property market direction (january 2010)

Singapore Only FREE Quarterly Property Market Magazine

1 | P a g e A Free Quarterly Magazine published by Sam Gian [Independent Real Estate Sales Consultant]

The past year was a bizarre but surprisingly good year for

most real estate agents – ‘bizarre’ for the property rally

amidst the nagging economic pains of a recession year;

while ‘good’ for the resultant swelling of most agents’

wallets. Otherwise, 2009 was a forgettable year for many

others. Not that any agents were complaining about the

unexpected but certainly not unwelcomed harvest, but

the true impact of the global financial tsunami – which

nearly crippled the entire world economy in 2008 – may

have been slow in arriving from the epic centre. And so,

instead of rejoicing the fragile recovery, a little

conservatism at this point may be the best policy. After

all, any little complications can still despatch the economy

back to the high-dependency ward.

At our end, it has once again proven beyond doubts that

real estate brokering is a recession-proof business due to

the unique characteristics of the products being

inherently price-elastic. So, there is always a one-third

chance of buyers ‘getting it wrong’, which would lead to

eventual off-loading. And there is another one-third

chance of ‘getting it right’ which may prompt a quick

profit-taking. Finally, there is yet another one-third chance

of the investors renting out the properties in the interim

for one reason or another.

That means, for every deal done, two more are WAITING

to be struck. Speaking of which, the ‘W’ word may

become the most appropriate word to describe this year.

Early signs have suggested a ‘flatter and slower’ year for

agents compared with last year. Plus, there will be a host

of new government regulations to be complied with. The

final sum could mean a more strenuous market

environment where business opportunities are more

likely to be like ‘hidden treasures’ rather than low-hanging

fruits. When every other customer is WAITING for the

good time to materialise, the agents will have to dig deep.

As such, only he who is authentic and creative will know

how to eke a living this year.

2010 shall be a year of THE CROUCHING TIGERS.

TTaabbllee ooff CCoonntteennttss

Market Update (1) High-end home sales frizzled in Q4 2009

[Page 4 - 8]

(2) Vintage harvest of TOP new homes in 2010/11 [Page 9 - 11]

(3) A year of great expectation for landlords [page 12 - 15]

(4) More land banking options for developers [page 15 - 17]

(5) When freehold owners sell only 99-year lease [page 17 - 19]

Letter of RETRACTION and APOLOGY to Singapore Accredited Estate Agencies Limited

INTRODUCING THE CERTIFIED ESTATE AGENTS® COURSE

VERY PRACTICAL AND BENEFICIAL TO NEW AGENTS – EASY TO PASS

FFRREEEE QQuuaarrtteerrllyy MMaaggaazziinnee iissssuueedd bbyy

Sponsored by

in association with

Editor

Sam Gian

www.update.sg



LETTER OF RETRACTION AND APOLOGY

Date: 4 November 2009 TO WHOM IT MAY CONCERN Dear Sir/Madam LETTER OF RETRACTION AND APOLOGY 1. We, Sam Gian (NRIC No S1623182G) and Heng Uei Duan t/a Worldview Development Consultant (NRIC No S1654028E) admit that we have made various libelous and/or disparaging allegations (henceforth referred to as ‘the Allegations’) against the Singapore Accredited Estate Agencies Ltd (henceforth referred to as ‘SAEA Ltd’), its Chief Executive Officer Dr Tan Tee Khoon (henceforth referred to as ‘Dr Tan’) and its former Executive Committee Chairman Dr Lim Lan Yuan (henceforth referred to as Dr Lim) vide the article entitled ‘Open Letter to the New Government Regulatory Body for Real Estate Agents in Singapore’ which was published in the September 2009 issue of ‘Property Market Direction’ magazine (henceforth referred to as ‘the Magazine’) 2. We confirm that SAEA Ltd is a credible accreditation body and both Dr Tan and Dr Lim are persons of integrity and honesty, who have not acted unethically or in conflict of interest. 3. We accept that the Allegations made by us against SAEA Ltd, Dr Tan and Dr Lim are wrongful, groundless and untrue, and we unreservedly apologise to SAEA Ltd, Dr Tan and Dr Lim and unconditionally withdraw and retract all of the Allegations. 4. We undertake not to repeat any of the Allegations and not to further publish these and other similar allegations concerning SAEA Ltd, Dr Tan and Dr Lim. 5. We further undertake (a) to publish this Letter of Retraction and Apology on the next quarterly issue of Property

Market Direction in January 2010 (b) to ensure that the issue of Property Market Direction of January 2010 is uploaded on the

website www.update.sg and contains this Letter (c) to upload and display this Letter on the website www.updates.sg until 31st December

2009 6. We also agree to pay SAEA Ltd, Dr Tan and Dr Lim a sum of S$15,000 (all in) as damages and costs. Yours faithfully Mr Sam Gian Madam Heng Uei Duan t/a Worldview Development Consultant



According to data gathered from the

Urban Redevelopment Authority (URA),

there were a total of 814

condo/apartment transactions in the posh

District 10 in the third quarter (Q3) of 2009,

out of which 86 top end deals exceeded

$5 million in absolute price quantum.

There were 33 similar top end transactions

in D10 in Q2 2009 but only 6 in Q1 2009.

So the stage appeared set for a glorious

upswing in the high-end home segment -

but that was not to be.

The glitters of the high-end home sales

toned down in the final quarter of the year,

ending with a modest 424 transactions of

condo/apartments in D10 with only 46

deals exceeding $5 million in absolute sale

prices. Compared with the 86 top end

deals in the preceding quarter, that is a

drastic 47.9% drop in the D10 sales

volume in Q4 2009.

The abrupt loss of sales volume in Q4

2009 may be caused by the surprised

November statement by the Monetary

Authority of Singapore (MAS) that ‘further

action may be needed to cool the market’

if the withdrawal of the Interest

Absorption Scheme (IAS) and the Interest

Only Loan (IOL) proved insufficient.

This case study seeks to determine the

price movements in the posh districts of

D9 and D10 in the second half of 2009 to

verify the extend the earlier warning shot

fired by the central bank has altered the

course of events in the high-end home

market in Singapore; and whether the

claim of ‘foreigners coming’ can be

substantiated.

