singapore property weekly issue 60

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CONTENTS

p2 What Transaction Volumes Tell Us

About Investing in the Property Market

p8 Singapore Property News This Week

p14 Resale Property Transactions

(June 27 – July 3)

Welcome to the 60th edition of the Singapore Property Weekly. Hope you like it! Mr. Propwise

FROM THE

EDITOR

mailto:[email protected]

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SINGAPORE PROPERTY WEEKLY Issue 60

Page | 2 Back to Contents

What Transaction Volumes Tell Us About Investing in the Property Market

Transaction volumes can tell us a lot about

the current activity and sentiment in the

Singapore property market. In general,

volume tends to pick up during bull markets

and die down during bear markets.

How volumes are affected during bull and

bear markets

We can see this quite clearly in Figure 1.1.2a,

which looks at the Total Residential Sales

Volume (in terms of number of units) on a

quarterly basis. Transaction volume in the

Singapore residential property market had a

pronounced peak during 2007Q2 at just under

13,000 units, one quarter before the end of

the Early Bull Market Phase in

PropertyMarketInsights.com’s Property

Market Cycle Model. Due to the Global

Financial Crisis, volumes collapsed after

2007Q2 and hit a bottom in 2008Q4 at under

2,000 units, one quarter after the start of the

Early Bear Market Phase.

Since then, residential property sales volume

recovered quickly and remained at a high

level from 2009 onwards, much higher than

the average levels we saw from 2000 to 2006.

As at 2012Q1, total residential sales volume

C:/Users/vesquira/AppData/Local/Temp/propertymarketinsights.com













was 6,377 units, comprising 4,154 developer

sales and 2,223 secondary market sales.

Do note that all the volume data are obtained

from the URA and based on caveats lodged

by purchasers at the Singapore Land

Registry. The numbers only provide an

indication of the level of activity as not all

purchasers lodge caveats for their

transactions.

Primary versus Secondary Market

Transactions

Figure 1.1.2b shows the Quarter-on-Quarter

change in Residential Sales Volume split by

whether they are Developer Sales (which we

call Primary Sales as new units are sold

firsthand to buyers) and Resale Market Sales

(which we call Secondary Sales as they are

sold secondhand from a buyer to another

buyer).

We can see that Residential Sales Volumes

are in general very volatile, and also that

Developer Sales are in general more volatile

than Secondary Sales. This is potentially

because real estate developers have a

greater ability versus individuals to time the

market for their property launches. They also

typically exhibit pro-cyclical behaviour, which

is to say that when the market for new units is

hot they will all crowd in and try to launch as

many units as possible.



As of 2012Q1, versus the previous quarter,

total residential sales had risen by just 0.2%,

with developer sales increasing 36.9% and

secondary sales falling by 33.3%.

Figure 1.1.2c shows the quarterly

Composition of Residential Sales Volume by

the type of sale. The green bars show the

Secondary Sales. The red bars show the sale

of uncompleted units by developers. The blue

bars show the sale of completed units by

developers.

From the graph we can observe a few

phenomena. First, from 2000 to 2005

developers were still digesting a lot of their

inventory (completed units) and this probably

kept both the market and their new launches

fairly depressed. The digestion of this

inventory likely helped the property bull

market to really take off from 2006 onwards.

Second, Secondary Sales have been

shrinking as a percentage of total sales

volume versus Developer Sales over this

period (i.e. the green bars are shrinking while

the red bars have been growing).



As of 2012Q1, the proportion of developer

sales to total sales was 65.1% while

secondary sales made up 34.9%.

Figure 1.1.2d shows this shift clearly. The 12-

year average for Developer Sales as a

percentage of Total Sales is around 30%, but

in 2012Q1 it hit an all time high of 65.1%.

Correspondingly, Secondary Market Sales as

a percentage of Total Sales have plunged

from their 12-year average of around 70% to

an all-time low of 34.9% in 2012Q1 (Figure

1.1.2e).



