Issue 98

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

CONTENTS
p2
p6 p7 p11
What Should Property Investors Do With Their Money Today? Property Renting Tip #2: Stamping

FROM THE

EDITOR

Welcome to the 98th edition of the Singapore Property Weekly.

Hope you like it!

Mr. Propwise

the Tenancy Agreement

Singapore Property News This Week Resale Property Transactions (March 20 March 26) 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.

Advertise
Want to get your brand, product, service or property listing out to thousands of Singapore property investors at a very reasonable cost? Head over to www.propwise.sg/advertise/ to find out more.

SINGAPORE PROPERTY WEEKLY Issue 98

What Should Property Investors Do With Their Money Today?

By guest contributor Gerald Tay Dear Readers, I want to share some personal thoughts and investment decisions based on the 2013Q1 URA PPI flash estimate and what it means for the property market. The 2013Q1 estimate of 213.1 represents a 0.5% quarter-on-quarter increase, which is a moderation from the 1.8% q-o-q pace we saw in 2012Q4, but suggests that the market prices are still rising, albeit slightly, despite seven rounds of government cooling measures.

Back to Contents

Page | 2

SINGAPORE PROPERTY WEEKLY Issue 98 Today, were at the record peak of the property cycle since 1965. It does not take a lot of common sense to tell us we need to tread extremely carefully, especially in the current uncertain economic climate. Prices likely to continue to increase, but My personal predictions (I personally hate to invest on predictions), if you may, is that there might be further price increases in all segments of the property market. The residential market is still being supported by local first-time buyers (though we dont know for how long yet), while the commercial and industrial sectors have experienced continued hot money inflows resulting from the severe cooling measures on the residential sector. However, this does not mean investors should simply rush out to buy that new launch property today and hope to cash out in the
Back to Contents

next few years. The potential downside is much greater than the upside, and based on the price-rental index which indicates a 57% over-valuation (based on The Economist), buyers and investors today are already paying for future price increases for years down the road. I have done my personal investment calculations for the residential market, comparing price versus rental. Even with the current low interest rates , most properties (resale and new) are already fetching negative yields, not to mention when these rates start to rise back to normal levels in future. Phoney money supporting the market Today, the Asian property market (especially in Singapore, Hong Kong and China) is being supported by phoney money.
Page | 3

SINGAPORE PROPERTY WEEKLY Issue 98 Money is printed endlessly in the trillions of dollars by irresponsible governments for political motives. Banks are either lowering their reserve rates or cutting interest rates and these have fuelled the inflow of more hot money. The money is finding its way into Asian markets like Singapore, in the hopes of so-called higher returns and inflating many asset bubbles. know that country inside out. When I mean inside out (NOT as a tourist), I mean you have been living in that country for years and are very familiar with the local real estate market. Or, you have credible partners who are locals in that country who are willing to invest together with you. If you are simply investing in an overseas property and expecting good returns based on a piece of paper, some cocktail champagne, a nice sales talk or because you think you spent one full month to do some due diligence, I have to candidly say best of luck to your investment. As for local properties, invest on cash flow and never capital appreciation. For myself, Ive stayed away from our local property market since 2011 and have expanded to the USA real estate market.

When a financial crisis erupts (e.g. a Europe, USA, or China crash), this phoney money would find its way back home faster than a speeding bullet, resulting in severe price deflation and chaos.
A word of caution to investors I personally urge you, if you are an investor who is still in the midst of growing your wealth for your retirement, to be very careful where you are putting your money today. If you are investing in overseas property, make sure you
Back to Contents

Page | 4

SINGAPORE PROPERTY WEEKLY Issue 98 I work with experienced local USA investors who are more familiar with the terrain and have invested their own money with me. If you do not have that kind of connections or expertise, then my best wealth advice for you TODAY is to leave your money in the bank, despite the low interest rate on deposits. Be patient to take advantage of massive opportunities to grow your wealth within the next few years when prices start tumbling down again. Please Remember: The Return of Money is more important than the Return on Money in any investment. By guest contributor Gerald Tay, CEO of CREI Academy Group, who exposes widelyheld property investment myths that have proven highly ineffective in creating wealth, and prevent a comfortable retirement for the ordinary investor.
Back to Contents
Page | 5

SINGAPORE PROPERTY WEEKLY Issue 98

Property Renting Tip #2: Stamping the Tenancy Agreement

(Reference: www.iras.gov.sg) Stampingthe Tenancy Agreement (TA) is an important protection to both the Tenant and the Landlord.This document binds both parties until the end of the lease. rent), applicable for annual rents exceeding $1,000:

Evasion of stamp duty is a serious offence in Singapore.In most TAs, this cost is borne by the Tenant. The TA is the only contractual document given to the Tenants for their rights to stay in the said premise and also gives rights to the Landlord to take action for any breach of the covenant with the forfeiture clause (e.g. when the Tenants have not paid the rental on time).
The stamp duty rates are as follows (for every $250 or part thereof of the average annual
Back to Contents

