Issue 150

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

CONTENTS
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Think You Can Profit From Your Home?
Think Again Singapore Property News This Week Resale Property Transactions (March 19 March 25)

FROM THE

EDITOR

Welcome to the 150th edition of the Singapore Property Weekly. Hope you like it!

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SINGAPORE PROPERTY WEEKLY Issue 150

Think You Can Profit From Your Home? Think Again

By Property Soul (Guest Contributor) Since 10 March 2014, the Housing Development Board only accepts valuation requests from resale flat buyers or their property agents after the granting of the Option to Purchase by the sellers. This Revised HDB Resale Procedure is believed to encourage buyers and sellers to focus their price discussions on the recent sales transactions, rather than the Cash Over Valuation (COV) that sellers expect buyers to pay on top of the flats value.

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SINGAPORE PROPERTY WEEKLY Issue 150 The end of the Singapore dream to profit from HDB? Back in 1996, 2007 and from 2010 to 2013, the media liked to pick up stories of HDB sales transactions that came with very high COVs, sometimes up to $100,000 to $150,000. There were also reports that mentioned extreme cases with the transaction prices of HDB flats crossing the one million dollar mark. These might be exceptional incidents but were often considered by reporters as newsworthy stories to cover in the paper. Nonetheless, the stories raised the hope of HDB owners to secure a high COV when it was their turn to sell their flat. The HDB flat became part of the Singaporean dream whereby you could buy a first-hand flat from the government at a subsidized rate, resell it at a high price after staying there for years,
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and get a windfall from the high COV that the buyer paid. To an ordinary family, a few hundred thousand dollars of profit and tens of thousands more from the COV is a considerable amount that can take years to save. Above all, to realize the dream of upgrading the family home to a condominium, the amount would come in handy for the downpayment. Since when have HDB flats become a goldmine? People who think that they can make some cash out of their HDB flat have probably forgotten one important thing: HDB is a government home ownership scheme to meet the housing needs of Singaporeans. It was never meant to be sold as an asset for investment or for speculation.
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SINGAPORE PROPERTY WEEKLY Issue 150 There is definitely no guarantee that owners can make a profit when they sell it one day. Over the last few decades, the housing market benefited from the rapid growth of Singapores economy. Prices of private properties increased by leaps and bounds. The cost of HDB flats have followed suit. However, Singapore has long passed the stage of growing from a developing to a developed country. It is therefore unrealistic for anyone to expect the value of properties to jump tenfold like those flats bought by Singaporeans decades ago. Looking at the selling prices of first-hand or resale HDB flats in recent years, it is doubtful anyone can make a windfall selling it after the minimum occupation period of five years. In fact, the median COV for HDB flats is reaching zero in February this year the
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lowest in the last eight years. Twelve HDB towns report zero or even negative median COVs, especially in non-mature estates like Sengkang.

Are there enough buyers for all the resale HDB flats?
Above all, there is a large supply of new flats from the government over the next few years. Just within these two years in 2014 and 2015, there are already a total of 55,000 new flats built by the Housing Development Board getting ready for occupation. And dont forget that the government can jack up the supply by adding new plans, building new flats, and rebuilding old blocks any place any time. In last years National Day speech, our Prime Minister promised to keep the HDB flats affordable for future flat buyers. Later that month, the government announced that there
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SINGAPORE PROPERTY WEEKLY Issue 150 is now a 3-year waiting period for newlyconverted Singapore PRs to buy HDB resale flats. I just have one question on my mind: Do we have enough potential buyers for all the resale HDB flats in the market? What about private properties? Even if you are staying in a private property, it is also not that easy to profit from selling your home. In a booming market, assuming that you manage to sell your home at a good price, you may still end up spending all the profit on your next home that is most likely bought at a high price in a sellers market. Worse still, while waiting to buy your next home, prices are climbing so fast that the profit from your old home may prove to be insufficient to buy
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the next one. If you dont want to sell high, buy high, unless you are willing to downgrade, it is nave to believe that you can profit from the value appreciation of your home. Selling your home is different from selling an investment Once you stay in a property, whether its value goes up or down has little to do with you now. Remember your total net worth is calculated by your assets minus your debts, but excluding your own residence. It is because you need a roof over your head under all circumstances. If it is your home, it is inevitable that you will be emotional about it, especially if you have been staying there for many years, because it is your residence and you need to find a new
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SINGAPORE PROPERTY WEEKLY Issue 150 shelter after the sale; because you are used to your home and whatever profit wont make you part with it; because few people can easily move out of their home without being sentimental. Selling a home is never as straightforward as selling an investment. So always make it a point to separate your home from your investments. By guest contributor Property Soul, a successful property investor, blogger, and author of the newly released No B.S. Guide to Property Investment http://www.propwise.sg/nobsguide/.

