singapore property weekly issue 205
TRANSCRIPT
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8/9/2019 Singapore Property Weekly Issue 205
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CONTENTS
p2 Do Property Prices Always Recover and
Go Up Higher?
p7 Singapore Property News This Week
p12 Resale Property Transactions
(April 8 – April 14 )
Welcome to the 205th 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]
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By Property Soul (Guest Contributor)
Recently, there were reports on units in high-
end condominium projects being sold at a big
loss. As property buyers, we often hear from
developers and property agents that propertyprices will always go up in the long run.
Does the property market always manage to
recover, with prices going higher than the
previous peak? Is it true that any time is a
good time to buy? Below is an abstract from
my book No B.S. Guide to Property
Investment about one of my real-life property
stories and the lessons learned.
Do Property Prices Always Recover and Go Up Higher?
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Bought a unit in a seafront condominium
In 2003, I bought a unit in a seafront
condominium. When it was under renovation,
two neighbors staying at the units above minedropped by for a chat. They both bought their
place first-hand from the developer.
“Do you mind telling us what price you paid?”
I told them the amount.
“Oh, that was more or less what we paid for last time.”
“Which year did you buy your place?”
“It was 1984. Do you know about their launch
at that time?”
“I don’t know. I was still in primary school in
1984.”
I did a search of the old newspapers. I found
that the condominium was selling in a
depressed market that year. My two
neighbors weren’t overpaying at all.
It was amazing that, almost twenty years
later, despite inflation and after all the upsand downs in the economy, we were back to
the launch price!
Who said prices can’t go back twenty years?
They don’t just go back, they can even go
back to where they started from.
Prices can’t drop lower?
Between 2002 and 2004, my strategy was to
buy rental properties at fifteen percent lower
than the last transacted price. In that way, I
still had a fifteen percent buffer in case prices
dropped further. And once the marketrecovered, I could sell them at any price and
still make a profit.
I did make money. But I was wrong.
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How could I know that prices couldn’t drop
another fifteen or twenty percent?
Many people who bought in 1995 held on to
their overpriced purchase. They struggledthrough the recession in 2001, SARS in 2003,
the downturn in 2004… Every time when they
thought the bad days were finally over, a
more severe storm came.
J. Anthony Boeckh, author of The Great
Inflation, told what happened in some USstates after the sub-prime crisis:“In general,
prices nationally have dropped back to the
level of the cost of building a new dwelling,
which includes land acquisition, building
costs, and profit for the builder.”
Will exponential growth happen again?
Prices of landed properties in Singapore have
increased 75 to 100 times in the last fifty
years. But can they rise at the same rate in
the next fifty years?
I doubt so.
In the 1960s, Singapore’s infrastructure,
economy and social stability were verydifferent from today. The ease of borrowing
and the pool of eligible buyers were also very
limited.
In the last fifty years, Singapore has evolved
from an emerging country to a developed
nation. It is with substantial improvement in
our economy and living standard, coupled
with easy financing, that housing prices can
climb to where they are today.
Markets that achieved high growth in the past
cannot guarantee continued growth. On thecontrary, it could imply that the boom may
soon be over. Once the fundamentals are
changed, the trend will be reversed.
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There are many countries that used to have a
strong economy. Then they experienced
recession. Some managed to recover and
grow again while others have remained weak
since.
Although history often repeats itself, there are
also things in history that, once they are
gone, are gone forever.
When, or will it ever, recover?
There is a saying that, in each property cycle,
prices always surpass the previous peak to
reach an all-time high. This happened several
times in the history of the Singapore property
market. But the question is: When?
The commodity bull market which started inthe early 1930s was surpassed only by the
bull market in the 1970s. Just look at gold,
there was a very long period of depressed
prices after its collapse in 1980.
Amid spiraling property prices in the 1980s,
many Japanese believed they would never be
able to afford it if they didn’t buy now. Many
borrowed huge housing loans that could only
be paid off by their grandchildren. The bubble
that burst in the late 1980s started two lost
decades in Japan.
This is how Marc Faber described a major
market collapse, as compared to a minor correction:
Major manias occur very infrequently. Once
they burst, they shake an entire generation’s
faith in the object of speculation ... while mini
manias may take place every few years ... a
major mania will represent the final stage, or
culmination, of a long-term secular up-trend
which may have lasted 10 to 25 years.
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What are the lessons learned?
Only invest if you have the answers for the
following questions:
• Can you see any upside in the fundamentalsin the foreseeable future?
• How long do you think you can wait to see
profit from your property investment?
• Do you have the holding power to wait till
the next Bull Run?
• Will you see a recovery before your
retirement (and at least live to see that
happen)?
The next time you want to ask when a good
time to buy is, take the hint from investor Jim
Rogers:
Bottoms in the investment world don’t end
with four-year lows. They end with 10- or 15-
year lows. You do not buy unless it is cheap
and unless you see positive change coming
within the next 2 to 3 years.
Can you see positive or negative changes
coming?
