Singapore Property Weekly Issue 38

8/3/2019 Singapore Property Weekly Issue 38

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Issue 38Copyright 2011-2012 www.Propwise.sg. All Rights Reserved.
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CONTENTS

p2 Singapore Property News This Week

p7 Foreign Buyers and the Impact of the ABSD

p11Resale Property Transactions

(January 25 January 31)

Welcome to the 38th edition

of the Singapore Property

Weekly.

Hope you like it!

Mr. Propwise

FROM THE

EDITOR
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SINGAPORE PROPERTY WEEKLY Issue 38

Singapore Property This Week

Page | 2Back to Contents

Residential

Effect of ABSD is only temporary, rental

market benefits in the short term

Consultants say that the effect of the ABSD is

temporary, as foreign buyers are still on the

lookout for attractively-priced properties.

However, since some of these buyers are

expatriates who brought their families along

when they came to work in Singapore, they

need a temporary accommodation and this is

where the rental market comes in. This

includes private homes for rent, servicedresidences and long stay accommodations,

whose demand have increased after the

ABSD though the increase in demand for

such accommodations may be due to other

factors. With the developers absorbing part of

if not all of the ABSD and offering furniture

vouchers to attract buyers and Singapores

strong property market and reputation for safe

investments, foreign buyers may continue to

invest in the property market.

Number of HDB upgraders increase

The number of HDB flat owners purchasing

non-HDB residential homes has increased to

13,910 in 2011, breaking the previous record

of 13,769 in 2010. This figure is equivalent to

42% of the total sale transactions in the non-

HDB market segment. ECs were the most

popular, having seen 2,407 purchases from


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upgraders, an increase of 123% from 2010.

The large supply launched in 2011, and the

new projects developed to attract these

buyers, the location of these projects aredriving the demand for ECs. Furthermore, the

increase in HDB resale prices also leaves the

upgraders with more cash to purchase the

ECs. This trend is likely to continue, albeit

dependent on the attractiveness of the non-

HDB property, in terms of design, conceptand location.

Tampines Trilliant and Parc Rosewood see

strong sales

670-unit Tampines Trilliant sold 149 units over

the weekend including 32 two-storeypenthouses, 24 of which were sold to first-

time home buyers. The 48 penthouse units

ranging from 1,841 to 2,465 sq ft, has four-

bedrooms and a personal open terrace that

can be accessed via the master bedroom.

The prices for the penthouses start from $1.1

million. The project also includes 127 872 to1,141 sq ft three-bedroom units, 397 1,001 to

1,378 sq ft three-bedroom-plus-utility units

and 98 1,302 to 1,593 sq ft four-bedroom

units. 42% of the 1,000 applications received

were from first-timers and the rest were from

second-time buyers, many of whom are HDBupgraders.

Meanwhile, 689-unit 99-year leasehold Parc

Rosewood has sold more than 280 units with

the addition of 110 more units it sold over the

past week. The project which consists of one-bedroom, two- bedroom, three-bedroom, and

penthouse units, are offering its units at

prices decreased by 8-10% to woo buyers


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who might have been deterred by the ABSD.

Prices of residential properties set to fall

Historical data compiled by Credo Real Estate

showed that in the past years (2008, 2000,

and 1983) where there had been consecutive

quarter-on-quarter near-zero adjustments of

prices, there will be a fall in prices of

residential properties. Given the most recent

quarter-on quarter increase of only 0.2%, the

fall in prices is very likely. There is also a

tendency for the price fall to go hand-in-hand

with economic downturns and falls in GDP. If

there is a recession, or the situation is likely to

lead to recession, the residential property

prices will definitely fall. While some predict aweakening market, citing the economic

outlook, increased supply and the ABSD,

others foresee a slight slowdown in the

market if the economic situation is not as bad

as predicted, with the mass-market segment

performing better and the prime residential

segment less so with the ABSD.

The effects of ABSD on foreign buying

As the effects of the ABSD sets in, we may

see fewer investments in property from

Indonesians, a slowdown in the small format

homes segment of the market, and mainland

Chinese who buys these properties turning to

investing in the office, retail or industrial

properties instead. However, a large scale

switch to other segments of the property

market is unlikely since a slowdown in the

residential market is likely to be felt in these

other markets eventually. Furthermore, theforeign buyers may not choose to do so

because of their lack of experience in these

markets. Nevertheless, foreign-buyers with

very deep-pockets who can invest long-term


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may continue to purchase properties, in

particular mainland Chinese and Indonesian

nationals who can afford over $5 million

purchases.

