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7/30/2019 Singapore Property Weekly Issue 85
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Issue 85Copyright 2011-2012 www.Propwise.sg. All Rights Reserved.
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2/18
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CONTENTS
p2 3 Property Investment Myths the
Experts are Telling You
p9 Singapore Property News This Week
p16 Resale Property Transactions
(December 19 December 25)
Welcome to the 85th 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]7/30/2019 Singapore Property Weekly Issue 85
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By guest contributor Gerald Tay
Singapores private residential property index
continued to climb to 211.9 in Q4 2012 from
208.2 in Q3. This is a hike of 1.8 percent
compared to the 0.6 percent increase in the
previous quarter. HDB re-sale prices have hitan all-time high and Executive Condominiums
(ECs) have reached a record-selling price of
S$2million dollars. The statistics are already
well-known to you so Im not going to further
bore you with it in this article.
STOP telling fairy tales to propertybuyers!
While writing this article, my frustration with
the current situation has made me bang the
3 Property Investment Myths the Experts are Telling You
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table and scream, STOP telling fairytales to
property buyers!
Listening to the property experts, youd
never guess it was the twenty-first century.They all seem to be teaching the same old
strategies for property investing and telling
unwitting buyers that beautiful fairy tale
endings are a reality, financial crises only
belong to pre-historic times, and property
downturns are just myths and legends!
Too many investment myths have gone
unchallenged lately. And we love to believe
that tomorrow will be like today. So the best
thing to do is relax, drink Teh-Tarik, and talk
about how easy it is to make money buying
properties now.
With our property landscape changing all of
the time, largely as a result of the influence of
global economic forces, savvy
investors/buyers have to keep up and realise
that everything is changing rapidly.
Here are three investment myths circulatingright now from property experts that annoy
me. Lets look at these myths, which are
perpetuated by so-called investment experts,
whose interests lie in selling dreams.
I believe these investment myths have kept
many ordinary people from creating wealth, or
even a comfortable retirement.
The great enemy of the truth is very often not
the lie deliberate, contrived, and dishonest
but the myth persistent, persuasive, and
unrealistic.
John F. Kennedy
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Myth 1: Expert Investment
Opinions/Comments in the Media Are
Always Right
Its puzzling why journalists often get buyingand investment advice from the very people
who have a vested interest in the market -
property developers, agencies, salesman,
investment companies etc.
The press tends to sensationalize
developments for the sake of creating news in
todays noisy media circus.
Lately, Ive heard some interesting media
comments from propertyexperts:
By 2014, projected prices would not differ
substantially; however, rent on investment
may provide a healthy gross yield, caveated
between four to six percent per year for
astute investors. (Expert with a large well-
known local property agency, marketing a
recently new launched condo)
On another recent new launch property:
The strong demand for XXX is reflective of
its premium location., which demonstrates
the value and potential price appreciation of
this locale and its surroundings. (Property
Developer who sells the project).
It is expected that the trend will continue in2013 with OCR prices likely to surpass 2012s
increment attaining close to 10 percent price
increment. (CEO of a large well-known local
property agency)
And again, the same CEO should be awarded
the years Oscar-award for Best Acting
Fortune Teller (He made similar euphoric
comments back in late 2007):
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Its almost a given that if you buy an EC
today and wait 10 years, you could make a
quarter of a million dollars in profit.
These experts made similar euphoric
comments in the media before the panic of
2008s Global Financial Crisis, right before
property prices plunged:
We expect the office sector to remain
resilient. Investment sentiment to remain
positive in 2008, given continued economicgrowth.
Prices unlikely to fall yet
Private residential property sector for 2008
will continue to perform well.
The price index for 2008 is predicted to grow
in the region of 15 to 18 per cent.
If you look back to the previous years, hardly
any (in fact none!) of these experts
predicted any financial crisis and property
downturns. Their predictions were always up
and positive!
Don't believe the fortune-telling media hype.
A delusion of rising property prices is that
prices will keep going up foreverand they
never do!