By Eileen Tan and Ui Wei Teck, property investors and authors of Enjoying Mid-Life Without Crisis. This tip and dozens more are from their book.
Page | 6

SINGAPORE PROPERTY WEEKLY Issue 98

Singapore Property This Week

Residential
Slowdown in HDB resale prices growth in Q1 The Resale Price Index (RPI) for HDB flats saw a 1.2% increase to 205.4 in Q1 2013, compared to the 2.5% increase in Q4 2012. Reasons for the slowdown include the capping of MSR at 30% and 35% of gross monthly income for loans granted by financial institutions and HDB, respectively, the large supply of alternative housing options in the forms of BTO flats and ECs. Another possible reason was a fall in demand from singles, who are now eligible to purchase new 2-room BTO flats in non-mature estates. However,
Back to Contents

supply of HDB resale flats could remain limited since singles are not eligible for ABSD concessions and PRs may be reluctant to sell their flats given the increased ABSD rates and the new rule that require them to sell their HDB flats within six months of buying a private home. Looking ahead, resale prices are expected to grow by 3-7% in 2013.
(Source: Business Times) Commercial Strata retail space popular in Q1 As a result of the cooling measures in the residential sector diverting investment to the commercial sector, the average capital values

Page | 7

SINGAPORE PROPERTY WEEKLY Issue 98 for prime strata-titled retail space in Orchard Road saw a 3% increase from Q4 2012 to $6,806 psf in Q1 while the average capital values for retail spaces in regional centres saw a 5% gain to $4,276 psf. The frequent rental revisions, coupled with limited supply are other factors for the increased interest in strata retail space. However, rents for both regions fell in Q1 2013, as a result of retailers resistance against increased rents. Looking ahead, retail rents are expected to remain stable with falls of no more than 5%. Strata-titled retail sales are also expected to continue to see demand, with average capital values in the Orchard Road region to increase by at least 5% and those in other non-central regions to increase by even more. (Source: Business Times) Rising speculative activity in strata retail units Of the total of 3,315 caveats of strata retail units (excluding collective and bulk sales) between 2008 and Q1 2013, there were 2,045 caveats for resale transactions, with 1,127 which previous caveats can be traced. Of these, the proportion of those which were transacted within 3 years of the previous transaction has increased from 42% in 2012 to 55% in Q1 2013 while the proportion of those sold within a year increased from 16% in 2012 to 25% in Q1 2013. This has led to a fall in average holding period in resale deals from5.8 years in 2012 to 4.7 years in Q1 2013. There were also 54 subsale transactions from projects launched from 2010 to Q1 2013,

Back to Contents

Page | 8

SINGAPORE PROPERTY WEEKLY Issue 98 of which 45 were sold within a year of their purchase from their respective developers. The rise in properties sold within one to three years of the previous transaction points to an increase in speculative activities, which may eventually result in cooling measures in the retail market. (Source: Business Times) occupancy rate for Grade A space in the CBD from 93.3% in Q1 from 94.5% in Q4 2012 at the same time as the increased occupancy rate for Premium space from 88.5% to 90.2% also points to a tenant shift from Grade A office spaces to Premium spaces, probably as a result of a fall in rents of Premium office space. Capital values of both Grade A and Premium office spaces in Raffles Place/New Downtown remained steady at $2,390 psf and $2,640 psf respectively in Q1 as a result of strong demand driven by the low interest rate and cooling measures in the residential and industrial sectors. Looking ahead, capital values are likely to continue rising while rents fall. This is since supply is expected to increase to 9.3 million sq ft by 2017, with 6.4 million sq ft in the CBD. (Source: Business Times)

Increased supply leads to fall in CBD office rents in Q1

As a result of increased office spaces from upcoming projects and increased vacancies from existing developments in the CBD, the average monthly gross rents for Premium and Grade A office spaces fell by 0.7% to $8.41 psf from Q4 2012 to Q1 2013. Rents in the city fringe and suburban micro-markets, on the other hand, remained stable at $7.60 psf and $4.53 psf respectively. The fall in
Back to Contents

Page | 9

SINGAPORE PROPERTY WEEKLY Issue 98

Retail resales proved profitable 96-100% of the 260, 291 and 51 resale transactions in 2011, 2012 and Q1 2013 respectively made an average percentage gain of 72%, 91% and 75% in profits respectively. Of those that made a profit, the most profitable was a sixth-floor unit in Lucky Plaza which was first bought for $17.6 million in 2007 and sold in 2012 for $32.6 million or a profit of $15.05 million. The biggest loss of $600,000 was from a fourth-floor Sim Lim Square unit which was first sold in 2011 at $1.7 million and sold again in 2007 at $2.3 million.

For subsales, all but three of the 54 subsale transactions in the same period made a profit. The most profitable was a ground-floor unit in Parc Elegance in Telok Kurau which was sold in 2010 for $1.13 million and sold again in 2012 for $1.95 million or a 73% gain. The three losses were from a third-floor unit at Oxley tower, which was purchased at $670,000 in June 2012 before being sold for $567,600 in August, a unit at Viva Vista in South Buona Vista Road and another at The Arizon in Geylang Road.