By guest contributor Property Soul, a
successful property investor, blogger , and
author of the No B.S. Guide to Property
Investment
SINGAPORE PROPERTY WEEKLY I 205
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Singapore Property This Week
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Residential
G C B p u t u p f o r a u c t i o n f o r $ 20 m
A Good Class Bungalow (GCB) that is located
at Binjai Rise has been put up for auction. Its
indicative price is $20 million, or $1,174 psf.
The site has a gross floor area of 13,378 sq
ft. It is currently partially completed, and is
expected to have a swimming pool. To
complete the construction, it is expected that
it will cost another $1 million to $2 million; to
tear down the current structures, it may cost
up to $6 million, said the Business Times.
According to industry experts, mortgagee
sales of GCBs like this are rare. In instances
where they are placed for auction, GCBs are
typically put up for sale by owners, not
mortgagees. Industry experts added that
since 2014, there have been fewer GCB
auction sales due to the implementation of
the total debt servicing ratio framework. The
framework, which acts as a cooling measure,
had affected demand in the GCB market, said
experts. According to William Wong from
RealStar Premier Group, the site at Binjai
Rise is competitively priced, however its
proximity to the expressway may reduce its
appeal.
(Source: Business Times)
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P r i v at e h o m e p r i c e s f a ll b y 1 % i n Q 1
In the first quarter, private home prices have
fallen by 1 percent, according to the Business
Times. Rents have also fallen by 1.7 percent.
Data from the Urban Redevelopment
Authority (URA) showed that the fall in prices
and rents in the private residential property
market has persisted for six consecutive
quarters. In Q1, prices of non-landed
properties fell by 0.4 percent in the corecentral region, 1.7 percent in the rest of
central region and 1.1 percent in the outside
central region, according to URA’s data. On
the other hand, a 0.9 percent fall was
observed in prices of landed properties.
Compared to the previous quarter, Q1 rentsof non-landed homes have fallen by 1.9
percent in the core central region, 1.8 percent
in the outside central region and 1.6 percent
in the rest of central region. Chia Siew Chuin
from Colliers International said that
developers have offered discounts in an
attempt to attract more buyers. For example,
GuocoLand offered discounts of up to 19percent for Sims Urban Oasis, while a 10
percent discount was offered to Marine Blue
buyers by CapitaLand. Chia added that she
believes private home prices will continue to
fall by about 5 to 8 percent this year. Nicholas
Mak from SLP International said that a 4 to 7
percent fall in overall rent is expected this
year. He believes that rents in the rest of
central region and outside central region are
falling faster than in previous quarters due to
an increase in supply of private and HDB
housing units for lease.
(Source: Business Times)
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Q 1 r e s a l e f l a t p r i c e i n d e x f e l l b y 1 p e r c e n t
quart er-on-quart er
In Q1 this year, the HDB resale flat price
index has fallen by 1 percent, quarter-on-
quarter. According to the Business Times, the
fall in prices is slower than the previous
quarter, and is the smallest recorded quarter-
on-quarter decline for the index since Q3
2013. As the supply of Build-to-order (BTO)
flats tapers, market experts believe that
buyers may flock back to the resale market.
This year, HDB is expected to launch 16,900
BTO flats, which is fewer than the 22,455
BTO flats launched last year and the 25,139
BTO units launched in 2013. Not only so,
there are 10.8 percent fewer applications for resale HDB flats in the first quarter of this
year, compared to the previous quarter, said
the Business Times. Eugene Lim from ERA
Realty believes that this year there will be
more resale flat deals. He predicts that
18,000 to 20,000 resale flats would change
hands by the end of the year. Market experts
believe that there would be a 3.5 percent to 5
percent drop in HDB resale prices this year.This is less than the 6 percent fall in the price
index last year.
(Source: Business Times)
Commercial
Q1 Grade A of f ice vacancy rat es f a l l by 0. 3
percent q uart er-on-quart er
According to Cushman and Wakefield,
vacancy rates for Grade A office spaces have
fallen by 0.3 percent quarter and quarter to
3.9 percent in Q1 this year. Data from URAshowed that overall the vacancy rates of
office spaces have remained unchanged at
10.2 percent this year.
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Christine Li from Cushman and Wakefield
added that Grade A office rents are expected
to increase by 5 to 6 percent this year as
vacancy rates will be around 3 percent by the
end of the year. Chia Siew Chuin fromColliers International added that the average
monthly gross rent for Premium Grade
spaces in Raffles Place/New Downtown may
increase by about 5 to 10 percent this year.
However, rents in the CBD area for Grade A
and B offices may increase by about 5percent for the entire year. Chia said that
despite the low transaction volumes in the
office market, there is still growing interest in
office properties. However Li believes that
retail rental market may remain weak due to
higher business costs and a smaller influx of
tourists.
(Source: Business Times)
Q 1 i n d u s tr ia l p r ic es i n c reas e d b y 0 .7%
w hile rent s increased by 0. 4%
According to the Business Times, prices and
rentals of industrial space have increased.
However this increase is slowing down due to
an increase in supply. In Q1 this year, the
overall prices of industrial spaces have
increased by 0.7 percent quarter-on-quarter
and rents have increased by 0.4 percent.
