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Issue 91

Copyright 2011-2012 www.Propwise.sg. All Rights Reserved.

CONTENTS
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3 Things You Must Know to Invest
in Property at the Right Time Property Buying Tip #5: Cash Component Singapore Property News This Week Resale Property Transactions (January 30 February 5) Contribute
Do you have articles and insights and articles that youd like to share with thousands of readers interested in the Singapore property market? Send them to us at info@propwise.sg, and if theyre good enough, well publish them here, on our blog and even on Yahoo! News.

FROM THE

EDITOR

Welcome to the 91st 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 <<
Hope you like it! Mr. Propwise

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SINGAPORE PROPERTY WEEKLY Issue 91

3 Things You Must Know to Invest in Property at the Right Time


By Mr. Propwise Buying a property is the biggest purchase most of us will make in our lives. Making a mistake and buying a property at the peak of the market can have disastrous consequences, leading to years of income being wiped out, and even bankruptcy if you are over-leveraged and suddenly find yourself unable to meet the mortgage payments (or a call from the bank to top up equity when you are cash-strapped). What the Wise Investor Does "Those who do not learn from history are doomed to repeat it." - George Santayana

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SINGAPORE PROPERTY WEEKLY Issue 91 The Wise Investor times his investment based on three things: (or her) obvious that nature has its cycles, but why do man-made things like the economy and property market have cycles? I believe that property market cycles occur due to the unchanging nature of human behavior. Emotions like fear and greed lead us to act as a whole in fairly predictable ways. Our compulsion to acting out of short-term interests and marginal thinking leads us to take actions that make sense via the lens of the next month or year, but which drives the market to extremes. One example of this is the relentless search for yield in the current low interest rate environment. People who buy properties that are yielding 2% because the current mortgage rates are 1% are doing something that is completely rational in the SHORT TERM ("Hey I'm getting a 1% yield spread!"), but make absolutely no sense in the longer
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1. Understanding the history of the property market cycle 2. Knowing which part of the cycle we are currently in 3. Looking at leading indicators to estimate the turning of the cycle

The Wise Investor bases his understanding and analysis on DATA, and not opinions, guesses, market sentiment or what his drinking buddy or the coffeeshop uncle says is the next "sure thing".
Why Do Cycles Occur? Cycles, like the seasons (at least outside of the equatorial regions like Singapore) and the waxing and waning of the moon, are continually repeating phenomena. It seems
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SINGAPORE PROPERTY WEEKLY Issue 91 term. But yet we cannot bear doing otherwise because the alternative is leaving your money as a deposit earning close to zero. The Danger of Marginal Thinking Marginal thinking leads us to look only at the next step ahead of us, not noticing that we are about to step off a cliff. We know that the action we are about to take is foolhardy (e.g. buying a shoebox unit in Punggol), but we do it anyway because the market has been going up and we believe that it will keep doing so because everyone says it will, and there's no obvious reason to believe that it won't. Cycles are Rhymes, Not Copies "History does not repeat itself, but it does rhyme." - Mark Twain

One common misconception about cycles are that they can be distilled into a mathematically sound formula, e.g. "every bull market lasts five years with a 50% upward move, followed by a two year downward move of 30%". This is simply not true.
Every cycle is different in terms of its details, magnitude and timing. For example, based on the Property Market Cycle Model by Property Market Insights, since 1996 we've had three Early Bull market phases, and they've lasted from 4 to 14 quarters, rising from 34% to 52%.

My friend, by the time the reasons for a correction are obvious, you'll be tumbling over a cliff into the icy cold sea with the rest of the lemmings. Sometimes we need to take a step back and look at the big picture.