Myth 2: The Long-Term Capital Gains on
Your Investment Property Will
Compensate for the Fact You Bought at aHigh Price and Its Cash Flow is Negative,
Marginal or Even Non-Existent
I believe it is getting harder to justify the
dream of strong capital growth as during the
previous years, particularly with properties
bought in the higher price brackets. My view
is that in the coming years, with an already
mature and peaking Singapore economy,
property investors and home buyers who buy
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at a high price today, could be disappointed
by the capital growth of their properties in the
years ahead.
If you buy a property that has positive cash-
flow from day one, it doesnt matter whether
theres any capital gain. Why? Because rents
will rise over time and you can then use those
rents to pay down the principal on your loan,
and eventually you will own all or a large
percentage of the property outright. You couldstill get some capital gains, and youll be
miles ahead of the investor/buyer who is
betting solely on capital gains.
Over the years, property has gone up in value
everywhere. However, buying property at a
super inflated price is not a good idea. It willtake a long time for you to make money out of
that investment, if you ever do, and in the
meantime you will be in a risky situation if the
market goes down.
Myth 3: Property Speculators are
Investors
Do you buy lottery tickets as an investment?
The people who gamble in real estate lose
money all the time. The people who investin
real estate rarely do, if ever. Even if they do
lose money, most of the time its just a
temporary paper loss. In all the years Ive
owned property, Ive never lost money. I may
not have made all that I should have (Ive hadtenants not pay rent, damaged property,
etc.) but by making the right purchases up
front, theyve always produced a profit for
me, not to mention capital gains. The
difference, I invest in properties, meaning
I pick a property with good cash-flow.Dont confuse successwith investingeither.
There was a time, not long ago, where you
could buy a property and resell it for a profit a
month or year later.
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Just because you made money in a crazy
economy, doesnt mean you can make a
sustainable profit later. People who bought
Facebook, Enron, WorldCom, and waste
lands from Profitable Plots were not
investorsinvestors were the ones who did
their research and avoided them. You can
make money sometimes buying stupid
things, but that doesnt make you an investor.
Are You Wearing the Emperors NewClothes?
I hope not.
The Emperor had no clothes on but everyone
told him how fantastic he looked in all his
robes and crowns, only to realize the truthlater. Just because someone says so and
everyone is doing it doesn't make it true.
Unfortunately, the truth is usually unpleasant
and most people prefer to pay thousands to
listen to half-truths and untruths which make
them feel good.
For savvy investors, you should raise the
question: which other myths do I believe in
that keep me from achieving my financial
goals?
Be sure you KNOW what you believe in to be
true.
By guest contributor Gerald Tay, CEO of
CREI Academy Group, who exposes widely-
held property investment myths that have
proven highly ineffective in creating wealth,
and prevent a comfortable retirement for theordinary investor.
SINGAPORE PROPERTY WEEKLY I 85
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/7/30/2019 Singapore Property Weekly Issue 85
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SINGAPORE PROPERTY WEEKLY Issue 85
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Singapore Property This Week
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Residential
EC market may see review
The Forestville EC project was stopped from
selling its units after its launch, a sign that the
authorities are reviewing or revising
measures that will result in the developer
having to make changes to the proposed
development plan. It was launched for
balloting without URAs approval to sell. The
developer, Hao Yuan Investment, claimed
that there were no sales bookings but instead
Express of Interests for potential buyers and
that no cheques were collected. URA was
said to be concerned over the proposed size
of the penthouses in the development and
has yet to give approval to proposed changes
in the development plans before Forestvilles
launch. The Forestville plan includes 29
penthouses ranging from 1,550 sq ft to 2,756
sq ft. Large ECs (2,000 to 2,500 sq ft) are
often sold at lower psf prices which is
problematic since large units are not suitable
for ECs (given that the buyers usually have
higher incomes) especially since it is a form
of subsidised housing. Furthermore, a larger
proportion of such large units could potentially
push up the prices of normal units. Possible
measures that the authorities may introduce
include a cap on number of EC units
exceeding 2,000 sq ft in size and an extended
family income ceiling for ECs.
