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Issue 114

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CONTENTS
p2 p9 p13
Singapore Property Prices Reach All-Time High Yet Again, But Singapore Property News This Week Resale Property Transactions (July 10 July 16)

FROM THE

EDITOR

Welcome to the 114th edition of the Singapore Property Weekly.

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Mr. Propwise

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SINGAPORE PROPERTY WEEKLY Issue 114

Singapore Property Prices Reach All-Time High Yet Again But


By Mr. Propwise
From the URAs recent 2Q2013 Private Residential Property Price Index (PPI) release, property prices have continued to defy gravity and have even accelerated the 2Q2013 Residential PPI was up 1.0% on a quarter-on-quarter basis, versus the 0.6% increase of the previous quarter. Singapore property prices at an all-time high Based on analysis of the URA numbers done by the Singapore property research site PropertyMarketInsights.com, at the current levels the price index is 21.4% above the previous 2Q2008 peak,
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SINGAPORE PROPERTY WEEKLY Issue 114 and 18.7% above the previous all time high in 2Q1996. low interest rates, has outweighed concern over the worrying economic situation in Europe and China, and the prospect of rising interest rates US (and hence globally) when the Fed tapers. And not to mention the dampening effect of multiple rounds of government measures since 2009. but is mainly supported by strength in the Outside Central Region The rate of price growth differed widely across the various market segments. In the Core Central Region, prices of non-landed private residential properties actually fell by 0.2% versus a remarkable increase of 3.8% in the Outside Central Region, an acceleration from the 1.4% increase in the previous quarter. This is the first time that the PPI in the Outside Central Region has surpassed

Figure 1 URA Property Price Index On the surface, it would appear that the strength of property demand, supported by

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SINGAPORE PROPERTY WEEKLY Issue 114 that of the Core Central Region. Singaporeans. Since 2009 Singaporeans have been growing as a proportion of total buyers, and made up 80.1% of buyers in 2Q2013.

Figure 2 URA Property Price Index for the Different Regions


This unprecedented phenomenon begs the question: who are buying these overpriced properties in the fringes of Singapore? Well, it turns out the answer is regular middle income
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Figure 3 Singaporeans as a percentage of total purchasers

The pullback in non-Singaporean buying has


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SINGAPORE PROPERTY WEEKLY Issue 114 also been affected by the much harsher Additional Buyer Stamp Duties imposed on Permanent Residents and Foreigners in January 2013 in the Seventh Round of government cooling measures. Will property prices correct? The question now hanging on most peoples minds is: when will property prices correct? Prices have been defying gravity despite the threat of a weak global economic environment, propped up by close-to-zero interest rates thanks to the multiple rounds of Quantitative Easing by the US Federal Reserve.

Figure 4 Change in URA Property Price Index


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Figure 5 3-Month and 12-Month SIBOR


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SINGAPORE PROPERTY WEEKLY Issue 114 The continued resilience of property prices despite the previous seven rounds of government measures, and the MAS measures on the Total Debt Servicing Ratio framework to limit leverage, increases the probability of further measures to cool sentiment. But it is not clear what more the government can do other than to refine the current measures (e.g. increase ABSD further?). I believe that we will only see significant levels of price declines if: 1. There is an external crisis that causes a panic, which we had in each of the previous three declines (e.g. Asian Crisis, Dotcom Bubble, Global Financial Crisis); or 2. If interest rates rise significantly thanks to the Feds tapering, which will happen when the US economy strengthens and unemployment rates fall, potentially in late 2014. In the meantime the abundant global liquidity situation and sustained low interest rates will continue to support Singapore property prices, although at the margins I think we are fairly close to the end game. Where will property prices go going forward? There are a couple of ways to think about this question. First, based on the Property Market Cycle Model of PropertyMarketInsights.com, we are in the Late Bull Stage of the market. This means that the upside potential risk is limited while the downside risk is significant. Second, while everyone believes that low interest rates will continue to prop property prices up, the large upcoming supply of more than 100,000 units could depress prices if demand is not able to keep up (and we are already seeing fairly weak rental growth).

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SINGAPORE PROPERTY WEEKLY Issue 114 Third, as Ive mentioned before, unexpected crises (black swans) tend to occur when we least expect it, especially when everyone has become complacent. I believe property prices cannot continue to defy gravity forever, and that investors looking to buy property in this market should be very cautious.

By Mr. Propwise, founder of top Singapore property blog Propwise.sg and PropertyMarketInsights.com, an essential property market analysis site that helps buyers and sellers make profitable investment decisions. Visit his sites to download free property reports.