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SINGAPORE PROPERTY WEEKLY Issue 91 If we can't predict how long each phase of the cycle will last and we don't know exactly how much prices will rise or fall, is there any value to understanding the cycle? The Value of Understanding Cycles I believe there absolutely is. While we don't know how long the wait will be or how great the reward, we know (as far as anything is knowable) that cycles will continue to occur. By positioning ourselves to ride the waves of each cycle, we can maximize both the probability of profiting and the size of that gain. best you will experience low returns for a long period of time. You'll have a high probability of losing years, if not decades, of savings. At worst, you could go bankrupt. That's the value of understanding the property cycle. In the next part of this series we will examine how forecastable the property market actually is and a multi-million dollar mistake an investor made. Till next time! 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

However, if you follow the lemmings you will most likely end up buying at the exact wrong time (i.e. the peak), and in doing so position yourself on the wrong side of the cycle. At

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SINGAPORE PROPERTY WEEKLY Issue 91

Property Buying Tip #5: Cash Component


There is no minimum CPF amount required to be used when buying property in Singapore. In other words, you can use all CASH to buy property if you want to. approval) with a minimum 10% cash plus 30% cash and/or CPF for the down payment. Other than Booking or Option Fees, Stamp Duty and Legal Fees, dont forget to put aside cash to provide for Property Valuation Fees, Mortgage Disbursement Charges, CPF Disbursement Charges, Property Tax and Maintenance Fees. By Eileen Tan and Ui Wei Teck, property investors and authors of Enjoying Mid-Life Without Crisis. Get dozens more tips in their new book.

There is, however, a minimum component when buying property:

Cash

If you have no outstanding home loan, you can take up to an 80% loan (subject to approval) with a minimum 5% cash plus 15% cash and/or CPF for the down payment. If you have an outstanding home loan, you can take up to a 60% loan (subject to

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SINGAPORE PROPERTY WEEKLY Issue 91

Singapore Property This Week


Residential
Private home sales jumped by 42.8% in January A total of 2,013 private homes excluding ECs were transacted in January, up 42.8% from 1,410 in December 2012. Specifically, the OCR constituted 1,287 deals or 63.9% of the total sales, the CCR constituted 350 deals or 17.4% and the RCR constituted 376 deals or 18.7%. The increase in private home sales is a result of increased demand from buyers trying to avoid the latest cooling measures before they take effect and the high discounts and rebates developers offered after the cooling measures to encourage sales. 60% of
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these 2,013 units were sold before the measures took effect on Jan 12 while the rest were sold from Jan 12. Some developers such as Q Bay Residences and D'Leedon Residences offered discounts of 5-7% and up to 15% respectively. Sales of ECs, however, saw a 69.8% fall to 256 transactions, bringing the total number of private homes sold including ECs to 2,269 units. Sales in February, however, are likely to fall to around 1,000 units given the usual slower uptake during Chinese New Year. Looking further ahead, the sales volume is likely to be around an average of 1,500-1,800 transactions per month in H1 2013.

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SINGAPORE PROPERTY WEEKLY Issue 91 Nevertheless, demand for private homes with good location and attractive pricing (especially for small homes) is likely to remain steady. (Source: Business Times) Redas: Developers worried about latest cooling measures but understand reason Chia Boon Kuah, the new head of Redas, had stated at Redass annual Spring Festival lunch that while developers are concerned about the latest cooling measures given the limited land supply in Singapore coupled with high development costs and the current maturing property cycle and uncertain economy, they understand the governments plan for "a soft landing of the property market" and will thus support it. Lim Ee Seng, the second vice-president of Redas and Frasers Centrepoint chief executive, also
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predicted a stabilisation of prices with transaction volumes being similar to that of last years. Wong Heang Fine, the former head and chief executive of CapitaLand Residential Singapore, also stated that it is too early to say if the cooling measures have achieved their desired effect. (Source: Business Times) Commercial Sale of Park Regis S'pore undergoing negotiations Following the closing of an expressions of interest (EOI) exercise for Park Regis Singapore at New Market Street/Merchant Road, negotiations of the sale is said to going on. Potential buyers of the 203-room hotel and a seven-storey office block with 42,000 sq ft NLA is said to include CDL Hospitality

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SINGAPORE PROPERTY WEEKLY Issue 91 Trusts (CDLHT), an Indonesian party, a local property investor and an international hotel investment group. The property which is built on a site with a remaining lease of 94 years could potentially be sold for $220-230 million. (Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 91

