Issue 71

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

CONTENTS
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Singapore Property Prices Continue to Defy Gravity in 3Q2012

FROM THE

EDITOR

Welcome to the 71st edition of the Singapore Property Weekly. Hope you like it!

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Singapore Property News This Week

Resale Property Transactions (September 12 September 18)

Mr. Propwise

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SINGAPORE PROPERTY WEEKLY Issue 71

Singapore Property Prices Continue to Defy Gravity in 3Q2012

By Mr. Propwise From the URAs recent flash estimate of the 3Q2012 Private Residential Property Price Index (PPI), property prices have managed to defy gravity and even managed to register a slight increase in the quarter. The 3Q2012 URA PPI flash estimate hit 208 and was up 0.6% on a quarter-on-quarter basis. At the current levels the price index is 17.2% above the previous 2Q2008 peak, and 14.7% above the previous all time high in 2Q1996.

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SINGAPORE PROPERTY WEEKLY Issue 71 Reserves QE3 have outweighed concern over the slowing economy, the worrying global economic situation especially with the troubles in Europe and weak growth in the US, and the dampening effect of multiple rounds of government measures. The rate of price growth differed across the various market segments. In the Core Central Region, prices of non-landed private residential properties increased by 0.2% versus an increase of 0.6% in the previous quarter. Prices increased by 0.7% in the Rest of Central Region (versus a 0.4% increase in the previous quarter), and increased by 1.0% in the Outside Central Region, an acceleration fro the 0.5% increase in the previous quarter. Do note that the URAs flash estimates are compiled based on transaction prices given in caveats lodged during the first ten weeks
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Figure 1 URA Property Price Index (based on 3Q2012 flash estimate)

This estimated increase of 0.6% comes after last quarters 0.4% quarter-on-quarter increase, implying the pace of price growth is accelerating after the 0.1% fall in 1Q2011. It appears that the strength of property demand and boost to sentiment from the U.S. Federal
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SINGAPORE PROPERTY WEEKLY Issue 71 of the quarter. The actual second quarter statistics will be updated four weeks later, and past data have shown that the difference could be significant, especially when the change is small. Will property prices go up or down? At the beginning of the year, most analysts were expecting a fall in prices, and were divided on whether we would see a sharp decline as during the 1997-1998 Asian Crisis and 2008-2009 Financial Crisis, or whether it would be a more gradual decline as we saw during the 2000-2004 Post-Dotcom Bubble and SARs era. Funnily, year-to-date, the URA PPI is actually UP 0.9%, an unexpected outcome versus the initial predictions of a 5% to 15% decline in prices predicted by most analysts. I believe that we will only see significant levels of price declines if there is an external crisis to cause a sense of panic, which we had in each of the previous three declines (e.g. Asian Crisis, Dotcom Bubble, Global Financial Crisis). This is because the abundant global liquidity situation could support Singapore property prices.
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Figure 2 Change in Property Price Index (based on 3Q2012 flash estimate)

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SINGAPORE PROPERTY WEEKLY Issue 71 Led by the European Central Bank and Fed, governments around the world have been easing monetary policy and keeping interest rates low to prevent another crisis triggered by too much debt. the Straits Times Index (STI) has recovered to 3,060 points as of end September, and is up 6% versus the last quarter. If you believe that the stock market is a leading indicator for the property market, then we could see continued support for property prices in the coming quarters. More Property Cooling Measures? The sales volume of new residential homes by developers fell by 26% versus the previous month in August, while the secondary market rose by 14%. This suggests that the prices of new homes are likely under some pressure, but even if the prices of new launches correct, the strengthening prices of resale units could take up the slack. Figure 3 Straits Times Index (till Sep 30, 2012) This continued resilience of property prices despite the previous five rounds of government measures increases the
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Since reaching a low of 2,738 points in May,

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SINGAPORE PROPERTY WEEKLY Issue 71 probability of a sixth round of property measures to further cool sentiment. This is especially so given that the harsh Additional Buyers Stamp Duty (ABSD) put in place in December 2011 seems to have not dampened sentiment that much. It is not clear right now whether a potential sixth round of cooling measures would comprise merely of refinements to the current measures (e.g. increase ABSD?) or be something brand new. Will property prices keep going up? I believe that they cannot continue to defy gravity forever, and that investors looking to buy property in this market should continue to be cautious. By Mr. Propwise, author of Timing the Property Market.

