singapore property weekly issue 250
TRANSCRIPT
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Issue 250Copyright © 2011-2016 www.propwise.sg. All Rights Reserved.
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CONTENTS
p2 How Buyers Get Squeezed like
Lemons by Developers
p6 Singapore Property News This Week
p10 Resale Property Transactions
(February 20 – February 26)
Welcome to the 250th edition of the
Singapore Property Weekly .
Hope you like it!
Mr. Propwise
FROM THE
EDITOR
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By Gerald Tay (guest contributor)
In a far, far away land, there’s a town called
Lemon Tree. In Lemon Tree, you open a stall
selling lemons. Your cost of each lemon is $1.
If you sell a whole lemon for $1.50, your gross revenue is $1.50 and gross profit is
$0.50 per lemon. Nothing to boast about.
Getting more profits by selling slices
You wisely decide there’ll be better profits
selling by the slice than a whole lemon.
Therefore, you slice the lemons into 6 slices
and sell each slice for $0.50 each.
How Buyers Get Squeezed like Lemons by Developers
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This has effectively increase your gross
revenue from $1.50 to $3. Your gross profit
has gone up from $0.50 to $2. Now, we’re
talking…
Later, you realise the lemon can be sliced
further into 10 slices instead of six and if you
lower the selling price to $0.40 per slice, you’ll
make $4 revenue and $3 profit. Wow!
But wait…
In each instance of price inflation people paid
exorbitant amounts for lemons and lemon
slices that shouldn’t have been worth
anything like the going price.
The cost of a lemon rose from $1 to $1.50.
This time, 10 lemon slices will give a lower profit of $2.50 instead of $3 the last time.
There were fewer buyers to sell to and
smaller profit margins to be made.
You have to do creative selling to boost
flagging profits.
Instead of 10 slices, you decide to slice the
lemon into 20 slices and sell at a lower sellingprice of $0.30 per slice to entice more buyers.
Doing this will give $6 revenue and a gross
profit of $4.50. People are now calling you a
business sage!
For buyers, the quantum price of a lemon
slice may have gone down 40% (from $0.50to $0.30) but the size of each lemon slice has
also shrunk 70%!
It’s no longer a lemon slice. It’s bits and
pieces of a lemon.
Throw in some discounts and hype
Offer an 8% discount to sweeten the deal.
Create a ton of hype marketing for your
lemon slice and watch the buyers flow in!
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A $0.30 lemon slice is “sweetened” to $0.276.
Your gross revenue is $5.52 with a gross
profit of $4.02 for 20 slices. Hey look! This is
more profitable than selling 10 slices at $0.40
each!
Simply put, prices today in Lemon Tree are
set artificially low for a bigger mass market of
“financially-impaired” lemonade drinkers
eager to own an exclusive slice of lemon.
An allegory for how the world works today
It’s a perfect example of how the world and
the economy operate. The fools work, slave
and buy garbage, while the so-called winners
enjoy “the good life.”
It all starts at a subconscious level. Theyshow us something we want and charge us a
lot only to get a small piece of it. The best
marketers are those who know very well what
the people need and want, but instead of
giving it to them in its true form – they sell
garbage.
Just like how developers are cashing in on $1
million or under properties today. They knowthey can't sell high quantum units in the
current market.
One of the oldest tricks in the developer’s
book
One of the oldest tricks real estate developers
use is squeezing a piece of land to its
maximum allowable plot ratio for optimal
economic profit (theirs, not yours).
It’s not uncommon to see today's 3-bedroom
properties built with less than 1,000 square
feet and costing less than a $1 million pricequantum. It's also not uncommon to see less
than 500 square feet properties selling like
hot cakes either.
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They give the marginal buyer just enough
affordability to own a private property.
This technique increases the profit of the
developer significantly, and as you already
know, property showrooms are "The Greatest
Manipulation" of this world – you never know
how the end product will turn out to be when
you buy it.
Why I only buy resale properties of
meaningful sizes
That's the primary reason all of my successful
purchases over the last 15 years or personal
purchases are of resale properties of
meaningful sizes.
While a smaller price quantum won’t hurt younearly as much as a bigger price quantum,
it’s still a "scam" as the real value is much
less than the promised worth. In this case,
buyers bought a lemon (slice) and they don't
know it.
