Issue 123

Copyright 2011-2013 www.Propwise.sg. All Rights Reserved.

CONTENTS
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The Hong Kong-ization of Singapore Property
Singapore Property News This Week Resale Property Transactions (September 11 September 17)

FROM THE

EDITOR

Welcome to the 123th edition of the Singapore Property Weekly. Hope you like it!

Mr. Propwise

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SINGAPORE PROPERTY WEEKLY Issue 123

The Hong Kong-ization of Singapore Property

By Mr. Propwise After slow sales at some projects in early September, market commentators were

pondering if the property market was starting

to buckle under the weight of the Total Debt Servicing Ratio (TDSR) framework. It appears that this pessimism was premature, with developers racking up good sales at

some projects by going back to their favorite

playbook smaller, cheaper units.

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SINGAPORE PROPERTY WEEKLY Issue 123 Sky Vue sells 60% of the project on launch day per square foot this translates to a sellthrough ratio of around 80% of the units launched and 60% of the entire project. Most of the units sold were small one- and twobedroom units, with the average price of a one-bedroom units around $750,000 while that of a two-bedroom units being $933,000. The developers, CapitaLand and Mitsubishi Estate Asia, managed to keep the total cost of the units under the magical $1 million (and thus appeal to mass market investors and upgraders) by shrinking the size of the units. One-bedroom units ranged in size from 484 to 592 square feet, versus next door Sky Habitats 635 to 958 square feet for onebedroom units. Sky Vues two-bedroom units ranged from 678 to 915 square feet in size versus the 721 to 1485 square feet of Sky Habitats.

Artists impression of Sky Vue

Sky Vue, a 694-unit 99-year leasehold residential project near Bishan MRT, reportedly sold 410 of the 505 units released on its first day, at an average price of $1,500

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SINGAPORE PROPERTY WEEKLY Issue 123 While CapitaLands ex-CEO had famously called shoebox units almost inhuman, new management seems to have reversed course, with the smallest units at Sky Vue now breaking below the 500 square feet shoebox barrier. But its just business. Sky Habitat, with larger unit sizes and a higher per square foot price, has only sold ~30% of its units despite being launched over a year ago. Clearly, total unit cost and hence affordability is a key factor to drive sales, even more so now given the introduction of the TDSR. CapitaLand is just responding to market forces. Hong Kong-ization property of Singapore a redefinition of what a bedroom stands for. Whereas in the past a bedroom referred to a room that was big enough to comfortably fit a queen-sized bed, two side tables and a wardrobe, bedrooms in some projects cannot even fit a standard-sized double bed. With property prices rising faster than incomes in recent years, and the governments cooling measures and debt curbs constraining affordability, this Hong Kong-ization of Singapore property has become an inevitable trend as developers design units that people are willing and able to buy (but perhaps not willing to live in), while propping up their sales and margins. I dont know if youve seen a Hong Kong apartment before, but I once visited one where you could only open the bedroom door halfway as it was blocked by the single bed in the room.
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Sky Vue is just the latest example of a trend weve been seeing in new developments over the past few years the shrinking of flats and
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SINGAPORE PROPERTY WEEKLY Issue 123 And there was nothing else that could fit into the room just the single bed. And perhaps youve heard of the toilets so small that you could only enter it by reversing in.

Caveat Emptor
For buyers, I would caution you to see the actual property before making any purchase decision. Properties are no longer comparable just by looking at the number of bedrooms, or even the Gross Floor Area. A three-bedroom apartment can range from less than 1,000 square feet to close to 2,000 square feet. The mix of bay windows, balconies, air-con ledges and PES space in a unit could drastically alter how big two different properties feel and the useable area, even if they are of the same size. For people who buy properties after looking at an ingeniously-designed show flat or off the plan, well, good luck.
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SINGAPORE PROPERTY WEEKLY Issue 123

Singapore Property This Week

Residential
Residential sector most hit by TDSR Following the introduction of the TDSR framework in June, demand in all segments of the property market sank in July. According to property consultancy CBRE, residential deals were hit the hardest with a decrease of 56.6 percent, while transactions of strata industrial and commercial units went down by 20.9 percent and 31 percent respectively from June. Transactions for commercial units were supported by a relatively more resilient resale market. New sales of private homes by developers decreased by 73.3 percent to 482 in July compared with 1,806 in June. Resale
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private homes in July fell 14.3 percent to 539 based on caveats lodged. The number of strata units developers sold in the commercial segment went down by 57.6 percent to only 42, compared with 99 of June. Developers strata sales in the industrial segment also fell 32.3 percent, with resales falling 19.7 percent to 118 units in June. (Source: Business Times) Sideline income for property squeezed by cooling measures agents

