Singapore Property Weekly Issue 139

8/13/2019 Singapore Property Weekly Issue 139

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CONTENTS

p2 Property Market in 2014 – A Watershed Year?

p7 Singapore Property News This Week

p12 Resale Property Transactions

(January 1 – January 7)

Welcome to the 139th edition of the

Singapore Property Weekly .

Hope you like it!

Mr. Propwise

FROM THE

EDITOR

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SINGAPORE PROPERTY WEEKLY Issue 139

Page | 2Back to Contents

By Property Soul (guest contributor)

The property market in 2014 started with a

series of bad news from the Urban

Redevelopment Authority (URA) and the

Housing and Development Board (HDB).

How bad are the numbers?

On 2nd January 2014, HDB announced that

the HDB Resale Price Index continued to

drop in the 4th Quarter of 2013. The 1.3

percent decline was the worst since eight

years ago in 2005.

The URA also released disappointing

estimated figures of private home sales in the

4th quarter of 2013. The Private Residential

Property Price Index fell 0.8 percent.

Property Market in 2014 – A Watershed Year?





Even the usually resilient landed home

market had its price index drop 1.2 percent

from the previous quarter. Overall, luxury

homes were the worst performer with prices

falling by 2.1 percent last year. Residential

units sold in the prime districts were down 20

percent compared with 2012.

In the entire year of 2013, private home

prices only grew by a humble 1.2 percent.

What a frustrating fact for investors who justbought in 2013!

If they have put their money in a Singapore

dollar 12-month fixed deposit account at the

start of 2013, they could have enjoyed a

comparable 1.1 percent interest rate from the

bank — minus the hassle to calculate their

total debt, the expenditure to pay all

transaction costs, and the risk to face any

volatility in the market.

When market sentiment turns bearish

With the market losing steam, market players

who were once optimists suddenly turned

pessimistic.Industry analysts who shared their optimistic

view on the property market not long ago

have changed gears to paint a bleak market

outlook that echoes with the URA figures.

Their forecasts on the decline of private home

prices in 2014 vary from a slight drop of a onedigit figure to a big slump of 40 percent.

Local property developers may be the only

party who remain consistently optimistic.

They are reluctant to admit any market

weakness, claiming that prices are unlikely tobe reduced in the coming new launches,

though many have quietly done so in recent

projects.





Meanwhile, property agents are reminding

buyers that ―this is the right time to buy‖ while

asking sellers to lower their price

expectations, hoping to close as many deals

as possible before the rainy days.

The all-too-obvious culprits

It is not a difficult task for industry analysts to

explain what have contributed to the softening

of the market.

It is all too convenient to blame the imposition

of ABSD (Additional Buyer‘s Stamp Duty) and

TDSR (Total Debt Servicing Ratio) for the

poor private home sales. The declining COV

(Cash-Over-Valuation) of HDB flats is also a

big deterrent for HDB upgraders.

For HDB flats, anyone can see why prices

dropped simply by reviewing the cooling

measures rolled out last year, particularly the

cap of 30 percent for the Mortgage Servicing

Ratio and 25 years for HDB mortgage loan

tenures. And thanks to the government who

keeps reminding the public every now and

then that there will be an increasing supply of

Build-to-Order flats and building of new HDB

flats.

But they are all wrong.

The depressing numbers shouldn‘t come as a

surprise to anyone. In fact, things have been

incubating before 2013 and well before theintroduction of the latest cooling measures.

There are at least three hints that show a

possible reversal in market direction:

1. Properties for sale have an obviously

longer ‗shelf life‘ compared with their primedays;

2. A gradual reduction in the volume of sales

transactions, especially in resale units; and





3. The rise in properties prices has slowed

down, and prices have remained almost the

same for consecutive quarters.

And all of the above have been happening in

the market since 2012.

How strong are the external forces?

Macroeconomic factors have been overused

to explain what is happening. The withdrawal

of QE, drain of hot money, rise of interest

rates … these are topics that people pick up

all the time. But to what extent are they

responsible for the softening local property

market?

If foreigners buying private residential

properties in Singapore are well below 10percent of the total number of units sold, how

significant can tapering QE or retreating hot

money affect property prices?

There is talk and predictions about the

upward movement of interest rates. But how

much exactly have interest rates increased

for the whole year?

Look at the global economy, have we seen

any real big changes in the US and European

markets? What about Singapore? Did our

economy, including GDP, export, retail, etc.

change much during 2013?

