Singapore Property Weekly Issue 255

8/18/2019 Singapore Property Weekly Issue 255

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Issue 255Copyright © 2011-2016 www.propwise.sg. All Rights Reserved.

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CONTENTS

p2 Is it Time to Jump in to the Singapore

Property Market?

p8 Singapore Property News This Week

p12 Resale Property Transactions

(March 26 – April 1)

Welcome to the 255th edition of the

Singapore Property Weekly .

Hope you like it!

Mr. Propwise

FROM THE

EDITOR

mailto:[email protected]://www.propwise.sg/advertise/http://www.propwise.sg/advertise/mailto:[email protected]


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SINGAPORE PROPERTY WEEKLY Issue 255

Page | 2Back to Contents

By Gerald Tay (guest contributor)

We know property prices have gone down,

albeit just an 8% dip since the peak in

2013.There're plenty of arguments from

"experts" (who mostly argue against) on

whether the Singapore Property Market will

face further severe price correction, perhaps

to the lows seen during the 1997 Asian

Financial Crisis, the economic stagnation

period between 2002 and 2005, and the 2008

Global Financial Crisis.

Time to jump in?

Prospective buyers who are eagerly waiting

on the side-lines are looking for answers can

be easily misled.

Is it Time to Jump in to the Singapore Property Market?


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Some arguments suggest buyers, instead of

waiting for the "impossible" scenario of a

bloody market, should take advantage of the

"discounted" prices by developers who are

desperately clearing stock today.

Those who argue that buyers should jump

in now cite the following reasons:

1. A low employment rate of 1.8%.

2. The economy is projected to grow

positively, albeit at a modest pace of 2% to

4%.

3. The Government has already acted early

against over-leveraging with prudent lending

measures such as the Total Debt Servicing

Ratio (TDSR)

4. Higher interest rates are already expected

and will be manageable.

The best lies are seasoned with a bit of

truth

If you read local property reports or watch the

financial news, they often have asophisticated panel of “experts” to predict the

market direction and tell buyers and sellers

what to do. They look the part with their

slicked-back hair, fancy suits and snazzy

market efficiency theories. What’s not to

believe?The problem is that these “experts” are

famous for collectively never having predicted

a recession or a property market plunge

before it happened. None predicted the 1997

Asian Financial Crisis (AFC), 2000 dot-com

bubble-burst, September 11, SARS, Asian

economic stagnation of 2002 to 2005, and the

2008 Global Financial crisis.

Our government could not prevent any of it.


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Major corporations were too blinded by profits

to even notice.

Asian Financial Crisis – A Period of Mass

HysteriaThe period leading up to 1997 AFC saw

unprecedented economic growth and high

spending from consumers in Singapore, just

like Japan in the 1980s before their own

bubble burst. There were clear signs of frothy

valuations and plenty of speculation in thelocal property market. A capital gains tax was

implemented in response, causing massive

panic among both buyers and sellers.

Between 1996 and 1997, local property prices

plunged 45%. When the giant financial

tsunami hit our shores between 1997 and

1998, all markets sunk to the deepest levels

of the abyss. There was prevalent mass

hysteria and blood in every financial and real

estate market in Asia.

Local property price levels never recovered

until late 2006. The aftermath of the 1997

AFC went on to create more unfortunatefinancial losses in the years after. For almost

10 years between 1997 and 2006, apart from

a couple of short-lived recoveries, the

Singapore economy was in the doldrums.

This gloomy period coincides with high

unemployment rates, plenty of job losses,income losses and stagnation and plenty of

FEAR in the markets.

My experience witnessing financial

devastation

As a young adult back in those tumultuous

years, I witnessed the financial devastation

from personal interactions with its victims. My

family’s fortunes dwindled drastically and

wealthy businessmen I knew had their


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fortunes wiped out overnight.

Personal and corporate bankruptcies were

not uncommon, businessmen became taxi

drivers, stock brokers became broke for and

unemployed property buyers and even

property agents themselves who could no

longer afford mortgage payments had to let

go of properties way below what they paid for

it at the peak.

Many went from Rich to Poor – and somefrom Poor to Rich. But for every darkness,

there is a glimpse of light if you know where

to shine the torch. Opportunistic buyers who

knew how to take advantage of FEAR

became wealthy. I was one of the privileged

ones.

