singapore property weekly issue 59

Issue 59 Copyright © 2011-2012 www.Propwise.sg. All Rights Reserved.

http://www.propwise.sg/

Contribute Do you have articles and insights and articles that you’d like to share with thousands of readers interested in the Singapore property market? Send them to us at [email protected], and if they’re good enough, we’ll publish them here, on our blog and even on Yahoo! News.

Advertise Want to get your brand, product, service or property listing out to thousands of Singapore property investors at a very reasonable cost? Head over to www.propwise.sg/advertise/ to find out more.

CONTENTS p2 Singapore Property News This Week

p7 Timing Your Investment In the

Singapore Property Market

p15 Resale Property Transactions

(June 20 – June 26)

Welcome to the 59th edition of the Singapore Property Weekly. Hope you like it! Mr. Propwise

FROM THE

EDITOR

mailto:[email protected]

http://www.propwise.sg/advertise/

SINGAPORE PROPERTY WEEKLY Issue 59

Singapore Property This Week

Page | 2 Back to Contents

Residential

Botanic Investments said to have sold 17

units at freehold 8 Napier

172,013 sq ft three-bedroom units at the

freehold project 8 Napier located opposite the

US Embassy and near the Singapore Botanic

Gardens are said to have been sold to Alpha

Investment Partners at $100 million or $2,800-

3,000 psf via sale of shares in Botanic

Investments. These units can found on the

second to the eighth floors of the 10-storey

development, which has yet to sell 15 of its

units, including six penthouses.

Demand for resale HDB flats on the rise as

COV falls

As the cash-over-valuation (COV) starts to

stabilise after falling by over 20% in Q1,

demand for resale HDB flats are increasing.

According to HDB's flash estimate of the

resale price index (RPI), prices for flats

increase by 1.3% in Q2, possibly due to the

fall of median COVs to $25,000 in June 2012,

as well as the increase in valuations.

Transaction volumes also increased by 8%

from 5,126 in Q1 to 5,549 in Q2, with the

highest volumes coming from Woodlands,

Jurong West and Yishun. Buyers may choose

to purchase resale flats instead of BTO flats

since COVs have fallen to a level similar to

the resale levy imposed on second-timers

when buying BTOs. Furthermore, those who

did not qualify for BTOs or those who failed in

their BTO and Sale of Balance (SBF) flats



application attempts may turn to the resale

market. Some, however believe that the

upward trend in prices is unlikely to continue,

growing by less than 2% in the next quarter

and perhaps even fall since the prices are

near the peak.

Recovery of property market since 2009

means more gains for private home

owners

Since the recovery in late 2009, private home

owners has gained at least $20.3 billion worth

of gross profit and even more since profits

from collective sales were not included.

Overall profitability, however, has been falling

from more than $4 billion in H1 2011 to $2.7

billion in H1 2012 while the percentage of

unprofitable transactions has increased from

1% to 2% in H1 2012. Despite this, the

average profitability per transaction in the

secondary market reached a new high of

$522,056 in H1 2012 almost double the

$288,991 recorded in H2 2009.

99-year Landmark Tower up for sale by

public tender

99-year Landmark Tower located on Chin

Swee Road comes with an indicative price tag

of $280-288 million or $1,315-1,355 psf ppr if

another $42 million was paid to top-up the

lease. If the 10% additional GFA for balcony

space is included, the price would increase to

$1,252-1,286 psf ppr. The 38-storey building

sits on a 60,821 sq ft site zoned “residential”

with a 4.014 plot ratio based on its current

GFA. It also offers a 360⁰ view of Singapore’s

skyline and has the added benefit of being

located near the Chinatown and Outram Park

MRT Stations and other amenities. The tender

closes at 3pm on Aug 7.



Proportion of ABSD-exempt buying

increases

In H1 2012, purchases by foreign buyers

(including PRS) from ABSD-exempt countries

as a result of bilateral free-trade agreements

made up 3.1% of foreign purchases, up from

2% in H1 2011 and 2.6% in H1 2010.

