Download - Singapore Property Weekly Issue 146
-
8/12/2019 Singapore Property Weekly Issue 146
1/17
Issue 146Copyright 2011-2013 www.Propwise.sg. All Rights Reserved.
http://www.propwise.sg/http://www.propwise.sg/ -
8/12/2019 Singapore Property Weekly Issue 146
2/17
ContributeDo you have articles and insights and articles that youd like to share
with thousands of readers interested in the Singapore property
market? Send them to us at [email protected] , and if theyre good
enough, well publish them here, on our blog and even on Yahoo!
News.
AdvertiseWant 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 7 Singapore Property Market Trends in
2014 and Beyond
p11 Singapore Property News This Week
p16 Resale Property Transactions
(February 19 February 25)
Welcome to the 146th edition of the
Singapore Property Weekly.
Hope you like it!
Mr. Propwise
FROM THE
EDITOR
mailto:[email protected]://www.propwise.sg/advertise/http://www.propwise.sg/advertise/mailto:[email protected] -
8/12/2019 Singapore Property Weekly Issue 146
3/17
SINGAPORE PROPERTY WEEKLY Issue 146
Page | 2Back to Contents
ByPaul Ho (Guest Contributor)
The numerous property cooling regulations
imposed by the MND, URA, MAS and IRAS
have done much to curb the speculative fever
in the property market, but regulations to stopthe latent demand are futile. In short, if there
are 20,000 people needing houses and only
10,000 houses, then prices will surely go up.
Brute force measures to artificially restrict
10,000 people from changing their minds to
stop buying or defer buying will onlymomentarily solve the problem.
7 Singapore Property Market Trends in 2014 and Beyond
http://www.icompareloan.com/resources/tag/paul-ho/http://www.icompareloan.com/resources/tag/paul-ho/http://www.icompareloan.com/resources/tag/paul-ho/http://www.icompareloan.com/resources/tag/paul-ho/ -
8/12/2019 Singapore Property Weekly Issue 146
4/17
SINGAPORE PROPERTY WEEKLY Issue 146
Page | 3Back to Contents
A brief background to Singapore's
housing woes
Itsnot clear if the Singapore government is
sincere in wanting to solve these problemsgiven the way government land sales are
structured, where the chief valuer lets the bid
price meet an undisclosed minimum before
releasing the land out for tender.
By the time the prices of land parcels rise to
meet the minimum bid price the Singapore
government wants, the pressure of demand
outstripping supply has already been built up.
And given that houses need two to three
years to build, during this phase, the land
prices will continue to shoot up. We believe
that this is also the reason behind Mr. Ku
Swee Yongs observation of a unique
Singaporean phenomenon that when land
supply is released, prices shoot up. Why?
Because when land is released, developers
are already starved of land, and will bid
aggressively for the land. Developers would
also know that this supply is released on the
back of demand outstripping supply. Why elsewould they bid so high?
http://www.icompareloan.com/resources/how-is-singapore-land-supply-managed/http://www.icompareloan.com/resources/how-is-singapore-land-supply-managed/http://www.icompareloan.com/resources/how-is-singapore-land-supply-managed/http://www.icompareloan.com/resources/how-is-singapore-land-supply-managed/http://www.icompareloan.com/resources/how-is-singapore-land-supply-managed/http://www.icompareloan.com/resources/how-is-singapore-land-supply-managed/ -
8/12/2019 Singapore Property Weekly Issue 146
5/17
SINGAPORE PROPERTY WEEKLY Issue 146
Page | 4Back to Contents
Here is a chart of the sequence of events that
is behind a run up in property prices:
Figure 1: Sequence of events behind a run
up in property prices
So if the government really wants to cool the
market or solve the issue of property prices
running out of control, they would do well to
solve the inherent problems in the system.
Many people have already suggested the
remedies for fixing wild property price swings,
but I doubt anything has been adopted thus
far.
