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In this issue:- What Transaction Volumes Tell Us About Investing in the Property Market- Singapore Property News This Week- Resale Property Transactions (June 27 - July 3 )
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CONTENTS
p2 What Transaction Volumes Tell Us
About Investing in the Property Market
p8 Singapore Property News This Week
p14 Resale Property Transactions
(June 27 – July 3)
Welcome to the 60th edition of the Singapore Property Weekly. Hope you like it! Mr. Propwise
FROM THE
EDITOR
SINGAPORE PROPERTY WEEKLY Issue 60
Page | 2 Back to Contents
What Transaction Volumes Tell Us About Investing in the Property Market
Transaction volumes can tell us a lot about
the current activity and sentiment in the
Singapore property market. In general,
volume tends to pick up during bull markets
and die down during bear markets.
How volumes are affected during bull and
bear markets
We can see this quite clearly in Figure 1.1.2a,
which looks at the Total Residential Sales
Volume (in terms of number of units) on a
quarterly basis. Transaction volume in the
Singapore residential property market had a
pronounced peak during 2007Q2 at just under
13,000 units, one quarter before the end of
the Early Bull Market Phase in
PropertyMarketInsights.com’s Property
Market Cycle Model. Due to the Global
Financial Crisis, volumes collapsed after
2007Q2 and hit a bottom in 2008Q4 at under
2,000 units, one quarter after the start of the
Early Bear Market Phase.
Since then, residential property sales volume
recovered quickly and remained at a high
level from 2009 onwards, much higher than
the average levels we saw from 2000 to 2006.
As at 2012Q1, total residential sales volume
SINGAPORE PROPERTY WEEKLY Issue 60
Page | 3 Back to Contents
was 6,377 units, comprising 4,154 developer
sales and 2,223 secondary market sales.
Do note that all the volume data are obtained
from the URA and based on caveats lodged
by purchasers at the Singapore Land
Registry. The numbers only provide an
indication of the level of activity as not all
purchasers lodge caveats for their
transactions.
Primary versus Secondary Market
Transactions
Figure 1.1.2b shows the Quarter-on-Quarter
change in Residential Sales Volume split by
whether they are Developer Sales (which we
call Primary Sales as new units are sold
firsthand to buyers) and Resale Market Sales
(which we call Secondary Sales as they are
sold secondhand from a buyer to another
buyer).
We can see that Residential Sales Volumes
are in general very volatile, and also that
Developer Sales are in general more volatile
than Secondary Sales. This is potentially
because real estate developers have a
greater ability versus individuals to time the
market for their property launches. They also
typically exhibit pro-cyclical behaviour, which
is to say that when the market for new units is
hot they will all crowd in and try to launch as
many units as possible.
SINGAPORE PROPERTY WEEKLY Issue 60
Page | 4 Back to Contents
As of 2012Q1, versus the previous quarter,
total residential sales had risen by just 0.2%,
with developer sales increasing 36.9% and
secondary sales falling by 33.3%.
Figure 1.1.2c shows the quarterly
Composition of Residential Sales Volume by
the type of sale. The green bars show the
Secondary Sales. The red bars show the sale
of uncompleted units by developers. The blue
bars show the sale of completed units by
developers.
From the graph we can observe a few
phenomena. First, from 2000 to 2005
developers were still digesting a lot of their
inventory (completed units) and this probably
kept both the market and their new launches
fairly depressed. The digestion of this
inventory likely helped the property bull
market to really take off from 2006 onwards.
Second, Secondary Sales have been
shrinking as a percentage of total sales
volume versus Developer Sales over this
period (i.e. the green bars are shrinking while
the red bars have been growing).
SINGAPORE PROPERTY WEEKLY Issue 60
Page | 5 Back to Contents
As of 2012Q1, the proportion of developer
sales to total sales was 65.1% while
secondary sales made up 34.9%.
Figure 1.1.2d shows this shift clearly. The 12-
year average for Developer Sales as a
percentage of Total Sales is around 30%, but
in 2012Q1 it hit an all time high of 65.1%.
Correspondingly, Secondary Market Sales as
a percentage of Total Sales have plunged
from their 12-year average of around 70% to
an all-time low of 34.9% in 2012Q1 (Figure
1.1.2e).
