singapore property weekly issue 156

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CONTENTS

p2 New HDB Resale Rules – A Disaster

in the Making?

p6 Singapore Property News This Week

p10 Resale Property Transactions

(April 30 – May 6)

Welcome to the 156th edition of the Singapore Property Weekly.

Hope you like it!

Mr. Propwise

FROM THE

EDITOR

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SINGAPORE PROPERTY WEEKLY Issue 156

Page | 2Back to Contents

By Paul Ho (Guest Contributor)

On March 10 2014, the Ministry of National

Development (MND) issued new rules on

HDB resale procedures. As usual, the

headline is almost the same: “A stable

housing market, better homes for all.” How

ironic!

Over the following two months, we have

observed how this new rule has affected the

market, and will share our views in this article.

New HDB Resale Rules – A Disaster in the Making?



Overview of the past practices and current

rules

Here is an overview of the property purchase

process under the old system and the current

rules:

Before March 10 2014

• Property sellers obtain a valuation report

• The property buyer and seller agree on a

price based on the valuation, i.e. cash over

valuation, at valuation or under valuation. For

example if a unit is valued at $350,000, if

buyers and sellers agree on $20,000 above

valuation, the transacted price will be

$370,000.

• The buyer pays for an Option to Purchase

(OTP) and exercises the option

After March 10 2014

• Property transactions must use the new

OTP form

• The property buyer and seller agrees on

the price

• Property buyer pays a deposit for the

Option to Purchase (OTP)

• Once an OTP is obtained, buyers and

sellers can seek a valuation.

What is the impact of such a measure?

Cash-over-valuation was previously criticized

as it gave the impression that the valuations

of HDB flats were “micro-managed”.

For example, how could the valuation be

correct if the Cash Over Valuation (COV) is

consistently different from that of the official

valuation by a large margin and for an

extended period of time? Would it not make

sense for the valuation to eventually catch up



based on large COV premiums or discounts?

If the valuation did not catch up, would it not

give the impression that the valuations are

somehow managed? But if it was managed,

by who?

So the question is: Would it not make more

sense that the valuations should catch up

with actual transacted prices, thereby

eliminating the need for COV totally? Based

on this, we support the MND's stand of

removing Cash Over Valuation or Cash Under

Valuation as a mechanism for determining the

property price.

HDB to provide recent 2 years of HDB flat

transacted prices

In its place, HDB will announce the recent two

years of HDB flat transacted prices more

frequently. So property buyers can then make

a more informed decision.

However, we understand that the market is

currently chaotic, which runs counter to the

aim of “a stable housing market, better

homes for all.” This is because many HDB

buyers are not even sure what the prices

should be. Worst still, they may approach a

seller’s agent who will sometimes discourage

the property buyer from co-broking, citing that

prices may become higher if they engage a

buyer’s agent. So what then is an appropriate

price to offer?

Market practice of Singapore private

property transactions

Whilst it may not be the proper valuation

practitioner's process, asking for a “desktop”

valuation for a property is the market practice.

This serves to ensure that the buyer can find

a bank that can back up the valuation of the



property and agree to the home loan

financing.

If the seller offers to sell at $500,000, you

agree on it. Then you go to seek a valuation,

only to find out that the valuation is $450,000.

The buyer will have to find CASH for this

extra $50,000. This is effectively a Cash Over

Valuation. If the buyer is not prepared for this

surprise, the buyer will have to forfeit their

Option To Purchase deposit.

The new rules thus serves to create doubts

for buyers and artificially halt demand in the

form of regulatory impediments to the market.

Potential for more fraud and a proposal

Property sellers and buyers may then be

encouraged to enter into private agreements

to alter the Option To Purchase by redoing it

or by making private arrangements and

adjustments in prices. This is even more

dangerous and fraught with potential

monetary losses and fraud, and does nothing

to create a stable and sustainable housing

market.

