singapore property weekly issue 243

8/20/2019 Singapore Property Weekly Issue 243

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Issue 243Copyright © 2011-2014 www.Propwise.sg. All Rights Reserved.

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CONTENTS

p2 5 Benefits to Using a Company to Invest

in Property

p6 Singapore Property News This Week

p10 Resale Property Transactions

(December 30 – January 5)

Welcome to the 243th edition of the

Singapore Property Weekly .

Hope you like it!

Mr. Propwise

FROM THE

EDITOR

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SINGAPORE PROPERTY WEEKLY Issue 243

Page | 2Back to Contents

By Tam Ging Wien (guest contributor)

Using an investment vehicle for your property

purchase is a topic I wished I knew about

earlier. So far, I have not used an investment

vehicle for my property purchase. But

knowing now the benefits of this method, Imay consider it for my next purchase.

I discovered this tip from my property agent

(who was just as clueless as myself!) who

casually asked me the question: “I have been

servicing a loyal client for many years, and

every time he makes a property purchase he

will form a company and buy in the

company’s name. Do you know why?”

5 Benefits to Using a Company to Invest in Property


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I set out to research this topic and to my

surprise, I discovered a wealth of advantages

in doing so! Here are the five benefits of using

a company to invest in property.

Benefit #1 – Overcome Local Property

Ownership Laws

An experienced property investor friend

shared that in the Iskandar Region in

southern Malaysia, foreign property owners

must resell their properties to a local if thevalue is below RM1million. Some savvy

investors therefore incorporated a local

company to purchase the property and later

sold the company (with the property as an

asset) to other investors. While I can’t verify

the story, this might be an interesting point to

research when investing in foreign properties.

Benefit #2 – Tax Exemptions and

Reductions

To encourage small businesses, countries in

South East Asia have special tax laws wherenew companies enjoy tax exemptions for the

initial years of incorporation. The income

generated from the property could therefore

be tax-free for the first few years.

In most countries, companies enjoy a much

wider variety of tax breaks or deductions. Asa property investment company, many of the

expenses incurred can be expensed in the

company books. Examples of expenses

include: utilities, repairs, agent fees,

maintenance fees, property taxes, furnishings

and renovations.


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Benefit #3 – Clean Way for Multiple

Investors to Invest

Direct property investments require high

upfront capital. Therefore a group of investorsmay pool resources together to share in a

property purchase and profit together. By

incorporating a company as an intermediary,

the shareholders can easily draft terms and

agreements into the company’s shareholders

agreement. The share of the property canalso be easily apportioned by using company

shares. In the unlikely event of death,

bankruptcy or major illness of one

shareholder, the interest of the remaining

shareholders is still protected using company

law.

Benefit #4 – Ability to Make Larger

Investments

By incorporating a company to pool resources

together, a group of investors couldpotentially negotiate for better prices with

developers by making bulk purchases.

Perhaps with a larger pool, the group of

investors may even acquire costlier properties

with higher yields such as shop houses or

even buildings.Benefit #5 – Enjoy Company-Specific

Benefits

Many governments support small and

medium businesses by providing assistance

to support their businesses. This may take

the form of tax rebates, innovation credits or

something else.


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A good example is Singapore where the

government has encouraged local businesses

to improve productivity through the PIC

scheme. The scheme provides up to 60%

grants to businesses that invest in innovative

ways to enhance their business productivity.

By guest contributor Tam Ging Wien, an avid

investor and blogger who spends his time

empowering the masses in financial

education.

http://www.propertyconnectionasia.com/http://www.moneymatters.sg/http://www.propertyconnectionasia.com/http://www.propertyconnectionasia.com/http://www.propertyconnectionasia.com/http://www.propertyconnectionasia.com/http://www.propertyconnectionasia.com/


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Singapore Property This Week


Residential

Resale condo prices fall by 0.8% month-

on-month in Dec 2015

Based on flash estimates by SRX Property,

resale prices of non-landed residential units

have fallen by 0.8% month-on-month in

December 2015. Year-on-year, the price

index fell by 2.1%. Resale prices of condos

fell the greatest in the Outside Central Region

as a 4.1% drop was recorded last year

compared to a 3.3% in 2014. In the Core

Central Region and the Rest of Central

Region, resale prices had increased by 2.2%

and 1.5% in 2015 after falling in 8% and 4.8%

2014 respectively. Last year, the resale

transaction volume for condos rose by 28%

from 2014 to 6,346 units. Eugene Lim from

ERA Realty said that more buyers are

returning to the resale market particularly for

units with larger floor areas as developers

tend to launch smaller units.

(Source: Business TImes)

Condo rents fell by 5.4% while HDB flat

rents fell by 4% in 2015

Year-on-year, the condo rental price index

has fallen by 5.4% for non-landed privatehomes in 2015. This was more than in 2014

when a 5.2% year-on-year drop was

recorded.

SINGAPORE PROPERTY WEEKLY I 243


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Eugene Lim from ERA Realty predicts that

there will be a 5 to 8% fall in rental prices of

non-landed private homes in 2016 due to tight

immigration policies and high supply of rental

units, particularly in the Outside CentralRegion. In 2015, condo rents in that region

had fallen 6.4% while rents in the city fringe

fell by 7.6%. Condo rents in the Core Central

Region had fallen by just 0.9% last year.