Let’s take a look at the situation since

1Q2012. In May 2012, the estimated total

residential transaction volume was 3,475

units, comprising 2,057 developer and 1,418

secondary market sales (Figure 1.1.2f).

Developer sales were 59.2% of total sales,

remaining at a relatively high level. The total,

developer and secondary market sales were

down 19.0%, 23.0% and 12.4% respectively

on a month-on-month basis.

How these trends affect investors

Lower volumes suggest that the property

market is cooling off, but we will need to see

at least a few months’ worth of data to

establish a trend. The dominance of developer

sales and drying up of the resale market

presents a double challenge to investors.

Firstly, currently new property launches tend

to be unattractively priced versus their

surrounding resale projects (a phenomenon

we will explore in greater detail in a later

article), thus reducing the prospect for future



capital appreciation and increasing the risk of

capital loss.

Secondly, a shrinking resale market means

that investors will find it more difficult to sell

off their purchased property, i.e. have less

liquidity. This could also negatively affect the

transacted pricing.

And given that we are currently in the Late

Bull Market Phase of the Property Market

Cycle Model, investors should be doubly

cautious when looking to make a property

purchase.

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://propertymarketinsights.com/


http://www.moneymatters.sg/


Singapore Property This Week


Residential

Freehold Asia Gardens back on the en bloc

market, with a lower price

Freehold Asia Gardens at Everton Road is

back on the market, asking for a lower $273.2

- 300.3 million or $1,354 to $1,488 psf ppr,

compared with the earlier $302.6 - 307.7

million. The 84-unit development zoned for

residential use has an allowable GFA of

201,765 sq ft based on its 2.8 plot ratio. There

is no development charge payable for the site,

which is located near the Outram Park MRT

interchange. The tender closes at 3pm on July

31.

Cooling measures helped in stabilising the

property market and making it sustainable

According to National Development Minister

Khaw Boon Wan, the ABSD, among other

cooling measures, has helped the property

market stabilise and made it more

sustainable. He said that the ABSD and the

increase in supply for both private and public

housing has helped to reduce the proportion

of foreign purchase of private properties from

20% in 2011 to 7% in H1 2012, stabilise prices

of private housing to a 0.3% increase in H1

2012 compared to a 6% increase in the whole

of 2011 and reduce short-term property

speculation.



Buyers from the middle and low-end of the

housing market has also benefitted from the

moderation to a0.4% increase in Q2

compared to the 1.1% in Q1 2012. The

increase in supply of BTO flats also meant

that most first-timers who apply will be

successful.

New policies for PR owning HDB flats

To deter PRs from buying flats for investment

or rental yields, the approval to sublet HDB

flats is reduced to one year, compared to the

earlier three years. Unlike the earlier policy,

which allows owners to renew the approval at

expiry without limit, extension will be granted

only if there are extenuating reasons and the

total period of subletting during the flat

owner's entire duration of ownership cannot

exceed five years. According to HDB, PRs

can sublet their flats on a temporary basis

and should sell the flats if they no longer need

the flats for their own occupation instead of

subletting them. Since the number of flats

owned by PRs (5,000) accounts for only 5%

of the HDB sublet market, the overall impact

of the new policy will be small even if there

may be a small increase in HDB rental rates

in the short term.

New homes between $500,000 to $1

million the most popular

46.3% of all new home deals or 3,361

transacted by Singaporeans in H1 2012 were

in the $500,000 to $1 million price range,

compared to 26.0% in H1 2010 and 40.1% in

H1 2011. The demand for such homes is

strong, especially from HDB upgraders

gaining from the higher COVs recently.