During periods of distressed prices between

2002 and 2005, interest rates were as low as

0.8% per annum – the market had NO

buyers. During the price-spike periods

between 2006 and 2008, interest rates were

4% per annum – yet buyers stormed the

markets like herds of pigs to the slaughter

houses!

Reckless Affluent Buyers

In reality, the real danger to today’s property

market does not lie with higher interest rates,

but with a dark macroeconomic outlook, a

slowing economy, and an overleveraging of the affluent.

In Singapore, the number of affluent middle-

class private property buyers grew rapidly

since 2008. From 2009, the number of private

properties and Executive Condominiums

launched and sold in the Mass Market region

were the largest ever seen since 1975. This

growing number will be further supplemented

by a massive upcoming supply this


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year and in 2017.

This is not a coincidence with endless

Quantitative Easing and stimulus since 2008.

This has led to easy credit and low borrowing

costs. Going forward, that will be less and

less the case. Interest rates are already

negative in certain major economies. They

cannot go any lower.

Currently, the group of property buyers

consists of primarily HDB “Upgraders” andExecutive Condominium (EC) buyers. Many

investors have left the scene. This is a

worrying sign.

HDB “Upgraders” benefited financially from

the price appreciation of HDB flats in the

recent years. New EC buyers whom are

mostly millennials (born after 1981) grew up

with instant gratification and expensive life

aspirations. These two groups have benefited

the most from zero interest rate policies and

the artificial bubble and “recovery” since

2008.

The clear lack of financial judgment is

extremely disturbing especially for buyers

who bought at the peak of 2013 and onwards.

So what will happen to the property

market in Singapore?

And guess who will lose the most wealth in

this next, larger crash? The top 0.1%, 1%,

10%, 20% and 30% because they own almost

all of the financial assets that have been

favoured in this bubble period with endless

QE and zero interest rates.

The S&P Global Luxury Index whichspecifically measures the spending of affluent

consumers on global luxury goods

plummeted 16% year-on-year from the peak

of 2014.

SINGAPORE PROPERTY WEEKLY I 255


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What this means effectively is, we’re

seeing lesser spending from affluent

consumers who have been the pillars of

global economic growth in past years. This

will be a major cause of concern for worldmarkets. Less spending means lower growth.

And lower economic growth means bad news

for real estate markets.

Worse, it’ll be years before buyers see

another great boom in the overall localproperty market – not until 2022 and later

optimistically. Based on my observation and

analysis, the recovery won’t be like the

booms and price-spikes we saw between the

periods 1975 and 1984, 1985 and 1995, 2006

and 2008, 2009 and 2013.Not even close.

In my next post I will go through the reasons

why I think property prices will continue to

struggle going forward and when the best

time to enter the market will be.

By guest contributor Gerald Tay, who is the

founder and coach at CREI Academy Group

Pte Ltd , an organization dedicated to

empowering retail property investors with

smarter investing philosophy and strategies.

He is a full-time investor with over 13 years of solid experience in building his wealth

through Property Investment and is financially

wealthy today.

SINGAPORE PROPERTY WEEKLY I 255

http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/


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Singapore Property This Week


Residential

Retail rental falls due to weak demand

According to data from DTZ, retail rental fell

in Q1 due to weak demand. Vacancies have

also climbed that quarter as occupancy fell

1.6% from 2015 to 91.9%. The averagemonthly first-storey rents have dropped 1.2%

quarter-on-quarter to about $30.15 psf in Q1

this year, which is the fourth quarter of decline

since Q2 2015. Year-on-year, rentals have

been down by 7%. According to DTZ,

increase in visitor arrivals in Orchard/ ScottsRoad area had increased by 0.9% in 2015.

However market experts pointed out that this

increase was because of the low base in

2014, following a series of aviation accidents.

Experts added that rents were affected byweak business sentiments and also the large

impending supply of retail spaces that were

slated for completion.

(Source: Business Times)

HDB resale prices remain flat in MarchSRX Property’s flash estimates for March

showed that its HDB resale price index fell by

just 0.1% month-on-month despite a 37.6%

month-on-month increase in the number of

HDB resale transactions to 1,651 units.

Market experts believe that resale prices will

continue to remain flat for the rest of the year.

Since April 2013, the HDB resale price index

has fallen by 11%.



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Due to the slowing economy and loan curbs,

experts believe that prices will continue to

stabilise in the coming months. ERA expects

that the official HDB resale price index will fall

about 1% this year compared to the 1.6%drop last year. According to SRX, HDB resale

prices have fallen by 0.3% month-on-month in

March in mature estates while the index

remained unchanged for non-mature estates.

