singapore property weekly issue 155

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Issue 155 Copyright © 2011-2014 www.Propwise.sg . All Rights Reserved.

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Issue 155Copyright © 2011-2014 www.Propwise.sg. All Rights Reserved.

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CONTENTS

p2 An Example of Bad Property Advice

p9 Singapore Property News This Week

p14 Resale Property Transactions

(April 23 – April 29)

Welcome to the 155th edition of the Singapore Property Weekly.

Hope you like it!

Mr. Propwise

FROM THE

EDITOR

SINGAPORE PROPERTY WEEKLY Issue 155

Page | 2Back to Contents

By Gerald Tay (guest contributor)

I can't help it. I read some bad advice recently

and have to say something. I'll try to keep it

positive, but my tongue is already bleeding

from biting it. In Singapore, inflation is on the

rise, but this one thing is still offered for free –

advice. It‘s really funny to observe people

taking it so lightly. But only the advice that

makes you profit in reality (i.e. real profit not

imaginary) is good, otherwise it‘s useless or

even disastrous.

Most people don‘t know the difference

between advice from rich people and advice

from sales people.

An Example of Bad Property Advice

SINGAPORE PROPERTY WEEKLY Issue 155

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Most get their financial advice from the latter

— people who profit even if you lose. In this

post, I explore why one recently written article

by ‗experts‘ (sales people in disguise) will

prove disastrous for both average investors

and home buyers. Your task is to look for any

hidden agenda.

An example of bad property advice

The article, Why 2014 is going to be the best

year in buying property, appeared in Yahoo

Singapore News on 16th April, 2014.

The article aims to sell readers three ‗benefits‘

of buying a suburban condo today:

1. Because You Can Afford a Better First

Home Than You Realize

BAD ADVICE: ―The monthly salary needed to

get the most out of your property purchase is

$10,000 to $12,000. I know, it’s not the

easiest number to reach. But if you and your

spouse can climb your way to this number,

you’ll be in a prime position to afford a

fantastic first home.”

BAD ADVICE: “According to ERA key

spokesman Eugene Lim, depending on

whether your income is fixed and your

finances are well within the Total Debt

Servicing Ration (TDSR) framework, you

should be able to afford properties priced

between $600,000 and $1.2 million.”

REALITY CHECK: Having a combined

income of $10,000 to $12,000 for married

couples does not justify a worthwhile reason

to own an expensive suburban condominium

as their first home. The purchase is more

conspicuous spending than financial

prudence.

SINGAPORE PROPERTY WEEKLY Issue 155

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Most married couples I know simply live from

pay-check to pay-check servicing expensive

home and car loans to keep up with society‘s

expectations. If one spouse loses his/her job,

their financial position gets tougher with kids

along the way.

Suburban condos that are priced lower than

$1 million today are very small units, either

the 1-bedders or 2-bedders, spaces that may

be too small for a married couple who wants

to start a family. Today‘s $1.2 million condos

do not get you much space either, only larger

mortgage payments. Even at a low 1.5%

interest rate for a 30-year loan tenure on a

20% down-payment, a couple would have to

fork out $3,300 every month. With interest

rates at 3.5%, the mortgage payments jump

to $4,300 every month.

REALITY CHECK: Total Debt Servicing Ratio

(TDSR) guidelines are meant to serve the

business interests of a lending bank to a

borrower. They are not meant to serve as

financially prudent advice for buyers.

Most couples with a combined income of

$10,000 to $12,000 would do a lot better

financially buying less expensive re-sale HDB

flats instead. They could use that savings to

acquire financial freedom instead of paying

through their noses for a cage in the sky.

SINGAPORE PROPERTY WEEKLY Issue 155

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2. Because Falling Prices Make the

Additional Buyer’s Stamp Duty (ABSD)

Less Scary

BAD ADVICE: “What a 7% property drop

would save you on ABSD - As you can see,

falling property prices take the “bite” out of

ABSD when it comes to purchasing a second

or third property. You’ll even be able to save

money, as the example above shows.”

BAD ADVICE: “If property prices drop by 7%

to 10% over the course of 2014, which

everyone expects will happen – the pain of

ABSD actually gets nullified.

REALITY CHECK: I have received many

emails from readers telling me they have

gotten a great price on a property. One

particular lady approached me excitedly

about discounted developer prices for a

project called Sky Habitat in Bishan recently.

―How good is the price?‖ I asked

―During launch, developer is selling units at

$1,600 to $1,800 psf. And now they are

selling only at $1,300 psf. What do you think?