Demand for new units under $500,000 and

new units in the $1 million to $2 million range

also increased, with the former seeing a

three-time increase from 2011 to 384 at the of



H1 2012 and the latter increasing from 1,760

units in H1 2011 to 1,910 or 26.3% in H1

2012. Meanwhile, new home deals in the $2

million to $3 million, $3 million to $5 million

and beyond $5 million range fell by 21.2%,

21.3 % and 50.0% from H1 2011 to 215, 59

and 12 units In H1 2012, respectively. This

trend towards new home purchases in the

under $1 million range is likely to continue as

there is a large upcoming supply of suburban

developments and developments with small

units.

99-year leasehold 486-unit Parc Olympia

launched at an average price $820 psf

The 99-year leasehold 486-unit Parc Olympia

at Flora Drive in Pasir Ris has been launched

at an average price of $820 psf, with the

cheapest unit at an affordable $440,000. The

mass market residential development

consists of eight residential blocks comprising

one-bedroom units (495 sq ft to 646 sq ft),

two-bedroom units (646 sq ft to 1,292 sq ft),

three-bedroom units (969 sq ft to 2,164 sq ft)

and four-bedroom units (1,324 sq ft to 2,702

sq ft) sitting on a 322,368 sq ft site with

facilities such as a 600 metre synthetic

jogging track, a 50 metre lap pool, an air-

conditioned badminton court and a putting

green for golfers. The project also offers a

feeder bus service to and from nearby MRT

stations and the Singapore Changi Airport. It

is located next to The Japanese School and a

drive away from Tampines Mall, Tampines

One and Downtown East. It will be launched

in total of four phases, with the first offering

118 units.

99-year leasehold Potong Pasir site

expected to be very popular

The 88,267 sq ft plot located at Tai Thong

Crescent and five minutes away from Potong



Pasir MRT Station was released after a

successful application to release the site from

the reserve list. It is expected to draw 7-15

bids with the top bid of $580-750 psf ppr

since it is zoned for residential use with

commercial space on the first storey and well

located, being near near schools such as St

Andrew's Junior and Secondary and Cedar

Girls' Secondary School, and near the MRT

station. However, some believe that it may

have some disadvantages when compared to

nearby sites since it is near a major road

junction and a fly-over and has a partial two-

storey height limit. The maximum GFA of

308,945 sq ft can potentially yield around 267

homes. The expected selling price of the

apartments and first-storey commercial space

are $1,250-1,450 psf and $4,000-4,500 psf,

respectively.

Most expect more cooling measures

47% of some 300 hundred respondents to a

Credit Suisse survey believe that home prices

will rise next year since they believe that

there is genuine demand, with 30% predicting

a 10% rise, while another 35% expect prices

to fall. 60% believes that there will be more

cooling measures, with 40% expecting it to

happen within a year. 60% also stated that

they may consider buying a residential

property within three years, though only 31%

of these intend to buy them for investment;

others are buying for occupation, upgrading,

or buying for family. However, only 21% said

that they will consider buying a home within

the year, suggesting cautiousness in the

market. 60% of the respondents also said

that they will not purchase shoebox

apartments.



Commercial

Upward revision of Singapore’s office

market needed

Demand in the office market has been

stronger than expected, with the positive net

office absorption of 473,200 sq ft in Q2

bringing H1 2012’s total to 1.06 million sq ft.

This means that the earlier prediction of

having no change in net office demand has to

be revised to one of having a positive net

demand. Meanwhile, vacancy rates in all

submarkets and building grades have fallen

from Q1 to Q2 2012 (with the overall vacancy

rate falling from 7.3% in Q1 to 6.4% in Q2,

and Grade A vacancy rate falling from 12.9%

in Q1 to 12.2% in Q2), though the vacancy

rates in the CBD are expected to rise as more

space are released back into the market as

leases expires and tenants move out.

Grade A rents have fallen more than Grade B

rents, 4.9% from Q1 to $10.10 psf in Q2

compared to 0.6% to $7.21 psf for the latter,

hence narrowing the gap between the two.