The following are seven trends I see shaping
the Singapore property market in 2014 and
beyond.Trend #1 Pockets of extra HDB supply
from PRs will be an overhang on the
market
Since January 2013 Permanent Residents
have not been allowed to rent out their units
after the expiry of their current lease. This
means that by January 2014 or 2015 many of
these Permanent Residents will be looking to
-
8/12/2019 Singapore Property Weekly Issue 146
6/17
SINGAPORE PROPERTY WEEKLY Issue 146
Page | 5Back to Contents
sell their HDBs if they continue to be away
from Singapore. This creates a small pocket
of extra supply of HDB flats that will be an
overhang on the market.
Permanent Residents who are away from
Singapore and cannot secure permission to
rent out their HDB flats have no economic
benefit from keeping these units and will be
keen to sell their HDB units. We have come
across several Permanent Residents who
have left Singapore to work overseas and
decided to sell their HDB due to being unable
to obtain a license to rent out their HDB flats.
Trend #2 It may be more difficult to get
financing for an HDB or EC than a condo
The imposition of the Mortgage Servicing
Ratio (MSR) of 30% or less for ExecutiveCondominiums (EC), combined with the
income ceiling of $12,000, means that the
maximum price of an Executive Condominium
is about $880,000 (assuming an 80% loan).
Buying an EC or HDB will be tough as many
will fail the MSR criteria. A couple would have
an easier time to borrow a larger quantum for
Condominiums than for an HDB flat or an EC.
-
8/12/2019 Singapore Property Weekly Issue 146
7/17
SINGAPORE PROPERTY WEEKLY Issue 146
Page | 6Back to Contents
Many property buyers have chosen to buy
private residential homes instead of ECs or
HDB flats due to financing difficulties. And
since they could not afford a large quantum,
they ended up buying very tiny private
apartments or condos.
Trend #3 Artificially depressed HDB
demand and prices may bounce back from
2016
HDB prices will be artificially depressed due
to the MSR of 30% or less, at least for the
short term. But at the same time, the
government has deliberately slowed down the
supply of HDB flats. This may lead to a
buildup of demand pressure for HDB flats in afewyearstime.
Currently, new PRs are barred from buying
HDB resale flats for three years after
obtaining their PR. By 2016, these new PRs
(numbering in the tens of thousands) would
be eligible to buy HDB, causing a demand
and supply imbalance. As HDB is the base
benchmark for property prices, if HDB prices
rise, every property class will likely follow.
Thus HDB prices may bounce back from
2016, after the elections.
SINGAPORE PROPERTY WEEKLY I 146
-
8/12/2019 Singapore Property Weekly Issue 146
8/17
SINGAPORE PROPERTY WEEKLY Issue 146
Page | 7Back to Contents
Trend #4The private residential vacancy rate will increase
Figure 2: URA Q4 2013 stock, vacancy and supply in the pipeline
SINGAPORE PROPERTY WEEKLY I 146
-
8/12/2019 Singapore Property Weekly Issue 146
9/17
SINGAPORE PROPERTY WEEKLY Issue 146
Page | 8Back to Contents
For private property, there are 18,003 vacant
units representing a vacancy rate of 6.2% in
the 4th Quarter of 2013. This is considered a
low rate versus historical comparisons. If you
take a look at the Property Price Index (PPI)from 2002 to 2005, the vacancy rate at which
property price is more or less at equilibrium
(i.e. neither increasing nor dropping) is about
7.5% to 8%. Hence prices for private
properties are still holding up fairly well even
though we hear anecdotal evidence of
softening ahead of the actual supply coming
on-stream.
The supply in the pipeline is 83,702 units,
versus an annual demand of about 11 to 15
thousand units, thus representing roughly 5 to7 years of supply that will be coming on-
stream in the next 5 years. While this might
seem like a lot, there is some room for more
supply to come in before the vacancy rate
reaches 7.5% to 8%.
Trend #5 A larger share of household
incomes will be going into property
purchases and loan repayment servicing
The artificial channeling of buyers into private
residential dwellings may increase the long
term sales trend line, even though the
average household income has been falling.