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SINGAPORE PROPERTY WEEKLY Issue 71

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SINGAPORE PROPERTY WEEKLY Issue 71

Singapore Property This Week

Residential
Heron Bay attracts 1,664 applicants for 394 units The Heron Bay EC project in Upper Serangoon View attracted a total 1,664 applications for its 394 units leading to a subscription rate of 4.2 applicants for each unit. Its appeal lies in its luxury features such as a six-metre jaccuzzi pool or a garden pond, e European household appliances, free fibre broadband service for a year, a basement carpark and a swimming pool with hydroactivated water. The average price of a unit is $715-720 psf with smallest 775 sq ft at $560,000 and a 2,841 sq ft five-bedroom penthouse at $1.5-1.6 million. Balloting will be
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conducted in about two weeks with successful applicants being able to book their units from Oct 26. (Source: Business Times) Number of local purchase of luxury homes increase in 2012 Singaporeans have bought a total of 46 luxury homes in 2012 so far, compared to 40 homes in 2011, with a total of 31 bought in Q2 2012 compared to 11 bought in Q2 2011. The proportion of Singaporean buyers also increased from 19% in 2011 to 35% in 2012; the foreign buyers bought 49 such homes, making up around 37% of the sales. The remaining 27% are from Singapore

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SINGAPORE PROPERTY WEEKLY Issue 71 permanent residents and companies who purchased 32 and four luxury homes respectively. The prices have also stabilised in Q3 2012 at the average of $2,621 psf, compared to the 2.0% decline over the past three quarters, reflecting an underlying demand from buyers waiting for more attractive prices. The increase in price is driven by landed homes, which saw a 1.2% increase in average resale price in prime districts and a 2.4% increase in average resale price in the suburbs. Prices of freehold non-landed homes in both the prime districts and the suburban areas also increased by 1.0% in Q3. (Source: Business Times) Sengkang, Pasir Ris EC sites to attract moderate bids The 99-year leasehold 151,779.6 sq ft EC site at Sengkang West Way/Fernvale Link has a
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455,338.8 sq ft maximum GFA and can potentially yield 420 units. It could potentially draw four to eight bidders; with a $270-$330 psf ppr top bid since there HDB estates, H20 Residences and other facilities, including the Aerospace Park and The Seletar Mall at Fernvale LRT Station in the vicinity will be completed in the next two years. The site is likely to face competition from new launches which boasts improved amenities and facilities in the Punggol and Sengkang areas. The Pasir Ris Drive 3/Pasir Ris Rise 297,729.5 sq ft EC site with a 625,231.9 sq ft maximum GFA that can potentially support 590 units is expected to face competition from neighbouring condominium projects that have a total of 385 unsold units as well as the increase in EC land supply. It is expected to attract five to seven bidders with a top bid of $250-$336 psf ppr.
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SINGAPORE PROPERTY WEEKLY Issue 71 Some believed that the EC market may be reaching saturation point, thereby leading to more moderate bids for the newly launched sites while others believe that there are still interest in ECs given the results in launches in H1 2012. Possible other reasons for cautious biddings are the increment of the minimum occupation period (MOP) for HDB flats which limits the number of HDB upgraders and the BTO and DBSS flats. Also available on the reserve list is a 99-year leasehold 69,981.5 sq ft site at Alexandra View which has a 342,916.3 sq ft maximum GFA which can yield some 375 homes. It can potentially draw four to six bidders, with a $900-$930 psf ppr top bid since it is located near central downtown. Tender for the EC sites at Sengkang and Pasir Ris will close at 12 noon on Nov 8 and Nov 22, respectively.
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(Source: Business Times) HDB to increase BTO supply to 27,000 HDB is planning to increase the supply of BTO flats in 2012 from 25,000 to 27,000 to control the price increase and meet the demand. In the most recent launch, there will be a total of 7,055 flats will be launched under the joint BTO and Sale of Balance Flats (SBF) exercises, with another 6,400 to be launched in November. The current launch includes seven BTO projects offering 3,727 flats in two non-mature towns (Choa Chu Kang and Woodlands) and three mature towns (Ang Mo Kio, Kallang Whampoa, and Tampines). A five-room flat in Keat Hong Quad in Choa Chu Kang, a non-mature estate, will start from $313,000 (excluding grants) and $303,000 (inclusive of grants) whereas a five-room flat at Tampines GreenLace in Tampines, a mature town,
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SINGAPORE PROPERTY WEEKLY Issue 71 will start from $384,000 (excluding grants), and $374,000 (including grants). 95% and 85% of the BTO flat supply excluding Studio Apartments (SA) in mature towns and in nonmature towns respectively will be reserved for first-timers. The demand for flats in Choa Chu Kang is likely to be lower than that of flats in mature towns. 3,328 balance flats in 11 non-mature and 13 mature towns are also offered under the SBF exercise, including 818 SAs, 697 two-room flats, 302 three-room flats, and 1,016 fourroom flats 471 five-room flats, and 24 executive flats. As with the BTO launch, 95% of the supply (excluding SAs) is reserved for first-timers. 23% of these have been completed while the remaining 77% are still under construction, with some being BTOs to be completed in 2014 or 2015, which reflects the governments intention to meet demands. However, selling BTO flats under SBF
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launches also suggests that some flats in BTO launches in certain towns were not sold. Applications for flats launched under both exercises close on Oct 3, 2012. (Source: Business Times) Commercial Property investment sales hit $8.5b in Q3