SINGAPORE PROPERTY WEEKLY Issue 60
Page | 6 Back to Contents
Let’s take a look at the situation since
1Q2012. In May 2012, the estimated total
residential transaction volume was 3,475
units, comprising 2,057 developer and 1,418
secondary market sales (Figure 1.1.2f).
Developer sales were 59.2% of total sales,
remaining at a relatively high level. The total,
developer and secondary market sales were
down 19.0%, 23.0% and 12.4% respectively
on a month-on-month basis.
How these trends affect investors
Lower volumes suggest that the property
market is cooling off, but we will need to see
at least a few months’ worth of data to
establish a trend. The dominance of developer
sales and drying up of the resale market
presents a double challenge to investors.
Firstly, currently new property launches tend
to be unattractively priced versus their
surrounding resale projects (a phenomenon
we will explore in greater detail in a later
article), thus reducing the prospect for future
SINGAPORE PROPERTY WEEKLY Issue 60
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capital appreciation and increasing the risk of
capital loss.
Secondly, a shrinking resale market means
that investors will find it more difficult to sell
off their purchased property, i.e. have less
liquidity. This could also negatively affect the
transacted pricing.
And given that we are currently in the Late
Bull Market Phase of the Property Market
Cycle Model, investors should be doubly
cautious when looking to make a property
purchase.
By Mr. Propwise for
PropertyMarketInsights.com, a Singapore
property market research site that helps
buyers and sellers make profitable investment
decisions – subscribers get updates on where
we are in the Property Market Cycle Model to
help you time your investments.
SINGAPORE PROPERTY WEEKLY Issue 60
Singapore Property This Week
Page | 8 Back to Contents
Residential
Freehold Asia Gardens back on the en bloc
market, with a lower price
Freehold Asia Gardens at Everton Road is
back on the market, asking for a lower $273.2
- 300.3 million or $1,354 to $1,488 psf ppr,
compared with the earlier $302.6 - 307.7
million. The 84-unit development zoned for
residential use has an allowable GFA of
201,765 sq ft based on its 2.8 plot ratio. There
is no development charge payable for the site,
which is located near the Outram Park MRT
interchange. The tender closes at 3pm on July
31.
Cooling measures helped in stabilising the
property market and making it sustainable
According to National Development Minister
Khaw Boon Wan, the ABSD, among other
cooling measures, has helped the property
market stabilise and made it more
sustainable. He said that the ABSD and the
increase in supply for both private and public
housing has helped to reduce the proportion
of foreign purchase of private properties from
20% in 2011 to 7% in H1 2012, stabilise prices
of private housing to a 0.3% increase in H1
2012 compared to a 6% increase in the whole
of 2011 and reduce short-term property
speculation.
SINGAPORE PROPERTY WEEKLY Issue 60
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Buyers from the middle and low-end of the
housing market has also benefitted from the
moderation to a0.4% increase in Q2
compared to the 1.1% in Q1 2012. The
increase in supply of BTO flats also meant
that most first-timers who apply will be
successful.
New policies for PR owning HDB flats
To deter PRs from buying flats for investment
or rental yields, the approval to sublet HDB
flats is reduced to one year, compared to the
earlier three years. Unlike the earlier policy,
which allows owners to renew the approval at
expiry without limit, extension will be granted
only if there are extenuating reasons and the
total period of subletting during the flat
owner's entire duration of ownership cannot
exceed five years. According to HDB, PRs
can sublet their flats on a temporary basis
and should sell the flats if they no longer need
the flats for their own occupation instead of
subletting them. Since the number of flats
owned by PRs (5,000) accounts for only 5%
of the HDB sublet market, the overall impact
of the new policy will be small even if there
may be a small increase in HDB rental rates
in the short term.
New homes between $500,000 to $1
million the most popular
46.3% of all new home deals or 3,361
transacted by Singaporeans in H1 2012 were
in the $500,000 to $1 million price range,
compared to 26.0% in H1 2010 and 40.1% in
H1 2011. The demand for such homes is
strong, especially from HDB upgraders
gaining from the higher COVs recently.