In other words, more and more people arebuying private residential housing despite
having weaker incomes. And it is not because
they really want the luxurious lifestyles or
high life as the government is prone to
highlight, but because they could not wait for
the HDBs anymore having been repeatedlyrejected by the BTO balloting process, or
were not able to obtain a loan due to the
MSR.
SINGAPORE PROPERTY WEEKLY Issue 146
-
8/12/2019 Singapore Property Weekly Issue 146
10/17
SINGAPORE PROPERTY WEEKLY Issue 146
Page | 9Back to Contents
Hence developers are building ever smaller
private residential units for this substantial
group of people, while charging ever higher
per square foot (PSF) prices.
Trend #6 Developers will be under
pressure, but prices may not crash
There is pressure on developers to launch
uncompleted units for sale to ease their
financing costs. Highly leveraged or weaker
developers may be more hard pressed tolaunch and garner sales faster. As many
developers rush to launch, these
uncompleted units come into the market (as
uncompleted supply), giving rise to the
impression that the market is softening
dramatically or even crashingwith so manyunits for sale.
The stronger developers will have holding
power and not act rashly. Once the weaker
developersstock is absorbed, prices will firm
up again. HDB shortages will set the baseline
prices and all the other classes of properties
will have upward pricing pressure. It's
basically a scarcity game.
Trend #7 The Core Central Region is
becoming more attractive
The Core Central Region (CCR) has become
very attractively priced relative to the Outside
of Central Region (OCR). This is an anomalywhich is not justified. There is currently no
change so material that makes Punggol or
Sengkang more attractive than Orchard
Road.
Historically prime regions in the CCR always
command a premium relative to the other two
regions. The OCR overshooting the CCR may
indicate that many people are buying into the
hype and are overpaying for these
SINGAPORE PROPERTY WEEKLY Issue 146
-
8/12/2019 Singapore Property Weekly Issue 146
11/17
SINGAPORE PROPERTY WEEKLY Issue 146
Page | 10Back to Contents
properties (on a per square foot basis).
Figure 3: Property Price Index
Q3 2013
Non-landed Private Residential Property
If property buyers start to look at the prime
areas, they may realize that these areas are
not too expensive after all. The CCR will have
more good pickings for long term rental
income, capital downside protection as well
as capital gain potential. But the relatively low
per square foot prices could reflect poor totalquantum affordability as many of the units
there are bigger in size and hence could cost
between $3 million to $10 million.
Many of the buyers of OCR properties could
be sitting on stagnant prices for years to
come. If there is no recession or further
regulatory actions, we expect property prices
to soften about 10% based on the current
trend.
By Paul Ho, holder of an MBA from a
reputable university and editor of www.iCompareLoan.com, Singapores first
Cloud-based Home Loan reporting platform
used by Property agents, financial advisors
as well as Mortgage brokers.
SINGAPORE PROPERTY WEEKLY Issue 146
http://www.icompareloan.com/http://www.icompareloan.com/http://www.icompareloan.com/http://www.icompareloan.com/http://www.icompareloan.com/http://www.icompareloan.com/ -
8/12/2019 Singapore Property Weekly Issue 146
12/17
SINGAPORE PROPERTY WEEKLY Issue 146
Singapore Property This Week
Page | 11Back to Contents
Residential
R es a l e H DB f l a t C O V h i t s z e r o f o r t h e f i r s t
t i m e i n a l m o s t a d e c ad e
The overall median cash-over-valuation
(COV) for resale HDB flats hit zero in
February, the first time since 2006, as
demand for resale public homes dropped.The overall median COV for January was
$3,000. According to the transaction records
from agencies registered with the Singapore
Real Estate Exchange (SRX), 37.3 percent of
HDB resale deals last month closed below
valuation compared with 29.4 percent inJanuary. HDB resale prices also fell 1.8
percent month-on-month, the hardest since
April 2013. Resale volume stood at 734
deals, down 20 percent from a month ago. 12
out of 26 HDB towns had zero or negative
median COV, compared with 8 HDB townspreviously.
