singapore property weekly issue 25

Issue 25 Copyright © 2011 www.Propwise.sg. All Rights Reserved.

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CONTENTS p2 Singapore Property News This Week

p5 How to Calculate Your Property’s

Return On Investment

p9 Resale Property Transactions (October 22 – 28)

p11 Singapore Property Classifieds #15

Welcome to the 25th edition of the Singapore Property Weekly. Hope you like it! Mr. Propwise

FROM THE

EDITOR

mailto:[email protected]

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http://www.propwise.sg/

SINGAPORE PROPERTY WEEKLY Issue 25

Singapore Property This Week

Page | 2 Back to Contents

Residential

Indian citizens more likely to purchase

resale private homes than mainland

Chinese, Indonesians and Malaysians

DTZ's analysis showed that 82% of the total of

private homes that Indian citizens (PRs as

well as non-PR foreigners) purchased in Q3

2011 were from the resale market, twice of

what the other three major nationalities

(mainland Chinese, Malaysians and

Indonesians) who buy private homes in

Singapore bought. The other three are more

likely to purchase directly from developers,

suggesting that they might be investors and

specu-vestors, and hence have no need for

immediate occupation, unlike Indian buyers.

In Q3, 51% of what mainland Chinese bought

was from developers, with the remaining from

secondary market deals. Similarly, 48% and

49% of the private homes purchases by

Malaysians and Indonesians were directly

bought from developers.

DTZ : Foreign buyers loses interest in

subsales

Less foreigners (particularly non-PR

foreigners) are buying private homes in the

subsale market. The trend found across all

buyers (foreigners, PRs and Singaporeans) is

to buy directly from the developers. This is

due to the increase in launches from

developers as well as governmental

measures to deter short-term trading of

private homes.



The percentage of private home sales by

foreigners in the subsale market has fallen

from 18-21 % in 2007-2009 to 11 % in the first

nine months of this year. The corresponding

figures for PRs and Singaporeans are 13-14%

to 10% and 11-13% to 8% respectively.

Lower asking price of $323m for Vista Park

319,248 sq ft leasehold Vista Park at South

Buona Vista Road is asking for $323m now,

lower than the $338m it asked for in May. The

site with a remaining lease term of 66 years

has a maximum gross floor area of 446,947

square feet, reflecting a 1.4 gross plot ratio.

The reserve price is equivalent to a land price

of $824 psf ppr including an estimated $45.3

million for topping up the site's lease to 99

years. The breakeven cost is estimated to be

$1,250 psf. The tender for Vista Park closes

on Dec 7.

Commercial

13-storey Paya Lebar Square to start

selling office units in December

Paya Lebar Development Pte Ltd is set to sell

its 550 office strata units in Paya Lebar

Square, located next to the Paya Lebar MRT

Station on the East-West Line in December.

Half of the units available will be about 480 sq

ft each with some larger units of 800 sq ft and

1,500 sq ft. Contiguous units can be bought to

combine them into larger offices and office

units on a single floor would add up to 43,000

sq ft. Indicative prices range from $1,650 to

$2,000 psf, with the cheapest being $800,000

for a 480 sq ft office on the fourth level. There

is a total of 430,000 sq ft of offices with the

remaining net lettable area of 95,000 sq ft in

the building for a retail podium in Basement 1

to Level 2.



New industrial site at Sims Drive/Aljunied

Rd released under Reserve List

The 60-year leasehold 0.63 hectares site

zoned for Business 1 uses has a maximum

permissible gross plot ratio of 2.5. It will only

be released for sale if the criteria for the

triggering of the site are met.

http://www.propwise.sg/secretsofsingaporepropertygurus/



How to Calculate Your Property’s Return On Investment

By Mr. Propwise

People who are interested in investing in

property often get the well-meaning advice to

“do your sums” before making the leap. As

property is often one of the biggest purchases

that you will make in your lifetime, and usually

comes with a large mortgage that can result

in financial distress if not managed properly, I

completely agree that you should “do your

sums”. But what does that mean?

It’s an ambiguous term that I think covers

three essential components of analyzing a

property purchase:

1. The attractiveness of the property relative

to the surrounding units, projects and areas



2. Your ability to service the mortgage

including all your other commitments and

accounting for some bad scenarios (e.g. your

falling sick or losing your job) 3. The potential

upside or downside of your investment based

on both the potential yield and capital

appreciation. In this article we will focus on the

third part – calculating your Return On

Investment (ROI)

ROI defined

ROI is simply the percentage gain of an

investment after deducting the associated

costs of that investment. A simple formula to

calculate this is as follows:

ROI = (Gain from investment – Cost of

investment) / Cost of investment

However, as you have probably guessed, for

property investments there are a large number

of variables that go into calculating each of the

above components, and the number will also

be distorted by the use of a loan.