Demand for new units under $500,000 and
new units in the $1 million to $2 million range
also increased, with the former seeing a
three-time increase from 2011 to 384 at the of
SINGAPORE PROPERTY WEEKLY Issue 60
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H1 2012 and the latter increasing from 1,760
units in H1 2011 to 1,910 or 26.3% in H1
2012. Meanwhile, new home deals in the $2
million to $3 million, $3 million to $5 million
and beyond $5 million range fell by 21.2%,
21.3 % and 50.0% from H1 2011 to 215, 59
and 12 units In H1 2012, respectively. This
trend towards new home purchases in the
under $1 million range is likely to continue as
there is a large upcoming supply of suburban
developments and developments with small
units.
99-year leasehold 486-unit Parc Olympia
launched at an average price $820 psf
The 99-year leasehold 486-unit Parc Olympia
at Flora Drive in Pasir Ris has been launched
at an average price of $820 psf, with the
cheapest unit at an affordable $440,000. The
mass market residential development
consists of eight residential blocks comprising
one-bedroom units (495 sq ft to 646 sq ft),
two-bedroom units (646 sq ft to 1,292 sq ft),
three-bedroom units (969 sq ft to 2,164 sq ft)
and four-bedroom units (1,324 sq ft to 2,702
sq ft) sitting on a 322,368 sq ft site with
facilities such as a 600 metre synthetic
jogging track, a 50 metre lap pool, an air-
conditioned badminton court and a putting
green for golfers. The project also offers a
feeder bus service to and from nearby MRT
stations and the Singapore Changi Airport. It
is located next to The Japanese School and a
drive away from Tampines Mall, Tampines
One and Downtown East. It will be launched
in total of four phases, with the first offering
118 units.
99-year leasehold Potong Pasir site
expected to be very popular
The 88,267 sq ft plot located at Tai Thong
Crescent and five minutes away from Potong
SINGAPORE PROPERTY WEEKLY Issue 60
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Pasir MRT Station was released after a
successful application to release the site from
the reserve list. It is expected to draw 7-15
bids with the top bid of $580-750 psf ppr
since it is zoned for residential use with
commercial space on the first storey and well
located, being near near schools such as St
Andrew's Junior and Secondary and Cedar
Girls' Secondary School, and near the MRT
station. However, some believe that it may
have some disadvantages when compared to
nearby sites since it is near a major road
junction and a fly-over and has a partial two-
storey height limit. The maximum GFA of
308,945 sq ft can potentially yield around 267
homes. The expected selling price of the
apartments and first-storey commercial space
are $1,250-1,450 psf and $4,000-4,500 psf,
respectively.
Most expect more cooling measures
47% of some 300 hundred respondents to a
Credit Suisse survey believe that home prices
will rise next year since they believe that
there is genuine demand, with 30% predicting
a 10% rise, while another 35% expect prices
to fall. 60% believes that there will be more
cooling measures, with 40% expecting it to
happen within a year. 60% also stated that
they may consider buying a residential
property within three years, though only 31%
of these intend to buy them for investment;
others are buying for occupation, upgrading,
or buying for family. However, only 21% said
that they will consider buying a home within
the year, suggesting cautiousness in the
market. 60% of the respondents also said
that they will not purchase shoebox
apartments.
SINGAPORE PROPERTY WEEKLY Issue 60
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Commercial
Upward revision of Singapore’s office
market needed
Demand in the office market has been
stronger than expected, with the positive net
office absorption of 473,200 sq ft in Q2
bringing H1 2012’s total to 1.06 million sq ft.
This means that the earlier prediction of
having no change in net office demand has to
be revised to one of having a positive net
demand. Meanwhile, vacancy rates in all
submarkets and building grades have fallen
from Q1 to Q2 2012 (with the overall vacancy
rate falling from 7.3% in Q1 to 6.4% in Q2,
and Grade A vacancy rate falling from 12.9%
in Q1 to 12.2% in Q2), though the vacancy
rates in the CBD are expected to rise as more
space are released back into the market as
leases expires and tenants move out.
Grade A rents have fallen more than Grade B
rents, 4.9% from Q1 to $10.10 psf in Q2
compared to 0.6% to $7.21 psf for the latter,
hence narrowing the gap between the two.
