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Issue 88 Copyright © 2011-2012 www.Propwise.sg . All Rights Reserved.

Singapore Property Weekly Issue 88

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In this issue: - Lessons from Our Journey to Financial Freedom - Property Buying Tip #2: To take or not to take a mortgage loan? - Singapore Property News This Week - Resale Property Transactions (January 9 – January 15)

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Page 1: Singapore Property Weekly Issue 88

Issue 88 Copyright © 2011-2012 www.Propwise.sg. All Rights Reserved.

Page 2: Singapore Property Weekly Issue 88

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CONTENTS

p2 Lessons from Our Journey to Financial Freedom

p6 Property Buying Tip #2: To take or

not to take a mortgage loan?

p7 Singapore Property News This Week

p15 Resale Property Transactions

(January 9 – January 15)

Welcome to the 88th edition of the Singapore Property Weekly. I’m glad to announce that the 2012Q4 URA data has been updated for PropertyMarketInsights.com members. >> Click here to find out more << Hope you like it! Mr. Propwise

FROM THE

EDITOR

Page 3: Singapore Property Weekly Issue 88

SINGAPORE PROPERTY WEEKLY Issue 87

Page | 2 Back to Contents

Lessons from Our Journey to Financial Freedom

By Eileen Tan and Ui Wei Teck (guest

contributors)

Real Estate and Value Investing are two of the

ways you can grow your wealth if you adopt

the correct mindset and strategy while working

for others or running your own business. With

wealth, you can have peace of mind, greater

freedom to pursue what you truly enjoy doing,

and contribute to do your part for the less

advantaged.

With sufficient wealth built while you are still

working, you will have no fear when any

change occurs as the unexpected change has

been expected and prepared for. If you have

not already started to invest seriously, now is

the time to get educated.

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SINGAPORE PROPERTY WEEKLY Issue 87

Page | 3 Back to Contents

In this article we will share our journey to

becoming financially free.

Long-term vs. Medium-term investments

There are investments which require a longer

duration to bear fruit so start early to benefit

from them. Time is the best capital you have

when you start early. Let’s look at the long

and medium term investments for Property as

elaborated below:

• Long-Term (> 5 years): Go for Capital

Upside Potential or En-Bloc Opportunities

which require longer holding periods for

maximum returns.

• Medium-Term (< 5 years): Go for Good

Rental Yield so you can sell it at a reasonable

market rate to benefit from Capital Upside.

In our case, we bought both a public housing

flat and a private apartment during our late

twenties and sold both properties when the

prices had risen by 200% to 300%. We

benefited from the bull market unknowingly

during the 1990s. With no property

investment knowledge then, we made our first

mistake by thinking that property prices would

continue to go up and moved into a landed

house. It was like a dream come true to own

a landed house and drive a luxury car during

our early thirties.

Property investing is cyclical

We came to realize that Property investment

is cyclical when our house price plunged over

the next few years due to the Asian Financial

Crisis, Dot.com bubble bursting and SARS. It

was one disaster after another.

The economy only started to pick up when

the Singapore Government announced

development plans for the Integrated Resorts.

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This was big news that revived the interest to

invest in Singapore again. It was this reversal

of a property downtrend that prompted us to

invest in a private property near an upcoming

business hub and an MRT (Mass Rapid

Transit) Interchange.

We had to wait until the next bull market cycle

to sell our landed house which was bought

near the prior peak. The fortunate thing is that

our mistake didn’t cause a disaster as we

spent 12 years staying in a beautiful house

where we brought up two lovely children.

Learning to live simply

We had a “wakeup call” when we could sell

our house for some profit and decided to start

our retirement journey in our early forties. We

also wanted our children to live as

heartlanders and not to take things for

granted. It was not easy to convince our

daughter to move as she loved her

neighbours and we struck a deal by moving to

a two-storey public housing flat (a

Mansionette) within the same neighbourhood,

near an MRT station, neighbourhood parks

and amenities. My son said we should have

bought the flat 12 years ago!

By moving to a flat and with passive income

from the fully paid-off condominium, we had

achieved our dream of financial freedom!