Non-Landed Residential Resale Property Transactions for the Week of Jan 30 Feb 5
Postal District 3 3 4 5 5 8 9 9 9 9 10 10 10 11 11 11 12 12 14 14 14 15 15 15 Area (sqft) 1,281 1,755 2,390 1,679 2,250 1,098 743 1,572 1,302 1,173 2,885 5,113 1,410 947 1,066 1,421 1,281 1,335 1,023 1,249 2,142 1,744 1,389 990 Transacted Price ($) 1,780,000 1,550,000 7,050,500 2,500,000 2,070,000 1,450,000 1,440,000 3,000,000 2,250,000 1,880,000 9,600,000 12,500,000 1,700,000 1,550,000 1,530,000 1,930,000 1,750,000 1,068,000 1,400,000 1,270,000 2,100,000 2,440,000 1,870,000 1,130,000 Price Tenure ($ psf) 1,390 99 883 99 2,950 99 1,489 FH 920 FH 1,321 FH 1,939 FH 1,909 FH 1,728 FH 1,602 FH 3,328 FH 2,445 FH 1,206 FH 1,636 FH 1,436 FH 1,358 FH 1,366 99 800 99 1,369 99 1,017 FH 980 FH 1,399 FH 1,347 99 1,141 FH Postal District 15 15 15 15 16 16 16 16 16 16 17 17 17 18 18 18 19 19 19 19 21 21 21 21 Area (sqft) 1,087 1,647 1,528 1,453 1,238 1,184 947 1,292 1,335 1,238 883 1,270 1,292 1,539 1,259 958 1,173 1,378 1,636 1,152 1,496 840 1,647 1,776 Transacted Price ($) 1,180,000 1,638,000 1,500,000 1,350,000 1,480,000 1,288,000 1,008,000 1,320,000 1,352,000 1,155,000 895,000 1,230,000 1,095,000 1,480,000 1,120,000 780,000 1,295,000 1,499,999 1,515,000 915,000 2,105,000 1,170,000 1,720,000 1,687,200 Price Tenure ($ psf) 1,085 FH 995 99 981 99 929 FH 1,196 99 1,088 99 1,064 99 1,022 99 1,013 99 933 99 1,014 FH 968 FH 848 FH 962 FH 889 99 814 99 1,104 99 1,089 999 926 99 794 99 1,407 FH 1,394 999 1,044 FH 950 99

Project Name DOMAIN 21 PEARL BANK APARTMENT MARINA COLLECTION THE PEAK@BALMEG THE PARC CONDOMINIUM THE MERLOT THE PIER AT ROBERTSON CASA CAIRNHILL TIARA ROBERTSON 100 ARDMORE PARK LATITUDE THE ASTON THOMSON EURO-ASIA M21 THOMSON 800 TREVISTA KIM KEAT GARDENS DAKOTA RESIDENCES GROSVENOR VIEW THE WATERINA AMBER PARK COTE D'AZUR PALM GALLERIA

Project Name BLU CORAL LAGOON VIEW MANDARIN GARDEN CONDOMINIUM HAIG COURT COSTA DEL SOL THE BAYSHORE CASAFINA BAYSHORE PARK EAST MEADOWS EAST MEADOWS FERRARIA PARK CONDOMINIUM DAHLIA PARK CONDOMINIUM ESTELLA GARDENS RIS GRANDEUR CHANGI RISE CONDOMINIUM MELVILLE PARK CHUAN PARK PALM GROVE CONDOMINIUM CHILTERN PARK REGENTVILLE MAPLEWOODS THE BLOSSOMVALE SYMPHONY HEIGHTS MAYFAIR GARDENS

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SINGAPORE PROPERTY WEEKLY Issue 91


Postal District 23 23 23 23 25 27 Area (sqft) 1,270 1,033 1,658 1,206 2,357 1,335 Transacted Price ($) 1,380,000 1,120,000 1,500,000 970,000 1,400,000 950,000 Price Tenure ($ psf) 1,086 FH 1,084 FH 905 999 805 99 594 99 712 99

Project Name HILLBROOKS GLENDALE PARK CHESTNUT VILLE PALM GARDENS WOODGROVE CONDOMINIUM YISHUN EMERALD

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.

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