singapore property weekly issue 219

8/20/2019 Singapore Property Weekly Issue 219

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CONTENTS

p2 Expert Advice for Housing Loan Borrowers

p7 Singapore Property News This Week

p10 Resale Property Transactions

(July 15 – July 21 )

Welcome to the 219th edition of the

Singapore Property Weekly .

Hope you like it!

Mr. Propwise

FROM THE

EDITOR

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SINGAPORE PROPERTY WEEKLY Issue 219

Page | 2Back to Contents

By Property Soul (guest contributor)

Recently I had an interview with Wayne Quek,

Director of mortgage consultancy firm Home

Loan Whiz, to understand more about how

property financing and SIBOR rates work.

Below is a summary of our conversation.

PS = Property Soul

Wayne = Wayne Quek, Director, Home Loan

Whiz

M ai n f a c to r s a ff e c ti n g a n d f u t u r e d i r e c t io n

o f m o r t g a g e r a te s

PS: Could you share with us the main factors

affecting housing loan interest rates?

Expert Advice for Housing Loan Borrowers

http://propertysoul.com/author/propertysoul/

http://www.homeloanwhiz.com.sg/














Wayne: There are many factors that will

affect mortgage rates. I think the most

significant factor at this time is the US Federal

Reserve’s announcements and actions with

regards to their interest rate policies.

SIBOR (Singapore Interbank Offer Rates) is

heavily influenced by the Singapore-US

Dollar exchange rate and also the US Federal

Funds rate. Historically, there is a very strong

correlation between the interest rates inSingapore and the US. We have already seen

an example earlier this year when the Federal

Reserve announced the end of their QE

program, which led to a spike in our SIBOR

from 0.4 percent all the way to 1 percent.

PS: Where do you see the SIBOR rates going

in the near future? How would that impact

banks and mortgage borrowers?

Wayne: If we examine the current 3-month

SIBOR of 0.82 percent, it is still hovering

below its long-term average. It is unlikely that

the rates will increase dramatically overnight,

but it most likely will increase in the next year

or two. This depends very much on the

actions of the Federal Reserve and MAS.

A higher SIBOR will be good news for the

local banks, as they will be able to earn a

much larger margin with their low cost of

funds. Just think about it from the bank’sperspective: paying customers 0.05 percent

interest for savings account and charging

three percent for mortgage lending.

With a healthy economy and high

employment rate, there should not be a huge

impact on mortgage borrowers. The

government has also implemented measures

to curb investors’ speculation and over-

leveraging, with the introduction of the Total

Debt Servicing Ratio and Buyer/Seller Stamp





Duties.

We might however, start seeing more defaults

from over-leveraged investors, and a rise in

bank mortgagee sales (or bank loan defaultedproperties). This is due to a “double whammy”

effect of a huge supply of residential units

coming into the market and the tight foreign

immigration policy, which will result in a

lackluster rental market.

Options for borrowers in a rising rate

environment

PS: What are the options of a borrower in the

environment of rising interest rates?

Wayne: Mortgage borrowers should avoid

timing the market. Be financially prepared interms of your cash flow to handle a one to

two percent increase in interest rates.

If you find that you will not be able to handle a

spike in interest rates, you can consider

switching to fixed rates to eliminate that short-

term concern. Also, if you are on a floating

interest rate, always make sure that you are

getting the best spreads at any point of time.

We have no control over the SIBOR, but we

can better manage the spreads we pay to the

banks.

PS: Under what circumstances should a

borrower consider refinancing his existinghousing loan?

Wayne: There are many factors one should

consider when refinancing an existing

housing loan. The primary reason would be to

lower your interest rate spreads to save

money. Most interest rate packages inSingapore tend to have teaser rates for the

first few years, and spike up thereafter. I

cannot emphasize the importance of doing a

periodic loan review every three years.





PS: What are the key factors to consider

hen comparing housing loan offers from

different banks?

Wayne: Key factors will differ betweenindividuals. A person who intends to prepay

needs to go for a package without lock-in.

Someone who wants to do a maximum cash

out might go for the bank that can support the

highest valuation. A person who has not-so-

good credit might want to approach a bankthat is more lenient. Of course, after fulfilling

all these requirements, it always comes down

to interest rates which are still the main factor

hen comparing packages.

PS: What do you recommend borrowers do if

they have difficulties passing the TDSR test inthe process of refinancing?

Wayne: For borrowers who have difficulties

passing the TDSR, they have to figure out the

root cause of the problem and figure out how

to reduce their liabilities. Is it because of their

car loan? Is it because of too much personal

loan and credit card expenditure?