Property investors typically use an Out of

Pocket (or “Cash on Cash”) method to

calculate return. This method looks at how

much cash you put in, and then calculates

your return based on how much cash you will

get back after accounting for all expenses.

A case study example

The calculation is best illustrated by the use of

an example, and I will use one from the book

Real Estate Riches by Ku Swee Yong. In it he

goes through the example of an actual

property his firm International Property Advisor

Pte Ltd helped a client to source.

The property was a 3-bedroom (1,152 square

feet) mid-floor pool-facing unit at Blue



Horizon (a condominium located at West

Coast Crescent). The transacted price of the

property was $1.02 million or $885 per square

foot. Taking into account the downpayment of

40% (we are assuming a 60% loan), stamp

duty of $25,200 and the legal fees of $2,500

(this is usually absorbed by the bank but we

will include it here to be conservative), the total

cash outlay is $435,700.

This particular property had a monthly rental of

$3,800 that was on a lease that would last till

November 2012, giving a gross annual rental

of $45,600.

Moving on to the expenses side, if we assume

an interest rate on the loan of 1% per annum,

then the annual interest costs on the 60% loan

will be $6,120 (this does not include principal

repayments). The owner will also have to

cover the $3,120 annual cost of the

maintenance fee plus the sinking fund, and a

property tax of $4,560 (10% of annual revenue

– we have not taken out expenses to keep it

simple). To keep things simple, we will assume

no additional costs for repairs etc. The total

expenses are thus $13,800.

Subtracting this from the gross annual rental

we get a net retained rental of $31,800. Note

that part of this will have to go towards

reducing the principal amount of the mortgage,

which is part of the monthly mortgage

payment that you make to the bank.

And thus the return on invested cash is the net

retained rental of $31,800 divided by the total

cash outlay of $435,700, which gives a return

of 7.3%. Not too shabby when compared to

deposit rates that are close to 0%,



but note that the return has been enhanced by

leverage, and if interest rates rise this return

will fall. Also it doesn’t take into account any

gaps in the rental income when tenants move

out and the property is empty.

To recap, you can calculate your return on

invested cash using the following formula:

Net retained rental

(= Gross annual rental – mortgage interest

– maintenance fees – property tax – other

expenses)

Divided By

Total cash outlay (= downpayment + stamp

duty + legal fees)

Note that the above calculation looks at only

the yield of a property when owning it for

rental, and any capital appreciation you get

when you sell the property is extra, which you

can then add on top of this.

Happy investing, but don’t forget to do your

sums!

