Issue 192

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

CONTENTS
p2

FROM THE

EDITOR

What is the Impact of Population

Welcome to the 192th edition of the

Singapore Property Weekly.

Growth on Property Prices?

Hope you like it!

p9

Singapore Property News This Week

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Resale Property Transactions

Mr. Propwise

(January 7 January 13 )

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SINGAPORE PROPERTY WEEKLY Issue 192

What is the Impact of Population Growth on Property Prices?

By Gerald Tay (Guest Contributor)
Heres the burning question this article will try
and answer: Will a 6.9 million population by
2030 support property prices or increase it
exponentially?

To answer it we will analyse the historical

price indices of the Singapore private
residential property market and compare that
to population growth.
This article aims to help investors, buyers and
sellers to:
1. Do their own analysis when buying or
selling
2. Understand
in-depth
property market trends
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the

historical

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SINGAPORE PROPERTY WEEKLY Issue 192

3. Manage risks rather than predict unknown
future

Over a 38-year period, property price

growth is 7.8% per annum.

4. Make
decisions

What mid to long term means depends

on each individual buyers preference.

better

property

investment

The charts and tables are based on public

information collected and collated from
various sources, including:

Urban Redevelopment Authority (URA)

Monetary Authority of Singapore (MAS)

Singapore Statistics (Singstat)

Some notes for readers

The tables below show real property
returns after consumer inflation versus annual
population growth rates over a 38-year period
(1975 to 2013)
Over a 38-year period, the population
growth rate is 2.3% per annum.
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The ONLY period that produces a high

property price growth rate from7.5% to
14%was
during
Singapores
rapid
industrialisation years of 1975 to 1996.
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SINGAPORE PROPERTY WEEKLY Issue 192

From peak to peak, the years after 1996

produces negative or very low returns for
property buyers, even with population
growth exceeding 2% per annum.

The table above proves a simple point

entering the market close to the bottom
will always provide generous returns for
property buyers regardless of population

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growth. From 1998 to 2000, population

growth was at a low of 1.7%, yet
registered a high return of 22.57% for
buyers

Regardless of a high 3% population

growth rate in the period from 2008 to
2009, property prices plummeted 28%
after inflation.
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SINGAPORE PROPERTY WEEKLY Issue 192

Even with a population growth of 2.33%

between year 1996 to 2000, property
return was a negative 7.14% compared
with other periods.

Mid-term holding-wise, property returns

was unjustifiable even with population
growth above 2% per annum between
from 2000 to 2013.

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Long-term property holding proves

disastrous for buyers who enter at or
close to peak market after 1996. Property
Real Returns were negative even with an
increasing population growth rate as high
as 2.5% per annum.

Summary Points
1. Population
correlation
prices.

growth has NO direct

whatsoever with property
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SINGAPORE PROPERTY WEEKLY Issue 192

2. Singapore property prices are highly
dependent on a confluence of complex
factors such as government policies,
monetary policies, economic conditions
(internal and external), monetary supply,
bank lending curbs, interest rates, etc.

5. Future land use for both infrastructure

and housing have already been allocated
and planned for a future 6.9 million
population. Buyers who bought properties
at or close to the 2013 peak market will
have bought into far future prices.

3. Large property price growth occurred

primarily in the early years of rapid
industrialisation from 1975 to 1996. After
1996, Property Real Returns have
diminished regardless of population
growth.

Who will win in the future property

market?

4. From 2015 to 2030, a population target to

reach 6.9 million population represents a
growth rate of 1.5% per annum. It is one
of
the
lowest
since
Singapores
independence. This growth rate may even
be capped lower with a tightening of
foreign workers and productivity policies.

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For sceptical readers, you can say Im wrong

about the lack of correlation between property
prices and population growth. Before Im
proven wrong and you start jeering away, let
me point this out: smart property buyers will
win on either outcome for the future property
market regardless of which occurs:
First outcome: Going forward to 2030,
property prices rise exponentially due to the
6.9 million population,

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SINGAPORE PROPERTY WEEKLY Issue 192

or perhaps a comprehensive MRT network as
some believe.
Properties will go up in value tremendously,
especially for properties bought at a low price.
As an added bonus to savvy buyers, their
rental income will also rise exponentially with
an increasing population.
Second Outcome: Going forward to 2030,
property prices stagnate or rise marginally
due to a mature property market.
If property values do stagnate, smart
investors will still make a decent rental
income.

prefer short-cuts and choose to believe

owning a home can make them property
tycoons. Many Japanese, European and
American middle-class home buyers paid
dearly for this belief.
Scared home-owners are scared of prices
rising beyond affordability so they buy a
property for more than what it is worth,
coupled with a foolish belief that a future 6.9
million population will support or boost future
property prices.
2. The Not-So-Rich Speculators

1. Middle Class Home Owners

Some sold their first HDB homes for $1

Million dollars. Others were lucky to gain
some inheritance from their late parents. With
sudden wealth, they falsely believe they have
finally joined the ranks of the rich.