Alternatively, they can approach mortgageconsultants like us to review their situation

and find possible solutions and to develop an

action plan.

PS: Do you see rising interest rates having a

strong impact on the performance of REITs?Wayne: Rising interest rates mean higher

interest expense as most REITS have a high

gearing ratio. This will affect the profitability of

the REITs. However, on the other hand, when

interest rates rise, it is most likely the result of

an improving economy. An improvingeconomy will lead to more jobs, higher

consumer spending, which in turn leads to

higher rentals.





I think that rising interest rates will probably

cause a short-term correction in the REITs

market, especially those that are more heavily

geared. This may present some buying

opportunities.

By guest contributor Property Soul, a

successful property investor, blogger , and

author of the No B.S. Guide to Property

Investment.

SINGAPORE PROPERTY WEEKLY I 219

http://propertysoul.com/

http://aktive.com.sg/store/no-b-s-guide-to-property-investment/


http://www.moneymatters.sg/















http://propertysoul.com/




Singapore Property This Week


Residential

Shun fu Vi l l e up fo r en bl oc s al e

Located at Marymount Road, a privatised

estate, Shunfu Ville has achieved the

minimum consent level required for it to be

launched for en bloc sale. The estate is about

409,000 sq ft large and has a balance lease

term of 70 years. The plot is expected to sell

for $800 psf ppr. Under the Urban

Redevelopment Authority’s Master Plan 2014,

Shunfu Ville is zoned for residential use. Also,

it has a 2.8 plot ratio, which may be

constructed into 1,280 units with an average

unit size of 850 sq ft.

(Source: Business Times)

C o n d o p r i c e s i n c e n t r a l r e g i o n h a s f a l l e n

by 12.7% sinc e 2013

According to the Singapore Residential Price

Index (SRPI), prices of completed private

apartments and condos in the central region

have fallen by 12.7% since May 2013. Pricesof small apartments that are no larger than

506 sq ft have also taken a 9.9% hit, since

August 2013, when property prices peaked.

Ong Kah Seng from R’ST Research

explained that this is because flat owners

may be releasing their shoebox units for saleafter the flat has been left vacant for a period

of time. On the whole, the SRPI has fallen

10% since July 2013.

SINGAPORE PROPERTY WEEKLY I 219





Ong Kah Seng from R’ST Research predicted

that prices of completed private homes in the

non-central region may be volatile in the

upcoming months.


Q 2 C u r r e n t S e n t i m e n t I n d e x i n c h e s u p t o

3.9 poi nts f rom 3.8 i n Q1

According to the Real Estate Sentiment Index

survey, the Current Sentiment Index has

increased to 3.9 in Q2 from a score of 3.8 in

Q1. In the same survey, the Future Sentiment

Index had also increased from 3.7 points to 4

from Q1 to Q2. The results indicate that

developers are optimistic about the market.

Survey respondents believe that the

upcoming General Elections may have

influenced market sentiments as developers

are hoping that the election may bring about

policy changes. About 74% of developers

surveyed believed that the number of

residential projects that will be launched in

the next 6 months will either increase or

remain the same. 52% believe that there will

be a drop in residential property prices in thenext half of the year while 38% believe that

prices will remain stable.


Choa Chu Kang EC si te attracts 11 bi ds

Situated at Choa Chu Kang Avenue 5, an

executive condominium site has attracted 11

bids in a tender. The site was eventually sold

to the top bidder for $295 psf ppr. 8 of the 11

bids were priced below $250 psf ppr. Ong

Teck Hui from JLL said that this is expected

as there is still a large volume of unsold EC

units in the market, and more EC units are

expected to be launched in the future.

SINGAPORE PROPERTY WEEKLY Iss e 219





Nicholas Mak from SLP said that the site may

have attracted a large number of bidders as

developers anticipate that the income ceiling

for buyers will be increased. The Choa Chu

Kang site is said to incorporate smart livingfeatures into the residential development and

ill be launched in late-2016 or early-2017.


Commercial

Thong Si a Bui l di ng sol d for $380 m i l l i on

Thong Sia Building, which is 26 storeys high,

has been sold for $380 million or $2,430 psf

in a collective sale. It is the first and the

largest ever mixed use collective sale this

year. The building is freehold and was built in1981. It has a land area of about 21,602 sq ft.

The building may be redeveloped into a

mixed residential and commercial

development with at least 60% of the space

set out for residential use. Market experts

believe that the building had fetched a very

high price, given current market conditions.