This is Rents for Grade A office space could
fall even further to $9.30/9.40 psf by the end
of 2012, a 15% fall from 2011. This may
change as Grade B rents may fall more as
supply from vacating tenants (1.2 million sq ft)
and shadow space are expected to increase
in the next one-and-a half years while rents
for Grade A fall at a slower rate. Grade A’s
rental decline is due to the large amount of
new space from recently completed projects
whereas Grade B rental’s relative lack of
change is due to the higher occupancy level it
enjoys. However, since Grade A rental rates
have fallen much from its recent peak, there
is room for growth, unlike Grade B rental
rates which have likely reach the peak,
SINGAPORE PROPERTY WEEKLY Issue 60
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hence widening the rental gap again. A total
of 1.37 million sq ft of office space will be
completed by 2012, with another 2.8 million
sq ft in 2013 and 1.7 million sq ft in 2014.
Secondhand spaces filling up
Almost 90% or 114,000 sq ft of the 129,000
sq ft left behind by Citi when its lease at
Centennial Tower expired has been taken up,
with existing tenants of the building such as
Sumitomo Mitsui Banking Corporation
(SMBC) and McKinsey taking a total of
36,000 sq ft, and other new tenants such as
Maxwell Chambers and PetroChina taking up
the rest. Citi will also vacate 143,000 sq ft of
space at Millenia Tower when its lease
expires, but two tenants taking up two floors
of this space has been confirmed. Rents in
both Centennial Tower and Millenia Tower are
in the $9-11.50 psf a month range.
Meanwhile, other companies such as Allianz
and JP Morgan that are facing lease expiry
are said to be deciding either to renew their
leases or move out to other spaces.
Creative ways to tackle office supply glut
As supply of office space increase,
developers found a new way to deal with the
competition by redeveloping existing office
buildings for other uses and downsizing units
to make them more affordable. A total of 1.4
million sq ft of net lettable area in the CBD
are to be redeveloped into residential and
commercial type projects. However, despite
this, the amount of space slated for
redevelopment is unlikely to make much of a
impact, especially with low pre-lease figures
and higher vacancy rates.
SINGAPORE PROPERTY WEEKLY Issue 60
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Non-Landed Residential Resale Property Transactions for the Week of Jun 27 – Jul 3
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
1 THE SAIL @ MARINA BAY 2,174 5,761,100 2,650 99
1 ONE SHENTON 1,098 2,305,800 2,100 99
1 EMERALD GARDEN 1,033 1,650,000 1,597 999
1 THE CLIFT 527 1,180,480 2,238 99
3 THE METROPOLITAN CONDOMINIUM 1,076 1,610,000 1,496 99
5 THE INFINITI 1,496 1,500,000 1,003 FH
5 BOTANNIA 1,238 1,390,000 1,123 956
5 MONTEREY PARK CONDOMINIUM 1,259 1,280,000 1,016 999
5 BLUE HORIZON 1,152 1,233,000 1,071 99
5 THE INFINITI 1,087 1,050,000 966 FH
5 ONE-NORTH RESIDENCES 592 990,000 1,672 99
5 THE INFINITI 926 970,000 1,048 FH
5 ONE-NORTH RESIDENCES 592 940,000 1,588 99
5 ONE-NORTH RESIDENCES 592 935,000 1,579 99
5 REGENT PARK 904 920,000 1,018 99
5 VISTA PARK 1,001 860,000 859 99
