singapore property weekly issue 142

8/13/2019 Singapore Property Weekly Issue 142

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Issue 142Copyright 2011-2013 www.Propwise.sg. All Rights Reserved.
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CONTENTS

p2 6 Reasons Why Property Curbs

Should NOT Be Removed

p9 Singapore Property News This Week

p13 Resale Property Transactions

(January 22January 28)

Welcome to the 142thedition of the

Singapore Property Weekly.

Hope you like it!

Mr. Propwise

FROM THE

EDITOR
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SINGAPORE PROPERTY WEEKLY Issue 142

Page | 2Back to Contents

By Gerald Tay (guest contributor)

There have been recent calls to the

government asking to relax some of its

property-cooling measures as demand for

real estate wanes. MrGetty Goh, director at

Ascendant Assets voiced his view on this,

speaking at a Business Outlook Forumrecently.

He said the government should consider

repealing the Seller Stamp Duty (SSD) for

residential properties introduced in January

2011, because sellers who are keen to

dispose their properties may find themselvestied down by it.

Many people I have met who want you to

invest in property dontcare two hoots if you

6 Reasons Why Property Curbs Should NOT Be Removed


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make money or not, as long as they profit

from your investment. And the same group of

people are now calling for property curbs to

be removed because of a so-call lacklustre

property market.

Mr Getty Goh is one of the few respected

voices I listen to among the many industry

players, and therefore I believe he does not

fall into the category of those Please invest

in property so WE can get rich group. His

view on relaxing some property rules may be

a personal view of his own and not for profit

interests.

Here are six reasons why property curbs

should NOT be removed today at least till a

correction happens.

1. Itstoo early

Private home prices registered their first drop

in seven quarters in the October-December

period, falling 0.9 percent quarter-on-quarter.

Meanwhile, public housing prices posted their

second consecutive quarterly drop, down 1.5

percent - the worst reading in eight years.

Unwinding existing tightening policies for

property simply because of a slight drop?

This may be too premature as prices in both

private homes and public housing are still

very much elevated.

For the government to roll back its policiesthat took four years to have an impact, a

major correction has to happen. And I believe

the government will continue its stand on

existing measures till that happens.

2. The market is not ready psychological ly

Market psychology plays a huge part in rising

asset prices and Singapores economy was

resting more and more on asset based

inflation supported by cheap liquidity in


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recent years.

Credit growth and bank financing drive up

asset prices, causing lenders and borrowers

to believe that even more credit growth isboth safe and desirable.

The last four years of rapid property price

escalation has been played out, not by real

estate or economic fundamentals, but simply

because everyone believes in the fallacy of

an illusionary demand/supply dominated bythe market psychology of lemmings following

the crowd.

An even more vicious inflationary cycle will

happen. If the government begins to unwind

its policies, buyers want to buy, sellers want

to sell, banks want to lend, developers see

demand and want to buy more land and

build more, the government sells and

releases more landthe whole cycle will turn

on itself.

This will cause more supply in future and if

theres a correction, the results will be

distastrous to the economy.3. Still plenty of liquidity

Even with the recent Fed tapering, the world

is still awash with cash and developed-market

interest rates are close to zero. Liquidity

factors still have the ability to push real estate

markets to new highs and to crazy

overvaluation.

The dire consequences and outcome of

removing Sellers Stamp Duties (SSD) and

other property measures in a bullish real

estate market is unthinkable.

4. Gamblers dontdeserve sympathy

On the removal of the Sellers Stamp Duty

(SSD), Mr Getty Goh explained this move


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would help property owners offload their

properties.

He said, Theseowners in the event that they

own two or three properties, giving risin

interest rates and their inability to do a

refinancing because of the Total Debt

Servicing Ratio (TDSR), may be compelled to

slash their prices to offload their property.

This could snowball into a longer term

problem when sellers flood the market aftethe Seller Stamp Duty expires in four years

time, precipitating a crash in prices.

Should we protect the interest of these

property buyers whose finances are not built

on solid foundations?

The owners who buy and sell properties

hoping to make a quick buck in a bullish

market, either during a sub-sale or when the

property T.O.Ps is gaming the property

market like a casino. When the Sellers Stamp

Duty and other property measures were

implemented, they got stuck and hope for

some form of salvation.

Removal of SSD by the government will only

send a negative message to more

speculators that flipping in a bullish market is

the right thing to do.

An analogy to the above:

Should we remove all casino regulations to

help more gamblers gamble?

Should we extend credit to gamblers to help

them recover when they incur bad gambling

debts?

Will the casinos in Singapore go under

because a bunch of gamblers lost money?

Professional gamblers understand risk and

protect the downsides to prevent losses


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before they step into a casino. Shrewd

property buyers are the same.

The only downside protection ignorant

gamblers have is buyand pray. So let them

pray for now.

5. Higher Cost of Living for Most

Singaporeans

Removal of property measures at current

bullish levels will cause a further spike in land

prices (See Reason 2), adding inflation to all

asset prices. And this may result in a higher

cost of living for most Singaporeans.