Similarly, the rental index for HDB flats had

also gone down by 4% in 2015. Month-on-

month, the index had fallen by 0.6% in

December last year. Yet, the volume of HDB

flats had increased by 8% year-on-year in

2015. Lim believes that more expats are

renting HDB flats instead of private

apartments due to crimped relocation

packages, thus the surge in rental volumes

for HDB flats.

(Source: Business Times)

Commercial

Mortgage auctions expected to increase

According to market experts, mortgagee

listings at auctions are expected to increasethis year. This month, the properties on

auction include an uncompleted factory in

Kranji, shop units along Cuscaden Road and

a two-storey detached house at Upper East

Coast Road. Market experts believe that

properties are auctioned off as a last resort.

Often, these properties are put up by foreign

investors who have defaulted on their loans,

said experts. While the number of properties

put up for auction has increased to 796 in

2015, only 33 units were sold because of a

mismatch between sellers’ and buyers’

expectations, added Colliers’ Grace Ng.

Nevertheless, Sharon Lee from Knight Frank

said that sales rate at auctions may be low as

SINGAPORE PROPERTY WEEKLY I 243


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buyers tend to pick up a property after the

auction.


Rents for 1st floor retail space down by1.2% in Q4 last year

According to DTZ, rents for first-storey retail

space have fallen by 1.2% quarter-on-quarter

in Q4 last year to about $30.50 psf. Year-on-

year, rents have fallen by 5.9%. Market

experts believe that the fall in prices could

have been due to weaker consumer

sentiments. Rents of retail spaces at

Orchard/Scotts Road fell by 5% year-on-year,

compared to a 5.7% drop in retail space rents

in the suburban areas in the same period.

Lee Nai Jia from DTZ said that rents in the

Other City areas such as Chinatown and

Bugis are expected to recover when

residential components in mixed-use

developments receive their temporary

occupation permits.


Site at Lok Yang Road up for sale

An industrial site at Lok Yang Road is up for

sale by expression of interest. The indicative

price is set at $20 million. The 133,876 sq ft

site which comprises of 5 buildings, has a

total gross floor area of 107,130 sq ft and has

been zoned for Business 2 use with a

maximum approved plot ratio of 2.5. Grace

Ng from Colliers said that end-users in the

Business 2 industry such as those in

manufacturing may be particularly interested

in the site as industrial spaces of such size

are hardly available for sale.




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Tuas South Link 2 site tender awarded

JTC has awarded the tender for an industrial

site at Tuas South Link 2, at a tendered price

of $3 million. The 5,050 sq m site has a grossplot ratio of 1.4 and a tenure of 20 years. The

site has been zoned for Business 2 use.



http://propertymarketinsights.com/


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Non-Landed Residential Resale Property Transactions for the Week of Dec 30 – Jan 5

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

District Project Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf) Tenure

1 MARINA BAY RESIDENCES 1,076 2,500,000 2,323 99

3 RIVER PLACE 1,324 1,700,000 1,284 99

3 QUEENS 1,195 1,500,000 1,255 99

4 REFLECTIONS AT KEPPEL BAY 1,550 2,500,000 1,613 99

5 THE INFINITI 1,561 1,328,888 851 FH

9 SCOTTS SQUARE 1,249 3,500,000 2,803 FH

9 ONE OXLEY RISE 1,055 1,820,000 1,725 FH

10 GRANGE RESIDENCES 2,583 5,600,000 2,168 FH

10 BOTANIC GARDENS MANSION 1,755 2,650,000 1,510 FH10 JERVOIS LODGE 1,238 1,740,000 1,406 FH

10 THE MERASAGA 1,367 1,830,000 1,339 99

13 INTERO 1,012 1,360,000 1,344 FH

14 WATERBANK AT DAKOTA 883 1,300,000 1,473 99

14 KEMBANGAN SUITES 538 750,000 1,394 FH

15 SUITES @ EASTCOAST 366 608,000 1,661 FH

15 ONE AMBER 1,389 2,058,000 1,482 FH

15 COTE D'AZUR 1,292 1,820,000 1,409 99

15 TANJONG RIA CONDOMINIUM 1,399 1,505,000 1,076 9917 FERRARIA PARK CONDOMINIUM 1,324 1,150,000 869 FH

18 SEA ESTA 517 588,000 1,138 99

19 RIO VISTA 1,249 900,000 721 99

Postal

District Project Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf) Tenure

21 HUME PARK I 1,496 1,345,000 899 FH

21 KISMIS COURT 1,948 1,150,000 590 99

22 THE MAYFAIR 1,227 1,060,000 864 99

23 HILLVIEW REGENCY 904 800,000 885 99

23 REGENT HEIGHTS 1,023 840,000 821 99

23 THE WARREN 1,206 950,000 788 99

26 THE CALROSE 1,238 1,388,888 1,122 FH

27 CANBERRA RESIDENCES 1,324 1,120,000 846 99

singapore property weekly issue 243

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