However, transaction volumes from these

buyers have been falling, suggesting that the

economy may be more of a factor than

cooling measures in determining demand.

Nevertheless, these purchases only account

for a minute percentage of the market and

hence could not reflect the overall market. It

appeared that the ABSD has been effective in

discouraging foreign purchases since the

number of such purchases has fallen by 75%

from 1,374 in Q4 2011 to 345 in Q1 2012

before falling by another 3% to 334 in Q2

2012.

A slew of upcoming launches to look out

for

The new upcoming launches in the next

couple of weeks include Haus@Serangoon

Garden, Eden Residences Capitol near City

Hall MRT Station, V on Shenton, Parc

Olympia at Flora Drive and Parc Centros near

Punggol MRT station.

First up is 99-year leasehold

Haus@Serangoon Garden which consists of

97 terrace houses priced at $2.5 million-$3

million each. An intermediate terrace house

will have 3,600 sq ft of built-up floor area

sitting on a 1,600 sq ft land area.

Some of the 39 units at 99-year leasehold

Eden Residences Capitol near City Hall MRT

Station next to Capitol Theatre may be

released in late July or early August.



The units include three-bedroom (2,200 sq ft)

and four-bedroom units (over 3,000 sq ft),

penthouses and garden villas on the levels 3-

11 of the mixed development with most

offering views of Marina Bay. Prices have not

been sets but some speculate that it could hit

$3,000 psf given its location.

99-year leasehold 510-unit V on Shenton, will

be launched late this month at an average

price of $2,300-$2,500 psf. The units in the

54-storey tower include 440-plus sq ft studio

apartments, 880 sq ft two-bedroom units,

1,000 sq ft two-bedroom-plus-study units,

1,500-1,750 sq ft three-bedroom units and six

3,300-7,000 sq ft penthouses. The project

also offers a swimming pool, club lounge, an

indoor gym, open-air landscaped gardens

and outdoor dining areas for private parties.

Other upcoming launches include the 99-year

leasehold Parc Olympia at Flora Drive with an

average price tag of $880-$900 psf and 16-

storey Parc Centros near Punggol MRT

Station at $950 psf on average. Prices for the

project with one to five-bedroom units and

penthouses start from $550,000 or $1,195 psf

for a 460-sq ft one-bedroom unit.

Commercial

34,912.7 sq ft freehold industrial plot at

Sims Drive asking for $48-50m

The site located at at 53 Lorong 17 Geylang

is up for sale by public tender is asking for

$48-50 million or $550-$573 psf ppr based on

its 2.5 gross plot ratio. There is no

development charge payable for the

redevelopment of the site zoned ‘Business 1’.

A new high-tech development with communal

lifestyle facilities and 45 to 50 150 sq m

strata-titled units could be built and sold at an

estimated average price of $1,000-1,200 psf.



However, many believe that the $48-50

million price tag is too high especially since a

new development would have to be sold at

above $1,100 psf, way above the average

price of $800-900 psf in the area. The high

price tag assumes that the average price will

increase but this may not happen since there

have been governmental measures to control

price increases.

Prices of industrial space expected to rise

Even as rents for industrial space fall (greater

fall expected in high-tech industrial spaces),

the capital values of such property are on the

rise. Average rents of business parks and

high-tech industrial space fell by 0.7% to

$4.35 psf per month and $2.98 psf per month

in Q2 respectively while rents for conventional

industrial space remained stable at $1.75 psf

per month. The fall in rents for high-tech

spaces is expected to be higher than that of

the latter, especially since much of the

upcoming supply are high-tech spaces.

Capital values, however, has been on the

rise, driven by investors turning to the

industrial market as a result of the ABSD and

higher prices in new launches in the

residential market. Prices for first-storey

industrial space and upper-storey spaces in

the secondary market increased by 4% to

$577 psf and 4.9% to $430 psf respectively in

Q2. This decrease in rents coupled with

increase in capital values means that yields

are getting smaller but prices are expected to

continue to climb as demand for new GLS

and resale sites not affected by the new

restrictions on industrial properties increase.