What the future holds

Unlike the stock market, the ups and downs

in properties do not happen overnight. And

unless there is a big disaster or a financial

crisis, we are unlikely to see a dramatic

market crash.

Time is needed to sell a property and to

complete a sales transaction.





It will be a few months or even a few quarters

before a clear direction can be seen.

Is the once red-hot property market

approaching a corner and going to turnaroundsoon?

The property market has definitely reached a

crossroad. Time will tell whether the 4th

quarter of 2013 is the turning point for a steep

downward trend, or only a short-lived hiccup

in a stable market.

By guest contributor Property Soul, a

successful property investor and enthusiast

who shares her experiences and knowledge

on her blog .

SINGAPORE PROPERTY WEEKLY I 139

http://propertysoul.com/

http://www.moneymatters.sg/







Singapore Property This Week


Residential

A l l 2 8 1 u n i t s o f H i l l f o r d s o l d

All 281 units at 60-year leaseholdThe Hillford,

Singapore's first retirement resort, were sold

within five hours on Jan 18 from about 1,000

prospective buyers with earlier indicated

interest. The average price for the units is

$1,100 psf. 186 of all the units are in one-

bedroom configurations, with size from 398 to

431 sqft, and a starting price of $388,000. 52

two-bedroom units from 506 to 560 sqft had

starting prices of $498,000, and the rest – 40

two-bedroom dual key units of 657 sqft in size

– had starting prices of $648,000. Even

though the lease is only 60 years, prospective

buyers cited affordability as the main driver

for their decision to buy a unit. The Hillford is

expected to get its Temporary Occupation

Permit in November 2017.

(Source: Business Times)

R en t a l y i e l d s o f n o n - l a n d ed p r i v a t e h o m e s

d o w n

According to the Singapore Real Estate

Exchange (SRX), rental yields for non-landed

private homes dropped below the 4 percentpsychological mark to stand at 3.9 per cent in

2013, from 4.2 percent in 2012.

SINGAPORE PROPERTY WEEKLY I 139





SRX co-founder and chief technology

officerJeremy Leesaid that 4 percent for

rental yields is the psychological barrier for

many investors seeking income from

residential properties. Above 4 percent,investors would be able to justify the risks

inherent in property as an asset. Below 4

percent, investors would worry that inflation

affects their gains. 31 out of 34 planning

areas witnessed a weakening in median

gross rental yields.


H D B s u b l e t t i n g q u o t a f r a m e w o r k f o r n o n -

c i t i ze n s i s o u t

The Housing & Development Board (HDB)

released the details of the subletting quota

framework for non-citizens on Jan 16 - the

number of flats that can be wholly sublet to

non-citizens is now capped at 8 percent at the

neighbourhood level, and 11 per cent at the

block level. This applies to subtenants who

are Singapore permanent residents (PRs)

and foreigners.Malaysians are exempt

because they are able to better integrate dueto their cultural and historical similarities with

Singaporeans. The details reflect the

government‘s efforts in preventing the

formation of foreigner enclaves in HDB

estates. However, the quota would not apply

to subletting of rooms to reduce the impact on

those who rely on subletting for additional

income, for example the elderly and low-

income households.


Privat e home sales decl ine

Developers' private home sales decreased to

only 259 units (excluding executive

condominiums - ECs) in Dec 2013,






compared with 1,271 units in November and

1,410 units in December 2012. This figure is

also the lowest since Jan 2009 with 109 units.

Despite its being worse than market

expectations, there is no panic apparently. Agents believe that the December drop was

mainly due to developers' strategy of holding

back launches and gathering interest first.

Developers only launched 118 new private

homes in Dec 2013, the least since the Urban

Redevelopment Authority (URA) started to

release monthly developer housing sales data

in June 2007.


G o v e r n m e n t n o t l i k e l y t o u n w i n d c o o l i n g

measures

At The Business Times-MaybankKim Eng

Invest Asia 2014,Maybank Kim Eng head of

research Ng Wee Siang said that the

government is not likely to unwind any of its

property cooling measures in 2014, as long

as interest rates remain where they are now.

The government may reduce the number of

private homes and HDB flats in the longer term instead. This comment comes amid a

call for the government to relax its property

cooling measures.