Investment sales of property hit $8.5 billion in Q3 so far, a 13% increase from $7.5 billion in Q2. Almost $6.3 billion of the sales in Q3 were from the private sector though the sales of commercial and industrial properties have decreased by 38% and 15% respectively from Q2 as a result of the eurozone crisis, the slowing Chinese economy and the bid-ask gap. Most buyers were also local since the current global economy is not conducive for investments from foreign companies and funds.
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SINGAPORE PROPERTY WEEKLY Issue 71 While sales in the residential sector accounted for $3.52 billion in Q3, a 13% fall from Q2s $4.04 billion, the value of residential collective sales doubled from $500 million in Q2 to $1.02 billion in Q3. The sales of hospitality sector assets hit almost $2.7 billion, the reason for the 13% increase. The investment sales of property are expected to hit $27-28 billion in 2012 compared to the $30 billion in 2011, and fall further to $25-27 billion in 2013 as the Western economies may not have recovered and the Chinese economy is slowing down. Another factor could be the bid-ask gap. However, with the QE3, this situation may improve. (Source: Business Times) Office rents in CBD falls but rents in fringe stable In Q3 2012, the gross average monthly rentals in CBD decreased by around 4% in Q3 from Q2 but the rentals in the CBD fringe
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remained fairly stable, a trend likely to continue for the next six to 12 months. The more diversified tenant profile in the fringe areas probably accounted for its relative stability unlike the tenant profile in CBD where over 50% are in banking and finance which is the most affected by the eurozone crisis. One other reason is that the relative fewer supply of new offices in the fringe areas compared to supply in the CBD, which accounted 70% of the available 240,000 sq ft of shadow space. A total of 1.5 million sq ft net increase in office demand is estimated for the whole of 2012, compared to 2.3 million sq ft in 2011, with 570,487 sq ft for Q1 2012, and 355,209 sq ft for Q2 and an estimated 323,000 sq ft for Q3 and 258,000 sq ft in Q4. Supply is also expected to increase from 1.7 million sq ft in 2012 to 2.4 million sq ft in 2013.