Prices have however increased by 0.3% year-

on-year in mature estates and 0.1% in non-mature estates in that same time period.


OUE offers 15% discount for Twin Peaks

condo

Located near Leonie Hill Road, a high-end

condo project, Twin Peaks is on sale. After a

discount of 15%, prices now begin at $2,300

psf for units on the lower floors. To attract

more buyers, a deferred payment scheme

was also set up to allow buyers to defer

payment of the balance sum, which is 80% of

the total price, by 2 to 3 years. Buyers will

have to pay another $1,000 to exercise theoption to purchase (OTP) within 2 weeks and

pay relevant stamp duties and $1,000 to take

vacant possession of the unit within 8 weeks

from the option date. In another scheme,

buyers may exercise their OTP by the end of

this year. Both schemes are offered under private treaties as the project has already

received its Certificate of Statutory

Completion.


Commercial

Plum site at Cuscaden Road for sale

A 25,741 sq ft freehold site located at

Cuscaden Road has been put up for sale and



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owners are expecting offers between $160-

170 million. The site is flanked by St Regis

Residences Singapore and Tanglin Shopping

Centre. It has been zoned for hotel use with a

4.2 plot ratio under the 2014 Master Plan. According to JLL, the marketing agent for the

property, URA may consider other

redevelopment proposals. Market experts

predict that interest will be strong due the

prime location. Also, the site may be

redeveloped into a mid-scale to upscale hotelwith around 300 rooms, added market

experts.


CBD office rents fall by 3.9% in Q1

Quarter-on-quarter, office rents in the CBD

have fallen by 3.9% in Q1 to $9.90 psf per

month for the third consecutive quarter.

Market experts believe that this is due to the

global economic slowdown. According to the

Business Times, Marina Bay office rents were

the most affected as prices decreased 5%

quarter-on-quarter to $11.90 psf per month.Office occupancy also fell by 0.4% to 93.9%.

This is likely because tenants have moved

out of Marina Bay and also due to the 1.9

million sq ft of office space at Marina One

which is expected to be completed within

these 2 years. Rents for Grade B offices inShenton Way and Tanjong Pagar area had

fallen 4% to $7.30 psf per month. Rents in

that area however had only fell by 2.3% to

$10.50 psf per month. According to DTZ, this

was due to the area’s high occupancy rate of

97.4% and a lack of new office supply.




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Sembawang Park site won for $51.07

million

A 99-year leasehold 0.7-ha private housing

site near Sembawang Park has attracted 9

bids in a tender. The site’s highest bid stood

at $51.07 million or $481 psf ppr. This was

higher than the expected top bid of $470 psf

ppr. The site may be developed into a part-

three storey and part-seven storey project.

The site may also yield 130- 140 units. The

average selling price is expected to be

between $1,000- 1,100 psf. While the site is

not located near transportation nodes or

amenities, market experts believe that it is still

attractive as it is the only non-landed project

within a 2-km radius in a precinct that ispredominantly landed.



http://propertymarketinsights.com/


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Non-Landed Residential Resale Property Transactions for the Week of Mar 26 – Apr 1