[Traditionally, foreign participation in Singapore’s real estate concentrates in the prime areas and involves mostly high-end homes with dearer price tag.]

QUIET UPSWING IN D10 UNSUSTAINABLE IN Q4 2009

� DISTRICT 10 IN OCTOBER 2009

There were a total of 155

condo/apartment transactions in D10 in

October 2009, out of which 20 of them

exceeded $5 million in absolute sale price. [Table 1]

Table [1] – 20 condos exceeded $5 mil in absolute sale price in OCTOBER 2009 in D10

D10 Project Name

Floor

Area

(sq ft)

Floor

Rate

(psf)

Price

($ mil)

1 Nassim Pk Res. 3,477 3,480 12.1

2 Nassim Pk Res. 3,466 2,856 9.9

3 Ardmore Pk 2,885 3,189 9.2

4 Ardmore Pk 2,885 3,051 8.8

5 The Ladyhill 3,843 2,082 8.0

6 Volari 3,950 1,811 7.15

7 Nassim 9 3,423 1,987 6.8

8 Grange Res 2,583 2,632 6.8

9 The Orchard Res. 1,808 3,399 6.14

10 Nassim Mansion 2,852 2,086 5.95

11 The Trizon 4,994 1,141 5.7

�� MMaarrkkeett UUppddaattee

High-end home sales frizzled in Q4 2009

Investors braced for further intervention



12 Grange Res 2,583 2,090 5.4

13 Madison Res. 3,218 1,669 5.37

14 Ardmore II 2,024 2,650 5.36

15 Ardmore II 2,024 2,634 5.33

16 Astrid Meadows 3,800 1,382 5.25

17 The Orange Grove 2,336 2,199 5.13

18 Nassim Jade 2,260 2,212 5.0

19 Four Seasons Pk 2,260 2,212 5.0

20 Parc Stevens 2,949 1,695 5.0

Source of data: URA website

Among the 20 top end transactions, eight

(08) of them crossed the $2,500 psf

psychological threshold. [Table 1-A]

Table [1-A] – Eight transactions exceeded the $2,500 psf psychological threshold in OCTOBER 2009 in D10

D10 Project Name

Floor

Area

(sq ft)

Floor

Rate

(psf)

Price

($ mil)

1 Nassim Pk Res. 3,477 3,480 12.1

2 The Orchard Res. 1,808 3,399 6.14

3 Ardmore Pk 2,885 3,189 9.2

4 Ardmore Pk 2,885 3,051 8.8

5 Nassim Pk Res. 3,466 2,856 9.9

6 Ardmore II 2,024 2,650 5.36

7 Ardmore II 2,024 2,634 5.33

8 Grange Res 2,583 2,632 6.8


� DISTRICT 10 IN NOVEMBER 2009

The condo/apartment transactions in D10

in November 2009 began to show sign of

weariness and the month ended with 142

transactions, out of which 11 of them

exceeded $5 million mark. [Table 2]

Table [2] – Eleven condos exceeded $5 mil in absolute sale price in NOVEMBER 2009 in D10

D10 Project Name

Floor

Area

(sq ft)

Floor

Rate

(psf)

Price

($ mil)

1 Boulevard Vue 8,051 4,150 33.4

2 Nassim Pk Res. 6,803 3,234 22.0

3 Nassim Pk Res. 3,466 2,885 10.0

4 Ardmore Pk 2,885 3,051 8.8

5 Ardmore Pk 2,885 2,617 7.55

6 Honolulu Tower 5,823 1,202 7.0

7 The Orchard Res. 2,174 3,100 6.74

8 Gallop Green 3,907 1,640 6.4

9 Regency Pk 3,649 1,727 6.3

10 Gallop Green 3,229 1,700 5.49

11 Gallop Green 3,218 1,700 5.4


Though the highest sale price breached

the $4,000 psf ceiling, the quantity of

transactions that crossed the

psychological barrier of $2,500 psf was

two shy of the previous month’s figure at

only six deals in November 2009. [Table 2-A]

Table [2-A] – Six transactions exceeded the $2,500 psf

psychological threshold in NOVEMBER 2009 in D10

D10 Project Name

Floor

Area

(sq ft)

Floor

Rate

(psf)

Price

($ mil)

1 Boulevard Vue 8,051 4,150 33.4

2 Nassim Pk Res. 6,803 3,234 22.0

3 The Orchard Res. 2,174 3,100 6.74

4 Ardmore Pk 2,885 3,051 8.8

5 Nassim Pk Res. 3,466 2,885 10.0

6 Ardmore Pk 2,885 2,617 7.55


� DISTRICT 10 IN DECEMBER 2009

In December 2009, the condo/apartment

transactions in District 10 disappointed

with 127 deals, though 15 luxury home

units (which is four more than November)

were sold at prices exceeding $5 million in

absolute quantum. [Table 3]

Table [3] – 15 condos exceeded $5 mil in absolute sale price in DECEMBER 2009 in D10

D10 Project Name

Floor

Area

(sq ft)

Floor

Rate

(psf)

Price

($ mil)

1 Nassim Pk Res. 5,231 2,485 13.0

2 Nassim Pk Res. 3,175 3,304 10.4

3 St Regis Res. 3,757 2,609 9.8

4 Ardmore Pk 2,885 2,773 8.0



5 Beaufort on

Nassim 3,671 2,030 7.45

6 Grange Res 2,852 2,542 7.25

7 Draycott Eight 2,863 2,445 7.0

8 Beverly Hill 3,778 1,800 6.8

9 Regency Pk 3,649 1,658 6.05

10 The Orchard Res. 1,808 3,318 6.0

11 Latitude 2,788 2,035 5.67

12 Regency Pk 3,175 1,685 5.35

13 The Grange 2,293 2,299 5.27

14 Latitude 2,680 1,867 5.0

15 Ardmore II 2,024 2,471 5.0


The quantity of transactions that crossed

the psychological barrier of $2,500 psf

continued to be subdued and it came

down to five deals in December 2009. [Table 3-A]

Table [3-A] – Five transactions exceeded the $2,500 psf

psychological threshold in DECEMBER 2009 in D10

D10 Project Name

Floor

Area

(sq ft)

Floor

Rate

(psf)

Price

($ mil)

1 The Orchard Res. 1,808 3,318 6.0

2 Nassim Pk Res. 3,175 3,304 10.4

3 Ardmore Pk 2,885 2,773 8.0

4 St Regis Res. 3,757 2,609 9.8

5 Grange Res 2,852 2,542 7.25


FINDING: HIGH-END HOME BUYERS MORE CAUTIOUS

The case study uncovers the following: i.e.

as we approached the end of year, fewer

transactions breached the psychological

barrier of $2,500 psf.