Discovering a passion for property

investing

However, we had so much passion for real

estate and found that we had the capacity to

invest more. We had also built up our

Financial Literacy and understood that being

Financially Free does not mean being Debt

Free. We are conscious about not over-

borrowing by keeping our Debt-Service Ratio

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at safe levels. We subsequently invested in

uncompleted and resale condominiums in

prime districts, and also co-invested in a

commercial property.

Our high yielding resale and uncompleted

properties are classified as our medium-

term investments. These are the properties

that will bring in a good rental yield and will

be sold when the prices have risen

reasonably. A gain of 100% to 200% Return

on Investment is good enough as we have to

leave some room for the next buyer to

continue to gain from their investments.

Our aged property (more than 30 years old)

in a strategic location is classified as our

long-term investment. Such investment

may not be yielding a high rental but there is

upside potential due to its enbloc potential

(i.e. the land is not fully utilized based on the

plot ratio).

In investing, you have to be prepared to be

wrong. Nobody can predict the future

correctly all the time, so do not invest if you

cannot afford to be wrong. Analyze the

downside first, and only invest if you have the

holding power to not sell the property at the

wrong part of the market cycle.

By Eileen Tan and Ui Wei Teck, authors of

Enjoying Mid-Life Without Crisis.

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Property Buying Tip #2: To take or not to take a mortgage loan?

A Mortgage or Housing loan is a good debt

where you are able to borrow money to gain

a higher return versus the lower mortgage

interest rate, especially when the interest rate

is lower than the inflation rate.

In addition, you can better protect your family

with mortgage insurance for the mortgage

house.

Purchasing a property can be a very stressful

financial event in a person’s life. It is a good

practice to obtain an in-principle loan

approval from the bank for your mortgage

loan, before proceeding with the property

purchase. With an in-principle loan approved

ahead of time and understanding your

property budget, you can keep your stress

level to a minimum and focus on selecting

your dream house and completing the

purchasing process.

You can work with a Mortgage Broker for

loan analysis as well as to compare the

mortgage packages that various banks are

offering.

By Eileen Tan and Ui Wei Teck, property

investors and authors of Enjoying Mid-Life

Without Crisis.

Page 8: Singapore Property Weekly Issue 88

SINGAPORE PROPERTY WEEKLY Issue 88

Singapore Property This Week

Page | 7 Back to Contents

Residential

More developers offer discounts in light of

ABSD

Far East Organisation is offering additional

discounts of up to 4% on projects such as

The Seawind at Telok Kurau, SeaHill at West

Coast Link and euHabitat at Jalan Eunos;

CapitaLand is said to have increased its

discounts to 10-15% at 1,715-unit d'Leedon,

a luxury condominium at Farrer Road. These

are to offset the effects of the increased

ABSD rates though such high discount rates

will probably be seen only in Q1 2013.

(Source: Business Times)

Chee Hoon Ave GCB bungalow plot up for

sale

The 15,184 sq ft plot at 8 Chee Hoon Avenue

has been put up for sale by auction. The site

with a 37-metre frontage and proximity to

Botanic Gardens, Cluny Court and Serene

Centre as well as schools such Anglo-

Chinese School, Nanyang Primary and

Raffles Girls' Primary can potentially fetch

over $23 million. The auction will be held on

Feb 27.

(Source: Business Times)

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Proportion of foreign purchase to fall in

H1

With the increase in ABSD rates in the latest

cooling measures, the proportion non-PR

foreign purchase of private homes may fall to

3-5% in H1 from 6.3% in 2012, which had in

turn, fell from 17.6% in 2011 following the

introduction of the ABSD in December 2011.

While the proportion of PR purchase of

private homes have increased from 13.4% in

2011 to 15.8% in 2012, this may change

since a 5% ABSD have been extended to

first-time PR buyers, leading to a fall to 5-

12% share. This is especially since PRs who

own HDB flats now have to sell their flats

after purchasing a private home.