It makes you wonder why today's property
buyers still fall for the oldest marketing trick in
the world.
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.
http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/
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Singapore Property This Week
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Residential
Prices of non-landed private homes up by
0.1% month-on-month in Jan
Based on flash estimates by the National
University of Singapore for the Singapore
Residential Price Index (SRP), there was a0.1% month-on-month increase in prices of
completed non-landed private homes in
January from the previous month. This price
increase was led by small units and units in
the non-central region. In January, the
estimates were made based on a revisedbasket that consists of 574 private residential
projects. This was an increase from the 429
projects that were included previously. To
reflect changes in the completed privatehousing stock, the composition of the basket
is adjusted every two years. For the revised
basket with December 2015 as the base
year, prices of small units of 47 sqm or less
increased by 0.5% month-on-month. Price of
units in the non-central region, excludingsmall units had increased by 0.5% during the
same period. However, prices of units in the
central region had fallen by 0.5% in January,
after a 0.8% drop in December. Eugene Lim
from ERA Realty said that residential
purchases in the central region took a harder hit than non-central apartments due to
market volatility and the economic downturn,
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as non-central apartments tend to draw more
owner-occupiers than investors.
(Source: Business Times)
HDB resale prices increase by 0.2% in Feb
According to the Business Times, resale
prices may be stabilizing for HDB resale flats
as prices have increased by 0.2% month-on-
month in February. This increase was seen in
both mature and non-mature estates. Year-
on-year, HDB resale prices are still 0.6%
lower than a year ago and 10.9% lower than
in April 2013. ERA Realty’s Eugene Lim said
that the recent increase in prices could
indicate that prices have bottomed out.
However, this does not mean that the market
has fully recovered or that sellers should up
their prices, he said. Ong Kah Seng from
R’ST Research agreed that HDB resale
prices have yet to stabilize entirely. He added
that buyers are unlikely to accede to higher
asking prices as cooling measures such as
the mortgage servicing ratio have not yet
been eased. For buyers that cannot wait for
BTO flats to be completed or do not qualify tobuy BTO flats, Lim believes that these buyers
will turn to the HDB resale market. As such,
he expects resale volumes in March to
increase.
(Source: Business Times)Wandervale EC set at average price of
$755 psf
Wandervale, the first EC to be launched this
year, will be selling at an average price of
$755 psf. Prices will begin from $655,000 for
a three-bedroom unit to $753,000 for a three-
bedroom premium unit and $896,000 for a
four-bedroom unit. Since its e-application
period ended, the development was
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oversubscribed by 1.47 times. A total of 783
e-applications were made while only 534
units were available. Located at Choa Chu
Kang, the 99-year leasehold development is
expected to receive its Temporary OccupationPermit by 2019. The development will consist
of 130 three-bedders, 322 three-bedroom
premium units and 82 four-bedders that range
from 958 to 1,249 sq ft.
(Source: Business TImes)Commercial
Mixed sentiments seen for retail property
market
Market experts expect sentiment in the retail
property market to remain mixed this year asprime retail rents are expected to fall on the
whole. Nonetheless, in the regional centres,
prime rents are expected to remain resilient.
In Q4 last year, several retailers have
reported falling profits with some closing
down. Yet, several other major flagship stores
have been opened by foreign retailers during
that period. This included Hong Kong-basedPedder Group which opened an outlet at
Scotts Square last October and French label
Maje which opened a store at Marina Bay
Sands. In Q4 last year, the Orchard Road
micro-market experienced the steepest fall in
rents among retail submarkets as the average
monthly gross rent for ground-floor shop
spaces fell by 1.2% quarter-on-quarter to
$34.40 psf. Year-on-year, rents were down by
4.9% in 2015, which was higher than the
0.8% fall that was recorded in 2014. However,
due to a ready population catchment, the
average monthly gross rent of ground-floor
space in the regional centres maintained for 3
quarters at $33.94 in Q4 2015.