For example, in October 2009, 5.16% of the 155 transactions in D10 crossed the $2,500 psf psychological threshold. But the percentage was down to 4.22% (of 142 transactions) in November 2009, and 3.93% (of 127 transactions) in December 2009.

The evidence points to an increasingly cautious buying mood with both prices and sales volume gradually softening.

Next, let’s look at the relevant numbers in

District 9.

DISTRICT 9 TRANSACTIONS SOFTENED IN Q4 2009

The same abrupt deceleration seen in

District 10 was mirrored in District 9 over

the same three-month period in Q4 2009.

In fact, the 297 total condo/apartment

transactions in D9 in the final quarter of

2009 was a massive 68.3% drop in sale

volume when compared with the 938 total

transactions in the same district in the

preceding quarter.

Likewise, there was a 50% drop in the

sales volume of private homes in the top

end price bracket of $5 million and above.

Altogether, there were 21 transactions that

exceeded the $5 million sale price in Q4

2009, compared with 43 in Q3 2009.

Only 10 of those deals in the top end price

bracket crossed the psychological barrier

of $2,500 psf in Q4 2009, and that was half

the feat compared with the previous

quarter.

Let’s now look at the details.



� DISTRICT 09 IN OCTOBER 2009

Out of the 119 condo/apartment

transactions in District 09 in October 2009,

only seven (07) of them exceeded $5

million in absolute sale price; and none of

the transactions crossed the psychological

barrier of $2,500 psf in unit price. [Table 4]

Table [4] – Seven condos exceeded $5 mil in absolute sale price in OCTOBER 2009 in D9

D9 Project Name

Floor

Area

(sq ft)

Floor

Rate

(psf)

Price

($ mil)

1 Belle Vue Res 5,425 1,627 8.83

2 Belle Vue Res 4,004 1,647 6.59

3 Belle Vue Res 3,897 1,647 6.42

4 Skypark 2,648 2,300 6.09

5 Belle Vue Res 3,520 1,609 5.66

6 Belle Vue Res 3,477 1,496 5.2

7 Alba 2,067 2,450 5.06


� DISTRICT 09 IN NOVEMBER 2009

In November 2009, there were a total of

110 condo/apartment transactions in

District 09, out of which 10 exceeded $5

million in absolute sale price. [Table 5]

Table [5] – Ten condos exceeded $5 mil in absolute sale price in NOVEMBER 2009 in D9

D9 Project Name

Floor

Area

(sq ft)

Floor

Rate

(psf)

Price

($ mil)

1 The Tate Res 3,208 2,775 8.9

2 The Tate Res 3,208 2,681 8.6

3 The Claymore 3,348 2,503 8.38

4 One Devonshire 4,876 1,517 7.39

5 The Light @ Cairnhill

3,907 1,625 6.35

6 Paterson Res 3,843 1,561 6.0

7 The Tate Res 2,185 2,581 5.64

8 The Edge On Cairnhill

3,175 1,700 5.39

9 The Tate Res 1,894 2,799 5.3

10 One Devonshire 2,756 1,912 5.27


Out of the same 110 transactions done in

District 09 in November 2009, six (06)

crossed the psychological threshold of

$2,500 psf. [Table 5-A]

Table [5-A] – Six transactions exceeded the $2,500 psf psychological threshold in NOVEMBER 2009 in D9

D9 Project Name

Floor

Area

(sq ft)

Floor

Rate

(psf)

Price

($ mil)

1 The Tate Res 1,894 2,799 8.9

2 The Tate Res 3,208 2,775 8.6

3 The Tate Res 3,208 2,681 8.38

4 Hilltop 807 2,676 7.39

5 The Tate Res 2,185 2,581 6.35

6 The Claymore 3,348 2,503 6.0


� DISTRICT 09 IN DECEMBER 2009

Probably affected by the festive season,

the slide in the sales volume was more

pronounced in December 2009 with only

68 transactions concluded in D09, out of

which only four deals exceeded $5 million

in absolute sale price. [Table 6]

Table [6] – Four condos exceeded $5 mil in absolute sale price in DECEMBER 2009 in D9

D9 Project Name

Floor

Area

(sq ft)

Floor

Rate

(psf)

Price

($ mil)

1 Rivergate 3,724 1,550 5.77

2 Orchard Scotts 2,282 2,402 5.48

3 Alba 2,250 2,387 5.37

4 The Tate Res 1,894 2,639 5.0




Three (03) units at The Tate Residence

were transacted at slightly higher than the

$2,500 psf psychological barrier. [Table 6-A]

Table [6-A] – Three transactions exceeded the $2,500 psf psychological threshold in DECEMBER 2009 in D9

D9 Project Name

Floor

Area

(sq ft)

Floor

Rate

(psf)

Price

($ mil)

1 The Tate Res 1,894 2,639 5.0

2 The Tate Res 1,894 2,599 4.92

3 The Tate Res 1,894 2,534 4.8


FINDING: HIGH-END HOME BUYERS MORE CAUTIOUS

The finding in D9 is consistent with the

earlier finding in D10, i.e. fewer

transactions breached the psychological

barrier of $2,500 psf as we approached

year end.

For example, none of the D9 transactions

crossed the $2,500 psf psychological

barrier in October 2009. And when they

did, the percentage was down to 4.41%

(of 68 transactions) in December 2009

from 5.45% (of 110 transactions) in

November 2009.

WHAT DOES THE TREND IN THE HIGH-END MARKET TELL US?

A couple of messages need to be decoded

from the sales numbers gathered in this

case study:

� Firstly, contrary to the media hype, buying mood in the prime district has turned cautious since the onset of Q4 2009.