In 2012, Singaporeans, PRs and non PRs

purchased a total of 24,815, 5,086 and 2,038

private homes respectively, reflecting a

17.7% increase, 20.6% increase and a 63.2%

fall respectively. The top three foreign buyers

(including PRs) of private homes in 2012 are

the Malaysians (accounting for 26.1%),

mainland Chinese (22%) and Indonesians

(19.4%). As a result of the ABSD, the OCR

(where mass market homes are located)

accounted for 55% of the 7,124 private

homes bought by foreigners in 2012,

compared to 49% in 2011. It is likely to

increase to 60% this year since the ABSD

rates have increased. The OCR proportion of

private homes purchased by Singaporeans is

also likely to increase to 56% from 51% in

2013.

(Source: Business Times)

Two-year deadline for projects with

foreign ownerships stays

The rule that all units in projects with any

foreign ownership must be sold within two

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years of the project receiving its TOP will stay

despite developers’ appeal for extension of

the deadline. Projects that failed to do so face

extension charges based on the proportion of

unsold units, of 8%, 16%, and 24% of the

property purchase price for the first, second

and third extra years respectively. However,

projects such as those under SC Global

Development may be exempt from the

extension charges since its chairman and

chief executive Simon Cheong can now

privatise the company.

The extension charges would be especially

hard on the luxury property market, which has

been seeing slow sales. Furthermore, the

recent cooling measures had also included an

increase in ABSD rates which will affect

foreigners and investors, the main sources of

demand for this segment of the market.

Prices of luxury property market are expected

to fall by 5-10% in 2013 as a result of this

though some believe otherwise, citing the

high liquidity.

(Source: Business Times)

Freehold 21 Anderson Royal Oak

Residence up for sale at $250-260m

The 10-storey 34-unit development located in

the Ardmore Park residential enclave is

asking for $250-260 million. It has 85,552 sq

ft of strata area on sits on a 49,048 sq ft site.

Nearly 100% of the units are leased out.

Features and amenities offered includes

private lift lobbies, concierge services, a

swimming pool, tennis courts, gymnasium, a

BBQ area and a children's playground. In

addition to being located near Orchard Road,

it is also near schools such as Raffles Girls'

School, Anglo-Chinese School and the

Chinese International School.

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The expression of interest exercise will close

at 3pm on Feb 28.

(Source: Business Times)

Yishun mixed site draws $212.1m top bid

The mixed commercial and residential

development site at the corner of Yishun Ring

Road and Yishun Avenue 9 attracted a total of

13 bids, with the top bid of $212.1 million or

$794.44 psf from a unitof Chip Eng Seng

Corporation. The developer could potentially

sell the retail and residential components at

3,000-$4,000 psf and $900 psf respectively.

(Source: Business Times)

ABSD payable for companies buying

properties via SPV

IRAS has recently stated that companies

purchasing residential properties are subject

to a 15% ABSD and that it will carry out audits

of stamp duty transactions. This meant that

buying shares in SPVs would not help in

avoiding the ABSD.

(Source: Business Times)

OCR completed condos saw highest gains

in Q4 2012

Prices of completed, non-landed private

homes in the OCR saw a 5.6% increase in

Q4 2012, compared to 2.4% for uncompleted

homes in the OCR in the same period.

Similarly, prices of completed homes in the

CCR saw a 1.5% increase from Q3 to Q4,

compared to a 0.4% fall for uncompleted

homes. The RCR saw a 1% increase for both

completed and uncompleted homes. This

brought the prices of completed and

uncompleted homes to an overall increase of

3.2% and 1.7% respectively. The overall

private home price index which includes both

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landed and non-landed homes, completed

and uncompleted, increased by 1.8% in Q4,

bringing the full year increase to 2.8%.

Prices for completed homes in the OCR

gained the most with an 8.8% increase,

compared to the 4.4% increase in the prices

of uncompleted homes in the OCR. This is

attributed to the high prices in new launches

leading to more demand for completed

homes, which in turn drove the prices up.

Looking ahead, the transaction volume in the

both the primary and secondary markets are

expected to fall by 10-15%.

(Source: Business Times)

Prices of HDB resale flats likely to remain

stable

Despite achieving a record breaking figure of

202.9 in Q4 2012 (a 2.5% increase from Q3

and 6.6% increase from 2011), HDB’s Resale

Price Index is likely to remain stable in 2013,

with an increase of 3-5% though some

predicted a decline of no more than 3%. This

is especially since the latest round of cooling

measures includes an increase of ABSD

rates, restrictions on the MSR, rules to ban

PR from subletting their entire flat and

requiring them to sell their flats after buying

private homes; all of which would help control

prices. These latest cooling measures would

also cause a downward pressure on COVs,

which may fall by 10-20% for bigger flats,

which would in turn moderate resale prices.