6. Protect Genuine Home Buyers and

Conservative Investors

If Sellers Stamp Duty (SSD) and other

property measures are removed at current

point, property prices may continue to rise

given the above reasons. This certainly does

not bode well for many genuine home buyers

in both private residential and HDB.

Though most of the property measures are

targeted to the private residential market,

rising land prices have collateral effects on

the HDB BTO market as well.

Shouldnt the implementation of property

measures to curb rising prices be meant for

the majority of Singaporeans to afford and

buy a decent home at decent prices?

Or should the removal of the SSD and other

property measures be meant to protect

property speculators, and those with vested

interests?

Conservative investors can also help support

the vibrancy of a stable property market wheninvesting with decent yields. Todays yields

have been molested by current the indecent

high prices.

SINGAPORE PROPERTY WEEKLY I 142


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Moving Forward

On the contrary, more cooling measures are

needed as prices have not come down to

acceptable and reasonable levels.

Removing property curbs is supposed to

allow more sellers and buyers to come into

the market, but in todays climate where

prices are still adamantly high, will only add

oil to the fire.

Historically, property curbs are removed

whenever there is a major price correction.

This removal and correction will bode well for

many genuine buyers and investors.

Property prices climb up by the escalator and

come down by the lift. A combination of risinginterest rates and increased supply in the

market could trigger a correction in 2014 to

2015, according to Barclays. The bank

estimates home prices will fall 5 percent this

year and between 5 and 15 percent next year

and maybe more.

For genuine buyers and investors, my advice

to you is be patient and avoid buying with the

lemmings, as the next eventual major

correction may just be around the corner.

Debt and leverage caused the 2008 crisis and

now debt and leverage are greater than at

any point in history. History always repeatsitself and this will end in tears.

As for the speculators, their turn is soon over.

By guest contributor Gerald Tay, CEO of

CREI Academy Group, who exposes widely-

held property investment myths that haveproven highly ineffective in creating wealth,

and prevent a comfortable retirement for the

ordinary investor.

SINGAPORE PROPERTY WEEKLY I 142
http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/


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https://www.coassets.com/https://www.coassets.com/


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Singapore Property This Week


Residential

Opt imist ic out look for Riverbank @

Fernvale

Sale of units at UOL Group's 99-year

leasehold 555-unit private condominium

Riverbank @ Fernvale will begin next week.

The average price indication is slightly over

$1,000 psf. Prices of a 495 sq ft one-bedroom

unit start from $476,000, or around $962 psf.

A 947 sq ft three-bedroom unit starts from

$878,000 or $927 psf. UOL Groupsproperty

president Liam Wee Sin remains optimistic

about buyer response, despite falling resale

prices recently. Mr Liam says that their pricing

is realistic because the tender bid last year

was $489 psf ppr, and with the total debt

servicing ratio (TDSR), underlying demand to

upgrade is strong.

(Source: Business Times)

Savi l ls : pr ivate proper ty pr ices to r ise by

2%

The global real estate services providerSavills has forecast that overall prices of

private property could increase by 2 percent

in 2014, contrary to market expectations of

decreasing prices which are not supported by

the facts. In fact, Alan Cheong, the senior

director at Savills Research, Singapore, saidthat many mass-market and mid-tier projects

are in the hands of strong developers, who

are unlikely to lower prices below comparable



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benchmarks just to clear their stock.


Property sector hopes for the curb s to be

tweaked or remo ved

Property players are reported to hope that

some of the cooling measures introduced -

the total debt servicing ratio (TDSR) and

additional buyers' stamp duty (ABSD) - might

be tweaked or even rolled back. Donald Han,

managing director at Chesterton Singaporesaid that such measures could be loosened

up because they have had the desired

results. In addition, sub-sales and foreigners'

participation rates are now at a new low

compared to two years ago thanks to the

sellers' stamp duty (SSD) and ABSD, whilethe TDSR framework has significant influence

on escalating property prices and transaction

volumes.


Redas-NUS index s ends m ixed sign als

The latest Real Estate Sentiment Index

(RESI) survey, developed by the Real Estate

Developers' Association of Singapore (Redas)

and the National University of Singapore,

shows that the Composite Sentiment Index

capturing the overall market sentiment of

property developers increased to 4.0 in Q4

2013, from 3.9 in Q3 2013. Similarly, the

Future Sentiment Index reached 4.0 from 3.9.

However, 62 percent of the developerssurveyed anticipate a moderate decrease in

residential property prices in the next six

months, compared with 51.3 percent in Q3

2013. Ku Swee Yong, chief executive of

property consultancy Century21, said that

such mixed signals in the survey reflectmarket uncertainties.




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Resale f lat COV hits 2009 cr isis low mark

Median cash-over-valuation (COV) premiums

for Housing and Development Board (HDB)

resale units decreased from $5,000 in

December 2013 to $3,000 January 2014

similar to the previous low in the Global

Financial Crisis in June 2009. Eight out of the

28 HDB towns saw zero or negative median

COV. Nicholas Mak, executive director at SLP

International, said that HDB resale prices are

stabilizing, and need to be read in light of the

low transaction volumes in the same period

which could translate to a wide range of COV

figures. The flash report by the Singapore

Real Estate Exchange (SRX) shows that

Sengkang and Punggol had negative overall

COVs in January; while Bishan, Geylang,

Jurong West, Sembawang, Woodlands, and

Yishun recorded zero overall median COV.