If there were any ‘foreigners buying’ in the

posh areas, they must have gone about it

surreptitiously – not in a manner where

the massive sales figures could bulge out

of the URA caveat records.

� Secondly, buyers remain price sensitive and are keeping their purchases below the psychological barrier of $2,500 psf.

It appears there had been a lot of wishing

thinking going on about the state of the

high-end market before the opening of

the two Integrated Resorts. The media has

certainly done a good job in hyping up

the global attention. But as far as the sales

figures have shown, nobody is jostling to

buy anything yet – not when the future is

still blurry.



Here are some compelling reasons why

sub-sale of TOP projects will be a safer bet

than selling new home units this year.

2010 A VINTAGE YEAR FOR FREEHOLD TOP PROJECTS

This case study shows that among the 41

condo projects that will be ready for

vacant possession in 2010, 18 of them (or

roughly 44%) are well placed in prime

locations including Districts 9, 10, 11, the

Marina Bay and Sentosa Cove. And out of

the 18 prime projects, 15 of them (or

83.4%) are of the coveted Freehold status. [See Table 7 for details of projects]

Likewise in 2011, from among the 23

quality condo projects to be ready for

occupancy, 14 of them (or roughly 61%)

are in the prime districts, with none of

them being 99-year leasehold projects. [See Table 8 for details of projects]

In all, the next two years will see a total of

69 quality projects (those beyond District

15 are not included in this case study)

ready for occupancy, and among them 56

projects or 80% of them will boast of the

highest prestige of freehold tenure.

As such, owners of such ‘soon-to-be’

completed units will undoubtedly have the

upper hand over the majority of leasehold

projects that were sold in last year’s

property rally.

HISTORIC LOW INTEREST RATE A BIG HELP TO INVESTORS

The received wisdom today calls for the

investors to get their feet wet while bank

interest rates are still at their historical

valley so as to enjoy the fruit of passive

income made possible by the

unprecedented low costs of capital; rather

than waiting for the interest rates to

eventually rise when the economy gets

better.

The same argument has converted many

prospective buyers into believing that real

estate investments are the best hedge

against inflation.

While there are no obvious flaws in the

optimistic assessment of the current

market, it is not to say that there are no

inherent risks in property investments. But

before we discuss the risks, here are some

useful information on the candidates for

sub-sales in this year and next. [Table 7]

Table [7] – Condos projects likely to receive the Temporary Occupation Permit (TOP) in 2010

SR Old

Code

PROJECT NAME TENURE

1 01 Marina Bay Residences 99-yr

2 01 One Shenton 99-yr

3 03 The Metropolitan 99-yr


Vintage harvest of TOP new homes in 2010/11

Sub-sale of TOP units a better bet this year



4 03 The Regency @Tiong Bahru FH

5 04 Turquoise 99-yr

6 05 Botannia 956-yr

7 05 Cystal Heights FH

8 05 One-North Residences 99-yr

9 08 Citigate Residence FH

10 08 Kent Residences FH

11 09 Cairnhill Residences FH

12 09 Luma FH

13 09 Rhapsody on Mt Elizabeth FH

14 09 Scotts Square FH

15 09 The Trillium FH

16 10 Ardmore II FH

17 10 Cuscaden Residences FH

18 10 Orange Grove Residences FH

19 10 The Ford@Holland FH

20 10 The Orange Grove FH

21 10 Sixth Avenue Residences FH

22 11 Hillcrest Villa FH

23 11 Pavilion 11 At Novena FH

24 11 The Axis FH

25 11 Sky@Eleven FH

26 12 The Centrio FH

27 12 The Riverine By The Park FH

28 14 Dakota Residences 99-yr

29 14 The Amarelle FH

30 15 Cantiz@Rambai FH

31 15 Espira Residence FH

32 15 Espira Spring FH

33 15 Esta Ruby FH

34 15 One Amber FH

35 15 Palm Galleria FH

36 15 Palm Vista FH

37 15 The Espira FH

38 15 The Montage FH

39 15 Tierra Vue FH

40 16 Bleu @ East Coast FH

41 16 Casa Merah 99-yr

Table [8] – Condos projects likely to receive the Temporary Occupation Permit (TOP) in 2011 SR Old

Code

PROJECT NAME TENURE

1 02 The Clift 99-Yr

2 04 Reflections @ Keppel Bay 99-Yr

3 05 Carabelle 956-Yr

4 05 The Parc Condo FH

5 08 Oxford Suites FH

6 09 City Vista Residence FH

7 09 Helio Residences FH

8 09 Martin Place Residences FH

9 09 Parc Centennial FH

10 09 The Lumos FH

11 09 The MarQ on Paterson Hill FH

12 09 Waterford Residence 999-Yr

13 10 Duchess Residences 999-Yr

14 10 Grange Infinite FH

15 10 Latitude FH

16 10 One Jervois FH

17 10 Shanghai One FH

18 10 Waterfall Gardens FH

19 11 MonteBleu FH

20 13 Parc Mondrian FH

21 15 Blu Coral FH

22 15 Park Seabreeze FH

23 15 The Seafront On Meyer FH

WORST CASE SCENARIO

However, there is a flip side to the same

coin. Luckily, it is not at all bad for the

man in the middle – the real estate agents.

Since the 2008 market dip, there have

been some signs of incipient fears that

some of the condo units which were

purchased under the now-defunct

Deferred Payment Scheme (DPS) at the

height of the 2007 bull-run may be up for

distressed sales due to the increasingly



cautious banks. Some speculators may

have their attempts at bank financing

snubbed at these tentative moments.

Financial institutions in developed

countries, including China, are being

warned by their central bank to tighten

credit risk management to prevent a

runaway asset bubble. Some buyers who

had back in 2007 taken advantage of the

DPS may find themselves at the receiving

end with the banks becoming more

cautious after MAS had raised the alarm in

November 2009.

The worst case scenario depicts a sudden

collapse of the market confidence in

Singapore after a few high profile defaults

a.k.a. the Dubai World fashion.