(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 71 Four industrial properties in the market The first is a terrace building with a 30,570 sq ft built-in area at 1 Kaki Bukit Place. It sits on a 11,950 sq ft land which 60-year lease began on Nov 20, 1995. It is asking for $11.95 million or $390 psf on the built-up area and $1,000 psf on the land area with vacant possession. The second is the Global Innovation Centre industrial building at 152 Ubi Avenue 4 which sits on a 49,187 sq ft land with a gross floor area of 98,246 sq ft. The tenure of the property is 30 years, with an option to renew it for another 30 with effect from Feb 1, 1997. It is asking for $60 million or $611 psf ppr with vacant possession. Both 1 Kaki Bukit Place and Global Innovation Centre are available via private treaty.
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The third is a standard single-storey factory with a mezzanine level along 42 Changi South Street 1, which has a 51,204 sq ft GFA and 30-year tenure with an option to renew it for another 30 with effect from July 1, 1996. It is asking for $11 million or $215 psf ppr. The current lessee is exploring a sale and leaseback of the building. The fourth is the Pak Chong Building at 78 Playfair Road which sits on a 25,782 sq ft freehold land. It is asking for $36 million or $559 psf ppr. The building comprises seven units with sizes ranging from 4,768.4 sq ft to 6,835 sq ft. This property is expected to be popular given its proximity to the Tai Seng MRT station on the Circle Line (250m away) and the limited supply of freehold industrial sites. The expression of interest for 42 Changi South Street 1 and the tender for Pak Chong
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SINGAPORE PROPERTY WEEKLY Issue 71 Building will close on Oct 2 and 3pm on Oct 24 respectively. (Source: Business Times) Yishun industrial site attracts $31.69m top bid The 30-year leasehold 11,719.9 sq m (126,152 sq ft) industrial site at Yishun Avenue 9 attracted a top bid of $31.69 million or $100.48 psf ppr from Soilbuild Group Holdings, slightly above market expectations of $50-70 psf ppr. It has a maximum permissible gross plot ratio of 2.5 and an expected breakeven price of $265-290 psf ppr. The high bids are not very surprising since despite the reduction of land leases to 30 years, there is much liquidity in the market. (Source: Business Times) 3 industrial sites launched for sale by tender The first is a 30-year-leasehold 0.75ha site in Serangoon North. It has a 2.5 plot ratio and is zoned for Business 1 development.
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Retail rents in Orchard Road in decline

The prime retail rents in Orchard Road continued their decline in Q3 2012 to $37.66 psf per month in Q3 2012 as a result of declining retail sales and visitor arrivals. This decline might have been worse had there not been healthy leasing activity among food and beverage operators and the entry of new retail players. However, suburban prime rents remained stable at $28.20 psf per month since Q3 2011. To compete with suburban malls, some malls in Orchard Road such as The Heeren, Shaw Centre and Pacific Plaza are being revamped. Retail rents are expected to be on the rebound by H2 2013 when the global economy improves. (Source: Business Times)
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SINGAPORE PROPERTY WEEKLY Issue 71 It is expected to draw five to eight bids with the top bid at $100-$150 psf ppr given its location within a cluster of established industrial and housing estates. The remaining two plots of land are in Tuas South Street 8. They are zoned for Business 2. Each of has a tenure of 22 years and eight months, a 0.3ha site area and a 1.0 plot ratio. They will likely attract fewer than 10 bids with a top bid of $45-$70 psf ppr. The tender for all three sites will close on Nov 23 at 11am. (Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 71