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Non-Landed Residential Resale Property Transactions for the Week of Feb 20 Feb 26
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
2 CRAIG PLACE 570 970,000 1,700 993 ALEXIS 388 725,000 1,871 FH
3 REGENCY SUITES 1,421 2,350,000 1,654 FH
4 CARIBBEAN AT KEPPEL BAY 840 1,490,000 1,775 99
4 CARIBBEAN AT KEPPEL BAY 1,647 2,240,000 1,360 99
4 MOUNT FABER LODGE 2,454 3,150,000 1,284 FH
4 THE INTERLACE 3,735 3,030,000 811 99
5 THE GRANDHILL 1,830 1,880,000 1,027 FH
9 URBAN RESORT CONDOMINIUM 4,715 8,500,000 1,803 FH
9 ASTORIA APARTMENTS 700 1,205,000 1,722 FH
9 MACKENZIE 88 452 750,000 1,659 FH
9 WATERMARK ROBERTSON QUAY 1,733 2,680,000 1,546 FH
9 THE REGALIA 1,216 1,760,000 1,447 FH
9 WHARTON VALE 624 861,000 1,379 FH
9 8 @ MOUNT SOPHIA 1,550 1,788,000 1,154 103
10 ST REGIS RESIDENCES SINGAPORE 5,543 15,000,000 2,706 999
10 GLENTREES 1,991 2,450,000 1,230 999
11 PARK INFINIA AT WEE NAM 1,001 1,801,800 1,800 FH
11 1 MOULMEIN RISE 1,259 1,950,000 1,548 FH
11 NINETEEN SHELFORD ROAD 1,722 2,020,000 1,173 FH
12 TREVISTA 1,281 1,550,000 1,210 99
13 AVON PARK 1,711 2,020,000 1,180 FH
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
14 LA FLEUR 409 550,000 1,345 FH14 THE LATTIZ 1,249 1,365,000 1,093 FH
14 THE TRUMPS 1,421 1,340,000 943 99
14 THE HELICONIA 1,335 1,200,000 899 FH
14 D' CASITA 1,647 1,380,000 838 FH
15 THE ESTA 1,345 1,900,000 1,412 FH
15 THE MAKENA 1,152 1,480,000 1,285 FH
15 FERNWOOD TOWERS 1,636 1,630,000 996 FH
15 AXIS @ SIGLAP 1,572 1,330,000 846 FH
15 VILLA MARINA 2,024 1,650,000 815 99
16 COSTA DEL SOL 1,238 1,600,000 1,293 99
16 COSTA DEL SOL 1,313 1,550,000 1,180 99
16 COSTA DEL SOL 1,313 1,450,000 1,104 99
16 BAYSHORE PARK 936 972,000 1,038 99
16 BAYSHORE PARK 1,292 1,200,000 929 99
16 CHANGI GREEN 872 810,000 929 FH
16 THE BAYSHORE 947 815,000 860 99
17 LOYANG VALLEY 1,485 950,000 640 99
18 NV RESIDENCES 1,453 1,350,000 929 99
18 CHANGI RISE CONDOMINIUM 1,130 925,000 818 99
18 THE TROPICA 990 800,000 808 99
19 THE SCALA 1,044 1,410,000 1,350 99
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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 purchaser
signs an OTP, hence the lagged nature of the data.
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
19 SUNGLADE 1,238 1,300,000 1,050 99
19 THE MINTON 1,173 1,050,000 895 99
19 FRAGRANT GARDENS 1,496 1,102,000 737 FH
20 BISHAN 8 1,173 1,300,000 1,108 99
20 THE GARDENS AT BISHAN 1,227 1,280,000 1,043 99
20 SEASONS VIEW 2,745 2,400,000 874 99
21 THE CASCADIA 1,496 2,505,000 1,674 FH
21 FLORIDIAN 1,851 3,080,000 1,664 FH
21 LE WOOD 1,141 1,000,000 876 99
22 THE CENTRIS 1,292 1,340,000 1,037 99
23 FORESQUE RESIDENCES 463 605,000 1,307 99
23 GLENDALE PARK 1,313 1,300,000 990 FH
23 NORTHVALE 3,197 1,580,000 494 9925 PARC ROSEWOOD 431 565,000 1,312 99
25 PARC ROSEWOOD 431 550,000 1,277 99
27 YISHUN EMERALD 1,539 960,000 624 99
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