BEST CASE SCENARIO

However, many property investors seem to

have firmly subscribed to the best case

scenario which forecasts that property

prices will continue to rise by 3% to 5% in

2010, if not higher, because of the

impending opening of the two Integrated

Resorts.

However, regardless of how the scenarios

pan out, this should be good news for real

estate agents as the sub-sale volume

should be much higher than last year due

to the record number of new units ready

for vacant possession and the

uncertainties ahead.

And the best case scenario seems to be

gathering currency at this moment as

many housing developers are prepared to

roll out the high-end projects that they

had shelved in 2009 in anticipation of the

better times ahead.

� LOOKING OVER THE HORIZON

Buoyed by the renewed optimism,

housing developers are lining up more

projects located in districts 9, 10 and 11 as

well as in Sentosa Cove and Marina Bay for

launch in the first half of 2010.

A 228-unit condo in Sentosa Quayside and

a 151-unit Seascape will be launched in

Sentosa Cove.

In District 9, a 20-unit 42 Stevens was

launched in mid-January 2010 at an

average price of $1,900 per sq ft (psf). In

District 10, 8 Nassim Hill has been

launched at $3,100 psf on average in mid-

January 2010.

A 229-unit The Laurels and the 64-unit

Urban Resort Condo will be launched in

the Cairnhill area.

Other projects will be in the vicinity of

Ardmore Park, Emerald Hill Road, Handy

Road, Thomson Road, Holland Residences,

The Holland Collection, Emerald Hill

Residences and a condo project along

West Coast Crescent.

CDL and Hong Leong Group will

commence construction on sites they

bought in Chestnut Avenue in 2009. Two

other GLS sites, Dakota Crescent and

Serangoon Avenue 3 will be launched in

the second half of 2010.



2009 Private Condo/Apt Rent Review

The objective of this case study is to assist

in the projection of the market condition

for the next 3 to 6 months, by way of

ascertaining whether private home prices

will continue to climb due to increasing

demand for use, or will they dip due to the

availability of more than 10,000 new

quality condo units at various locations

from this year onwards. [See article ‘Vintage harvest of TOP new homes in 2010/11 at preceding

page]

The methodology used here is to compare

the November 2009 median rent recorded

in a particular location with the January

median rent there to determine the

performance.

A total of 77 locations, comprising about

100 typical ‘hot spots’ favoured by

expatriate tenants in Singapore have been

selected from the URA REALIS rental

records for analysis.

Median rent is used as it is the amount of

rent any prospective tenant is most likely

to pay in a normal market situation.

Table [9] shows locations where tenants

had to pay higher median rents in

November 2009 compared with January

2009. [Table 9]

Table [9] – 29 out of the 77 selected locations saw median rent RISING

District / location

Project Name

(Only the well kno

wn

projects in that location are

shown)

Contract Date in 2009

Median RENT ($ )

1 [D1] MARINA BOULEVARD

THE SAIL @ MARINA BAY

NOV 4.95

FEB 4.27

2 [D3] JLN MEMBINA

CENTRAL GREEN NOV 3.38 JAN 3.17

3 [D3] ALEXANDRA RD

THE ANCHORAGE/ ALESSANDREA

NOV 2.89

JAN 2.83

4 [D4] KEPPEL BAY DR

CARIBBEAN @ KEPPEL BAY

NOV 5.96 JAN 5.79

5 [D8] JELLICOE RD

CITYLIGHTS NOV 4.5 JAN 4.32

6 [D9] LEONIE HILL RD

LEONIE HILL RESIDENCES

NOV 2.62 JAN 2.59

7 [D10] ORCHARD BLVD

WESTWOOD APT

NOV 2.42 JAN 2.24

8 [D11] DUNEARN RD

DUNEARN GDN / LODGE

NOV 3.46 JAN 3.04

9 [D11] EVELYN RD

RESIDENCES@ EVELYN / SETIA RESIDENCES etc

NOV 4.8

JAN 4.53

10 [D11] ARCADIA RD

THE ARCADIA NOV 2.88 JAN 2.85

11 [D12] AVA RD

AVA TOWERS NOV 2.33 JAN 2.19

12 [D14] GEYLANG EAST AVE 2

SIMSVILLE NOV 2.49

JAN 2.42

13 [D15] AMBER GDNS

AMBER PK / THE ESTA / VERTIS

NOV 2.68 JAN 1.82


A year of great expectation for landlords

But likely to fight tooth & nail for tenants



14 [D16] TANAH MERAH KECHIL RD

EAST MEADOWS / TANAH MERAH MANSIONS

NOV 2.64

JAN 2.56

15 [D16] UPP CHANGI RD EAST

CHANGI CT / CHANGI GREEN

NOV 2.11

JAN 2.06

16 [D16] BAYSHORE RD

BAYSHORE PK / COSTA DEL SOL / THE BAYSHORE

NOV 2.68

JAN 2.67

17 [D17] MARIAM WAY

BALLOTA PK NOV 1.93 JAN 1.56

18 [D18] SIMEI RISE

CHANGI RISE / SAVANNAH

NOV 2.5 JAN 2.42

19 [D19] LORONG CHUAN

CHUAN PK NOV 2.05 JAN 1.97

20 [D19] SENGKANG SQ

COMPASS HGHTS

NOV 2.57 JAN 2.3

21 [D19] KOVAN RD

KOVAN MELODY / KOVAN LODGE

NOV 2.99 JAN 2.65

22 [D19] HG ST 92

REGENTVILLE NOV 2.25 JAN 2.13

23 [D20] AMK CTR 3

GRANDEUR 8 NOV 2.7 JAN 2.67

24 [D21] TOH TUCK RD

SIGNATURE PARK

NOV 2.04 JAN 2

25 [D21] PINE GROVE

PINE GROVE NOV 2.55

JAN 2.44

26 [D22] JURONG EAST

PARC OASIS NOV 2.44 JAN 2.42

27 [D23] BT BATOK EAST

REGENT HGHTS NOV 2.19 JAN 2.14

28 [D23] BT BATOK CTR

THE JADE NOV 3.51 JAN 3.1

29 [D26] LENTOR LOOP

BULLION PK NOV 2.52 JAN 2.21

FINDINGS # 1 – PRIVATE HOME RENTS FIRM BUT NO JUBILATION EXPECTED

The above statistics show median rent in

29 (or 37.66%) of the 77 selected locations

rising marginally over the 11-month

period.