Non-Landed Residential Resale Property Transactions for the Week of Sep 12 Sep 18
Postal District 1 1 2 2 3 3 4 4 4 5 5 5 5 7 8 8 8 8 8 8 9 9 9 9 9 Project Name THE SAIL @ MARINA BAY EMERALD GARDEN ICON CHINATOWN PLAZA THE REGENCY AT TIONG BAHRU THE ANCHORAGE CARIBBEAN AT KEPPEL BAY CARIBBEAN AT KEPPEL BAY THE PEARL @ MOUNT FABER DOVER PARKVIEW BLUE HORIZON PARK WEST PARK WEST SOUTHBANK CITY SQUARE RESIDENCES CITY SQUARE RESIDENCES CITY SQUARE RESIDENCES TYRWHITT 139 THE MERLOT KENTISH COURT HELIOS RESIDENCES HELIOS RESIDENCES ILLUMINAIRE ON DEVONSHIRE RIVERGATE THE EDGE ON CAIRNHILL Area (sqft) 1,647 1,066 904 1,711 1,270 1,485 840 1,281 1,389 936 926 915 1,249 1,313 861 840 1,206 517 1,098 1,055 1,668 1,668 441 2,077 2,142 Transacted Price ($) 3,500,000 1,650,000 1,582,000 1,770,000 1,900,000 1,700,000 1,485,000 1,900,000 1,508,000 1,050,000 980,000 828,000 1,075,000 2,150,000 1,450,000 1,400,000 1,780,000 728,000 1,200,000 1,000,000 5,857,900 5,788,700 1,065,000 4,300,000 4,100,000 Price Tenure ($ psf) 2,125 99 1,548 999 1,750 99 1,034 FH 1,496 FH 1,144 FH 1,769 99 1,483 99 1,086 99 1,121 99 1,059 99 905 99 861 99 1,637 99 1,684 FH 1,667 FH 1,476 FH 1,409 FH 1,093 FH 948 99 3,511 FH 3,470 FH 2,413 FH 2,070 FH 1,914 FH Postal District 9 9 9 9 9 9 9 9 10 10 10 10 10 11 11 11 11 12 12 12 12 12 13 13 14 Project Name WATERMARK ROBERTSON QUAY WATERMARK ROBERTSON QUAY PARC SOPHIA 2 RVG GRANGE HEIGHTS ASPEN HEIGHTS EURO-ASIA COURT EURO-ASIA COURT ST MARTIN RESIDENCE STEVENS COURT THE HERMITAGE PINEWOOD GARDENS LEEDON 2 18 SHELFORD STRATA HILLCREST ARCADIA HILLCREST ARCADIA CITY REGENCY TREVISTA OLEANDER TOWERS THE CALLISTA SUMMER GREEN PLATINUM EDGE CASA MEYA NICOLE GREEN Area (sqft) 947 1,033 732 926 1,905 1,324 1,066 1,066 603 4,833 850 1,625 1,206 1,873 840 1,421 1,798 484 1,098 893 1,141 1,292 797 1,195 1,270 Transacted Price ($) 1,800,000 1,930,000 1,300,000 1,550,000 2,980,000 2,030,000 1,600,000 1,480,000 1,500,000 9,000,000 1,550,000 2,800,000 1,700,000 3,300,000 1,280,000 1,350,000 1,654,000 658,000 1,485,000 970,000 1,198,000 1,350,000 1,000,000 1,420,000 1,200,000 Price Tenure ($ psf) 1,900 FH 1,868 FH 1,776 FH 1,674 FH 1,564 FH 1,533 999 1,501 FH 1,389 FH 2,488 FH 1,862 FH 1,823 FH 1,723 FH 1,410 FH 1,762 FH 1,525 FH 950 99 920 99 1,358 FH 1,353 99 1,086 99 1,050 999 1,045 FH 1,255 FH 1,188 FH 945 FH

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SINGAPORE PROPERTY WEEKLY Issue 71