This is Rents for Grade A office space could

fall even further to $9.30/9.40 psf by the end

of 2012, a 15% fall from 2011. This may

change as Grade B rents may fall more as

supply from vacating tenants (1.2 million sq ft)

and shadow space are expected to increase

in the next one-and-a half years while rents

for Grade A fall at a slower rate. Grade A’s

rental decline is due to the large amount of

new space from recently completed projects

whereas Grade B rental’s relative lack of

change is due to the higher occupancy level it

enjoys. However, since Grade A rental rates

have fallen much from its recent peak, there

is room for growth, unlike Grade B rental

rates which have likely reach the peak,



hence widening the rental gap again. A total

of 1.37 million sq ft of office space will be

completed by 2012, with another 2.8 million

sq ft in 2013 and 1.7 million sq ft in 2014.

Secondhand spaces filling up

Almost 90% or 114,000 sq ft of the 129,000

sq ft left behind by Citi when its lease at

Centennial Tower expired has been taken up,

with existing tenants of the building such as

Sumitomo Mitsui Banking Corporation

(SMBC) and McKinsey taking a total of

36,000 sq ft, and other new tenants such as

Maxwell Chambers and PetroChina taking up

the rest. Citi will also vacate 143,000 sq ft of

space at Millenia Tower when its lease

expires, but two tenants taking up two floors

of this space has been confirmed. Rents in

both Centennial Tower and Millenia Tower are

in the $9-11.50 psf a month range.

Meanwhile, other companies such as Allianz

and JP Morgan that are facing lease expiry

are said to be deciding either to renew their

leases or move out to other spaces.

Creative ways to tackle office supply glut

As supply of office space increase,

developers found a new way to deal with the

competition by redeveloping existing office

buildings for other uses and downsizing units

to make them more affordable. A total of 1.4

million sq ft of net lettable area in the CBD

are to be redeveloped into residential and

commercial type projects. However, despite

this, the amount of space slated for

redevelopment is unlikely to make much of a

impact, especially with low pre-lease figures

and higher vacancy rates.



Non-Landed Residential Resale Property Transactions for the Week of Jun 27 – Jul 3