Except for The Sail @ Marina Bay where

the median rent had risen 68 cents psf per

month which represents a 15.9% jump in

the median rent, other landlords are

enjoying only small comfort with marginal

increases in their rental income.

In short, not many landlords are jumping for joy. Next, let’s look at locations where median

rents have FALLEN. [Table 10]

Table [10] – 46 out of the 77 selected locations saw median rent FALLING

District / location

Project Name

(Only the well kno

wn

projects in that location are

shown)

Contract Date in 2009

Median RENT ($ )

1 [D2] GOPENG ST

ICON NOV 5.83 JAN 6.32

2 [D3] INDUS RD

EMERALD PK NOV 2.97 JAN 3.32

3 [D3] STIRLING RD

QUEENS NOV 3.68 JAN 3.91

4 [D5] DOVER RISE

DOVER PARKVIEW

NOV 3.3 JAN 3.32

5 [D9] RIVER VALLEY RD

ASPEN HGHTS / VALLEY PK / YONG AN PK

NOV 3.32

JAN 3.51

6 [D9] SCOTTS RD

SCOTTS 28 NOV 4.39 JAN 4.74

7 [D9] CLAYMORE RD

THE CLAYMORE NOV 4.34 JAN 4.69

8 [D9] JLN RUMBIA

THE IMPERIAL NOV 5.37 JAN 5.75

9 [D10] DRAYCOTT 8 NOV 4.36



DRAYCOTT PK JAN 6.79

10 [D10] ARDMORE PK

ARDMORE PK NOV 5.24 JAN 5.6

11 [D10] CORONATION RD WEST

ASTRID MEADOWS

NOV 3.58

JAN 4.26

12 [D10] NASSIM RD

NASSIM PK / NASSIM REGENCY

NOV 5.31

JAN 6.24

13 [D10] EWE BOON RD

PALM SPRING / EWE BOON REGENT

NOV 2.82

JAN 3.17

14 [D10] RIDLEY PK

TANGLIN PK NOV 3.73 JAN 4.21

15 [D10] WILBY RD

THE TESSARINA NOV 5.43 JAN 5.79

16 [D11] NEWTON RD

AMARYLLIS VILLE / ELMIRA HGHT / NEWTON 18

NOV 4

JAN 5.24

17 [D11] SWISS VIEW

LA SUISSE I / II NOV 2.21 JAN 2.37

18 [D11] TREVOSE CRES

THE TREVOSE NOV 3.06 JAN 4.56

19 [D12] KIM KEAT LANE

CALARASI NOV 2.41 JAN 2.82

20 [D12] MOONSTONE LANE

MOONSTONE RES / M. VIEW

NOV 2.57

JAN 3.19

21 [D12] LO 1 TOA PAYOH

OLEANDER TOWERS / TRELLIS TOWERS

NOV 2.83

JAN 3.07

22 [D13] YOUNGBERG TERRACE

AVON PK AUG 1.77

JAN 2.14

23 [D13] LEICESTER RD

ONE LEICESTER NOV 2.27 JAN 2.83

24 [D14] LOR MYDIN

ASTORIA PK NOV 2.73 JAN 2.84

25 [D14] JLN KEMBANGAN

THE TRUMPS NOV 2.67 JAN 3.82

26 [D15] RHU CROSS

COSTA RHU NOV 2.55 JAN 2.71

27 [D15] FERNWOOD TERRACE

FERNWOOD TERRACE / TOWERS

NOV 1.65

JAN 2.68

28 [D15] SIGLAP RD

MANDARIN GDN

NOV 2.38 JAN 2.63

29 [D15] TG RHU RD

PARKSHORE / PEBBLE BAY / SANTUARY GREEN

NOV 2.76

JAN 2.93

30 [D15] VILLA MARINA NOV 2.34

JLN SEMPADAN JAN 2.57

31 [D16] BEDOK RESERVOIR VIEW

AQUARIS BY THE PARK / BAYWATER

NOV 2.29

JAN 2.32

32 [D17] FLORA DR

CARISSA PK / FERRARIA PK

NOV 1.95 JAN 2.12

33 [D20] BISHAN ST 21

BISHAN 8 NOV 2.94 JAN 3.19

34 [D20] SIN MING WALK

THE GARDENS @ BISHAN

NOV 1.97 JAN 2.38

35 [D21] BUKIT DR

THE RAINTREE NOV 3.12 JAN 3.48

36 [D21] HINDHEDE WALK

SOUTHAVEN I / II / SPRINGDALE

NOV 2.12 JAN 2.24

37 [D22] JURONG WEST

LAKESHORE NOV 3.47 JAN 3.54

38 [D22] CORPORATION RD

LAKEHOLMZ / PARC VISTA

NOV 2.43

JAN 2.48

39 [D23] CASHEW RD

CASHEW HGHTS / THE ESPA

NOV 1.78 JAN 1.82

40 [D23] DAIRY FARM RD

DAIRY FARM ESTATE

NOV 1.83 JAN 1.96

41 [D23] BT BATOK ST 52

GUILIN VIEW NOV 2.37 JAN 2.39

42 [D25] ROSEWOOD DR

ROSEWOOD / CASABLANCA

NOV 2.37 JAN 2.4

43 [D26] YIO CHU KANG RD

SEASONS PK / THE CALROSE

NOV 2.2

JAN 2.28

44 [D27] YISHUN ST 81

ORCHID PK NOV 2.04 JAN 2.18

45 [D27] SEMBAWANG RD

SELETARIS NOV 1.88 JAN 2.13

46 [D28] GERALD DR

SELETAR SPRINGS

NOV 1.92 JAN 2.25



FINDINGS # 2 – RENT FALL UNEVENLY WITH PRIME HOMES HEAVILY HIT

The above statistics show median rent in

46 (or 59.8%) of the 77 selected locations

falling over the 11-month period.

Rent falls were uneven in different

locations. For example, in District 2, the

November median rent for Icon fell 7.8%

or 49 cents from $6.32 psf/pm in January

2009 to $5.83 psf/pm in November 2009.