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SINGAPORE PROPERTY WEEKLY Issue 150

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SINGAPORE PROPERTY WEEKLY Issue 150

Singapore Property This Week

Residential
Private home and HDB resale flat prices decrease in Q1 The government's flash estimates showed that prices of private homes and HDB resale flats declined in 1Q 2014. This is expected to continue for the rest of the year, mostly due to the cooling measures and increasingly competitive pricing by developers. Resale flat prices decrease of 1.5 percent was for the third consecutive quarter, which was believed to prevent HDB upgraders to move to private property. The index for private residential property also decreased 1.3 percent, compared with the 0.9 percent decrease in 4Q2013. Sale transactions went down from 4,260 in the last quarter to only 1,676 caveats lodged this quarter. (Source: Business Times)

More marketing tools to attract potential buyers

As fewer projects could move more than half of their units in the month of their launch, developers and marketing agencies are adopting more marketing tools to draw more potential buyers. For instance, developers may have multiple marketing agencies for one project, offer higher commission to

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SINGAPORE PROPERTY WEEKLY Issue 150 agencies or discounts to buyers for certain periods, while property agencies hold more seminars to attract crowds. (Source: Business Times) Sales at The Santorini were disappointing Sales at the Mediterranean-inspired Tampines condominium The Santorini were reported to be disappointing. Only 80 out of the 200 launched units were sold, making up only 40 percent. Analysts said that this could show the market is not favorable towards mass-market projects, especially lowquantum compact units which were affected by the Total Debt Servicing Ratio (TDSR) framework that lower the loan-to-value limits for buyers with existing home mortgages. Half of The Santorinis units are one and twobedders. Spring Grove for en bloc sale Spring Grove in the prime Grange Road area can now be sold en bloc, after it acquired the requisite 80 percent consensus from its owners. 264 out of 325 units have signed the collective sale agreement, as reported on March 23, which translates to 81 percent of the condo's total share value and strata area. Its five-day cooling-off period after the approval has ended. The sales agent for the deal Knight Frank said that the unit owners will receive an average $2,600 psf for two- to four-bedroom apartments and penthouses. (Source: Business Times) Jurong condos price set at $1,250-1,350 psf Lakeville, the upcoming 696-unit condominium project in the Jurong Lake District by MCL Land, will be launched with an
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(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 150 average price of $1,250 to $1,350 psf the early-bird pricing on the balloting day to attract potential buyers. MCL Land, however, has yet to decide on how many units to Reits cause retail rents to go up. Yet, some property consultants said that some landlords use the listed Reits as benchmarks for their rates, thus giving Reits their indirect pricing

launch because it will depend on the demand.

The marketing agent for the project is Huttons. Lakevill is located on a 240,654 sq ft site with a 99-year lease. MCL acquired it in 2013 for $439 million, or $651 psf ppr. (Source: Business Times) Commercial Reit benchmarks could be the reason for increasing retail rents Statistics has proved that real estate

power. This effect is called herding. More

specifically, R'ST Research director Ong Kah Seng said that since information is made transparent shareholders, in quarterly commercial reporting or to industrial

property landlord may make back-calculations

for their potential rentals. (Source: Business Times) Industrial building in Kallang up for sale A five-storey industrial building located at 12 Kallang Way on a 51,264 sq ft leasehold site is reported to be up for sale.

investment trusts (Reits) neither own the majority of retail space nor prime malls in Singapore. Hence, it may not hold true that

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SINGAPORE PROPERTY WEEKLY Issue 150 Its owner is asking for offers higher than $25 million, or about $213 psf on a gross floor area (GFA) of 116,940 sq ft without having maximized its 2.5 plot ration. The property $11.50 in Marina Bay. The occupancy rates for these two areas were 97.9 percent and 88.1 percent respectively, which increased from last quarter. DTZ expected the rents in

has a 34 years remaining in its lease term.