8 CITY SQUARE RESIDENCES 1,238 1,850,000 1,495 FH
9 ORCHARD VIEW 2,530 7,125,000 2,817 FH
9 THE TRILLIUM 2,390 6,120,000 2,561 FH
9 THE COSMOPOLITAN 1,324 2,760,000 2,085 FH
9 THE COSMOPOLITAN 1,141 2,380,000 2,086 FH
9 TIARA 1,561 2,350,000 1,506 FH
9 ASPEN HEIGHTS 1,324 1,980,000 1,495 999
9 LUCKY PLAZA 829 1,735,000 2,093 FH
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
9 WATERMARK ROBERTSON QUAY 893 1,608,000 1,800 FH
9 THE SUITES AT CENTRAL 624 1,500,000 2,403 FH
9 ROBERTSON EDGE 689 1,300,000 1,887 999
9 MACKENZIE 88 807 1,180,000 1,462 FH
10 FOUR SEASONS PARK 2,260 5,510,000 2,438 FH
10 GARDENVILLE 1,765 3,360,000 1,903 FH
10 THE HORIZON 1,722 2,550,000 1,481 FH
10 RIDGEWOOD 1,744 1,980,000 1,135 999
10 OLINA LODGE 1,539 1,880,000 1,221 FH
10 VALLEY PARK 1,216 1,800,000 1,480 999
10 EWE BOON REGENT 1,141 1,598,888 1,401 FH
10 D' DALVEY 926 1,510,000 1,631 FH
10 THE LEVELZ 786 1,230,000 1,565 FH
11 SOLEIL @ SINARAN 1,722 3,185,700 1,850 99
11 THE SHELFORD 1,389 2,180,000 1,570 FH
11 THE LINCOLN MODERN 1,378 1,950,000 1,415 FH
11 NEWTON 18 980 1,700,000 1,736 FH
11 THE ANSLEY 1,302 1,680,000 1,290 FH
11 THE PARK VALE 1,012 1,285,000 1,270 999
12 DE ROYALE 1,055 1,300,000 1,232 FH
12 THE ELYSIA 1,249 1,100,000 881 999
14 LE REVE 786 968,000 1,232 FH
14 WING FONG COURT 1,066 805,000 755 FH
15 GRAND DUCHESS AT ST PATRICK'S 2,573 2,900,000 1,127 FH
SINGAPORE PROPERTY WEEKLY Issue 60
Page | 15 Back to Contents
NOTE: This data only covers non-landed residential resale property
transactions with caveats lodged with the Singapore Land
Authority. Typically, caveats are lodged at least 2-3 weeks after a
purchaser signs an OTP, hence the lagged nature of the data.
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
15 AMBER PARK 1,744 2,435,000 1,396 FH
15 THE ATRIA AT MEYER 1,615 2,230,000 1,381 FH
15 SANCTUARY GREEN 1,572 1,850,000 1,177 99
15 WATER PLACE 1,453 1,535,000 1,056 99
16 THE CLEARWATER 1,356 1,235,000 911 99
16 LIMAU PARK 1,270 1,200,000 945 FH
17 DAHLIA PARK CONDOMINIUM 1,270 1,020,000 803 FH
17 CARISSA PARK CONDOMINIUM 1,238 1,013,000 818 FH
17 LOYANG VALLEY 1,582 915,000 578 99
18 THE TROPICA 1,238 1,048,000 847 99
19 THE CHUAN 1,464 1,980,000 1,353 999
19 KENSINGTON PARK CONDOMINIUM 1,658 1,710,000 1,032 999
19 KENSINGTON PARK CONDOMINIUM 1,668 1,608,000 964 999
19 THE SPRINGBLOOM 1,442 1,360,000 943 99
19 NOUVELLE PARK 1,227 1,228,000 1,001 FH
19 THE QUARTZ 1,152 1,155,000 1,003 99
19 THE SUNSHINE 1,227 1,120,000 913 FH
19 RIO VISTA 1,249 1,030,000 825 99
19 THE QUARTZ 1,033 1,000,000 968 99
20 THE WINDSOR 2,454 2,400,000 978 FH
20 BRADDELL VIEW 1,453 1,070,000 736 99
20 BISHAN PARK CONDOMINIUM 1,324 1,055,000 797 99
20 FAR HORIZON GARDENS 1,152 800,000 695 99
21 THE HILLSIDE 1,528 1,670,000 1,093 FH
21 SUMMERHILL 1,550 1,530,000 987 FH
22 THE CENTRIS 1,238 1,380,000 1,115 99
22 PARC OASIS 1,399 1,140,000 815 99
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
23 CASHEW HEIGHTS CONDOMINIUM 1,658 1,560,000 941 999
23 HAZEL PARK CONDOMINIUM 1,367 1,280,000 936 999
23 NORTHVALE 1,281 888,000 693 99
25 CASABLANCA 936 760,000 812 99
25 ROSEWOOD 1,012 758,000 749 99
26 BULLION PARK 1,238 1,260,000 1,018 FH
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