P r i v at e r es a l e h o m e p r i c e s c o n t i n u e t o s l i p

Flash figures by the Singapore Real Estate

Exchanges (SRX) showed that prices of

private resale homes continued to decline in

Dec 2013 for the fourth month, led by

decrease in the core central region (CCR).

Home prices in the city area decreased 2.3

percent, followed by those in the Outside

Central Region (OCR) which decreased 1

percent.






Homes in the Rest of Central Region (RCR)

rose 2.9percent. Overall, the price index

eased 0.2 percent in Dec 2013.As the Total

Debt Servicing Ratio (TDSR) framework and

other cooling measures take their toll,consultants believe that this trend is likely to

continue this year.


B ar tl ey s it e r ec ei ves t op b id o f $648

p s f p p r

The site near Bartley MRT Station received

the top bid of $648.30psfppr from UOL, which

was 3.7 percent higher than the second-

highest offer of around $625 psfppr by EL

Development.These two top bids were also

quite higher than the next five bids. The sixth

highest bid was from a partnership between

City Developments Ltd (CDL) and TID,

standing at $463 psfppr. These two

companies, together with Hong Leong

Holdings, previously bought two nearby sites

– one for nearly $621 psfppr (which is now

being developed into Bartley Residences),

and the other for $495 psfppr (which is nowbeing developed into the Bartley Ridge

project).


Commercial

MRT n et w or k er o d es p r im e offices’

p r e m i u m

As Singapore‘s MRT network is expanding to

improve accessibility across the island, the

rental differences between prime office and

decentralised office space are expected toerode. In Q4 2013, gross average office rents

in Tampines were 46 percent lower than

Raffles Place;






those with office space in Jurong East had

25-35 percent discount off Raffles Place

rents. DTZ data showed that office spaces

closer to town had smaller differences:

Novena rents were 15 percent lower than

Raffles Place; Buona Vista and HarbourFront

were 18 percent and 21 percent lower

respectively.The premium that Raffles Place

commands has been decreasing over time.



http://propertymarketinsights.com/





Non-Landed Residential Resale Property Transactions for the Week of Jan 1 – Jan 7

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 apurchaser signs an OTP, hence the lagged nature of the data.

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

5 PARC IMPERIAL 398 690,000 1,733 FH9 RIVERGATE 1,023 2,210,000 2,161 FH

9 THE INSPIRA 667 1,260,000 1,888 FH

9 LEONIE STUDIO 936 1,688,888 1,803 99

10 THE BOULEVARD RESIDENCE 2,034 5,660,000 2,782 FH

10 THE SOLITAIRE 1,625 3,000,000 1,846 FH

10 ST MARTIN RESIDENCE 2,982 5,180,000 1,737 FH

10 THE MARBELLA 1,744 2,880,000 1,652 FH

11 AMARYLLIS VILLE 1,238 1,840,000 1,486 99

13 AVON PARK 1,701 2,300,000 1,352 FH

14 GOODVIEW APARTMENTS 1,141 800,000 701 FH

15 ONE AMBER 958 1,580,000 1,649 FH

15 IVORY 657 825,000 1,256 FH

15 MABELLE 1,981 1,750,000 884 FH

16 THE BAYCOURT 1,690 1,900,000 1,124 FH

17 THE GALE 1,636 1,700,000 1,039 FH

17 CARISSA PARK CONDOMINIUM 1,324 1,150,000 869 FH

17 BALLOTA PARK CONDOMINIUM 1,948 1,638,000 841 FH

17 LOYANG VALLEY 1,485 1,007,000 678 99

19 KOVAN RESIDENCES 1,259 1,620,000 1,286 99

19 NOUVELLE PARK 1,184 1,190,000 1,005 FH

19 EVANIA 1,938 1,680,000 867 FH

19 COMPASS HEIGHTS 1,238 1,050,000 848 99

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

20 GOLDENHILL PARK CONDOMINIUM 1,539 2,200,000 1,429 FH21 THE CASCADIA 1,184 1,963,000 1,658 FH

21 MAPLEWOODS 1,507 2,118,000 1,405 FH

21 SUMMERHILL 1,550 1,650,000 1,065 FH

23 MI CASA 990 960,000 969 99

23 PALM GARDENS 1,345 1,158,000 861 99

26 MEADOWS @ PEIRCE 3,035 2,518,000 830 FH

26 CASTLE GREEN 1,152 950,000 825 99

Documents

Singapore Property Weekly Issue 139