Perhaps one way is to keep the previous

process, but allow the valuations to be based

on a three month or six month moving

average, such that over time, the valuations

will rise to close the gap with asking prices.

By Paul Ho, holder of an MBA from a

reputable university and editor of

www.iCompareLoan.com, Singapore’s first

Cloud-based Home Loan reporting platform

used by Property agents, financial advisors

as well as Mortgage brokers.

http://www.icompareloan.com/






Singapore Property This Week


Residential

6,948 residential units remain unsold in

March

As of March 2014, 6,948 residential units that

were launched are still unsold. This was 252

units more as compared to the previous

month. Market analysts believe that the sale

of private residential units will remain slow in

the next few months. A recently launched

residential property in Pasir Ris, Coco Palms,

saw more than 3,000 visitors since its

opening last weekend. A 1-bedroom unit is

priced at about $1,075 per square foot while a

2-bedder is priced at $960 per square foot.

Property analysts believe that while prices

have been competitive, demand might still

trickle in slowly due to heavy competition from

other residential projects in the area.

(Source: Channel NewsAsia)

Non-landed private resale prices plunge

1.7% in April

Resale prices of non-landed private houses

are the lowest since December 2012 as it

plunged 1.7 per cent in April this year, thus

encouraging buyers to re-enter the market.

According to flash estimates by the Singapore

Real Estate Exchange, from March to April,

there was a 24.6 per cent increase in resale

transaction volumes.



Eugene Lim, ERA Realty key executive officer

believes that the market is stabilising as

resale volume was the highest since October

2013. Prices in the Rest of Central Region

and Core Central region fell by 3.6 per cent

and 2.3 per cent respectively. However,

prices in the Outside Central Region

increased by 0.4 per cent. Declining investor

interest may have resulted in weakening

prices, said R’ST Research director, Ong Kah

Seng.

(Source: Business Times)

April’s private home sales highest since

Nov 2013

Developers are offering more competitive

prices as loan restrictions and cooling

measures are taking effect. With the price

cuts, April’s private home sales are the

highest since November last year and

property observers predict that prices will

continue to fall. According to the Urban

Redevelopment Authority (URA), private

home sales upped from 480 units in March to

745 units in April. The 55 per cent increase in

sales transaction indicates a favourable

response to the re-pricing strategy that

developers have undertaken. Despite

dwindling buying sentiments, it appears that

there is still demand, if the price is right.

According to property consultants, discounts

of 10 to 15 per cent below previous levels are

likely to encourage buyers to return to the

market.


Commercial

Kallang Wave to open in July

FairPrice Xtra, Uniqlo, H&M and Harvey

Norman are among the tenants that will be



retailing at Kallang Wave, an up-and-coming

41,000 square meter mall in the Singapore

Sports Hub. The retail mall is expected to

open in July and more than 80 per cent of its

space has already been occupied said SMRT

Alpha, Kallang Wave’s manager. Dawn Low

from SMRT Alpha said that the tenants were

chosen to appeal to a broad spectrum of

Singaporeans. The sports-themed mall will

feature a 1,000 square meter climbing wall,

the largest and tallest indoor climbing wall in

Singapore.


92.8% stake in Prudential Tower sold for

$512 million

A consortium comprising of KOP Limited, Lian

Beng Group, KSH Holdings and Centurion

Global have bought over a 92.8% stake in

Prudential Tower from Keppel Reit for $512

million. The 221,080 square foot net lettable

area is going for $2,316 per square foot,

which reflects a net yield of 3.5 per cent

based on current income generated by the

space. The tower which is a 30-storey Grade

A office building near Raffles Place MRT

station, has a remaining lease term of 81

years. Its sale is expected to be completed on

September 26.


DFS Changi Airport stores undergoing

facelift

DFS stores in Changi Airport will undergo an

$85 million facelift for its existing stores and a

new 20,000 square feet outlet is expected to

open in the new Terminal 4 in 2017.