Timing Your Investment In the Singapore Property Market

By Mr. Propwise

If you’ve been in the market long enough,

you’d have noticed that property prices go up

and down in stretches over varying periods of

time. In markets as in real life, gravity rules –

what goes up must come down.

Sometimes you hear people refer to periods

when prices go up as a bull market, when

everyone is obsessed with (and an expert on)

property, you hear stories about people

making lots of money trading properties, and

property agents don’t bother returning your

calls.

These are then followed by bear markets,

when property prices are going down,

overleveraged property owners stop talking

about how many properties they own, and

property agents that are still in the industry tell

you how now is a good time to buy from the

forced sellers.

We call these recurring patterns of gains and

losses “cycles”, and while it is extremely

difficult to predict them with any accuracy, the

market often gives us clues as to what’s

coming next.



Imagine if you could read these signals to get

a fairly good sense of what’s coming next –

whether the market is likely to fall or to go up.

Wouldn’t that be extremely valuable to you if

you were planning to buy and sell a property?

Depending on the value of your property, we

could probably even quantify that value in the

hundreds of thousands of dollars over a cycle.

Introducing the Property Market Cycle

ModelTM

It was for this purpose that we created the

propietary Property Market Cycle ModelTM

(PMCM) at PropertyMarketInsights.com. The

PMCM basically splits the property market

cycle into four phases: Early Bull, Late Bull,

Early Bear and Late Bear.

Figure 1.1.1a is a summarized picture of the

what the PMCM looks like. To create the

model, various data sources such as property

prices, transaction volume, the stock market

index (usually a leading indicator for the

property market) and a lot of experience and

judgment were used.

http://propertymarketinsights.com/





We use the Urban Redevelopment Authority’s

(URA) Property Price Index (PPI) as a

measure of property prices.

We will now look in-depth at each of the four

phases of the PMCM.

Early Bear Market Phase

The Early Bear Market Phase (the areas

shaded red in Figure 1.1.1a) starts when

property prices start to turn negative after a

bull market. During this Phase we typically

see an acceleration of negative price growth

and decreasing volumes – in other words,

prices are falling quickly and few people are

buying property.

Historically since 1996Q3, this Phase has

lasted from 3 to 9 quarters with an average

duration of 5.7 quarters, or just under one-

and-a-half years. The average return during

the Early Bear Market Phase is -25%, with a

range from -12.7% to -39.6%. See Table 1

below for more details.

Late Bear Market Phase

The Late Bear Market Phase (the areas

shaded pink in Figure 1.1.1a) starts when

property price decreases start to slow after a

steep fall during the Early Bear Market

Phase. During this Phase we typically see

increasing volumes and conflicting signals



from the stock market (i.e. the stock market is

turning positive). We are nearing the trough of

the cycle. The smart money is starting to pick

up property bargains while desperate sellers

who had been holding out start to capitulate.



duration of 4 quarters, or one year. The

average return during the Late Bear Market

Phase is -10%, with a range from -4.7% to -

17.7%. See Table 2 below for more details.

Early Bull Market Phase

The Early Bull Market Phase (the areas

shaded green in Figure 1.1.1a) starts when

property prices start to turn positive after a

slump. During this Phase we typically see an

acceleration of price momentum and

increasing volumes – in other words, prices

are rising quickly and lots of people are

jumping into the market to buy property.



duration of 8.7 quarters, or just over 2 years.



duration of 8.7 quarters, or just over 2 years.



The average return during the Early Bull

Market Phase is 43%, with a range from

34.2% to 52.3%. See Table 3 below for more

details.

Late Bull Market Phase

The Late Bull Market Phase (the areas

shaded yellow in Figure 1.1.1a) starts when

property price increases start to slow down

after a steep runup during the Early Bull

Market Phase. During this Phase we typically

see decreasing volumes and conflicting

signals from the stock market (i.e. the stock

market is turning negative). We are nearing

the peak of the cycle. Lots of people are still

jumping on the property bandwagon and

prices are still rising (albeit more slowly) but

the smart money is selling or staying out of

the market.



duration of 2.5 quarters, or just over half a

year. The average return during the Late Bull

Market Phase is 6%, with a range from 1.5%

to 10.9%.