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SINGAPORE PROPERTY WEEKLY Issue 114

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SINGAPORE PROPERTY WEEKLY Issue 114

Singapore Property This Week


Residential
Property cooling measures discourage foreign buyers According to a caveats analysis by DTZ, Singapore PRs and foreigners continued to buy fewer private homes for the second consecutive quarter in Q2 2013, while Singaporeans private home purchases increased by 14.4 percent in Q2 compared to Q1 2013. PRs bought just 348 units in the secondary market in Q2, 30.3 percent less than Q1; yet PRs bought 525 units in the primary market in Q2, 4.2 percent more than Q1.

HDB data points to easing for resale market


As the latest round of cooling measures take effect, the pressure on the public housing resale market has apparently eased with the lowest price growth for the past four years. HDBs data has showed the Resale Price Index (RPI) increased by 0.5 percent to reach 206.6 in Q2, compared to the 1.3 percent increase in Q1. Christine Li, head of research and consultancy at OrangeTee, said that despite the slight increase in the RPI in Q2, market sentiment has been weighed down by the January cooling measures. (Source: Business Times)
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(Source: Business Times)


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SINGAPORE PROPERTY WEEKLY Issue 114 CapitaLand warned of headwinds residential property market for government policy, and supply issues could unintentionally lead to a surge in the demand of executive condominiums (ECs). More demand is being channeled towards ECs as the growth in private condominium and apartment prices continued to outpace ECs. (Source: Business Times) Commercial Pockets of weakness surfaced in firm property market The latest official stats on Singapores private property markets have shown the appearance of pockets of price falls, including industrial space and some residential categories, although the property market remains firm as a whole. The once-hot industrial space category fell substantially. Particularly, the price index for multiple-user warehouse space decreased greatly by 5.9 percent in Q2
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In its candid assessment of Singapore residential property market, CapitaLand predicted a moderation in prices and sales volume of residential property due to increasing impact of various property measures, which include the 60 per cent cap on total debt servicing ratio that financial institutions must apply before issuing property loans. CapitaLand was reported to be responsive to market changes and had introduced discounts at its projects d'Leedon, Interlace and Sky Habitat in Bishan. (Source: Business Times) ECs could see surge in demand soon: SLP According to property agency SLP International, due to the three main reasons of runaway private property prices, a new
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SINGAPORE PROPERTY WEEKLY Issue 114 from Q1 of 2013, compared to the 10.6 percent quarter-on-quarter increase in Q1. This put a stop to a rally that had spanned 14 consecutive quarters after the index bottomed in Q3 2009. Consequently URAs All Industrial price index decreased by 0.6 percent in Q2, in contrast to the 4.5 percent increase in Q1. (Source: Business Times) property group behind Big Hotel was reported to have intentions to develop more hotels in places like Malaysia, Vietnam, South Korea, Australia and Japan, either from scratch or by converting existing buildings into hotels. (Source: Business Times) Woodlands industrial site top bid draws $72.7m Urban Redevelopment Authority's tender for a 30-year leasehold industrial site in Woodlands Industrial Park E9 has attracted ten bidders. The highest bid was $72.69 million or $161.02 psf ppr from Incorporated Woodlands Pte Ltd - a unit of Incorporated Builders Group involved in construction and property development. The second highest bid was $107.17 psf ppr from Lian Beng Group unit Wealth Land.

Big Hotel up for sale


The Big Hotel along Middle Road has been put on the market and is expected to raise $260 million, which translates to $844,000 per room for the 16-storey freehold hotel with 308 rooms. So many offers have been received that Colliers International has been appointed the marketing agent for the property and is conducting an expression of interest exercise which closes at 3pm on August 6. The

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SINGAPORE PROPERTY WEEKLY Issue 114 The lowest bid was $55.38 psf ppr from NSS Development. The site is 1.68-hectare wide and is zoned for Business 2 use with an integrated heavy vehicle park for a minimum of 80 heavy vehicle parking lots. The minimum of 80 heavy vehicle parking lots, which shall be excluded from the computation of the development's maximum gross floor area (GFA) of 451,422 sq ft, can be sold as a single strata lot. It is also the first time the state has sold an industrial site with the heavy vehicle parking lots not counted as part of GFA, and the first time the developer has been allowed to have a separate single strata lot for the heavy vehicle parking lots. (Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 114

Non-Landed Residential Resale Property Transactions for the Week of Jul 10 Jul 16