Together with its unutilised 11,220 sq ft of GFA, the asking price is $195 psf ppr. (Source: Business Times)

CBD to further increase 10 to 15 percent for

2014. (Source: Business Times)

High take-up for office leasing market

The office leasing market was reported By DTZ to witness strong take-up for 1Q2014. The average gross rental rates in the central business district (CBD) increased between 3.9 to 4.5 percent quarter-on-quarter from higher occupancy rates. Average monthly per square foot rents were $8 in Shenton Way, Robinsons Road and Cecil Street, and were

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SINGAPORE PROPERTY WEEKLY Issue 150

Non-Landed Residential Resale Property Transactions for the Week of Mar 19 Mar 25

Postal District 2 3 5 5 5 8 9 9 9 10 10 10 10 10 10 10 11 11 11 11 12 13 14

Project Name CRAIG PLACE RIVER PLACE THE ROCHESTER BLUE HORIZON PARK WEST CITY SQUARE RESIDENCES HELIOS RESIDENCES THE METZ PARC EMILY REGENCY PARK MILL POINT MILL POINT THE MONTANA HOLLAND COURT SOMMERVILLE GRANDEUR CORONATION SHOPPING PLAZA RESIDENCES @ EVELYN MULBERRY TREE RESIDENCES @ EVELYN ROCHELLE AT NEWTON AIRSTREAM SOMMERVILLE LOFT STARVILLE

Area (sqft) 1,152 2,573 1,302 1,216 1,249 1,216 1,668 570 904 3,175 915 915 700 1,948 1,195 1,098 1,109 452 1,109 2,164 474 1,163 1,270

Transacted Price ($) 1,700,000 2,600,000 1,900,000 1,300,000 1,120,000 1,800,000 4,988,000 1,500,000 1,568,000 5,620,000 1,500,000 1,490,000 1,090,000 3,000,000 1,770,000 1,310,000 1,950,000 790,000 1,930,000 3,300,000 695,000 1,100,000 1,250,000

Price Tenure ($ psf) 1,476 99 1,011 99 1,459 99 1,069 99 897 99 1,480 FH 2,990 FH 2,629 FH 1,734 FH 1,770 FH 1,639 999 1,629 999 1,558 FH 1,540 FH 1,481 FH 1,193 FH 1,759 FH 1,747 FH 1,741 FH 1,525 99 1,467 FH 946 FH 984 FH

Postal District 14 15 15 15 15 15 15 15 16 16 16 17 18 18 18 18 18 19 19 19 21 21 21

Project Name THE SUNNY SPRING ARTHUR 118 ONE AMBER PEBBLE BAY WATER PLACE DAWN VILLE CANARY VILLE VILLA MARINA THE BAYSHORE BAYSHORE PARK BAYWATER AZALEA PARK CONDOMINIUM DOUBLE BAY RESIDENCES LIVIA OASIS @ ELIAS MODENA MELVILLE PARK THE YARDLEY RIVERVALE CREST REGENTVILLE PARC PALAIS SHERWOOD TOWER PINE GROVE

Area (sqft) 1,119 990 1,259 2,336 1,453 1,195 1,550 1,625 958 936 1,302 1,679 1,313 1,410 980 1,410 1,044 1,281 936 1,152 1,227 1,539 1,938

Transacted Price ($) 1,080,000 1,435,000 1,780,000 2,900,000 1,790,000 1,270,000 1,520,000 1,280,000 985,000 930,000 1,215,000 1,408,000 1,430,000 1,340,000 905,000 1,280,000 860,000 1,600,800 833,000 870,000 1,250,000 1,330,000 1,580,000

Price Tenure ($ psf) 965 FH 1,449 FH 1,413 FH 1,242 99 1,232 99 1,063 FH 981 FH 788 99 1,028 99 993 99 933 99 839 999 1,089 99 950 99 924 99 908 99 824 99 1,250 FH 890 99 755 99 1,019 FH 864 99 815 99

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SINGAPORE PROPERTY WEEKLY Issue 150

Postal District 22 22 23 23 23 25

Project Name PARC VISTA LAKEPOINT CONDOMINIUM THE WARREN HILLVIEW REGENCY YEWTEE RESIDENCES CASABLANCA

Area (sqft) 1,055 2,217 1,249 1,130 1,195 1,119

Transacted Price Tenure Price ($) ($ psf) 985,000 934 99 1,128,000 509 99 1,128,000 903 99 980,000 867 99 1,020,000 854 99 960,000 858 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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