(Source: Business Times)
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Private home prices rose 1.8% in Q4 2012
The 1.8% increase in URA's overall private-
home price index in Q4 is the highest since
the 2% increase in Q2 2011, bringing the full-
year increase to 2.8%. This was largely due
to the increased prices of mass-market
homes, which was in turn a result of the high
resale prices of HDB flats. The OCR saw a
3.4% increase which could be due to the high
prices for projects near MRT stations or the
increase in prices of older completed projects.
The RCR saw a 0.9% increase while the CCR
saw a 0.8% increase. While the ABSD and
the cap on loan tenures have helped to
control the increase in prices, the low interest
rates and liquidity have led to muchinvestment demand. This, coupled with the
increased land prices, will also result in an
increase of private home prices.
Nevertheless, the lacklustre economy and the
increase in supply would help to control price
increases, resulting in an overall increase of
2-3% at most. Sales volume is also expected
to be no more than 20,000 units in 2013. An
estimated total of 21,600 units were sold inthe primary market last year, with another
12,566 units sold in the secondary market.
There were also an estimated 2,269 sub-sale
transactions in 2012. These figures (all
excluding ECs) are expected to increase
once all the caveats in Q4 are tallied.
(Source: Business Times)
HDB resale flat prices hit historical high in
2012
HDBs latest flash estimates Resale Price
Index (RPI) reflected a 2.5% increase to
202.9 in Q4 2012 from Q3 2012, a 6.6%
increase from 2011s figure. This is despite
the record number of 27,084 BTO flats and
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7,153 Sales of Balance flats launched in the
2012. This is attributed to the bias of the new
flat programme towards first-timers, leading
to demand for resale flats from non-first-
timers and first timers in urgent need ofhousing (since it takes three years for
completion). Meanwhile, HDB has announced
its intention to launch at least 23,000 BTO
flats, up from the earlier announcement of at
least 20,000. 3,346 such units will be
launched in January in Choa Chu Kang,Yishun, Hougang, Tampines, Kallang
Whampoa and Ang Mo Kio. The high prices
was attributed to the limited supply of resale
flats caused by the extension of the Minimum
Occupancy Period, the increase in the
number of BTO flats and ECs allocated tosecond-timers and the requirement that
private home owners sell their private
residences if they purchase HDB flats. The
high demand for resale flats as a result of
buyers fearing further increases in COVs
(median: $34,000 in Q4 2012) bringing
forward their purchases is also another factor.
Looking ahead, resale prices are expected to
increase by 4-8% in 2013 despite the
increased supply of BTO flats since the effect
will only be felt in H2 2013. Even then, prices
are unlikely to fall unless there is a recession.
(Source: Business Times)
Hao Yuan Investment optimistic about
reopening Forestville EC showroom
Hao Yuan Investment, the developer of the
Forestville EC, claimed that the closure of its
showroom until further notice was not due to
URAs instruction to not sell any units but wasfor "general maintenance work". However, it
also stated that even when the showroom
reopens, the units will only be available for
viewing but not for purchase.
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URA had stopped Hao Yuan from selling the
units as it was found to have launched the
project without having gotten URAs go-ahead
on proposed changes in the development
plans, in particular, the size of thepenthouses, which ranges from 1,550 sq ft to
2,756 sq ft. While Hao Yuan had launched the
project, sales were not booked but rather,
non-binding Expression of Interests were
signed instead. The developer also stated
that agents were told not to collect chequesand to return any cheque collected.
(Source: Business Times)
Kismis Lodge back on the collective sale
market
Kismis Lodge, a 64- unit walk-up-apartment
development which sits on a 70,283 sq ft site
located off Toh Tuck Road is back on the
market with an indicative pricing of at least
$90 million, compared to the earlier asking
price of $90-95 million. Zoned for "three-
storey mixed landed housing", the site can
potentially yield 43 strata terraces which can
fetch $3.5-4 million per unit, or othercombinations of landed housing subject to
approval. The site is expected to be fairly
popular given the limited supply of landed
residential site under the GLS. No
development charge is payable for the site
which tender closes on Jan 24 at 2.30pm.