Is it a good buy?‖

―How would I know?‖ I replied. ―All you have

given me is the price.‖

SINGAPORE PROPERTY WEEKLY Issue 155

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―Yes!‖ she squealed. ―Now my husband and I

can afford it.‖

Only cheap people buy on price. Just

because something is cheap or cheaper

doesn‘t mean it‘s worth the cost.

One of my most basic money principles: I buy

value. I will pay more for value. If I don‘t like

the price, I simply pass. If the seller wants to

sell, he will come back with a better price. I let

him tell me what he will accept. I know some

people love to haggle; personally, I don‘t. If a

person wants to sell, they will sell. If I feel

what I am buying is of value, I‘ll pay the price.

Value rather than price has made me rich.

Whether you pay ABSD or not constitutes a

small part of what‘s important in the scheme

of things. Looking at the overall picture of

what really constitutes a quality investment is

a better gauge than simply looking at savings

and price alone.

REALITY CHECK: Banks do not lend money

to borrowers because they‘ve bought the

property at discounted prices or cheaper than

their neighbour.

Banks lend solely based on the ability of the

borrower to repay the loan. They don‘t care if

you bought the property with great savings by

buying at discounted prices, cheaper or less

expensive than your neighbour.

The bank‘s only concern is, ―Is the borrower

able to service his/her loan on time?‖

3. Because You’ll Be Able to Purchase

Additional Properties with Little or No

Financing

BAD ADVICE: ―But there’s another way to

purchase property in this buyer’s market –

buying property from new launches through

SINGAPORE PROPERTY WEEKLY Issue 155

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the progressive payment scheme.”

BAD ADVICE: “In most new launches, units

priced below $1 million are usually purchased

quickly. That’s because payment for new

developments is made progressively, allowing

buyers who aren’t severely affected by tighter

loan rules to buy smaller units with cash

instead of financing larger units.”

REALITY CHECK: If a buyer decides to buy

a smaller unit because he/she is severely

affected by tighter loan rules, it simply shows

he/she may already be overstretching on

finances, never mind a smaller unit.

This is the equivalent of saying, ―If I cannot

afford a Ferrari, I will throw my money

modifying a cheap Toyota Vios to look and

sound like one.‖

―If I cannot afford a second property in

Singapore, I‘ll just throw my money into a

cheap overseas property I‘ve never seen

before.‖

Many ‗experts‘ have given advice that

suggests buying with no or little money down

is more important than buying a quality

investment property. In your overall

investment analysis, how you finance the

property isn‘t as important as buying one that

will be a sound, long-term investment, i.e.

quality properties that have positive cash-

flow. Even if it‘s 100% financed, a bad

property is a bad property!

When you look at the noise out there, you will

come across numerous suggestions on what

you should do, and have to determine the

legitimacy of every idea presented to you.

SINGAPORE PROPERTY WEEKLY Issue 155

Page | 8Back to Contents

It‘s often not easy to differentiate between

good advice and a bad advice, so take care

before you act on it.

By guest contributor Gerald Tay, CEO of

CREI Academy Group, and a professional

real estate investor whose real estate

portfolio is now worth over $8 million and

generates a 6-figure sum in rental income

annually. He exposes widely-held property

investment myths that are highly ineffective in

creating wealth and prevent a comfortable

retirement for the ordinary investor.

SINGAPORE PROPERTY WEEKLY Issue 155

Singapore Property This Week

Page | 9Back to Contents

Residential

14 out of 18 HUDC estates have been

privatized

Serangoon North HUDC Estate is the

fourteenth out of eighteen HUDC estates to

be privatized. Out of the remaining four

estates, three estates at Hougang North

Neighbourhood 3, Hougang North

Neighbourhood 7 and Potong Pasir are in the

process of privatization; while another at

Braddell View is in the midst of garnering

support. Such privatization requires support

from at least 75 per cent of the residents. En

bloc sales in mature sites such as Serangoon

North HUDC are still attractive to developers

due to the sheer difficulty in applying for such

land parcels under government land sales

programmes.

(Source: Channel NewsAsia)

April’s HDB resale prices continues to

soften

From March to April, HDB resale prices for

three, four and five-room flats have fallen 0.2

per cent, 0.8 per cent and 0.4 percent

respectively. While prices of executive flats

have surged by 1.2 per cent, overall prices

are 0.2 per cent lower this April, as compared

to in March. In April, prices plummeted

despite a 4.4 per cent month-on-month

increase in resale transactions, resulting in a

total of 1,484 transactions.

