and resident real

estate analyst at PropertyMarketInsights.com,

a site to help property owners and investors

make profitable decisions in uncertain times.

Click here to learn more

SINGAPORE PROPERTY WEEKLY I 95
http://www.propwise.sg/the-3-critical-impacts-of-budget-2013-for-property-owners/http://propwise.sg/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propwise.sg/http://propwise.sg/http://propwise.sg/http://www.propwise.sg/the-3-critical-impacts-of-budget-2013-for-property-owners/http://www.propwise.sg/the-3-critical-impacts-of-budget-2013-for-property-owners/http://www.propwise.sg/the-3-critical-impacts-of-budget-2013-for-property-owners/http://www.propwise.sg/the-3-critical-impacts-of-budget-2013-for-property-owners/http://www.propwise.sg/the-3-critical-impacts-of-budget-2013-for-property-owners/


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Property Buying Tip # 11: Concurrent Ownership of HDBand Private Property

(Reference: www.hdb.gov.sg)

The current regulation does not allow you to

buy a public housing or Housing

Development Board (HDB) Flat if you own

private property in Singapore or any other

countries (unless you disposethe private

property within six months of the purchase

date of a non-subsidized flat).

There is no restriction on the number of

Private Properties you can own in Singapore,but there is a restriction to own only one HDB

flat at any one time, regardless of whether it

is subsidized or non-subsidized. For

concurrent ownership of HDB flat and Private

Property, you have to own the HDB flat first.

You must ensure that you have fulfilled the

Minimum Occupation Period (MOP) of five

years before you can buy a private property

with concurrent ownership.

By Eileen Tan and Ui Wei Teck, property

investors and authors of Enjoying Mid-Life

Without Crisis. This tip and dozens more arefrom theirbook.

SINGAPORE PROPERTY WEEKLY I 95
http://www.hdb.gov.sg/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/http://www.hdb.gov.sg/http://www.hdb.gov.sg/http://www.hdb.gov.sg/http://www.hdb.gov.sg/http://www.hdb.gov.sg/http://www.hdb.gov.sg/http://www.hdb.gov.sg/


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Singapore Property This Week


Residential

HDB explores possible measures to

ensure affordability of flats

To ensure that flats remain affordable, the

government is considering possible measures

such as reinstating the old policy where public

flats can be sold only back to HDB, increasing

the minimum occupation period and

shortening leases. MND will also be looking

into bring prices of new flats down by 30%.

Other than delinking prices of BTO flats from

resale flats by offering discounts to first-

timers, the government will also try to bringthe prices of BTO flats down from 5.5 years of

salary to four years of salary.

(Source: Business Times)

Over 80% of singles above 35 to benefit

from Singles BTO scheme

National Development Minister Khaw Boon

Wan explains the rational for setting the

income cap at $5,000 for first-timer singles

under the Singles BTO scheme which allows

singles above 35 to purchase new two-roomflats in non-mature estates directly from the

HDB, saying that 80% of the singles above

age 35 will benefit from the scheme and the

income cap is part of the first step. He

explained that a higher income ceiling may

result in a need to ration and ballot, and those

who need it more may not be able to get a

flat. However, the income ceiling could be

raised if subscription rates are manageable.




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Existing HDB owners not affected by any

new HDB curbs

One possible measure to help ensure the

affordability of public housing that was

highlighted by National Development Minister

Khaw Boon Wan at a community event on

Saturday was to restore an old rule where

owners can only sell their flats back to HDB

instead of the open market. However, he had

clarified further in a blog post that if such a

rule is to be implemented, it would apply only

to new buyers, and not existing flat owners.

For new buyers, this would mean that their

flats would no longer be seen as a tradable

asset. This might result in the creation of a

wealth gap since existing home owners can

have a chance at upgrading when they sell

their flats on the open market while new

owners may not be able to do so.


February private home sales take a hit

New private home sales (excluding ECs) fell

by 65% from 2,016 units in January to 708

units in February as a result of the latest

cooling measures, the Chinese New Year

holiday and the month being a shorter one.

Launches also fell by 86% from 1,802 units in

January to 261 units in February. OCR made

up the 48% of the sales with 341 units (64%

in January) while CCR and RCR made up

28% with 198 units (previously 17%) and 24%

with 169 units (previously 19%), respectively.

No ECs were launched in February though

209 units were sold, compared to 256 units in

January. Thus, including ECs, 917 new

private homes were sold in February, a fall

from the 2,272 units in January. Looking

ahead, the market is expected to improve in

March to 900-2,000 units, given major

launches in the month though the year



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is expected to end with lower figures than

2012.


Commercial

Demand for industrial space fall following

cooling measures

Following the introduction of the SSD,

demand for strata factory units fell from 133

to 118 units in 28 days. The monthly averagedemand for strata factories also fell from

321.8 transactions per month on average

from H2 2012 to Jan 11, 2013 to 173

transactions in the period from Jan 12. While

demand for speculators seemed to have

subsided, there is still demand from end-users and investors willing to wait out the

three years specified in the SSD and hold the

units for rental income in the meantime (in the

secondary market). Further, sellers in the

secondary market are more open to adjusting

their prices than developers.

While demand has fallen, prices remained

stable, as can be seen in the prices of 60-

year leasehold strata factories (which make

up the largest proportion of sales) where it

remained stable at an average $420 psf.

Prices in the resale and subsale markets also

remained stable.