(Source: Business Times)
Commercial
Industrial property prices to grow at a
more moderate pace
Despite the governmental measures such as
halving the maximum industrial land tenure to
30 years, and introducing restrictions on
subdivision in selected sites and requiring
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strata units to be at least 150 sq m, prices of
industrial properties continued to rise rapidly,
with the industrial property prices increasing
by 26.7% from Q1 Q3, and rents increasing
by 6% in the same period. The averagecapital values of ground and upper floor prime
freehold conventional factory space increased
by 15.7% and 19.5% to $699 psf and $636
psf respectively from Q1 to Q3 while the
average capital values of prime freehold
conventional warehouse space, ground andupper floor space grew by 8.4% and 10.1%
respectively in Q1 to Q3.
While the shorter tenure of GLS sites is
intended to make land more affordable for
industrialist to build their custom facilities, the
objective would not be achieved if the
developer succeeded in bidding for the site
and strata-subdivide the development to
attract investors instead of building facilities
more suited to industrial needs. This may
eventually lead to a lack of supply of suitable
premises which will cause rents to increase
while the unsuitable premises are rented out
for unauthorised uses or left vacant.
Sales volume rose 10% from 2,871 units last
year to 3,160 units in 2012, as a result of
increase in investment purchases from both
foreign and local investors, as well as an
increase in purchases by companies (10.5%
increase in 2012).
Looking ahead, the increase in industrial
property prices is expected to slow, as a
result of factories relocating overseas, the 16
million sq ft supply of industrial space to be
completed in 2013, though the marketliquidity will continue to ensure demand.
Industrial properties with attractive aspects
such as good locations, facilities and longer
tenures may see a price increase of 10-15%
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in 2013. Rents are also expect to increase by
3-5%.
(Source: Business Times)
Two-thirds of the 61 available NationalStadium hospitality suites sold
The 55,000-seater $1.33 billion Singapore
Sports Hub's National Stadium which will
open in April 2014 has sold two-thirds of the
61 released luxury hospitality suites. There
are a total of 62 such suites, one of which hasbeen set aside for VVIPs. The suites range
from 25 to 89 sq m and can accommodate
eight to 30 people each. There is a minimum
commitment of three years for the suites,
which annual fees are in the range of $72,000
to $272,000. Facilities and amenities include
in-suite catering, a members-only carpark and
priority event booking. New owners of these
suites include ANZ Singapore and DBS Bank.
Companies from the financial services,
construction and insurance industries make
up 40%, 15% and 10% of the owners of the
sold suites so far.
(Source: Business Times)
Freehold Paya Lebar industrial white site
on the collective sale market
20-unit Guang Ming Industrial Building which
sits on the 19,789 sq ft freehold white site in
Tai Seng Industrial Estate in Payar Lebar isasking for at least $58 million, or $837 psf
ppr. It has a 3.5 maximum GPR and a 70,000
sq ft GFA, including 20,000 sq ft of retail and
commercial space. It is likely to be popular
since it is located near Tai Seng MRT station
and the Ang Mo Kio, Toa Payoh and the East
Coast residential areas. The tender closes on
Feb 5.
(Source: Business Times)
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Tuas industrial plots saw much interest in
recent bidding
The 30-year leasehold 2.74-ha plot zoned for
Business 2 development at Buroh Street
attracted seven bids, with the top bid of $82.1
million or $111.35 psf ppr from Capital
Development and ZACD Investments. This is
within the expected five to nine bids of
between $40 to $105 psf ppr. The two plots at
Tuas South Street 6 are both 22.5 year
leasehold 0.86-ha plots. Plot 30 attracted 14
bids with the highest of $6.6 million or $70.99
psf ppr from Koh Brothers Building & Civil
Engineering Contractor while plot 32 attracted
18 bids with the top bid of $6.7 million or
$70.75 psf ppr from SH Design & Build.