However, occupancy rates have fallen by 0.2
percent. According to Chia Siew Chuin from
Colliers International, in Q1, prices in the
multiple-user factory market have increased
by 0.1 percent from the previous quarter. The
Business Times added that the stabilising in
prices could be due to the festivities inFebruary and may also be due to the Total
Debt Servicing Ratio framework.
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By the end of February this year, about 1,700
units of uncompleted multiple-user
developments were still available for sale,
according to statistics by JTC. Chia believes
that the overall industrial prices may reduceby 3 percent this year. However, rents for
business parks and independent high-spec
buildings are expected to increase by 3
percent and 6.5 percent in 2015 respectively,
said market experts.
(Source: Business Times)
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Non-Landed Residential Resale Property Transactions for the Week of Apr 8 – Apr 14
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
3 ALEXIS 657 1,140,000 1,736 FH
3 ALESSANDREA 1,001 1,440,000 1,438 FH
4 THE OCEANFRONT @ SENTOSA COVE 1,894 2,698,000 1,424 99
4 THE INTERLACE 2,099 2,700,000 1,286 99
8 CITY SQUARE RESIDENCES 1,206 1,655,000 1,373 FH
9 RIVERGATE 1,776 3,450,000 1,943 FH
9 THE COSMOPOLITAN 1,141 2,150,000 1,884 FH
9 ASPEN HEIGHTS 1,130 1,690,000 1,495 999
9 CAVENAGH HOUSE 1,701 2,150,000 1,264 FH
10 GOODWOOD RESIDENCE 2,508 6,150,000 2,452 FH
10 SOMMERVILLE GRANDEUR 1,884 2,850,000 1,513 FH
10 THE HORIZON 1,561 2,318,000 1,485 FH
10 VALLEY PARK 1,216 1,680,000 1,381 999
10 JERVOIS MEADOWS 1,216 1,600,000 1,315 FH
10 MUTIARA CREST 3,983 4,888,000 1,227 FH
10 CASABELLA 3,003 3,180,000 1,059 FH
11 AMARYLLIS VILLE 958 1,470,000 1,534 99
11 AMANINDA 1,249 1,810,000 1,450 FH
11 MONTEBLEU 1,141 1,580,000 1,385 FH
11 NOVENA HILL 710 970,000 1,365 FH
12 DE ROYALE 1,281 1,565,000 1,222 FH
12 KEMAMAN POINT 861 980,000 1,138 FH
13 8@WOODLEIGH 1,098 1,330,000 1,211 99
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
14 LE CRESCENDO 861 965,000 1,121 FH
14 WINDY HEIGHTS 2,476 2,120,000 856 FH
15 BELLA CASITA 506 800,000 1,581 FH
15 SUITES @ AMBER 635 965,000 1,520 FH
15 TIERRA VUE 1,227 1,700,000 1,385 FH
15 PEBBLE BAY 3,057 4,150,000 1,358 99
15 HAIG COURT 1,076 1,360,000 1,263 FH
15 AMBER PARK 1,744 2,140,000 1,227 FH
15 ST PATRICK'S RESIDENCES 2,562 2,900,000 1,132 FH
15 MABELLE 883 970,000 1,099 FH
15 PALM VISTA 990 1,000,000 1,010 FH
15 VILLA MARINA 1,281 1,200,000 937 99
16 OPTIMA @ TANAH MERAH 1,173 1,300,000 1,108 99
16 WATERFRONT WAVES 1,292 1,360,000 1,053 99
16 VILLAS LAGUNA 1,496 1,320,000 882 FH
17 LOYANG VALLEY 3,251 1,780,000 548 99
18 RIS GRANDEUR 1,539 1,400,000 910 FH
19 SUNGLADE 1,109 1,130,000 1,019 99
19 HOUGANG GREEN 764 700,000 916 99
19 REGENTVILLE 980 805,000 822 99
20 BISHAN 8 1,163 1,300,000 1,118 99
20 BISHAN 8 1,163 1,280,000 1,101 99
21 TERRENE AT BUKIT TIMAH 1,033 1,385,000 1,340 999
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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
21 SPRINGDALE CONDOMINIUM 1,163 1,238,000 1,065 999
21 SIGNATURE PARK 1,722 1,830,000 1,063 FH
21 THE RAINTREE 1,302 1,260,000 967 99
22 LAKEHOLMZ 1,507 1,370,000 909 99
22 PARC VISTA 1,302 1,055,000 810 99
23 HILLINGTON GREEN 990 1,030,000 1,040 999
23 MERA WOODS 1,345 1,360,000 1,011 999
23 HAZEL PARK CONDOMINIUM 1,335 1,210,000 907 999
23 REGENT HEIGHTS 1,023 860,000 841 99
23 NORTHVALE 1,087 850,000 782 99
23 PALM GARDENS 1,216 890,000 732 99
23 HILLTOP GROVE 1,862 1,160,000 623 99
27 CANBERRA RESIDENCES 1,141 1,210,000 1,060 99
27 THE ESTUARY 1,302 1,018,000 782 99
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