Commercial

Potential sale price of Twenty Anson is

over $400m

20-storey Twenty Anson, a Grade A office

tower located near Tanjong Pagar MRTStation, may be sold to CapitaCommercial

Trust (CCT) for more than $400 million. The

Platinum LEED certified tower, which sits on a

site with a remaining lease of about 95 years,

has a total net lettable area of about 202,700

sq ft and floor plates of about 13,000 sq ft.Ongoing discussion about the price is around

$2,200 psf of net lettable area with income

support and $2,120 psf without, with the net

yield at 4% with income support and 3%

without. It will also offer income potential from

lease renewals, with many leases up for

renewals in 2013/2014. The current average

monthly rental is $6.50 psf per month, below

the $8 psf per month market rate for a Grade

A building in this location.

StanChart sells space at Peace Centre

Standard Chartered Bank has sold its 5,600

sq ft two level corner space at Peace Centre,

a building located near Selegie and Sophia

Roads for around $11 million or $1,970 psf.

Seven-storey Peace Centre sits on a site with

57 years of remaining lease with the Peace

Mansion apartments behind it.

Tat Hong sells One Howard to MalaysianDairy Industries

Freehold five-storey One Howard, an

industrial building located near MacPherson


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and Howard Roads has been sold to

Malaysian Dairy Industries for $30.3 million or

$402 psf ppr. Malaysian Dairy Industries

owns the adjacent properties, and may

eventually amalgamate the lands it now owns

to redevelop the site in the long term,

especially since the new site does not require

any development charge for redevelopment.

Furthermore the sites, zoned Business 1, are

located near the Tai Seng MRT Station andhave a 2.5 plot ratio. The 30,157 sq ft One

Howard site in itself can be potentially

redeveloped further, since its estimated GFA

of around 54,000 sq ft is a far cry from its

75,393 sq ft potential. However, Malaysian

Dairy is likely to renovate the building when

existing tenancies in the building expire and

move into the building itself in the short term.

SINGAPORE PROPERTY WEEKLY I 38
http://www.propwise.sg/secretsofsingaporepropertygurus/


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Foreign Buyers and the Impact of the ABSD

By Mr. Propwise

Savills recently published an interesting report

titled Profiles of foreign buyers in Singapore.

Thanks to Singapores growing attraction as a

safe haven for investors, foreigners purchased

31% of all private home purchases in 2011, an

all-time high and twice the number versus 10years ago.

Profiles of the Four Main Groups of Foreign

Buyers

The top four main groups of foreign buyers are

the Mainland Chinese (28% of all purchasesby foreigners), Malaysians (20%), Indonesians

(18%) and Indians (12%). Together these four

groups made up 78% of all foreign buying.

SINGAPORE PROPERTY WEEKLY I 38
http://www.savills.com.sg/research/residential-sales-research.aspxhttp://www.savills.com.sg/research/residential-sales-research.aspxhttp://www.savills.com.sg/research/residential-sales-research.aspxhttp://www.savills.com.sg/research/residential-sales-research.aspxhttp://www.savills.com.sg/research/residential-sales-research.aspxhttp://www.savills.com.sg/research/residential-sales-research.aspxhttp://www.savills.com.sg/research/residential-sales-research.aspxhttp://www.savills.com.sg/research/residential-sales-research.aspxhttp://www.savills.com.sg/research/residential-sales-research.aspxhttp://www.savills.com.sg/research/residential-sales-research.aspxhttp://www.savills.com.sg/research/residential-sales-research.aspxhttp://www.savills.com.sg/research/residential-sales-research.aspx


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1. Mainland Chinese

Bought over 2,550 private homes in 2011,

triple that in 2007, mostly in the Outside

Central Region. Mainly buying smaller homesas 44% of purchases in 2011 were below $1

million. But demand is also growing in the

high end segment (more than $2 million) as

well. Districts 14, 15 and 16 were the most

popular among this group.

2. Malaysians

Proportion of purchases grew by 4% from

2007, as have their budgets. Most popular

district are 19 (Serangoon Garden, Hougang,

Punggol), 15 and 14 in that order.