After their bread-and-butter margins were affected by cooling measures, a small proportion of real estate agents are witnessing the disappearance of their sideline
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SINGAPORE PROPERTY WEEKLY Issue 123 income which is by dabbling in property investments themselves. According to the Council for Estate Agencies, there are 31,040 registered property salespersons as of Jan 1, 2013. The number of agents who invest in local properties is reported to be about 3 percent of the total number of buyers. (Source: Business Times) Property investment seminars on CEA radar As more and more property investors trying to circumvent the successive rounds of cooling measures attend seminars promising to teach buyers to buy property with no cash outlay or loopholes to owning multiple properties in recent months, property experts urged that these seminars be regulated by the authorities. According to Mr. Mohamed Ismail, PropNex Realty chief executive, such
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unregulated claims may be damaging to the industrys reputation and consumer protection, especially with the TDSR, and as more Singaporeans are looking for foreign properties to invest in. (Source: Business Times) Commercial Reit flotations bolsters investment sales Q3 property

Q3 property investment sales big-ticket transactions of at least $10 million have reached $13 billion with $9.3 billion from deals originating from the private sector. This quarters sale doubles the $6.4 billion of Q2 and is the strongest showing since the $8.7 billion of Q3 in 2007. The sale has been supported by three real estate investment trust flotations with nearly $5.7 billion in asset

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SINGAPORE PROPERTY WEEKLY Issue 123 sales, two government land sales sites of $2.35 billion at Telok Ayer Street and Yishun, and the sale of Grand Park Orchard hotel to Bright Ruby Resources for $1.16 billion. Due to the TDSR framework, the private-sector deals have decreased from 90 in Q2 to only 58 this quarter. Savills forecasts that investment sales would be $2-3 billion in the October-December period, which will take the full-year figure to $27-28 billion. (Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 123

Non-Landed Residential Resale Property Transactions for the Week of Sep 11 Sep 17
Postal District 1 2 9 9 9 9 10 10 10 10 10 11 11 11 11 12 14 14 15 15 15 15 15 15 15 Area Transacted Price Tenure (sqft) Price ($) ($ psf) 667 1,280,000 1,918 99 1,119 2,001,000 1,787 99 1,733 3,340,000 1,927 FH 1,432 2,310,000 1,614 FH 1,432 2,300,000 1,607 FH 1,195 1,600,000 1,339 FH 3,649 6,900,000 1,891 FH 1,259 2,100,000 1,667 FH 1,109 1,755,000 1,583 FH 2,551 3,650,000 1,431 FH 990 1,200,000 1,212 99 657 1,000,000 1,523 FH 710 1,030,000 1,450 FH 926 1,260,000 1,361 99 1,679 1,930,000 1,149 999 1,087 1,065,000 980 FH 915 970,000 1,060 FH 1,302 1,160,000 891 99 1,647 3,000,000 1,822 FH 2,745 4,350,000 1,585 99 1,894 2,940,000 1,552 99 1,259 1,940,000 1,540 FH 1,345 2,030,000 1,509 FH 1,119 1,360,000 1,215 99 1,109 1,308,000 1,180 FH

Project Name THE SAIL @ MARINA BAY ICON THE IMPERIAL THE BAYRON THE BAYRON TRIBECA REGENCY PARK VIZ AT HOLLAND SPANISH VILLAGE HOLLAND PEAK TANGLIN REGENCY GLOUCESTER MANSIONS NOVENA HILL CHANCERY COURT LA SUISSE ROCCA BALESTIER CITY PLAZA THE ALCOVE THE SEA VIEW PEBBLE BAY PEBBLE BAY ONE AMBER THE ESTA SANCTUARY GREEN IDYLLIC RESIDENCES

Postal District 15 15 15 16 16 17 18 19 21 21 21 22 22 23 23 23 23 23 23 26

Project Name CHELSEA LODGE COSTA RHU DUNMAN VIEW EAST MEADOWS THE BAYSHORE THE GALE NV RESIDENCES THE CHUAN GARDENVISTA SHERWOOD CONDOMINIUM SIGNATURE PARK CASPIAN PARC OASIS GLENDALE PARK YEWTEE RESIDENCES CENTURY MANSIONS REGENT HEIGHTS PALM GARDENS THE MADEIRA THE CALROSE

Area Transacted Price Tenure (sqft) Price ($) ($ psf) 775 895,000 1,155 FH 1,851 2,088,000 1,128 99 1,216 1,300,000 1,069 99 1,464 1,500,000 1,025 99 947 965,000 1,019 99 1,345 1,415,000 1,052 FH 1,109 1,168,000 1,053 99 1,582 2,020,000 1,277 999 1,249 1,500,000 1,201 99 936 1,119,020 1,195 FH 1,421 1,550,000 1,091 FH 872 1,050,000 1,204 99 1,076 1,000,000 929 99 1,249 1,300,000 1,041 FH 1,206 1,200,000 995 99 936 860,000 918 FH 1,163 1,020,000 877 99 1,206 905,000 751 99 2,659 1,880,000 707 99 1,421 1,738,000 1,223 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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