See Table 4 below for more details.

As of this writing, we are currently in the Late

Bull Market Phase and likely transitioning into

the Early Bear Market Phase, but are still not

there yet – the 2012Q2 URA PPI flash

estimate of a 0.4% quarter-on-quarter

increase suggests there is still bullishness left

in the market.

What Should Property Investors Do During

Each Phase of the Cycle?

The PMCM is not meant to be an academic

exercise but was created to help investors

time their property purchases and sales.

DISCLAIMER: Before describing the best

actions for investors to take at every Phase of

the Cycle, please note that the following is not

an investment recommendation and is not

guaranteed to produce a positive result.

Every investor’s personal situation is different

and every market cycle is also different. Also,

your exact investment return critically

depends on the specific property that you

buy.

The best actions offered below are based on

the historical performance of the market over

the past 3 cycles.



Market cycles in the future will not mirror

previous cycles but they will share similar

characteristics as they are often driven by

human behaviour, which does not

fundamentally change. As Mark Twain is

attributed to have said, “History doesn’t repeat

itself, but it often rhymes.”

During the Early Bear Phase, historically the

best action to take would be to sell your

property. If you had not already sold your

property by the time we enter the Late Bear

Phase, then you should hold on to it. Investors

who have a high risk tolerance can also enter

the market to buy properties if they want to try

and pick the bottom.

In the Early Bull Phase, the best action for

investors to take would be to buy property.

Entering the Late Bull Phase, shorter term

investors would probably think about selling

their property while long term investors can

continue to hold on through the cycle. I’ve

summarized the best actions for investors to

take in the table below.



You should know that the PMCM looks at the

overall market and the actions that investors

should generally take, but every property

purchase is a local one, and different

locations and types of properties could

perform in different ways.

By Mr. Propwise for

PropertyMarketInsights.com, a Singapore

property market research site that helps

buyers and sellers make profitable investment

decisions – subscribers get updates on where

we are in the Property Market Cycle Model to

help you time your investments.



http://www.moneymatters.sg/



Non-Landed Residential Resale Property Transactions for the Week of Jun 20 – Jun 26