(Source: Business Times)

Back to Contents

Page | 10

SINGAPORE PROPERTY WEEKLY Issue 98

Non-Landed Residential Resale Property Transactions for the Week of Mar 20 Mar 26
Postal District 3 3 3 3 4 4 4 4 5 5 5 5 5 9 9 9 9 10 10 10 10 10 11 11 Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,173 1,680,000 1,432 99 1,195 1,670,000 1,398 99 1,970 2,700,000 1,371 99 1,399 1,870,000 1,336 99 2,626 6,300,000 2,399 99 1,216 1,980,000 1,628 99 1,335 2,150,000 1,611 99 3,208 3,750,000 1,169 99 958 1,150,000 1,200 99 1,130 1,260,000 1,115 FH 1,238 1,310,000 1,058 FH 1,421 1,500,000 1,056 999 2,293 2,150,000 938 99 1,281 3,458,700 2,700 FH 624 1,100,000 1,762 FH 3,563 5,522,650 1,550 FH 1,163 1,610,000 1,385 FH 527 1,030,000 1,953 999 1,841 3,500,000 1,902 FH 1,076 1,930,000 1,793 FH 3,800 6,500,000 1,711 FH 2,002 2,580,000 1,289 999 1,884 3,548,000 1,884 FH 1,055 1,810,000 1,716 FH Postal District 11 11 12 12 12 13 14 14 14 15 15 15 15 16 16 16 16 17 18 18 19 19 19 19 Area Transacted Price Tenure (sqft) Price ($) ($ psf) 915 1,530,000 1,672 FH 990 1,399,888 1,414 FH 484 680,000 1,404 FH 474 643,000 1,358 999 1,432 1,770,000 1,236 FH 936 1,245,000 1,329 FH 1,324 1,660,000 1,254 FH 969 980,000 1,012 99 753 750,000 995 FH 1,647 2,800,000 1,700 FH 1,647 2,800,000 1,700 FH 775 1,068,000 1,378 FH 1,776 1,820,000 1,025 FH 1,884 2,300,000 1,221 99 1,345 1,498,888 1,114 99 1,195 1,177,000 985 99 947 880,000 929 99 1,399 1,400,000 1,000 FH 958 938,000 979 99 1,507 1,220,000 810 99 936 1,196,888 1,278 FH 1,572 1,590,000 1,012 FH 947 891,000 941 FH 1,055 928,000 880 99

Project Name MERAPRIME QUEENS RIVER PLACE THE METROPOLITAN CONDOMINIUM REFLECTIONS AT KEPPEL BAY REFLECTIONS AT KEPPEL BAY CARIBBEAN AT KEPPEL BAY CARIBBEAN AT KEPPEL BAY BLUE HORIZON LE HILL CONDOMINIUM THE INFINITI MONTEREY PARK CONDOMINIUM VARSITY PARK CONDOMINIUM HELIOS RESIDENCES WHARTON VALE BELLE VUE RESIDENCES PARC CENTENNIAL MILL POINT BALMORAL HILLS GOODWOOD GARDENS ASTRID MEADOWS RIDGEWOOD THE LINCOLN RESIDENCES BUCKLEY 18

Project Name ZEDGE SHELFORD REGENCY CITY REGENCY VETRO THE BELLEFORTE PARC MONDRIAN THE WATERINA SIMSVILLE ESCADA VIEW THE SEA VIEW THE SEA VIEW IMPERIAL HEIGHTS ONAN COURT COSTA DEL SOL THE BAYSHORE THE CLEARWATER THE BAYSHORE FERRARIA PARK CONDOMINIUM EASTPOINT GREEN THE TROPICA SANCTUARY @813 OASIS GARDEN WEMBLY RESIDENCES RIO VISTA

Back to Contents

Page | 11

SINGAPORE PROPERTY WEEKLY Issue 98

Postal District 20 20 21 22 22 22 23 23 23 23 23 25 25

Project Name GRANDEUR 8 THE GARDENS AT BISHAN CLEMENTI PARK PARC VISTA THE CENTRIS LAKEPOINT CONDOMINIUM HILLVIEW REGENCY HAZEL PARK CONDOMINIUM HAZEL PARK CONDOMINIUM MAYSPRINGS REGENT GROVE CASABLANCA CASABLANCA

Area (sqft) 1,249 1,227 1,722 1,259 1,572 3,401 904 980 1,378 904 926 1,109 1,195

Transacted Price ($) 1,360,000 1,330,000 1,820,000 1,109,000 1,360,000 1,900,000 1,000,000 1,028,000 1,400,000 830,000 765,000 980,000 975,000

Price Tenure ($ psf) 1,089 99 1,084 99 1,057 FH 881 99 865 99 559 99 1,106 99 1,049 999 1,016 999 918 99 826 99 884 99 816 99

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.

Back to Contents

Page | 12