99-year Venture Ave commercial site

attracts $701m top bid

The 1.2-hectare site at Venture Avenue in

Jurong East attracted nine bidders, with the

top bid of $701 million or $1,009 psf ppr fromfrom Sim Lian JV (Vision) under the Sim Lian

Group, exceeding earlier expectations and

reflecting a pent-up demand for strata titled

offices. It has a maximum permissible GFA of



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about 650,000 sq ft which can be developed

into a 25-storey project and 90% of it must be

for office use. The popularity of the site could

be attributed to a lack of strata office supply,

investors shift of interest towards thecommercial sector following cooling

measures in the residential sector and its

location near the upcoming JEM and

Westgate retail and office developments, the

International Business Park and Jurong East

MRT station. Its expected breakeven price is$1,700-$2,000 psf.


SBF Center sells 75% of its released units

75% of the 186 released units at SBF Center

have been sold, with 113 of the 138 officeunits being sold with prices starting from

$3,200 psf. The remaining 48 units are

medical suites. Of these, 27 have been sold

at prices starting from $3,800 psf. The 31-

storey SBF Center located at Robinson

Road/Cecil Street consists of 196 office units

(592-1,475 sq ft) on the 10th to 28th levels,

three yet-to-be-released full-floor offices

(10,850 sq ft each), and 48 medical suites(678-1,302 sq ft )at the Mediplex@SBF

Center on the third to fifth levels. It is located

near Tanjong Pagar MRT Station.


43 S'pore Shopping Centre units up for

collective sale

The strata shop and office spaces (total:

22,980 sq ft ) in seven-storey Singapore

Shopping Centre located at 190 Clemenceau

Avenue were put up for collective sale via an

expression of interest exercise that will closeon April 16. It is asking for $38 million or

$1,650 psf for the units that make up 19.8%

of the share value of the building which sits

on a site with a remaining lease of 34 years.



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While the owner would prefer selling to a

single buyer, he is open to selling the units in

three lots at a price of $1,650 psf as well. This

would include an 8,654 sq ft parcel consisting

of 16 adjoining units on the fourth floor, as

well as a 10,797 sq ft parcel with 18 adjoining

units and a 3,529 sq ft parcel with nine

adjacent units, both on the sixth floor. It is

expected to see much interest given its

potential gross rental yield of 3.55%

assuming a price of $38 million and the

current occupancy rate of 77.5%, its proximity

to Dhoby Ghaut MRT and the scarcity of such

space near Orchard Road. There are 44 lots

in the car park.


http://www.moneymatters.sg/


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Non-Landed Residential Resale Property Transactions for the Week of Feb 26 Mar 5

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

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

4 REFLECTIONS AT KEPPEL BAY 2,519 6,238,000 2,477 995 REGENT PARK 969 958,000 989 99

8 THE MERLOT 517 767,000 1,485 FH

10 ZENITH 560 1,063,000 1,899 999

10 VILLA DELLE ROSE 3,014 4,638,000 1,539 FH

11 PARK INFINIA AT WEE NAM 850 1,760,000 2,070 FH

11 SHELFORD 23 1,668 2,420,000 1,450 FH

11 M21 1,345 1,900,000 1,412 FH

11 WATTEN HILL 2,669 3,485,000 1,306 FH

12 BALESTIER PLAZA 1,001 1,050,000 1,049 FH14 LE REVE 926 1,030,000 1,113 FH

15 ESPIRA SUITES 441 710,000 1,609 FH

15 PEBBLE BAY 1,894 2,830,000 1,494 99

15 COTE D'AZUR 1,281 1,650,000 1,288 99

15 CRESCENDO PARK 1,055 1,097,200 1,040 FH

15 LAGOON VIEW 1,647 1,330,000 808 101

16 COSTA DEL SOL 1,238 1,620,000 1,309 99

16 BREEZE BY THE EAST 1,249 1,598,000 1,280 FH

16 KEW GREEN 3,509 2,400,000 684 9917 AVILA GARDENS 355 600,000 1,689 FH

18 RIS GRANDEUR 1,539 1,400,000 910 FH

19 ROSALIA PARK 1,475 1,280,000 868 FH

19 FIORENZA 1,410 1,210,000 858 FH

20 BISHAN PARK CONDOMINIUM 1,324 1,305,000 986 99

20 KINGSGROVE 1,582 1,423,800 900 FH

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

20 BRADDELL VIEW 1,798 1,430,000 796 9921 JARDIN 1,690 2,970,000 1,757 FH

21 GARDENVISTA 786 940,000 1,196 99

21 PANDAN VALLEY 1,647 1,780,000 1,081 FH

21 ASTOR GREEN 1,528 1,620,000 1,060 99

21 PANDAN VALLEY 1,647 1,735,000 1,053 FH

21 ROYAL COURT 1,270 1,330,000 1,047 FH

21 HIGH OAK CONDOMINIUM 1,001 988,000 987 99

22 THE LAKESHORE 926 1,100,000 1,188 99

22 THE LAKESHORE 1,270 1,350,000 1,063 9923 HILLINGTON GREEN 990 1,050,000 1,060 999

23 CASHEW HEIGHTS CONDOMINIUM 1,658 1,628,000 982 999

23 HAZEL PARK CONDOMINIUM 1,335 1,200,000 899 999

26 THE CALROSE 926 1,120,000 1,210 FH

28 NIM GARDENS 2,217 1,960,000 884 FH

Documents

Singapore Property Weekly Issue 95