Issue 153

Copyright 2011-2014 www.Propwise.sg. All Rights Reserved.

CONTENTS
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The Resurrection of Property Prices
Singapore Property News This Week Resale Property Transactions (April 7 April 15)

FROM THE

EDITOR

Welcome to the 153th edition of the Singapore Property Weekly. Hope you like it!

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SINGAPORE PROPERTY WEEKLY Issue 153

The Resurrection of Property Prices

By Property Soul (guest contributor) The Easter holiday celebrates the resurrection of Jesus Christ from death on the third day, a critical belief in Christianity. By coincidence, this past Easter also marked the resurrection of the purchase price for a private property bought in the mid-1990s by a friend of my father-in-law, i.e. the current market prices have finally recovered to the level that he bought it at.

I am not surprised that it took him almost 20 years to break-even. I just wonder how many people are comfortable telling others how long it took for their overpriced property to return to life again.
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SINGAPORE PROPERTY WEEKLY Issue 153 Why the Property Price Index can be deceiving The URAs Property Price Index (PPI) shows that the property price peak in the second quarter of 1996 was surpassed by a new high sometime in the middle of 2010. However, the PPI is an index that only shows the average price of all caveats lodged when buyers exercise their Option to Purchase. It monitors the general price movement of all private residential properties, but hides all the deviations from the average PPI. PPI includes all the transacted units from property new launches sold at future prices by the developers. It also encompasses resale units from relatively new projects that are able to sell at higher prices. There are relatively few transactions from projects that are 15, 20 years or even older. After all, with
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so many new launches coming up every quarter, who cares about such old developments? What goes up must come down It is nave to believe that prices can rise indefinitely. The market never goes up or down forever. It is destined to change course at a certain point of time.

Nothing can defy the law of gravity: If you drop a ball from a height, it will bounce back from the ground and reach for the sky again. And the higher it bounces, the nearer to the point where you will see the ball falling again.
Forget the sales talk about how property prices can only go up, how property investors always prosper in the long-term, and how this time is going to be different.

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SINGAPORE PROPERTY WEEKLY Issue 153 The Japanese property bubble that burst in the late 1980s started two lost decades (and still counting). The question is: How long are you prepared to wait to see the resurrection of your purchase price? How history repeats itself Many people are asking: What will happen to the Singapore property market? because there are so many up and downs in the history of the property industry. If the history of Singapore is not long enough, look outside the country. Look at what has happened in the property markets in any country in Asia, US or Europe. If the property market has not given you too many hints, you can look outside of real estate to study the history of different market bubbles. We have experienced many booms in our history: the railway industry in the 1840s, the commodity market in the early 1970s, technology stocks in the late 1990s, and the US housing market in the 2000s. These booms all developed into speculative manias, before they finally collapsed and caused an economic upheaval.

If you want to understand the financial markets and how it will turn out, dont study economics or finance. You should delve into history. For history doesn't only show you how to read the present, it also tells you the future from the past.
Don't just look at the name and date of a historical event. Read the details. You will find that there are many lessons to be learnt

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SINGAPORE PROPERTY WEEKLY Issue 153 Technology evolves over time. Things change in the long run. But the ignorance and greed of human nature remain the same. Once you understand the past, you can explain why things are where they are now. Once you know what is going on at present, it is not difficult to tell what will happen in the near future. Buy new launch projects before prices go up again? All overseas properties promise handsome profit? Any time is a good time to buy property? Property prices will always go up? Property is a safe investment for the longterm? Whenever you hear people making these statements, you don't even bother to argue. You can just keep quiet and smile. By guest contributor Property Soul, a successful property investor, blogger, and author of the newly released No B.S. Guide to Property Investment.

Stay calm, be intact

I am not a doomsayer. But please keep in mind that: When the market is hot, there is no need to be too excited. Likewise, when the market is gloomy, it is not necessary to be too pessimistic.