1 3 7 C e c i l S t r e e t s o l d f o r m o r e t h a n $ 2 0 0

m i l l i o n

The office block at 137 Cecil Street has been

sold for between $210- $215 million to a

Shanghai buyer. The Aviva Building, which is

located at Cecil Street, has a net lettable area

of 67,550 sq ft. According to URA, two units

on the first level of the office block will be

used as restaurants. A neighbouring site, 158

Cecil Street, was also sold in late June for

$2,100 psf based on the property’s net

lettable area of 115,000 sq ft.







Non-Landed Residential Resale Property Transactions for the Week of Jul 15 – Jul 21

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

1 THE SAIL @ MARINA BAY 678 1,254,300 1,850 99

2 INTERNATIONAL PLAZA 1,604 1,690,000 1,054 99

3 CENTRAL GREEN CONDOMINIUM 2,110 2,450,000 1,161 99

3 TANGLIN VIEW 1,163 1,280,000 1,101 99

4 THE INTERLACE 1,001 1,280,000 1,279 99

5 HERITAGE VIEW 969 1,080,000 1,115 99

8 CITY SQUARE RESIDENCES 1,238 1,650,000 1 ,333 FH

9 THE PIER AT ROBERTSON 678 1,250,000 1,843 FH

9 RIVERGATE 1,507 2,570,000 1,705 FH

9 RESIDENCES AT 338A 1,163 1,970,000 1,695 FH

9 THE QUAYSIDE 1,711 2,000,000 1,169 99

10 PARKVIEW ECLAT 3,251 8,200,000 2,523 FH

10 THE GRANGE 1,765 3,710,000 2,102 FH

10 CYAN 1,001 2,010,000 2,008 FH

10 ONE TREE HILL RESIDENCE 1,227 2,430,000 1,980 FH

10 TANGLIN PARK 1,023 1,850,000 1,809 FH

10 MONTVIEW 1,679 2,240,000 1,334 FH

11 SHELFORD REGENCY 1,152 1,800,000 1,563 FH11 SKY@ELEVEN 2,271 3,450,000 1,519 FH

11 MONARCHY APARTMENTS 1,216 1,235,000 1,015 FH

12 TWIN HEIGHTS 1,421 1,620,000 1,140 FH

12 SUNVILLE 1,152 1,000,000 868 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

14 WATERBANK AT DAKOTA 1,259 1,550,000 1,231 99

14 CASSIA VIEW 1,152 1,150,000 998 FH

14 EVER LODGE 990 880,000 889 FH

14 WING FONG MANSIONS 1,227 858,000 699 FH

15 THE SEAFRONT ON MEYER 2,088 3,600,000 1,724 FH

15 THE BELVEDERE 1,302 1,850,000 1,420 FH

15 ONE AMBER 1,593 2,130,000 1,337 FH

15 THE MAKENA 1,647 2,200,000 1,336 FH

15 THE WATERSIDE 2,411 3,150,000 1,306 FH

15 HAIG COURT 1,399 1,750,000 1,251 FH

15 THE AMERY 1,389 1,668,888 1,202 FH

15 B UTTERWORTH VIEW 1,195 1,406,000 1,177 FH

15 PARK EAST 1,970 2,149,500 1,091 FH

15 SUNNY PALMS 1,313 1,268,000 966 FH

15 WOO MON CHEW COURT 1,130 1,050,000 929 FH

16 COSTA DEL SOL 1,313 1,500,000 1,142 99

19 THE SCALA 474 750,000 1,584 99

19 THE MINTON 1,216 1,420,000 1,167 9919 TREASURE MANSIONS 753 838,000 1,112 FH

19 CHILTERN PARK 915 880,000 962 99

19 HOUGANG GREEN 764 735,000 962 99

19 CHUAN PARK 1,851 1,650,000 891 99






NOTE: This data only covers non-landed residential resale propertytransactions with caveats lodged with the Singapore Land Authority.Typically, caveats are lodged at least 2-3 weeks after a purchasersigns an OTP, hence the lagged nature of the data.

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

19 KOVAN 81 1,959 1,660,000 847 999

20 THOMSON V TWO 581 750,000 1,290 FH

20 CLOVER BY THE PARK 2,573 2,900,000 1,127 99

20 THE GARDENS AT BISHAN 1,399 1,320,000 943 99

23 GUILIN VIEW 1,281 1,088,000 849 99

23 THE WARREN 1,518 1,245,000 820 99

23 HILLTOP GROVE 1,238 958,000 774 99

26 SEASONS PARK 1,539 1,340,000 871 99

26 CASTLE GREEN 1,345 1,100,000 818 99

27 EUPHONY GARDENS 1,184 830,000 701 99

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singapore property weekly issue 219

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