There are buyers who aspire to be rich but

are too lazy to attain it the right way. They

For home owners sitting on paper profits, they

feel rich.

Who will lose in the future property

market?

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SINGAPORE PROPERTY WEEKLY Issue 192

You find them showing off photos of their
latest branded purchases, expensive dine-ins
and luxury holidays to gain likes in
Facebook and tell the world they have
arrived.
They buy overpriced properties at a
deceivingly low price quantum but with high
PSFs. Those slightly richer buyers dabble in
mid to high-end luxury investment properties
to emulate the rich.
3. Rich Speculators
They believe land is limited and they belong
to an all-exclusive club where their spouses
eat beluga caviar instead of salmon roe. They
are primarily buyers who dabble in highly
speculative high-end properties to add to their
collection of exotic trophies.
They may be one of those buyers who bought
Sentosa Cove properties and have lost half
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the value today. Certain rich people have

eccentric habits. In particular, Sentosa Cove
landed-property owners have paid many
millions to ogle at container ships and breathe
smelly fumes as they sail by their sea-front
property.
But then again, they are rich. So why should
we care if they can afford to lose millions or
how they spend their money on worthless
toys. Its peanuts for them anyway.
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.
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SINGAPORE PROPERTY WEEKLY Issue 192

Singapore Property This Week

Residential
Resale volumes of private
increased 8.4% in H2 2014

homes

In H2 2014, 2,528 more private homes

changed hands than in H1 that year.
According to DTZ, there was an 8.6 percent
increase in the resale volumes of private
houses. Lee Nai Jia from DTZ said that as
sellers adjusted their prices to fit demand,
resale volumes increased. Lee added that the
weak rental market has pushed home owners
to sell their properties. Ong Choon Fah from
DTZ believes that resale volumes will
continue to increase. On the other hand, new
sales by developers fell by 36 percent to
2,520 units in H2 from H1 last year. Despite
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that, Ong believes that developers would not

be cutting prices any time soon as they have
reserves to tide through the lull sales period.
(Source: Business Times)
Land bids for EC site hits a new low
Land bids for an executive condominium
located at Sengkang have been the lowest
since 2011, according to the Business Times.
Sim Lian won the bid for the site near
Anchorvale Crescent for $280.04 psf ppr. This
was lower than the $367 psf ppr bid that was
made for a neighbouring site in February
2014. The Anchorvale Crescent site had only
managed to attract 3 bids.

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SINGAPORE PROPERTY WEEKLY Issue 192

Christine Li from OrangeTee said that the 30
percent mortgage service ratio cap on
executive condo units have dampened
demand for executive condo units by
developers. As such, developers have been
less willing to bid for executive condo land
sites. The recent increase in executive condo
launches in Punggol and Sengkang have also
added on to developers negative sentiments,
said Li.
(Source: Business Times)
HDB resale prices down by 1.5% in Q4
In Q4 last year, resale prices of HDB flats
dropped by 1.5 percent from Q3.
Nonetheless, resale transactions of HDB flats
increased by 2.7 percent to 4,635 units from
October to December last year. According to
HDB, resale prices have fallen by a total of 6
percent by the end of 2014. Eugene Lim from
ERA believes that the fall in HDB resale
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prices and transaction volumes was due to

the implementation of cooling measures such
as the Mortgage Servicing Ratio. Lim said
that the increase in supply of new Built-ToOrder flats and Sale of Balance Flats have
also impacted resale volumes of HDB flats.
Nonetheless, resale volumes are expected to
increase in 2015, according to market
experts. Not only so, Ong Kah Seng from
RST Research added that resale flat prices
are expected to fall as the demand for private
houses
and
executive
condominiums
increases. HDB rentals are expected to
increase by 7 percent in 2015, said Ong.

(Source: Business Times)

Short-term rental policy for private homes
under review
The Urban Redevelopment Authority (URA)
will be reviewing its policy on short-term
rentals of private homes.
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SINGAPORE PROPERTY WEEKLY Issue 192

Under URAs guidelines, private homes have
to be rented out for no less than 6 months to
safeguard the living environment of residents.
While some believe that a relaxation in the
short-term rental policy will benefit tourists
and home owners, Minister for National
Development, Khaw Boon Wan, said that
leasing private homes on short-term basis will
raise concerns about noise and security.
Donald Han from Chesterton Singapore said
that vacancy rates for private homes have
increased to about 8 percent since Q3 2014,
and be predicts that more private homes will
be left vacant in the next 12 to 18 months.
Han added that he believes there will be a 10
percent increase in vacancy rates of private
homes in the next year.
(Source: Business Times)