(Source: Business Times)
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Non-Landed Residential Resale Property Transactions for the Week of Dec 19 Dec 25
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
1 MARINA BAY RESIDENCES 1,625 4,800,000 2,953 99
3 TWIN REGENCY 1,442 2,307,200 1,600 FH
3 RIVER PLACE 1,281 1,830,000 1,429 99
4 CARIBBEAN AT KEPPEL BAY 893 1,510,000 1,690 99
5 CARABELLE 947 1,200,000 1,267 956
5 HERITAGE VIEW 1,324 1,400,000 1,057 99
5 BLUE HORIZON 1,001 1,045,000 1,044 99
5 VARSITY PARK CONDOMINIUM 1,615 1,620,000 1,003 99
8KERRISDALE
990 1,200,000 1,212 999 LEONIE PARC VIEW 2,013 5,000,000 2,484 FH
9 LUMA 1,173 2,300,000 1,960 FH
9 GAMBIER COURT 1,485 1,900,000 1,279 99
10 FOUR SEASONS PARK 2,874 8,300,000 2,888 FH
10 THE MONTANA 700 1,160,000 1,658 FH
10 VIZ AT HOLLAND 1,259 2,010,000 1,596 FH
10 DUET 1,744 2,700,000 1,548 FH
11 PARK INFINIA AT WEE NAM 850 1,700,000 1,999 FH
11 NINETEEN SHELFORD ROAD 915 1,326,000 1,449 FH11 M21 1,066 1,525,000 1,431 FH
11 GLOUCESTER MANSIONS 2,045 2,863,000 1,400 FH
11 PASADENA 1,389 1,710,000 1,231 FH
11 WATTEN ESTATE CONDOMINIUM 2,594 2,900,000 1,118 FH
12 THE ARTE 1,873 2,520,000 1,345 FH
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
12 ECOVILLE 1,184 1,418,000 1,198 FH
13 CASA MEYA 1,561 1 ,330,000 852 FH
14 DAKOTA RESIDENCES 1,292 1,848,000 1,431 99
14 WINDY HEIGHTS 2,476 2 ,300,000 929 FH
15 ONE AMBER 1,335 1,888,888 1,415 FH
15 TEMBELING RESIDENCE 1,023 1,300,000 1,271 FH
15 WATER PLACE 1,216 1,540,000 1,266 99
15 COSTA RHU 1,399 1,480,000 1,058 99
15BUTTERWORTH 8
1,658 1,750,000 1,056 FH15 COSTA RHU 1,399 1,426,980 1,020 99
15 SUNSHINE RESIDENCE 1,249 1 ,200,000 961 FH
15 ESPIRA RESIDENCE 2,067 1 ,600,000 774 FH
16 RIVIERA RESIDENCES 1,281 1,588,000 1,240 FH
16 THE TROPIC GARDENS 1,249 1,335,000 1,069 FH
17 AZALEA PARK CONDOMINIUM 1,313 1,030,000 784 999
19 AROOZOO CENTRE 1,206 1,500,000 1,244 FH
19 YI KAI COURT 1,055 970,000 920 FH
19 THE QUARTZ 1,518 1,300,000 857 9919 REGENTVILLE 1,152 928,000 806 99
19 CASA ROSA 2,174 1,590,000 731 99
21 CLEMENTI PARK 818 1,100,000 1,345 FH
21 SUMMERHILL 1,206 1,350,000 1,120 FH
21 SOUTHAVEN II 1,744 1,650,000 946 999
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NOTE: This data only covers non-landed residential resale property
transactions with caveats lodged with the Singapore LandAuthority. Typically, caveats are lodged at least 2-3 weeks after apurchaser signs an OTP, hence the lagged nature of the data.
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
23 GLENDALE PARK 1,033 1,055,000 1,021 FH
23 CHANTILLY RISE 1,206 1,230,000 1,020 FH
23 HILLVIEW REGENCY 1,119 1,100,000 983 99
23 YEWTEE RESIDENCES 1,184 1,100,000 929 99
23 HILLVIEW REGENCY 1,119 1,025,000 916 99
26 CASTLE GREEN 947 880,000 929 99
27 ORCHID PARK CONDOMINIUM 1,206 890,000 738 99
27 ORCHID PARK CONDOMINIUM 1,152 810,000 703 99
http://www.propwise.sg/vis2013