(Source: Business Times)
P r o p e rt y p l a y e r s d i v i d e d o n C O V s f o r H D B
resale f lats
As the latest COV fell to zero from $32,000 ayear ago and might even decrease further,
property analysts and agencies are divided
on having cash over valuation (COV) in HDB
resale transactions. COV is the cash premium
paid by buyers in excess of the valuation of
an HDB flat. ERA Realty key executive officerEugene Lim said that COV figures and cash
under valuation figures should be scrapped
as negative COVs will trigger a downward
SINGAPORE PROPERTY WEEKLY Issue 146
-
8/12/2019 Singapore Property Weekly Issue 146
13/17
SINGAPORE PROPERTY WEEKLY Issue 146
Page | 12Back to Contents
spiral of HDB resale prices, and that only the
market price should be released. Mr. Lim said
when HDB started to publish COVs for
different estates and flat types to educate the
public and deal with the perception of COVsbeing too high, people then used these as a
benchmark to mark up their prices above it,
thus making the next valuation higher.
However, Ong Kah Seng, director of R'ST
Research, said that COVs are relevant as
they are a brake to over-buying duringaverage and thriving market conditions.
(Source: Business Times)
Cl un y Par k R es id en c e r ec ei v es s tr o ng
in t e r e st
Although up-market freehold condominium
Cluny Park Residence was not launched for
sale until March 8, 40 percent of its 52 units
had received purchase commitments from
professionals and businessmen at private
previews. 70 percent of the buyers are
Singaporeans. The strong interest was
believed to be due to the condos excellent
location and long-term investment potential,despite the current uncertain residential
property market affected by cooling
measures.
(Source: Business Times)
Commercial
M ac p h er so n M al l c o n fi rm s i n cl us io n o f
F a ir Pr ice a n d ib is St yle s
Macpherson Mall (M2) has announced that it
will feature NTUC FairPrice as its anchor
tenant and ibis Styles as its hotel operatorupon its opening in the second half of 2015.
The mall is 53,000 square foot in size and is a
freehold mixed development at the junction of
Aljunied Road and Macpherson Road, where
SINGAPORE PROPERTY WEEKLY Issue 146
-
8/12/2019 Singapore Property Weekly Issue 146
14/17
SINGAPORE PROPERTY WEEKLY Issue 146
Page | 13Back to Contents
the Windsor Hotel previously stood. The mall
has one basement level, three shopping
levels above ground with NTUC Fairprice
supermarket on the second floor, and a nine-
storey economy hotel on top of the shoppinglevels.
(Source: Business Times)
B o r n e o Motors Pan d an s i te t o r ec ei ve
m a k e o v e r
Borneo Motors Singapore (BMS) will be
giving its Pandan Crescent property a
makeover which will turn the site into an
eight-storey complex to house motor vehicle
businesses. The makeover is estimated by
property analysts to cost $40 million. BMS is
part of the spreading Inchcape Group (UK)
and is located at 33 Leng Kee Road in
Singapore. It distributes Toyota, Lexus,
Suzuki, and Hino.
(Source: Business Times)
M o re b en ef it s f o r p r o p er t y m a rk et f ro m
Reits
According to an independent reportcommissioned by the non-profit Asia Pacific
Real Estate Association (APREA), Reits are
now considered a positive force to help with
the development of property markets. Reits
are thought to offer predictable income, low
cost of exposure to property, and will improvethe operation of real estate market by
attracting capital, in particular foreign capital,
and allowing institutional and retail investors
to invest in commercial real estate. Reits
fundamentally break large pieces of property
into smaller, tradable pieces, guaranteesincome, and improves liquidity.
(Source: Business Times)
-
8/12/2019 Singapore Property Weekly Issue 146
15/17
SINGAPORE PROPERTY WEEKLY Issue 146
-
8/12/2019 Singapore Property Weekly Issue 146
16/17
S G O O ssue 6
Page | 15Back to Contents
reason behind business rents, and suggested
that it could be due to supply lagging
demand.
(Source: Business Times)
G o v e r n m e n t t o t a k e a c t i o n o n u n f a i r R e i t
p r a ct ice s
At the Committee of Supply debate on the
Ministry of Trade and Industry (MTI), Minister
of State for Trade and Industry Teo Ser Luck
said that the government will take action uponseeing collusion or abuse of market
dominance by any landlord including Reits.