In District 10, the fall is heavier with the

monthly median rent of Draycott Park

falling 35.8% or $2.43 psf/pm. The

November median rent there is $4.36 psf

per month, while it was $6.79 psf per

month in January 2009.

In District 11 Trevose Crescent, the

monthly median lost 32.9% or $1.50 psf

per month in absolute term from $4.56

psf/pm in January 2009 to $3.06 psf/pm in

November.

In other outlaying areas rents fall

moderately within the 6% to 12% range,

for example, in Rhu Cross the November

median rent lost 5.9% or 16 cents psf/pm;

while in Sembawang Road, the November

median rent lost 11.8% or 25 cents.

Only 3 out of the 77 selected locations

saw median rents remaining unchanged

and they are D19 Serangoon Avenue 3

with popular projects like Chiltern Park,

Springbloom and the Sunnydale; District

23 with project like The Warren; and

District 27 with projects like Yishun

Emerald and Sapphire.

It is not surprising to see median rent in

Yishun stagnating because at $1.12 psf per

month, there is no more room for any

downward adjustments.

� LOOKING OVER THE HORIZON

In the months ahead, there is unlikely to be any wild jubilation as the findings of an earlier study on the ready supply of quality new homes this year confirms that private landlords will be having a keen competition among themselves due to the advent of more than 10,000 new homes.

•• MMAARRKKEETT UUPPDDAATTEE

MORE LAND-BANKING OPTIONS FOR DEVELOPERS

Land sale activities warm up “When there is somebody who wants to

BUY it, there will be somebody who will

SELL it.” This is how I look at the

Government Land Sale (GLS) Program

Reserve List which may well be likened to

a thermostat to ensure no big fluctuation

of temperatures.

Of late, a few previously dormant sites

were triggered off for public tenders after

certain developers had put in their

commitment to bid for the sites in the

tender. The renewed interests for new

government land sites are probably due to

the perceived improvement in the market

sentiment.



ON SALE AGAIN – TEN MILE JUNCTION SITE

The first GLS site up for tender in 2010 is a

1.56 ha mixed commercial/residential site

at the junction of Choa Chu Kang Road

and Woodlands Road and it comes with

the Ten Mile Junction complex sitting on it.

The commercial space has a gross floor

area (GFA) of around 121,191 sq ft on the

first two levels, while an LRT station

occupies the third level.

In fact, in April 2008 a bid of $61m or $162

psf ppr put in by an obscure developer for

the same site was rejected

by URA which later

withdrew the site

altogether. Various

property experts reckon

that the site is worth more

than $130 million.

RESIDENTIAL SITE AT BARTLEY ROAD PUT ON RESERVE LIST

A 99-year leasehold

residential plot along

Bartley Road/Lorong How

Sun is now on sale.

It is near a residential

estate next to the Bartley MRT. It has a site

area of about 2.21 ha and can generate a

maximum gross floor area (GFA) of 61,865

sq metres.

The land parcel, which is located between

Bartley Road and Lorong How Sun, was

first unveiled during the GLS programme

for the second half of this year.

WESTWOOD LANDED PROPERTY SITE OVERWHELMED

A 99-year leasehold landed housing sites

at Westwood Avenue in Jurong West put

up for tender by the Housing and

Development Board (HDB) in December

2009 unexpectedly received 32 bids.

The winning bid was $38.5 million or

$253.69 psf of land area.

Other bidders include a joint venture

between Hoi Hup Realty and Sunway

Developments (about $38 million), ACT -

Nobel Homes ($35.12 million) and CEL

Development ($32.345 million).

SENGKANG RESIDENTIAL SITE UP FOR SALE

A 99-year leasehold residential site at the

junction of Sengkang West

Avenue and Fernvale Link

has been triggered for sale

from the reserve list. A

developer has committed

to pay at least $70 million,

or $128 per sq ft of gross

floor area.

The plot is 182,973 sq ft

and has a maximum

allowable gross floor area

of 548,920 sq ft. It can yield

about 450 units of 1,200 sq

ft.

Other than the government

land sale programme, private collective

sales appear to be warming up as well.

In December 2009, the first and only

collective sale deal was struck. Dragon

Mansion was successfully sold to Roxy-

Pacific for $100.8 million or $863 psf ppr –

almost $20 million off the original asking

price of $120 million.

MAYFAIR GARDENS COLLECTIVE SALE

Mayfair Gardens, in Rifle Range Road, is up

for en bloc sale. The asking price starts

from $210 million, excluding a further $40

million as *differential premium for the



topping up the site's lease to 99 years.

With the additional tax payable, the unit

sale price will work out to be at least $857

per sq ft per plot ratio (psf ppr).

The 124-unit Mayfair Gardens has a

remaining lease of about 72 years. The

land area is 208,475 sq ft, with a gross plot

ratio of 1.4.

The site is next to other private residential

projects and near Bukit Timah Plaza and

Beauty World Plaza.

*Differential premium (DP) is a form of tax land owner pays the state for lifting of state restrictions. In this case, the DP is to pay for the topping up of the state lease to its full 99-year term. GREEN LODGE COLLECTIVE SALE

Freehold Green Lodge at Toh Tuck Road

has been put up for collective sale - the

second residential site to be marketed en

bloc this year.

The freehold estate has a land area of

151,075 sq ft and a plot ratio of 1.4. The

owners are asking for $135 million.

There will be a $9.5 million development

charge payable, bringing the unit selling

price to $683 per sq ft per plot ratio (psf

ppr).

Green Lodge currently comprises 80 units

ranging from 1,679-2,110 sq ft in size.

There is potential to redevelop the site to

house around 211 units with an average

size of 1,000 sq ft. The average selling

price of the new development is expected

to be at least $1,250 psf.

Green Lodge is located among other

private residential estates, including

Rainbow Gardens which was also sold en

bloc in 2007. It is also near Beauty World

Plaza and Bukit Timah Plaza, and will be

close to the upcoming Beauty World MRT

station.

•• MMAARRKKEETT UUPPDDAATTEE

When freehold owners sell only 99-year lease Are buyers being short-changed?