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

1 THE SAIL @ MARINA BAY 2,174 5,761,100 2,650 99

1 ONE SHENTON 1,098 2,305,800 2,100 99

1 EMERALD GARDEN 1,033 1,650,000 1,597 999

1 THE CLIFT 527 1,180,480 2,238 99

3 THE METROPOLITAN CONDOMINIUM 1,076 1,610,000 1,496 99

5 THE INFINITI 1,496 1,500,000 1,003 FH

5 BOTANNIA 1,238 1,390,000 1,123 956

5 MONTEREY PARK CONDOMINIUM 1,259 1,280,000 1,016 999

5 BLUE HORIZON 1,152 1,233,000 1,071 99

5 THE INFINITI 1,087 1,050,000 966 FH

5 ONE-NORTH RESIDENCES 592 990,000 1,672 99

5 THE INFINITI 926 970,000 1,048 FH



5 REGENT PARK 904 920,000 1,018 99

5 VISTA PARK 1,001 860,000 859 99

8 CITY SQUARE RESIDENCES 1,238 1,850,000 1,495 FH

9 ORCHARD VIEW 2,530 7,125,000 2,817 FH

9 THE TRILLIUM 2,390 6,120,000 2,561 FH

9 THE COSMOPOLITAN 1,324 2,760,000 2,085 FH

9 THE COSMOPOLITAN 1,141 2,380,000 2,086 FH

9 TIARA 1,561 2,350,000 1,506 FH

9 ASPEN HEIGHTS 1,324 1,980,000 1,495 999

9 LUCKY PLAZA 829 1,735,000 2,093 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

9 WATERMARK ROBERTSON QUAY 893 1,608,000 1,800 FH

9 THE SUITES AT CENTRAL 624 1,500,000 2,403 FH

9 ROBERTSON EDGE 689 1,300,000 1,887 999

9 MACKENZIE 88 807 1,180,000 1,462 FH

10 FOUR SEASONS PARK 2,260 5,510,000 2,438 FH

10 GARDENVILLE 1,765 3,360,000 1,903 FH

10 THE HORIZON 1,722 2,550,000 1,481 FH

10 RIDGEWOOD 1,744 1,980,000 1,135 999

10 OLINA LODGE 1,539 1,880,000 1,221 FH

10 VALLEY PARK 1,216 1,800,000 1,480 999

10 EWE BOON REGENT 1,141 1,598,888 1,401 FH

10 D' DALVEY 926 1,510,000 1,631 FH

10 THE LEVELZ 786 1,230,000 1,565 FH

11 SOLEIL @ SINARAN 1,722 3,185,700 1,850 99

11 THE SHELFORD 1,389 2,180,000 1,570 FH

11 THE LINCOLN MODERN 1,378 1,950,000 1,415 FH

11 NEWTON 18 980 1,700,000 1,736 FH

11 THE ANSLEY 1,302 1,680,000 1,290 FH

11 THE PARK VALE 1,012 1,285,000 1,270 999

12 DE ROYALE 1,055 1,300,000 1,232 FH

12 THE ELYSIA 1,249 1,100,000 881 999

14 LE REVE 786 968,000 1,232 FH

14 WING FONG COURT 1,066 805,000 755 FH

15 GRAND DUCHESS AT ST PATRICK'S 2,573 2,900,000 1,127 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

15 AMBER PARK 1,744 2,435,000 1,396 FH

15 THE ATRIA AT MEYER 1,615 2,230,000 1,381 FH

15 SANCTUARY GREEN 1,572 1,850,000 1,177 99

15 WATER PLACE 1,453 1,535,000 1,056 99

16 THE CLEARWATER 1,356 1,235,000 911 99

16 LIMAU PARK 1,270 1,200,000 945 FH

17 DAHLIA PARK CONDOMINIUM 1,270 1,020,000 803 FH

17 CARISSA PARK CONDOMINIUM 1,238 1,013,000 818 FH

17 LOYANG VALLEY 1,582 915,000 578 99

18 THE TROPICA 1,238 1,048,000 847 99

19 THE CHUAN 1,464 1,980,000 1,353 999

19 KENSINGTON PARK CONDOMINIUM 1,658 1,710,000 1,032 999

19 KENSINGTON PARK CONDOMINIUM 1,668 1,608,000 964 999

19 THE SPRINGBLOOM 1,442 1,360,000 943 99

19 NOUVELLE PARK 1,227 1,228,000 1,001 FH

19 THE QUARTZ 1,152 1,155,000 1,003 99

19 THE SUNSHINE 1,227 1,120,000 913 FH

19 RIO VISTA 1,249 1,030,000 825 99

19 THE QUARTZ 1,033 1,000,000 968 99

20 THE WINDSOR 2,454 2,400,000 978 FH

20 BRADDELL VIEW 1,453 1,070,000 736 99

20 BISHAN PARK CONDOMINIUM 1,324 1,055,000 797 99

20 FAR HORIZON GARDENS 1,152 800,000 695 99

21 THE HILLSIDE 1,528 1,670,000 1,093 FH

21 SUMMERHILL 1,550 1,530,000 987 FH

22 THE CENTRIS 1,238 1,380,000 1,115 99

22 PARC OASIS 1,399 1,140,000 815 99

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

23 CASHEW HEIGHTS CONDOMINIUM 1,658 1,560,000 941 999

23 HAZEL PARK CONDOMINIUM 1,367 1,280,000 936 999

23 NORTHVALE 1,281 888,000 693 99

25 CASABLANCA 936 760,000 812 99

25 ROSEWOOD 1,012 758,000 749 99

26 BULLION PARK 1,238 1,260,000 1,018 FH


singapore property weekly issue 60

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