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

3 THE REGENCY AT TIONG BAHRU 1,281 2,050,000 1,600 FH

3 TANGLIN VIEW 872 1,120,000 1,285 99

4 REFLECTIONS AT KEPPEL BAY 872 1,480,000 1,697 99

4 THE INTERLACE 1,873 2,080,000 1,111 99

5 THE MAYLEA 1,023 1,255,000 1,227 FH

5 CARABELLE 2,077 2,400,000 1,155 956

5 CARABELLE 1,292 1,400,000 1,084 956

5 VILLA DE WEST 1,012 1,090,000 1,077 FH

5 PARK WEST 1,894 1,250,000 660 99

7 BURLINGTON SQUARE 883 1,050,000 1,190 99

8 CITYLIGHTS 560 920,000 1,644 998 CITY SQUARE RESIDENCES 1,216 1,730,000 1,422 FH

8 CITY SQUARE RESIDENCES 1,216 1,620,000 1,332 FH

8 CITY SQUARE RESIDENCES 1,238 1,600,000 1,293 FH

9 SCOTTS 28 1,658 3,130,000 1,888 FH

9 ASPEN HEIGHTS 1,324 2,030,000 1,533 999

9 8 @ MOUNT SOPHIA 861 1,270,000 1,475 103

9 ASPEN HEIGHTS 1,324 1,940,000 1,465 999

9 ASPEN HEIGHTS 1,582 2,280,000 1,441 999

9 PARC EMILY 980 1,400,000 1,429 FH

9 THE REGALIA 1,270 1,790,000 1,409 FH

9 HORIZON TOWER 2,303 2,500,000 1,085 99

10 ST REGIS RESIDENCES SINGAPORE 2,153 4,750,000 2,206 999

10 JUNIPER AT ARDMORE 3,520 7,280,000 2,068 FH

10 THE ARC AT DRAYCOTT 1,130 2,150,000 1,902 FH

10 THE TESSARINA 1,313 2,070,000 1,576 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

10 THE SIXTH AVENUE RESIDENCES 1,636 2,180,000 1,332 FH

10 CHARLESTON 1,023 1,328,000 1,299 FH

11 THE PARK VALE 1,485 1,940,000 1,306 999

11 HILLCREST ARCADIA 2,325 2,030,000 873 99

12 RIVERBAY 926 1,183,000 1,278 999

12 CALARASI 1,184 1,200,000 1,013 FH

13 AVON PARK 1,270 1,420,000 1,118 FH

14 SUITES @ EUNOS 366 590,000 1,612 FH

14 GUILLEMARD EDGE 409 600,000 1,467 FH

14 SIMSVILLE 969 915,000 945 99

14 SIMSVILLE 1,249 1,050,000 841 9915 16 @ AMBER 667 1,150,000 1,723 FH

15 THE WATERSIDE 2,142 2,520,000 1,176 FH

15 PARADISE PALMS 1,152 1,328,000 1,153 FH

15 OCEAN PARK 3,261 3,750,000 1,150 FH

15 TANJONG RIA CONDOMINIUM 1,399 1,510,000 1,079 99

15 THE ELEGANCE @ CHANGI 646 695,000 1,076 FH

15 VILLA MARTIA 1,335 1,368,000 1,025 FH

15 FERNWOOD TOWERS 1,636 1,520,000 929 FH

16 WATERFRONT KEY 1,518 1,628,000 1,073 99

16 WATERFRONT WAVES 1,292 1,368,000 1,059 99

16 CHANGI GREEN 872 820,000 940 FH

16 WATERFRONT WAVES 1,378 1,290,000 936 99

16 EAST MEADOWS 1,238 1,050,000 848 99

16 BAYSHORE PARK 2,196 1,700,000 774 99

17 FERRARIA PARK CONDOMINIUM 1,249 1,100,000 881 FH



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NOTE: This data only covers non-landed residential resale propertytransactions with caveats lodged with the Singapore Land Authority.Typically, caveats are lodged at least 2-3 weeks after a purchasersigns an OTP, hence the lagged nature of the data.

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

18 MODENA 958 860,000 898 99

18 LIVIA 1,259 1,038,000 824 99

18 LIVIA 1,259 1,010,000 802 99

18 THE TROPICA 1,227 958,000 781 99

18 MELVILLE PARK 1,410 965,000 684 99

18 ELIAS GREEN 1,518 860,000 567 99

19 KOVAN MELODY 1,292 1,385,000 1,072 99

19 THE SUNSHINE 1,249 1,220,000 977 FH

19 THE VUE 1,087 975,000 897 FH

19 CHUAN PARK 1,851 1,658,000 896 99

20 BISHAN POINT 1,184 1,200,000 1,013 99

20 FABER GARDEN CONDOMINIUM 2,120 2,050,000 967 FH

21 JARDIN 1,808 3,350,000 1,853 FH

21 SOUTHAVEN II 1,313 1,358,000 1,034 999

21 KISMIS VIEW 2,250 1,500,000 667 99

22 THE MAYFAIR 1,227 960,000 782 99

22 PARC VISTA 1,615 1,200,000 743 99

23 HILLVIEW HEIGHTS 1,668 1,720,000 1,031 FH

23 HAZEL PARK CONDOMINIUM 1,378 1 ,290,000 936 999

23 HILLVIEW REGENCY 904 811,000 897 99

23 THE WARREN 1,066 835,000 784 99

23 PALM GARDENS 1,216 890,000 732 99

23 HILLTOP GROVE 1,485 1,050,000 707 9927 THE ESTUARY 1,195 850,000 711 99

28 H2O RESIDENCES 1,389 1,388,000 1,000 99
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