SINGAPORE PROPERTY WEEKLY Issue 155

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HDB resale prices also saw a drop of 5 per

cent year-on-year in April, as total resale

transactions dipped by 14.4 per cent year-on-

year, according to the Singapore Real Estate

Exchange. The overall median transaction

over X-value, which measures how much

people pay over recent prices, have been

pushed down even further from a negative

$3,000 in March to negative $4,000 in the

April. This is expected to keep resale prices

low and is likely to attract more buyers

according to Eugene Lim, key executive

officer of ERA Realty.

(Source: Business Times)

Home buyers unsure about how TDSR

affects loan applications

According to a survey by UOB, one in three

home buyers are unfamiliar with the total debt

servicing ratio (TDSR) framework. While

some are unsure of how the TDSR framework

would affect loan applications, others do not

understand how the new ruling would apply to

them. Through the TDSR framework, the

Monetary Authority of Singapore aims to

encourage Singaporeans to borrow

judiciously. Introduced in June 2013, the

framework states that a maximum of 60 per

cent of one‘s gross monthly income can be

used to service loans.

(Source: Business Times)

Prices for The Panorama slashed by 10%

Following price cuts by its competitors,

Wheelock Properties may be slashing prices

for The Panorama, a condominium at Ang Mo

Kio. At its re-launch, unit prices may be as

much as 10 per cent lower than at the initial

launch. Depending on unit size, The

Panorama will be sold from $1,100 to $1,310

SINGAPORE PROPERTY WEEKLY Issue 155

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per square foot. One-bedders at The

Panorama which are between 431 and 474

square feet will start from $565,000; two-

bedders between 678 to 700 square feet are

marketed from $820,000; and three bedroom

units will sell from $1,175,000 for 990 to

1,066 square feet. Previously, 58 of the 698

units at The Panorama were sold for a

median price of $1,343 psf in January.

However, the show flat was closed in mid-

March due to poor turnout.

(Source: Business Times)

Minister says studio apartments make a

lot of sense for seniors

In his blog, Housing Matters, Minister for

National Development Khaw Boon Wan said

that senior citizens profit about $200,000 by

selling their old flats and moving into studio

apartments. This is possible if outstanding

loans have been paid off and if the new studio

apartment is fully paid for. Thus, according to

Minister Khaw, it is practical for senior citizens

to move into studio apartments, especially if

their children have moved out, as the net sale

proceeds may support retirement needs.

Beyond that studio apartments, which are

elderly-friendly, are more conveniently located

within HDB towns. Minister Khaw suggested

that besides moving into a studio apartment,

senior citizens may also rent out available

rooms in their old flats so as to support their

retirement.

(Source: Business Times)

Commercial

CBRE releases early-bird discount for

Parkway Centre office units

Located at Parkway Centre, 22 strata office

units that are between 732 square feet and

SINGAPORE PROPERTY WEEKLY Issue 155

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1,356 square feet are on sale. Marketed by

CBRE at a three per cent early-bird discount,

from $1,649 to $1,746 per square feet, the

units have leases that will expire between

November this year and July 2017. The 22

office units which are located between the

third and thirteen floors are part of an office

complex that has a 66-year lease remaining.

They are part of the 51 units that were

acquired in 2012 by the Parkway Investment

Holdings. In 2012, units in the office complex

were priced from $1,600 to $1,810 per square

feet.

(Source: Business Times)

50% cut in lease for prepared industrial

land

Although net allocation of prepared industrial

land (PIL) is positive, their leasing and rental

to companies is 50 per cent less than in Q1

2014 said JTC Corporation. Gross allocation

of PIL dipped from 118.1 hectares in Q4 2013

to 48 hectares in the following quarter.

According to JTC, this was due to lower gross

allocation in the generic land and Jurong

Island segments; not only so, take-up rates

were higher in the chemical and logistics

sectors in the following quarter. Nonetheless,

the gross allocation in the earlier quarters of

2013 was an average of 50 ha per quarter.

This is comparable to the gross allocation this

quarter.

(Source: Business Times)

New operator wanted for newly revamped

hotel along Robertson Quay

The Gallery Hotel at Robertson Quay is

looking for a new operator after it has

undergone a facelift. RB Capital, which

manages the 223 rooms at the Gallery Hotel,

SINGAPORE PROPERTY WEEKLY Issue 155

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has appointed JLL‘s Hotel & Hospitality Group

to launch a Request For Proposal exercise

from hotel management companies to

operate the hotel. RB Capital has invested

$50 million to $70 million to give a new life to

the hotel, and to integrate the retail podium of

The Quayside with the hotel. The hotel which

was acquired for $232.5 million last year is a

10-storey freehold building that will lease out

about 63,000 square foot of retail space.