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SINGAPORE PROPERTY WEEKLY Issue 153

Singapore Property This Week

Residential
100 of 131 units in The Sorrento sold 100 of the 131 units have been sold in The Sorrento a five-storey freehold condominium on West Coast Road which offers one-to three-bedroom units from 441 to 1,808 sq ft and is expected to be granted the temporary occupation permit (TOP) in 1Q2015. The rapid sales were the result of attractive prices ($1,380 to $1,600 psf) and the sense of exclusivity offered through the condos small scale and freehold status. Other developments such as Icon@Pasir Panjang, Seasuites, Village@Pasir Panjang and Whitehaven have also achieved

transacted prices of $1,600-1,700 psf.

(Source: Business Times) 11,000 Singaporean families purchased exec condos from 4Q2010 to 4Q2013

According to Minister for National Development Khaw Boon Wan, 11,000 Singaporean households purchased executive condominiums (EC) from Q4 2010 to Q4 2013. Approximately 86 percent of the buyers are HDB residents and 55 percent are second-timer families. Due to the increase of the income ceiling for ECs in 2011 from $10,000 to $12,000, there have been changes in terms of EC buyers profile over

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SINGAPORE PROPERTY WEEKLY Issue 153 that one-year period, where the share of second-timers increased from 43 percent to 57 percent and those aged from 35 to 44 increased from 35 percent to 43 percent. (Source: Business Times) HDB resale prices dropped 1.6% in Q1 2014 Resale prices of HDB flats have decreased by 1.6 percent in Q1, with the number of transactions falling 5 percent to 3,781, making it the third consecutive quarter where prices slid. According to ERA Realty, government measures of reducing the mortgage servicing ratio from 35 percent to 30 percent limited buyers from owning more expensive flats. Furthermore, the minimum three-year waiting period for newly minted permanent residents before they can purchase resale flats, the availability of twoBack to Contents

room build-to-order (BTO) flats for singles and the cessation of reporting cash-overvaluation (COV) held back market activities. Due to the slowdown in resale activities, the sub-letting market has seen improvement where subletting transactions rose 17 percent quarter-on-quarter in Q1 to 8,485. (Source: Business Times) Increase in foreigners proportion of home purchases Transactions of private home purchases in Q1 dropped to 2,076 units, seeing Singaporeans share falling to 70 percent from 73 percent in Q1 2013, PRs share rising to 19 percent from 16 percent in Q4 2013 and foreigners share mainly coming from mainland Chinese, Malaysians, Indonesians and Indians climbing up to 10 percent from 9 percent in Q4 2013.
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SINGAPORE PROPERTY WEEKLY Issue 153 Due to the additional buyers stamp duty and the high home ownership rate, purchasing activities among Singaporeans have slowed down, while with the regulation that new PRs must wait for three years before being allowed to purchase public flats, those who are in urgent need of accommodation started setting their eyes on the private housing market. acquired by private home owners. Smaller units are preferable among those with HDB addresses as the required investment sum is more affordable and they can benefit from the progressive payment scheme if they buy in the primary market, where 581 units or 65 percent of the total 892 private homes were purchased from developers in Q1. (Source: Business Times) 0.7 percent drop in private residential rentals quarter-on-quarter in 1Q2014 On a quarter-on-quarter basis, private housing rentals fell 0.7 percent for the second consecutive quarter, as a consequence of the growth in completed private homes, more restriction on foreign tenants in Singapore and a stricter property tax system. Private residential completions are estimated to reach 17,138 units in 2014, higher than the
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(Source: Business Times)

51 percent of units purchased by HDB owners were below 800 sq ft A total of 892 non-landed private homes were purchased by HDB owners in Q1 2014, 453 units or 51 percent of which were of areas of up to 800 sq ft, showing an increase from 44 percent in 2013. On the contrary, in terms of the equivalent area, merely 29 percent of the 1,014 non-landed private homes were
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SINGAPORE PROPERTY WEEKLY Issue 153 13,150 units in 2013, whereas demand will not match this supply due to tighter regulations on hiring foreign executives. Additionally, a stricter property tax policy took effect from Jan 1, 2014, stating that landlords can no longer claim vacancy refunds on property tax. Overall, consultants estimate a 5-10 percent dip in private housing rentals for the full year. Assets Pte Ltd a joint venture company between Lian Beng Group and parallel importer Vincar. The tender attracted around a dozen bidders as the Leng Kee Road/Alexandra Road area is regarded as Singapores key auto belt. (Source: Business Times) 15% increase in Singapores office rents this year Office rents in Singapore are anticipated to increase to 15 percent this year owing to the rise in demand, where international companies such as Cargill Inc and Bordier & Cie are having their offices in the central business district. Additionally, landlords are getting more bargaining power due to the lack of completed developments in 2015 and the increase in office occupancy rates which,