http://www.moneymatters.sg/



Non-Landed Residential Resale Property Transactions for the Week of Oct 22 - 28

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

3 EMERALD PARK 926 985,000 1,064 99

3 EMERALD PARK 947 1,000,000 1,056 99

4 CARIBBEAN AT KEPPEL BAY 1,216 1,780,000 1,463 99

5 ONE-NORTH RESIDENCES 980 1,380,000 1,409 99

5 BOTANNIA 1,270 1,450,000 1,142 956

5 DOVER PARKVIEW 936 965,000 1,030 99

5 BLUE HORIZON 1,163 1,123,000 966 99

5 DOVER PARKVIEW 936 900,000 961 99

8 CITYLIGHTS 678 1,000,000 1,475 99

8 KERRISDALE 1,259 1,370,000 1,088 99

9 THE LIGHT @ CAIRNHILL 1,690 3,400,000 2,012 FH

9 THE PIER AT ROBERTSON 743 1,380,000 1,858 FH

9 THE IMPERIAL 1,410 2,600,000 1,844 FH

9 PARC EMILY 893 1,560,000 1,746 FH

9 MIRAGE TOWER 570 925,000 1,621 FH

9 CAVENAGH COURT 1,862 2,380,000 1,278 FH

9 8 @ MOUNT SOPHIA 2,174 2,588,000 1,190 103

10 NASSIM JADE 2,153 5,100,000 2,369 FH

10 THE ORANGE GROVE 2,777 5,672,000 2,042 FH

10 REGENCY PARK 3,175 5,500,000 1,732 FH

11 PARK INFINIA AT WEE NAM 1,001 1,901,900 1,900 FH

11 1 MOULMEIN RISE 1,238 1,780,000 1,438 FH

11 AMARYLLIS VILLE 958 1,330,000 1,388 99

11 M21 1,345 1,776,720 1,320 FH

11 THE ANSLEY 1,292 1,650,000 1,277 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

11 THOMSON 800 1,399 1,600,000 1,143 FH

12 PARC HAVEN 1,313 1,420,000 1,081 FH

12 SUNVILLE 1,141 1,000,000 876 FH

14 ATRIUM RESIDENCES 1,259 1,105,000 877 FH

14 SIMSVILLE 1,528 1,195,000 782 99

14 EUNOSVILLE 1,701 1,270,000 747 102

14 SIMS POINT 1,227 875,000 713 FH

14 CARMI MANSION 1,313 600,000 457 FH

15 AALTO 1,528 2,850,000 1,865 FH

15 THE ESTA 1,475 1,945,000 1,319 FH

15 COTE D'AZUR 1,313 1,650,000 1,256 99

15 SANCTUARY GREEN 1,711 2,100,000 1,227 99

15 PARADISE PALMS 1,141 1,380,000 1,209 FH

15 OCEAN PARK 1,873 2,240,000 1,196 FH

15 TANJONG RIA CONDOMINIUM 635 726,800 1,144 99

15 TIERRA VUE 1,916 2,150,000 1,122 FH

15 HAIG COURT 1,076 1,190,000 1,106 FH

15 PARK EAST 2,024 2,120,000 1,048 FH

15 CADENCE LIGHT 850 878,000 1,033 FH

15 THE GERANIUM 947 960,000 1,013 FH

15 PARK EAST 1,292 1,285,000 995 FH

15 NEPTUNE COURT 1,636 1,300,000 795 99

16 COSTA DEL SOL 1,227 1,685,000 1,373 99

16 COSTA DEL SOL 2,045 2,460,000 1,203 99

16 THE SUMMIT 1,249 1,300,000 1,041 FH



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

16 LAGUNA GREEN 1,475 1,333,000 904 99

16 CASAFINA 2,131 1,425,000 669 99

17 BLUWATERS 2 1,496 935,000 625 946

18 EASTPOINT GREEN 1,141 975,000 855 99

18 MELVILLE PARK 936 770,000 822 99

18 CHANGI RISE CONDOMINIUM 1,130 908,888 804 99

18 MELVILLE PARK 936 745,000 796 99

18 SAVANNAH CONDOPARK 1,453 1,150,000 791 99

18 MELVILLE PARK 936 740,000 790 99

19 THE QUARTZ 1,195 1,160,000 971 99

19 CHILTERN PARK 1,270 1,172,000 923 99

19 THE QUARTZ 1,206 1,100,000 912 99

19 CHILTERN PARK 1,270 1,150,000 905 99

19 CASA ROSA 1,130 875,000 774 99

20 CLOVER BY THE PARK 1,604 1,750,000 1,091 99

20 CLOVER BY THE PARK 1,572 1,650,000 1,050 99

20 THE GARDENS AT BISHAN 883 870,000 986 99

20 THE GARDENS AT BISHAN 1,227 1,145,000 933 99

20 GRANDEUR 8 1,227 900,000 733 99

21 MAPLEWOODS 1,378 1,800,000 1,306 FH

21 1 KING ALBERT PARK 1,281 1,600,000 1,249 FH

21 CLEMENTI PARK 1,539 1,510,000 981 FH

21 THE HILLSIDE 1,528 1,490,000 975 FH

21 SIGNATURE PARK 1,701 1,650,000 970 FH

21 SHERWOOD TOWER 1,518 1,050,000 692 99

21 SHERWOOD TOWER 1,755 1,115,000 635 99

22 THE MAYFAIR 1,184 958,000 809 99

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

22 LAKEPOINT CONDOMINIUM 2,217 1,280,000 577 99

23 THE JADE 1,012 940,000 929 99

23 MAYSPRINGS 807 740,000 917 99

23 THE MADEIRA 1,733 1,500,000 866 99

23 THE LINEAR 1,206 1,000,000 829 999

23 YEWTEE RESIDENCES 1,195 955,834 800 99

23 REGENT HEIGHTS 1,163 830,000 714 99

23 MAYSPRINGS 1,550 1,020,000 658 99

25 CASABLANCA 1,130 900,000 796 99

25 ROSEWOOD 1,173 867,700 740 99

25 WOODGROVE CONDOMINIUM 1,518 1,030,000 679 99

26 FOREST HILLS CONDOMINIUM 1,539 970,000 630 99

27 SELETARIS 1,087 845,000 777 FH

27 YISHUN SAPPHIRE 1,023 760,000 743 99

27 EUPHONY GARDENS 1,518 918,000 605 99

Singapore Property Classifieds #15 For Sale



Lavender St Office, 1000-sqft modern

renovation 999-yrs carpark nearby. Pictures:

www.limyumu.com. Mark Lim 9739-9985

R018154H DWG

North Point Bizhub (B1). 2669-sqft parking lot

mezzanine toilet TOP end 2012. Pictures:


R018154H DWG

Verdana Villas (FH Cluster Semi-Detach). 4370-

sqft Pool Lift Carpark TOP 2014. Pictures:


R018154H DWG

HDB BLK 112 SIMEI (5I), 122sqm, 7 min to

MRT, #02 Nicely Renovated Corner. Val $520k.

Main Door Face North East. Call Nelson Lim

83680693

http://www.limyumu.com/

singapore property weekly issue 25

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