(Source: Business Times)

SINGAPORE PROPERTY WEEKLY Issue 155

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Non-Landed Residential Resale Property Transactions for the Week of Apr 23 – Apr 29

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

2 THE BEACON 1,163 1,540,000 1,325 99

5 HERITAGE VIEW 969 1,120,000 1,156 99

8 CITYLIGHTS 1,356 1,730,000 1,276 99

9 MARTIN PLACE RESIDENCES 1,421 2,750,000 1,935 FH

9 THE PATERSON 1,216 2,350,000 1,932 FH

9 THE INSPIRA 1,561 2,880,000 1,845 FH

9 THE INSPIRA 1,259 2,290,000 1,818 FH

9 RIVERSIDE 48 797 1,200,000 1,507 FH

10 ST REGIS RESIDENCES SINGAPORE 1,959 4,700,000 2,399 999

10 ONE JERVOIS 990 1,700,000 1,717 FH

10 TANGLIN REGENCY 1,109 1,443,000 1,302 99

10 RIDGEWOOD 1,744 2,010,000 1,153 999

11 TREVOSE PARK 1,701 2,600,000 1,529 FH

11 SHELFORD SUITES 893 1,360,000 1,522 FH

12 TRELLIS TOWERS 1,141 1,510,000 1,323 FH

12 DE ROYALE 1,281 1,675,000 1,308 FH

12 PAPILLON 936 1,080,000 1,153 FH

12 PAPILLON 1,238 1,360,000 1,099 FH

12 THE ABERDEEN 1,399 1,500,000 1,072 FH

14 LA BRISA 409 625,000 1,528 FH

14 STARVILLE 1,238 1,200,000 969 FH

14 ASTOR 872 760,000 872 99

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

15 AMBER RESIDENCES 1,163 1,977,100 1,701 FH

15 THE SEAFRONT ON MEYER 1,604 2,580,000 1,609 FH

15 COTE D'AZUR 840 1,150,000 1,370 99

15 KATONG GARDENS 1,948 2,608,000 1,339 FH

15 VERSILIA ON HAIG 1,130 1,460,000 1,292 FH

15 POSHGROVE EAST 990 1,240,000 1,252 FH

15 MANDARIN GARDEN CONDOMINIUM 1,528 1,600,000 1,047 99

15 STILLZ RESIDENCE 1,528 1,578,000 1,032 FH

15 MANDARIN GARDEN CONDOMINIUM 1,528 1,400,000 916 99

15 VILLA MARINA 2,024 1,670,000 825 99

15 KNOX VIEW 2,207 1,800,000 816 FH

16 CHANGI COURT 969 1,010,000 1,043 FH

16 LAGUNA GREEN 1,141 1,180,000 1,034 99

17 CARISSA PARK CONDOMINIUM 1,324 1,200,000 906 FH

18 CHANGI RISE CONDOMINIUM 1,130 985,000 872 99

18 SAVANNAH CONDOPARK 1,238 1,080,000 872 99

18 CHANGI RISE CONDOMINIUM 1,281 1,090,000 851 99

18 CHANGI RISE CONDOMINIUM 1,130 950,000 841 99

18 SAVANNAH CONDOPARK 2,045 1,550,000 758 99

19 STADIA 743 880,000 1,185 FH

19 KENSINGTON PARK CONDOMINIUM 1,658 1,900,000 1,146 999

19 CHUAN PARK 1,528 1,330,000 870 99

SINGAPORE PROPERTY WEEKLY Issue 155

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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.

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

20 BISHAN 8 1,528 1,575,000 1,030 99

21 THE BLOSSOMVALE 840 1,200,000 1,429 999

21 CLEMENTI PARK 1,722 1,850,000 1,074 FH

21 THE HILLSIDE 1,302 1,320,000 1,013 FH

22 THE CENTRIS 1,001 1,190,000 1,189 99

22 THE LAKESHORE 1,184 1,350,000 1,140 99

23 YEWTEE RESIDENCES 850 938,000 1,103 99

23 THE WARREN 1,238 1,100,000 889 99

23 THE WARREN 1,055 930,000 882 99

23 PALM GARDENS 1,345 1,125,000 836 99

23 HILLTOP GROVE 1,485 1,000,800 674 99

27 ORCHID PARK CONDOMINIUM 958 728,000 760 99