(Source: Business Times)

Commercial Lian Beng purchases 70,000 sq ft at 24 Leng Kee Road for $46.2m

A site of approximately 70,000 sq ft at 24 Leng Kee Road has been purchased by Lian Beng Group for $46.2m. It is expected that the area will be developed to prepare for the entry to the automotive business of Wealth

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SINGAPORE PROPERTY WEEKLY Issue 153 according to DTZ, rose to 95.1 percent from the last quarter. Compared to the previous quarter, rents in Marina Bay area rose by 4.5 percent, while compared to the same period in 2012, rents in the central business district increased by 8.4 percent in 4Q2013. (Source: Business Times) Two units in Orchard Towers and one unit in Marine Parade for sale Two commercial units in Orchard Towers and one in Marine Parade Central are open for sale, with no advanced indicative prices but guiding prices from sales of shops nearby. The freehold units in Orchard Towers occupy a strata area of approximately 8,105 sq ft, covering the ground floor and the basement. A third-floor unit in Orchard Towers was sold for $6,636 psf last year. With 62 years remaining on the lease, the unit in Marine Parade Central occupies a strata area of about 25,833 sq ft over the ground and second floors of Block 87. Sales of ground floor and basement shops in nearby The Flow ranged from $4,008 to $5,789 psf during the past nine months. (Source: Business Times)

Retail rentals in Central Region showed 0.3 percent drop: URA

According to the Urban Redevelopment Authority (URA)s data, there was a decline of 0.3 percent in rentals at retail malls in the Central Region, covering retailers and nonshop space such as food and beverage, entertainment, and health and fitness in the downtown area and city fringe.

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SINGAPORE PROPERTY WEEKLY Issue 153 However, skepticism about the indexs reliability was raised as according to several retailers, rentals have significantly increased in the past three years. URAs data set may not have captured the full scene as it does not look at suburban malls in Jurong East, Tampines and Bedok. (Source: Business Times) Annual supply of 2.1m sq m of industrial space over the next three years According to JTC Corps data, there is an average annual supply of industrial space of 2.1 million square metres (sq m) coming onstream over the next three years, of which 28 percent is multiple-user factory space, 37 percent is single-user factory space, 25 percent is warehouse space, and the rest business park space. This is double of the annual average demand. Concerns have been raised as there is no dearth in industrial space and the appropriate use of industrial space needs to be restructured, in order to capture more manufacturing companies. (Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 153