Ong Kah Seng, director at R'ST Research,

expects that prices may fall about 5 percent in

the first half of this year, despite a small

increase of 0.3 percent in January 2014.


Commercial

Anso n House up for sale

Anson Houses current owner, CBRE Global

Investors, is reported to have put the 13-

storey office block up for sale with an

indicative pricing of $175-180 million, or$2,292-2,357 psf on net lettable area (NLA) of

76,362 sq ft. 20 percent of the building, which

is on a site with about 82 years of remaining

lease, is currently vacant, which suits

potential occupier who seeks to partly occupy

the building as well as provision for signage

and naming rights. The average passing rent

is about $8 psf per month with recent rent

standing at $8.50-$9.50 psf per month.




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Westgate Tower back on the leasing

market

Westgate Tower, the 20-storey office block

next to Jurong East MRT Station, is back on

the leasing market. A Sun Venture-Low Keng

Huat (LKH) consortium has appointed Jones

Lang LaSalle (JLL) and CBRE as joint sole

leasing agents. Just last month, Sun Venture-

LKH was granted options to buy the office

tower at $579.4 million, or $1,900 psf, from

the developers of the Westgate mixed-

development project CapitaLand,

CapitaMalls Asia and CapitaMall Trust. Sun

Venture managing director Alvin Teo said that

the new owners' asking rent is around $6.50

psf, compared with the previous ownerssindicating office rents of $8 psf a month.


Tuas South lo ng- lease indus tr ial site for

sale

A long-lease 34,189 sq ft industrial site in 17

Tuas South Street 5 has been launched for

sale by Expression of Interest for $8.9 million.

The site has a two-storey building with

production and storage space, a mezzanine

office with a GFA of approximately 39,795 sq

ft. The lease tenure is about 45 years.

Nicholas Ng, local director of investments at

Jones Lang LaSalle the sites exclusive

marketing agent, said factories with lease

tenures of more than 40 years are rare, and

that this site would be attractive to

industrialists with huge upfront costs or

leases expiring in the next few years.(Source: Business Times)



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Non-Landed Residential Resale Property Transactions for the Week of Jan 22 Jan 28

NOTE: This data only covers non-landed residential resale propertytransactions with caveats lodged with the Singapore LandAuthority. Typically, caveats are lodged at least 2-3 weeks after apurchaser signs an OTP, hence the lagged nature of the data.

Postal

District

Project NameArea

(sqft)

Transacted

Price ($)

Price

($ psf)

Tenure

4 CARIBBEAN AT KEPPEL BAY 2,583 2,715,000 1,051 99

5 REGENT PARK 1,152 1,295,000 1,124 99

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

8 KENTISH GREEN 1,076 1,070,000 994 99

10 8 NAPIER 2,777 8,608,700 3,100 FH

10 8 NAPIER 2,777 8,391,300 3,022 FH

10 GOODWOOD GARDENS 1,044 2,125,000 2,035 FH

10 THE MONTANA 775 1,533,690 1,979 FH

10 GALLOP GABLES 2,842 4,800,000 1,689 FH

10 CASA JERVOIS 1,227 1,925,000 1,569 FH

11 STRATA 1,066 1,750,000 1,642 FH

14 STARVILLE 1,270 1,220,000 961 FH

14 ASTOR 1,119 1,000,000 893 99

15 PEBBLE BAY 1,894 2,620,000 1,383 99

15 CELESTIA 646 855,000 1,324 FH

15 RIVEREDGE 1,593 2,060,000 1,293 99

16 COSTA DEL SOL 1,755 2,550,000 1,453 99

16 CHANGI GREEN 904 988,000 1,093 FH

16 EAST MEADOWS 1,216 1,200,000 987 99

17 COASTAL BREEZE RESIDENCES 1,173 1,080,000 920 99

20 SIN MING PLAZA 1,593 1,755,000 1,102 FH

20 FAR HORIZON GARDENS 1,389 1,100,000 792 99

Postal

District

Project NameArea

(sqft)

Transacted

Price ($)

Price

($ psf)

Tenure

21 1 KING ALBERT PARK 1,012 1,385,000 1,369 FH

21 BEAUTY WORLD CENTRE 1,873 1,615,000 862 99

23 THE MADEIRA 936 970,000 1,036 99

23 PARKVIEW APARTMENTS 1,087 850,000 782 99

23 PARKVIEW APARTMENTS 2,002 1,200,000 599 99

25 CASABLANCA 936 900,000 961 99

25 CASABLANCA 1,184 1,018,000 860 99

25 THE WOODGROVE 893 755,000 845 99

26 FOREST HILLS CONDOMINIUM 1,894 1,395,000 736 99

singapore property weekly issue 142

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