The current store at the airport’s Terminal 2 is

likely to increase by another 10,000 square

feet by 2016, which means the DFS’ retail

footprint for liquor and tobacco concessions

will grow to 85,350 square feet. The Terminal

1 stores will be completed by December this

year while the Terminal 3 store will be

updated by 2015.


http://www.moneymatters.sg/



Non-Landed Residential Resale Property Transactions for the Week of Apr 30 – May 6

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

1 ONE SHENTON 1,141 2,196,425 1,925 99

2 LUMIERE 678 1,132,260 1,670 99

3 ASCENTIA SKY 1,475 1,900,000 1,288 99

3 THE ANCHORAGE 1,507 1,720,000 1,141 FH

5 PARC IMPERIAL 452 688,000 1,522 FH

5 CARABELLE 1,130 1,400,000 1,239 956

5 WESTCOVE CONDOMINIUM 1,227 1,180,000 962 99

8 TYRWHITT 139 366 538,000 1,470 FH

9 SCOTTS SQUARE 1,227 4,050,000 3,300 FH

9 THE TRILLIUM 1,798 3,700,000 2,058 FH

9 ONE OXLEY RISE 732 1,400,000 1,913 FH

9 THE PATERSON 1,206 2,291,400 1,901 FH

9 THE WHARF RESIDENCE 1,066 2,000,000 1,877 999

9 ST THOMAS SUITES 2,013 3,750,000 1,863 FH

9 CAIRNHILL PLAZA 2,293 3,650,000 1,592 FH

10 PARVIS 990 1,990,000 2,010 FH

11 TREVOSE PARK 1,679 2,520,000 1,501 FH

11 THOMSON 800 1,625 1,999,888 1,230 FH

11 EVELYN MANSIONS 1,227 1,390,000 1,133 FH

15 VERTIS 2,099 2,700,000 1,286 FH

15 THE SUNNIFLORA 818 935,000 1,143 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

15 TAIPAN GRAND 1,345 1,500,000 1,115 FH

15 VILLA MARINA 1,249 1,200,000 961 99

15 NEPTUNE COURT 1,270 1,060,000 835 99

16 BAYSHORE PARK 936 1,048,000 1,119 99

16 THE CLEARWATER 1,001 980,000 979 99

16 KEW GREEN 3,046 1,908,000 626 99

17 CASA PASIR RIS 1,130 850,000 752 946

17 COASTAL BREEZE RESIDENCES 2,207 1,400,000 634 99

18 SAVANNAH CONDOPARK 1,023 980,000 958 99

18 MODENA 1,410 1,267,000 899 99

18 LIVIA 1,539 1,330,000 864 99

19 3@SANDILANDS 764 908,888 1,189 999

19 THE QUARTZ 1,076 1,139,980 1,059 99

19 COMPASS HEIGHTS 1,281 910,000 710 99

20 THE GARDENS AT BISHAN 883 970,000 1,099 99

20 THE GARDENS AT BISHAN 1,152 1,232,500 1,070 99

21 SUITES DE LAUREL 517 800,000 1,548 999

21 SPRINGDALE CONDOMINIUM 1,389 1,575,000 1,134 999

21 SIGNATURE PARK 1,367 1,420,000 1,039 FH

21 SIGNATURE PARK 1,389 1,410,000 1,015 FH

22 PARC OASIS 1,507 1,380,000 916 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.

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

23 PARK NATURA 1,378 1,555,000 1,129 FH

23 HILLBROOKS 1,098 1,150,000 1,047 FH

23 REGENT HEIGHTS 1,023 900,000 880 99

23 REGENT GROVE 1,259 1,000,000 794 99

23 THE WARREN 1,238 950,000 767 99

25 CASABLANCA 1,119 1,000,000 893 99

26 BULLION PARK 1,238 1,250,000 1,010 FH

27 EUPHONY GARDENS 1,023 740,000 724 99

28 SUNRISE GARDENS 1,281 950,000 742 99

http://propertymarketinsights.com/

singapore property weekly issue 156

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