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

3 MERAPRIME 1,098 1,430,000 1,302 99

3 THE ANCHORAGE 1,238 1,528,000 1,234 FH

3 RIVER PLACE 1,313 1,590,000 1,211 99

3 THE ANCHORAGE 1,421 1,660,000 1,168 FH

4 THE BERTH BY THE COVE 1,658 2,919,000 1,761 99

4 THE BERTH BY THE COVE 1,604 2,726,800 1,700 99

4 THE PEARL @ MOUNT FABER 1,356 1,600,000 1,180 99

5 BOTANNIA 1,270 1,410,000 1,110 956

5 REGENT PARK 1,130 1,095,000 969 99

5 THE INFINITI 1,345 1,250,000 929 FH

5 DOVER PARKVIEW 1,345 1,075,000 799 99

5 WEST BAY CONDOMINIUM 1,345 1,040,000 773 99

7 THE PLAZA 732 858,000 1,172 99

8 KERRISDALE 1,485 1,700,000 1,144 99

8 KERRISDALE 1,259 1,300,000 1,032 99

9 SCOTTS 28 1,098 2,350,000 2,140 FH

9 THE LIGHT @ CAIRNHILL 1,690 3,250,000 1,923 FH

9 ROBERTSON EDGE 431 800,000 1,858 999

9 TOP TEN 1,496 2,500,000 1,671 FH

9 MIRAGE TOWER 2,605 4,015,000 1,541 FH

9 MIRAGE TOWER 1,496 2,230,000 1,490 FH

9 HORIZON TOWER 2,422 2,720,000 1,123 99

9 FAIRHAVEN 1,582 1,730,000 1,093 FH

10 THE ORANGE GROVE 4,047 8,900,000 2,199 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

10 THE LOFT 1,453 3,051,300 2,100 99

10 GALLOP GABLES 1,195 2,020,000 1,691 FH

10 THE SIXTH AVENUE RESIDENCES 1,432 2,325,000 1,624 FH

10 THE LEGEND 2,164 3,300,000 1,525 FH

10 LEEDON 2 1,109 1,630,000 1,470 FH

10 VALLEY PARK 1,701 2,500,000 1,470 999

10 MARTINA MANSIONS 2,443 3,200,000 1,310 FH

10 CORONA VILLE 1,528 1,835,000 1,201 FH

11 AMARYLLIS VILLE 958 1,430,000 1,493 99

11 THE LINC 1,292 1,870,000 1,448 FH

11 PEPPERMINT GROVE 1,195 1,600,000 1,339 FH

11 THE ARCADIA 3,821 3,800,000 994 99

12 ONE ST MICHAEL'S 936 1,100,000 1,175 FH

12 MOONSTONE RESIDENCES 1,238 1,200,000 969 FH

12 BALESTIER PLAZA 1,367 1,220,000 892 FH

14 DAKOTA RESIDENCES 1,044 1,390,000 1,331 99

14 D'OASIA 1,098 1,270,000 1,157 FH

14 REGAL 35 915 890,000 973 FH

14 THE SUNNY SPRING 1,195 1,070,000 896 FH

15 ONE AMBER 1,335 1,829,000 1,370 FH

15 SANCTUARY GREEN 1,227 1,545,000 1,259 99

15 THE ADARA 1,098 1,320,000 1,202 FH

15 MANDARIN GARDEN CONDOMINIUM 829 940,000 1,134 99

15 COSTA RHU 2,056 2,097,120 1,020 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

15 VILLA MARINA 1,087 1,015,000 934 99

15 TORIE MANSIONS 1,442 1,280,000 887 FH

15 BETA GROVE 1,668 1,400,000 839 FH

16 COSTA DEL SOL 1,313 1,668,000 1,270 99

16 RIVIERA RESIDENCES 1,238 1,485,000 1,200 FH

16 THE BAYSHORE 980 1,000,000 1,021 99

16 BAYSHORE PARK 1,292 1,300,000 1,006 99

16 BAYWATER 2,282 1,520,000 666 99

17 ESTELLA GARDENS 936 785,000 838 FH

17 DAHLIA PARK CONDOMINIUM 1,270 1,010,000 795 FH

17 LOYANG TOWNHOUSES 1,938 1,480,000 764 946

17 LOYANG VALLEY 1,033 705,000 682 99

18 SAVANNAH CONDOPARK 1,023 880,000 861 99

19 KOVAN RESIDENCES 947 1,210,000 1,277 99

19 EVANIA 1,076 1,068,000 992 FH

19 REGENTVILLE 1,152 826,000 717 99

19 HOUGANG GREEN 1,141 800,008 701 99

20 THOMSON IMPERIAL COURT 1,335 1,198,000 898 FH

20 FAR HORIZON GARDENS 1,948 1,400,000 719 99

20 THOMSON PLAZA 2,852 1,650,000 578 99

21 MAPLEWOODS 1,324 1,655,000 1,250 FH

21 SOUTHAVEN II 1,453 1,540,000 1,060 999

21 PARC PALAIS 1,485 1,420,000 956 FH

21 LE WOOD 1,238 965,000 780 99

22 THE LAKESHORE 926 1,000,000 1,080 99

22 PARC VISTA 1,249 973,000 779 99

23 THE JADE 1,087 1,045,000 961 99

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

23 PARK NATURA 1,582 1,520,000 961 FH

23 GUILIN VIEW 861 815,000 946 99

23 REGENT HEIGHTS 1,023 830,000 812 99

23 HILLTOP GROVE 1,238 920,000 743 99

23 PALM GARDENS 1,206 850,000 705 99

25 ROSEWOOD 1,475 1,160,000 787 99

26 CASTLE GREEN 1,173 900,000 767 99

27 SELETARIS 1,292 1,000,000 774 FH

28 SUNRISE GARDENS 1,216 918,000 755 99

singapore property weekly issue 59

Documents