Units at the former Rose Garden in Katong

are now being sold with a 103-year

leasehold period, even though the land

tenure is freehold which means the land

ownership is ‘forever’. The leasehold

project is now known as The Shore

Residence.

The rare move of selling the units for only

103-year lease term despite the freehold

land tenure means that the developer, Far

East Organisation (FEO) will have to price

the project at slightly lower prices than its

other freehold projects.

Actually, the ultimate prize that the largest

private property developer in Singapore is

coveting is the reversionary right* of the

land which, when the time arrives, will

allow the developer/landowner to reap

huge financial rewards again, e.g. to be

paid again for agreeing to extend the

lease period or for outright sale of the

entire freehold tenure.

In fact, FEO had purchased the old

freehold Katong project via a collective

sale in 2006 for $169.8 million or $423 psf

of potential gross floor area. By

comparison, this was much cheaper than

the $600 psf ppr FEO paid for the Ang Mo

Kio site where Centro Residences now is.

*Reversionary right refers to the right to repossess land in the future. When a 99-year lease expires, the land must be reverted to the freehold owner.



PRIVATE FIRMS HAVE ADVANTAGE OF SUCH LONG TERM ARRANGEMENT

While FEO cannot realise the full potential

of the site now, by retaining the freehold

tenure it will ultimately have the upper

hand in the negotiation of a possible

collective sale many years later.

Alternatively, FEO can buy back the project

and redevelop it again.

This is perhaps one of the benefits of

remaining a privately owned firm where

the patriarch can make decisions now to

benefit many future generations.

EXAMPLE #1

In Singapore, leasing out lands for a ‘long but definite’ term of 99 years instead of

selling the entire freehold tenure outright

is not without precedents. FEO itself has

done it before and other lesser known

outfits are also known to have done it,

such as MUIS, a Malay-Muslim self-help

group in Singapore which owns the

freehold rights over Chancery Residence

at Chancery Lane in District 11.

In 2005, MUIS’ development arm Warees

Development Pte Ltd launched and

developed the 40-unit cluster housing

project at Chancery Lane. The project is

now being owned by 40 subsidiary

proprietors of the strata-titled landed

housing project for a 99-year term

commencing 2004.

While the 40 subsidiary proprietors are

listed as the ‘lessees’ in the strata title,

MUIS being the freehold owner is listed as

the ‘land proprietor’ in the same title.

In the interim, the 40 subsidiary

proprietors are considered the legal

owners and are entitled to the exclusive

rights of possession, enjoyment, and

disposition. MUIS in turn holds the

reversionary right for the entire 99-year

lease period, and will get to repossess the

land at the end of the 99-year term.

EXAMPLE #2 & #3

FEO also owns two cluster housing

projects - Cabana and The Greenwood -

on freehold land with 103-year leases.

The 119-unit Cabana is in Sunrise Terrace,

near Yio Chu Kang MRT station, while the

54-unit The Greenwood is in Greenwood

Avenue in District 11.

EXAMPLE #4

In 1991, City Developments bought the

former Grange Road residence of the

American Ambassador for a 99-year term

and developed the site into the present

Spring Grove condo.

Prior to that, the United States

government bought the freehold land in

1950 and sold the same land to CDL on a

99-year lease commencing 1991. Upon

expiry of the 99-year lease, CDL will have

to return the land to the US government –

lock, stock, barrel - without any charges.

EXAMPLE #5

On 6 August 2009, The Straits Times

reported that an 86,402 square foot plot at

No 162 Tagore Avenue, within the

Teachers Housing Estate, was put on sale

with an indicative price of $15 million.

The freehold land was offered for sale on a

99-year leasehold tenure by the Singapore

Teachers' Union, which will continue to

hold the freehold interest in the property,

and of course, the reversionary right.

However, it is not known whether the sale

was successful.



FEO HAS ADVANTAGE IN FUTURE COLLECTIVE SALE NEGOTIATIONS

In the FEO’s case, when the land on which

The Shore Residence sits is ultimately ripe

for collective sale again, it will be FEO and

not the government which will have the

final say in the negotiation.

Being the freeholder, FEO has a few

options, including granting a lease top-up

(which will entitle it to collect a premium

payment from the buyer), buying back the

land, or sell the freehold tenure

altogether.

THE END-GAME OF ALL CONDO INVESTMENTS IS COLLECTIVE SALE

Actually, this is a win-win situation for

both the freeholder and the 99-year

leasehold owners because by the time the

condo project is at ripe old age of say 40

to 50 years old, the property would have

suffered from all sorts of obsolescence

including functional as well as economic

obsolescence.

This is because any housing project of

such grand old age will be too expensive

and impractical to maintain on a day-to-

day basis – the repair costs would be high

and the rental value low. As such, it will

become economically obsolete for the

owners to hold on to an investment that

drains their financial resources, such as on

recurring repairs.

FREEHOLD LAND VALUE DOES NOT DEPRECIATE

On the other hand, the underlying land

value is being upheld and even enhanced

by the presence of newer housing projects

in the nearby areas that collect higher

rents. As such, housing developers are

often motivated to buy over old estates

and redevelop the land into new

apartments so as to enjoy higher rents

subsequently.

RENT DETERMINES SALE PRICE

At the end of the day, it is the rents being

collected at similar properties in the same

locality that supports and upholds the

land value of ageing properties.

While old units in old condos cannot

command high rents due to its

obsolescence, a brand new condo with

brand units in its place will be able to. The

difference between the two values (i.e. the

future rental return and the current low

value) will attract housing developers to

make the move to buy over every single

unit in an old housing estate so as to own

the land.

COLLECTIVE SALE DEFINED

When all or the vast majority of owners in

a private housing estate put up their

respective units for sale to one single

buyer so that the buyer can own the land,

the sale is called Collective Sale.

As such, regardless of the tenure (whether

it is freehold or leasehold), each and every

condo/apartment owner will be able to

reap the ultimate return in a collective sale.

In this case of FEO, for as long as it

continues to lease the freehold site for 99-

year leasehold tenure and keep the

reversionary right, it will be able to reap

the financial rewards again and again

every 40 to 50 years when the collective

sale opportunities arise.

At least in theory, that is.



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property market direction (january 2010)

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