This statement came along the louder calls
for help with increasing business costs,
especially that Reits were blamed for shorter
lease renewals and larger increases in
rentals. Some of those Reits were formed
after JTC and HDB divested space to private
owners. Minister Teo said that Reits
accounted for only 13 and 16 percent of retail
and industrial rental spaces respectively, and
they are not the leading players in the rental
market. He also believed that rents for space
will moderate in the medium term after the
government has released a large amount of
land.
(Source: Business Times)
3 i n d u s t r i al s i t es u p f o r s a l e
Three industrial sites were up for sale. One of
them is a four-storey property in the JTC
Food Zone and has a corporate office, aresearch laboratory, a factory floor and cold
rooms located in Pandan Loop. It has an
asking price of $17 million, a gross floor area
(GFA) of 90,762.6 sq ft on a 100,070.90 sq ft
site. The site is zoned for Business 2 use with
a plot ratio of 2.5 and has 18 years left on its
tenure, and is marketed by Jones Lang
LaSalle (JLL). An expression-of-interest
exercise is held from now until April 16.
(Source: Business Times)
SINGAPORE PROPERTY WEEKLY Issue 146
-
8/12/2019 Singapore Property Weekly Issue 146
17/17
Page | 16Back to Contents
Non-Landed Residential Resale Property Transactions for the Week of Feb 19 Feb 25
NOTE: This data only covers non-landed residential resale propertytransactions with caveats lodged with the Singapore Land Authority.Typically, caveats are lodged at least 2-3 weeks after a purchasersigns an OTP, hence the lagged nature of the data.
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
1 THE SAIL @ MARINA BAY 614 1,325,000 2,160 993 LANDMARK TOWER 1,270 1,250,000 984 99
5 DOVER PARKVIEW 936 1,100,000 1,175 99
8 OXFORD SUITES 1,141 1,650,000 1,446 FH
9 THE TRILLIUM 1,798 3,800,000 2,114 FH
9 THE PROMONT 2,013 3,100,000 1,540 FH
9 UE SQUARE 915 1,400,000 1,530 929
10 THE MONTANA 614 1,266,110 2,064 FH
10 BOTANIC GARDENS VIEW 1,259 2,288,800 1 ,817 FH
10 HOLLAND RESIDENCES 1,356 2,400,000 1,770 FH12 BALESTIER PLAZA 1,367 1,468,000 1,074 FH
14 DAKOTA RESIDENCES 1,313 1,828,000 1,392 99
14 THE ALCOVE 1,324 1,200,000 906 99
15 AALTO 1,442 3,180,000 2,205 FH
15 THE ESTA 1,410 2,080,000 1,475 FH
15 THE MAKENA 1,582 2,300,000 1,454 FH
15 ONE AMBER 1,259 1,785,000 1,417 FH
15 AXIS @ SIGLAP 861 1,128,888 1,311 FH
15 VILLA MARINA 1,087 1,100,000 1,012 9915 SUNSHINE RESIDENCE 1,582 1,435,000 907 FH
16 RIVIERA RESIDENCES 786 1,045,000 1,330 FH
16 EAST MEADOWS 1,195 1,200,000 1,004 99
16 EASTWOOD LODGE 786 750,000 954 99
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
16 FAIRMOUNT CONDOMINIUM 904 818,000 905 9918 TROPICAL SPRING 1,378 1,250,000 907 99
18 TAMPINES COURT 1,711 1,010,000 590 101
19 THE SPRINGBLOOM 1,302 1,500,000 1,152 99
21 THE BLOSSOMVALE 840 1,140,000 1,358 999
21 FREESIA WOODS 1,690 2,080,000 1,231 FH
23 CASHEW HEIGHTS CONDOMINIUM 1,227 1,250,000 1,019 999
23 REGENT HEIGHTS 1,023 925,000 905 99
23 REGENT GROVE 1,163 930,000 800 99
25 ROSEWOOD SUITES 678 705,000 1,040 99