Postal District 14 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 16 16 16 16 17 17 17 17 18 18 Project Name SIMSVILLE THE SEA VIEW THE BELVEDERE THE MAKENA PEBBLE BAY FINLAND GARDENS SANTA FE MANSIONS WATER PLACE CASUARINA COVE COSTA RHU AMBER POINT SPRING @ LANGSAT EMERY POINT BUTTERWORTH VIEW COSTA RHU COSTA RHU SPRINGVALE KATONG APARTMENTS COSTA DEL SOL COSTA DEL SOL IDYLLIC EAST STRATFORD COURT ESTELLA GARDENS FERRARIA PARK CONDOMINIUM BALLOTA PARK CONDOMINIUM LOYANG VALLEY THE TROPICA THE TROPICA Area (sqft) 969 1,410 1,238 1,615 6,114 1,475 1,076 1,216 1,593 1,345 1,690 893 1,324 1,195 1,399 2,056 1,335 1,378 1,475 1,345 1,130 1,507 657 1,324 1,485 1,496 1,238 1,227 Transacted Price ($) 890,000 2,256,000 1,850,000 2,260,000 8,050,000 1,850,000 1,303,000 1,400,000 1,785,000 1,455,000 1,800,000 950,000 1,400,000 1,250,000 1,460,000 2,138,240 1,350,000 1,280,000 2,000,000 1,535,000 1,200,000 1,250,000 680,000 1,295,000 1,113,500 1,000,000 1,050,000 1,040,000 Price Tenure ($ psf) 919 99 1,600 FH 1,495 FH 1,400 FH 1,317 99 1,255 FH 1,211 FH 1,151 99 1,120 99 1,081 99 1,065 FH 1,063 FH 1,057 FH 1,046 FH 1,043 99 1,040 99 1,011 FH 929 FH 1,356 99 1,141 99 1,062 FH 829 99 1,036 FH 978 FH 750 FH 668 99 848 99 848 99 Postal District 18 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 21 21 21 21 21 22 22 22 22 22 Project Name EASTPOINT GREEN TANGERINE GROVE COMPASS HEIGHTS FIORENZA THE QUARTZ THE SPRINGBLOOM CHUAN PARK RIO VISTA REGENTVILLE REGENTVILLE RIO VISTA COUNTRY GRANDEUR FABER GARDEN CONDOMINIUM THE GARDENS AT BISHAN THE GARDENS AT BISHAN THOMSON IMPERIAL COURT GRANDEUR 8 FAR HORIZON GARDENS THE CASCADIA THE STERLING MAPLEWOODS HUME PARK I PINE GROVE THE LAKESHORE THE LAKESHORE PARC OASIS PARC VISTA THE MAYFAIR Area (sqft) 1,130 926 689 1,442 1,044 1,119 1,173 1,055 1,152 1,152 1,055 1,442 2,228 1,152 1,152 1,507 1,593 1,152 883 1,894 1,378 1,345 1,668 1,109 1,927 1,227 1,055 1,227 Transacted Price ($) 920,000 1,000,000 727,500 1,500,000 1,060,000 1,128,000 1,173,000 957,000 960,000 960,000 875,000 1,630,000 2,300,000 1,172,000 1,170,000 1,280,000 1,330,000 875,000 1,436,000 2,700,000 1,700,000 1,295,000 1,360,000 1,180,000 1,830,000 1,050,000 900,000 1,018,000 Price Tenure ($ psf) 814 99 1,080 FH 1,056 99 1,040 FH 1,015 99 1,008 99 1,000 99 907 99 834 99 834 99 829 99 1,130 FH 1,032 FH 1,018 99 1,016 99 849 FH 835 99 760 99 1,627 FH 1,425 FH 1,234 FH 962 FH 815 99 1,064 99 950 99 856 99 853 99 830 99

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SINGAPORE PROPERTY WEEKLY Issue 71

Postal District 22 23 23 23 23 23 23 23 26 26 27 27 27 Project Name PARC VISTA HILLINGTON GREEN CASHEW HEIGHTS CONDOMINIUM GUILIN VIEW HILLVIEW REGENCY THE LINEAR CHANTILLY RISE PALM GARDENS SEASONS PARK FOREST HILLS CONDOMINIUM ORCHID PARK CONDOMINIUM ORCHID PARK CONDOMINIUM YISHUN EMERALD Area (sqft) 1,259 990 1,227 1,281 1,119 1,421 1,798 1,206 1,249 1,227 872 958 1,023 Transacted Price Tenure Price ($) ($ psf) 975,000 774 99 1,060,000 1,070 999 1,138,000 927 999 1,060,000 828 99 885,000 791 99 1,100,000 774 999 1,350,000 751 FH 875,000 726 99 1,080,000 865 99 980,000 799 99 760,000 872 99 740,000 772 99 770,000 753 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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