Non-Landed Residential Resale Property Transactions for the Week of Apr 7 Apr 15
Postal District 2 2 3 5 5 5 5 9 9 9 10 10 10 10 10 10 11 11 11 11 12 12 12 12 Area (sqft) 700 1,238 1,033 1,518 969 1,830 2,271 1,668 1,410 1,292 1,227 1,259 1,163 1,593 1,711 3,229 1,442 2,713 2,271 2,250 1,141 710 1,195 1,636 Transacted Price ($) 1,250,000 1,850,000 1,033,000 1,960,000 1,130,000 1,900,000 2,050,000 4,880,000 2,538,000 1,800,000 2,500,000 2,300,000 1,980,000 2,642,500 2,435,000 4,300,000 2,650,000 4,500,000 3,565,470 2,986,000 1,718,000 925,000 1,268,000 1,280,000 Price Tenure ($ psf) 1,787 99 1,495 99 1,000 99 1,291 FH 1,166 99 1,038 FH 903 99 2,925 FH 1,800 FH 1,394 FH 2,037 FH 1,826 FH 1,703 FH 1,659 FH 1,423 999 1,332 FH 1,837 FH 1,659 FH 1,570 FH 1,327 999 1,506 99 1,302 FH 1,061 FH 782 FH Postal District 14 14 14 14 15 15 15 15 15 15 16 16 16 17 18 18 18 18 18 19 19 20 20 20 Area (sqft) 1,313 1,055 1,206 1,066 1,690 1,324 1,744 1,625 1,270 1,636 1,475 969 1,432 1,324 936 1,066 1,227 1,518 1,313 904 1,066 1,227 1,453 1,507 Transacted Price ($) 1,600,000 930,000 1,030,000 900,000 2,680,000 1,628,000 1,930,000 1,700,000 980,000 1,220,000 1,700,000 960,000 1,035,000 1,280,000 995,000 1,065,000 1,100,000 1,358,000 940,000 1,080,000 910,000 1,200,000 1,405,000 1,280,000 Price Tenure ($ psf) 1,218 99 882 FH 854 FH 845 FH 1,586 FH 1,230 FH 1,107 99 1,046 FH 772 99 746 99 1,153 99 991 99 723 99 967 FH 1,063 99 999 FH 896 99 895 99 716 99 1,194 99 854 99 978 99 967 99 849 99

Project Name ICON ICON LANDMARK TOWER THE PARC CONDOMINIUM DOVER PARKVIEW GOLD COAST CONDOMINIUM VARSITY PARK CONDOMINIUM HELIOS RESIDENCES THE IMPERIAL WILKIE STUDIO ONE TREE HILL RESIDENCE BOTANIC GARDENS VIEW BALMORAL HEIGHTS THE TRIZON GLENTREES BEAVERTON COURT PARK INFINIA AT WEE NAM SKY@ELEVEN SKY@ELEVEN THE PARK VALE TREVISTA CASA FORTUNA RIO GARDENS BALESTIER POINT

Project Name DAKOTA RESIDENCES CASA EMERALD MORO MANSIONS SUNFLOWER RESIDENCE THE VIEW @ MEYER FINLAND GARDENS SANCTUARY GREEN PALM VISTA NEPTUNE COURT NEPTUNE COURT COSTA DEL SOL THE BAYSHORE AQUARIUS BY THE PARK CARISSA PARK CONDOMINIUM DOUBLE BAY RESIDENCES RIS GRANDEUR SAVANNAH CONDOPARK THE TROPICA MELVILLE PARK KOVAN MELODY EVERGREEN PARK THE GARDENS AT BISHAN BRADDELL VIEW BISHAN PARK CONDOMINIUM

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SINGAPORE PROPERTY WEEKLY Issue 153

Postal District 20 21 21 21 21 22 22 22 22 22 22 22 23 23 23 23 23 23 25 25 26 27 Project Name THOMSON VIEW CONDOMINIUM BINJAI PARK BROOKVALE PARK CLEMENTI PARK ASTOR GREEN THE LAKESHORE THE LAKESHORE THE MAYFAIR PARC VISTA PARC OASIS THE MAYFAIR PARK VIEW MANSION HILLBROOKS MAYSPRINGS CHANTILLY RISE GUILIN VIEW NORTHVALE HILLVIEW REGENCY ROSEWOOD THE WOODGROVE CASTLE GREEN THE ESTUARY Area (sqft) 3,843 1,033 1,615 1,539 1,378 1,141 1,464 926 1,055 1,227 1,184 1,119 1,098 818 947 861 1,033 1,195 1,012 883 1,173 926 Transacted Price ($) 2,550,000 1,280,000 1,820,000 1,618,000 1,300,100 1,230,000 1,490,000 923,000 995,000 1,080,000 1,000,000 740,000 1,178,000 800,000 910,000 818,000 905,000 1,030,000 850,000 715,000 1,008,000 970,000 Price Tenure ($ psf) 664 99 1,239 999 1,127 999 1,051 FH 944 99 1,078 99 1,018 99 997 99 943 99 880 99 845 99 661 99 1,073 FH 978 99 961 FH 950 99 876 99 862 99 840 99 810 99 859 99 1,048 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.

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