3. Indonesians

Have the largest budgets, with 79% of total

purchases above $1 million, and home

purchases in the Core Central Region mainly

in the $2 to $3 million range. However versus

2007, proportion of home in the Outside

Central Region and Rest of Central Region

rose by 19% and 5% respectively, indicating a

shift of demand outside the central areas,

most likely due to reduced affordability as

home prices rise. The most popular districts

are 9, 15, 10 and 11 in that order.

4. Indians

Profile fairly similar to Malaysian buyers, with

66% of purchases coming from the Outside

Central Region. Most popular districts are 18

(Tampines, Pasir Ris), 15 and 16.

To sum up I noticed two distinct phenomena:

Firstly, the Mainland Chinese and

Indonesians form the largest bulk of buyers in

the high end market. Second, demand from

all groups have started to shift from the Core



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Central Region to the Rest of Central Region

and Outside Central Region as rising

property prices have made homes in

Singapore less affordable to them. Singapore

home prices are already fairly high, even

relative to the top cities in the world.

Impact of the ABSD on Foreigners

The Additional Buyers Stamp Duty slaps an

additional 10% stamp duty on non-

permanent residents and companies, while

permanent residents are required to pay an

additional 3% on their second and

subsequent home purchases. If foreigners

continue to buy despite this new tax, it either

means that they expect significantly higherproperty prices or that they are purchasing

for more than just investment reasons (e.g. to

get permanent residence, for their childrens

educations etc).

As foreigners made up 43% of the luxury

market in 2011, this segment could be the

hardest hit. Singapore is not the only marketof interest foreigners are also looking at the

U.S., London, Australia, Canada, Hong Kong,

Malaysia etc.

Only the foreigners who are determined to

make Singapore their home would buy a

home here, and will now be incentivized to

take up permanent residence to escape the

ABSD.

Segments of the market that are more prone

to speculation (e.g. shoebox units) could also

be hard hit, and foreign buyers may then

switch their attention to strata-titled office,

retail or industrial units (which to be fair have

already run up in prices).



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If foreign buyers who are living in Singapore

put off their buying decision due to the ABSD,

housing demand could then switch to the

rental market, pushing up rents and thusyields.

The ABSD will curb some foreign demand,

leading to a more domestic-centric property

market. From what we can see from the

recently property launches post the

announcement of the ABSD, mass market

projects targeted at local Singaporeans are

still doing very well, potentially leading to

another round of Government measures in

the not-too-distant future to cool any

remaining speculative fever/fervor.

http://www.propwise.sg/secretsofsingaporepropertygurus/


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Non-Landed Residential Resale PropertyTransactions for the Week of Jan 25 Jan 31

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

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

3 TANGLIN VIEW 1,195 1,360,000 1,138 99

3 QUEENS 1,184 1,300,000 1,098 995 ONE-NORTH RESIDENCES 1,335 1,732,500 1,298 99

8 KENTISH GREEN 1,098 900,000 820 99

9 CITYVISTA RESIDENCES 2,120 3,550,000 1,674 FH

10 VALLEY PARK 1,109 1,600,000 1,443 999

14 CRYSTAL MANSIONS 1,259 745,000 592 FH

15 COSTA RHU 646 918,000 1,421 99

15 NATURE MANSIONS 1,216 1,300,000 1,069 FH

16 COSTA DEL SOL 1,313 1,650,000 1,256 99

16 BAYSHORE PARK 936 865,000 924 9916 AQUARIUS BY THE PARK 1,324 1,140,000 861 99

18 TAMPINES COURT 1,711 990,000 578 101

19 CHILTERN PARK 1,098 890,000 811 99

20 GOLDENHILL PARK CONDOMINIUM 1,335 1,600,000 1,199 FH

20 CLOVER BY THE PARK 1,744 1,750,000 1,004 99

20 BRADDELL VIEW 1,701 1,200,000 706 99

21 GARDENVISTA 1,163 1,320,000 1,135 99

21 ASTOR GREEN 1,528 1,500,000 981 99

21 PINE GROVE 1,755 1,290,000 735 9922 LAKESIDE TOWER 1,981 1,028,000 519 99

23 CASHEW PARK CONDOMINIUM 1,819 1,600,000 880 999
http://www.moneymatters.sg/

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Singapore Property Weekly Issue 38