JTC to provide more detailed rental data

Rental price indices have been reviewed by
JTC to provide more detailed data for
businesses. JTC had increase the number of
industrial price and rental indices from 6 to
24, according to the Business Times. This
would include price and rental indices for
single-use factory space, and sub-indices for
multiple-users factories. Furthermore, the
indices would be expanded to cover more
areas. JTC have also reclassified properties
based on their location, remaining tenure and
land-use zoning so as to improve industrial
prices and rental indices. Following the
launch of the Fair Tenancy Framework, these
changes have since been in effect.
(Source: Business Times)

Commercial

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SINGAPORE PROPERTY WEEKLY Issue 192

Industrial property prices fall by 0.1% in
Q4 2014

Office rents up by 9.8% in 2014

Industrial prices and rentals have fallen by 0.1

percent and 0.6 percent in Q4 last year,
based on the updated price and rental indices
by JTC. Since Q4 2014, more geographies
and property types have been included in the
calculation of industrial price and rental
indices. According to JTC, multiple-user
factories saw a 4.4 percent year-on-year
increase in the previous year. Also,
occupancy rates remained at 90.9 percent
last year. JTC believes that industrial prices
and rents will continue to moderate in 2015
as an ample supply of industrial space is
expected to be released from 2015 to 2016.
However, Chia Siew Chuin from Colliers
predicts that industrial property prices may
decrease by up to 3 percent this year.

According to the Urban Redevelopment

Authority (URA), office rents increased by 9.8
percent while prices for office units increased
by 4.5 percent in 2014. Particularly, in Q4 last
year, office rents increased by 1.7 percent
after a 2.6 percent increase in the Q3. On the
other hand, rents and prices increased by 0.9
percent in 2014 for the retail market.
Nonetheless, market experts believe that
retail rents will fall this year due to decreased
demand. However, the office market should
continue growing, said experts. Alice Tan from
Knight Frank said that prime office rents are
likely to experience slower growth as demand
for rental units in the central business district
falls. She predicts that the annual growth in
the office market will be around 5 to 7
percent.

(Source: Business Times)

(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 192

Non-Landed Residential Resale Property Transactions for the Week of Jan 7 Jan 13

Postal
District
3
5
5
9
9
9
9
9
10
10
10
11
11
14
15
16
16
17
18
18
18
18
19
19

Project Name
QUEENS
THE ROCHESTER
DOVER PARKVIEW
NOMU
URBAN RESORT CONDOMINIUM
URBAN RESORT CONDOMINIUM
URBAN RESORT CONDOMINIUM
URBAN RESORT CONDOMINIUM
BELMOND GREEN
HOLLAND MEWS
RICH MANSION
PAVILION 11
HILLCREST ARCADIA
THE WATERINA
MANDARIN GARDEN CONDOMINIUM
BLEU @ EAST COAST
KEW GREEN
THE GALE
NV RESIDENCES
THE TROPICA
CHANGI RISE CONDOMINIUM
THE TROPICA
PALM GROVE CONDOMINIUM
CHILTERN PARK

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Area
(sqft)
1,195
840
936
1,389
2,120
2,120
2,120
2,120
1,270
904
1,765
958
1,970
1,356
1,572
1,173
3,025
1,044
797
1,518
1,130
1,238
1,496
1,249

Transacted
Price ($)
1,438,000
1,230,000
1,000,000
3,380,000
4,902,000
4,858,000
4,814,000
4,726,000
2,077,000
1,450,000
2,400,000
1,610,000
2,000,000
1,628,000
1,400,000
1,300,000
2,080,000
1,080,000
860,000
1,250,000
905,000
968,000
1,520,000
1,250,000

Price
Tenure
($ psf)
1,204
99
1,465
99
1,068
99
2,434
FH
2,312
FH
2,291
FH
2,270
FH
2,229
FH
1,635
FH
1,604
FH
1,360
FH
1,681
FH
1,015
99
1,200
FH
891
99
1,108
FH
688
99
1,034
FH
1,080
99
824
99
801
99
782
99
1,016 999
1,001
99

Postal
District
19
20
21
21
21
21
23
23
25
26
27
27

Project Name
EVERGREEN PARK
THE GARDENS AT BISHAN
THE CASCADIA
SYMPHONY HEIGHTS
HIGH OAK CONDOMINIUM
SPRINGDALE CONDOMINIUM
CASHEW HEIGHTS CONDOMINIUM
GUILIN VIEW
CASABLANCA
MEADOWS @ PEIRCE
ORCHID PARK CONDOMINIUM
YISHUN EMERALD

Area
(sqft)
1,173
1,152
581
1,152
1,216
1,130
1,647
1,701
926
1,195
958
1,399

Transacted
Price ($)
890,000
1,160,000
1,045,000
1,100,000
1,120,000
1,030,000
1,508,000
1,360,880
818,000
1,300,000
725,000
1,030,000

Price
Tenure
($ psf)
759
99
1,007
99
1,798
FH
955
FH
921
99
911
999
916
999
800
99
884
99
1,088
FH
757
99
736
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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SINGAPORE PROPERTY WEEKLY Issue 192

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