Postal District 2 3 4 4 4 4 4 5 5 5 5 5 5 9 9 9 9 9 9 9 9 9 10 10

Project Name SPOTTISWOODE PARK CENTRAL GREEN CONDOMINIUM MARINA COLLECTION REFLECTIONS AT KEPPEL BAY THE BERTH BY THE COVE CARIBBEAN AT KEPPEL BAY THE PEARL @ MOUNT FABER ONE-NORTH RESIDENCES REGENT PARK KENTVIEW PARK WESTCOVE CONDOMINIUM WEST BAY CONDOMINIUM THE INFINITI GRANGE INFINITE ILLUMINAIRE ON DEVONSHIRE THE TATE RESIDENCES CITYVISTA RESIDENCES LUMA BELLE VUE RESIDENCES LEONIE STUDIO WILKIE 80 LEONIE TOWERS FOUR SEASONS PARK THE GRANGE

Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,270 1,150,000 905 99 1,292 1,700,000 1,316 99 2,185 6,336,500 2,900 99 850 1,550,000 1,823 99 1,012 1,710,000 1,690 99 1,356 2,220,000 1,637 99 1,389 1,680,000 1,210 99 1,033 1,700,000 1,645 99 1,130 1,250,000 1,106 99 1,345 1,463,000 1,087 FH 1,249 1,200,000 961 99 1,475 1,385,000 939 99 1,561 1,453,333 931 FH 2,680 6,432,000 2,400 FH 635 1,520,000 2,393 FH 3,240 7,500,000 2,315 FH 2,142 4,750,000 2,218 FH 904 1,935,000 2,140 FH 2,271 4,700,000 2,069 FH 689 1,345,000 1,952 99 560 1,072,500 1,916 FH 2,906 4,900,000 1,686 FH 3,821 11,600,000 3,036 FH 2,282 5,750,640 2,520 FH

Postal District 10 10 10 11 11 11 12 12 14 14 15 15 15 15 15 15 15 16 16 16 16 16 17 19

Project Name THE MARBELLA EWE BOON REGENT HOLLANDIA THE LINCOLN RESIDENCES MANDALE HEIGHTS CHANCERY COURT PRESTIGE HEIGHTS TREVISTA SIMS DORADO CRYSTAL MANSIONS AMBER RESIDENCES IMPERIAL HEIGHTS THE MAKENA THE ARIEL ARTHUR 118 UNITED MANSION NEPTUNE COURT COSTA DEL SOL COSTA DEL SOL EASTERN LAGOON THE SUMMIT THE BAYSHORE SANDY PALM OASIS GARDEN

Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,475 2,480,000 1,682 FH 1,044 1,500,000 1,437 FH 1,970 2,400,000 1,218 FH 1,884 3,223,000 1,711 FH 1,345 1,720,000 1,278 FH 2,271 2,780,000 1,224 99 344 660,000 1,916 FH 1,281 1,640,000 1,280 99 969 1,060,000 1,094 FH 1,259 950,000 754 FH 1,163 1,650,000 1,419 FH 1,033 1,438,000 1,392 FH 1,507 1,921,000 1,275 FH 915 1,150,000 1,257 FH 1,604 1,820,000 1,135 FH 1,367 1,220,000 892 FH 1,636 1,380,000 843 99 1,227 1,670,000 1,361 99 1,345 1,750,000 1,301 99 980 1,100,000 1,123 FH 1,249 1,380,000 1,105 FH 1,184 1,100,000 929 99 1,744 1,220,000 700 99 1,335 1,550,000 1,161 FH

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SINGAPORE PROPERTY WEEKLY Issue 114

Postal District 19 19 19 20 20 21 21 21 21 22 22 25 27 28

Project Name THE SPRINGBLOOM VINA LODGE ROSALIA PARK THE GARDENS AT BISHAN BISHAN PARK CONDOMINIUM THE CASCADIA HIGHGATE PARC PALAIS SUNSET LODGE THE MAYFAIR PARC OASIS ROSEWOOD SEMBAWANG COTTAGE SERENITY PARK

Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,130 1,240,000 1,097 99 1,313 1,160,000 883 FH 1,518 1,235,000 814 FH 1,206 1,305,000 1,082 99 1,270 1,080,000 850 99 1,216 2,124,000 1,746 FH 1,905 2,175,000 1,142 FH 1,270 1,380,000 1,086 FH 1,023 1,070,000 1,046 FH 635 750,000 1,181 99 1,539 1,260,000 819 99 1,173 1,030,000 878 99 1,884 1,790,000 950 FH 1,098 1,050,000 956 FH

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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