The overall median COV saw an 11.67%

increase to $33,500 in Q4 2012, with the

median COV increasing by 15.15% to

$38,000 for five-room flats and 16.67% to

$35,000 for four-room flats. These, coupled

with the upcoming supply of at least 23,000

BTO flats in 2013, will help to control HDB

resale prices.

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Meanwhile, resale transactions fell by 14% in

Q4 to 5,631 from Q3’s 6,560, bringing the

total for 2012 to 25,094, a 2% increase from

2011.

(Source: Business Times)

Commercial

Over 90% of 99-year Alexandra Central’s

units sold

Alexandra Central, a 99-year leasehold hotel

and retail development located at the junction

of Alexandra Road and Jalan Bukit Merah has

sold 114 of its 116 units ranging from 10-103

sq m (108-1,109 sq ft) at $7,000, $5,600 and

$4,400-$4,800 for ground floor units and

second- and third- floor units respectively.

The hotel and retail development consists of

a 13-storey hotel in addition to the retail

space on three levels. Located near Ikea @

Alexandra, Queensway Shopping Centre and

Anchorpoint Shopping Centre, its popularity is

attributed to the diversion of investment from

the residential property market as a result of

the cooling measures and the scarcity of retail

spaces on sale.

(Source: Business Times)

99-year leasehold SBF Center sees

healthy interest

The development consists of 197 offices -

192 smaller strata units (592-1,442 sq ft) and

five floor plate offices (10,549 sq ft) - and 48

medical suites (614-1,345 sq ft), which are

marketed at $3,300-3,500 psf and $3,800-

4,000 psf respectively. The office space, in

particular the floor plate offices, has seen

much interest. Strata office spaces are

expected to be popular, with a potential price

increase of 10% in 2013. Prices of retail

space, however, may remain stagnant.

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Commercial properties are also likely to be

more popular than industrial properties

though completed industrial properties with

tenants may continue to see interests,

especially from long-term investors.

(Source: Business Times)

Office leasing to fall; more demand for

small units

Office space leasing activity is expected to fall

in the next six months, and driven mainly by

demand for smaller units (1,000-5,000 sq ft)

as the financial sector, which previously

demand large space, are demanding less of

such spaces as a result of banks shifting back

office operations to suburban regions and the

economic slowdown. Rents in the CBD are

also expected to fall by 0.5% in Q1 from Q2.

Serviced offices, however, are likely to

continue seeing strong demand since they

are cheaper, being fully fitted and offers

monthly renewals rather than two-year

tenures.

(Source: Business Times)

Govt will introduce cooling measures in

commercial sector if necessary

URA has stated that it would introduce

cooling measures in the commercial property

sector to moderate investment demand if

necessary. This is especially investors had

been increasingly diverting their attention to

the commercial sector following cooling

measures in the residential sector and

recently, the industrial sector. Recent projects

such as the yet-to-be launched SBF Center

on Robinson Road have already seen much

interest while the 99-year leasehold hotel-

cum-retail development, Alexandra Central,

had sold 114 of its 116 strata retail units.

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However, commercial property such as strata

officeit only generates yields of 2-4%, unlike

the 8-10% of industrial property. In addition,

URA also stated that it would work to ensure

that small units do not constitute an overly

large proportion of a development.

(Source: Business Times)

Q4 property figures reflects speculation

The primary market of private homes saw

22,197 units in sales volume, compared to

the 12,811 units in the secondary market.

This reflects speculation since investors

prefer purchasing new homes with

progressive payments while waiting out the

four-year period covered by the SSD.

Likewise, the large gap between prices and

rents of various properties also suggests that

there is speculative demand. Prices of office

and shop spaces gained 1.4% and 2%

respectively, accompanied by a 1.3% and

0.3% fall in rents. Similarly, the overall private

home price index saw an increase of 2.8%

with a 2.1% increase in rents while the All

Industrial price index increased by 25.8%with

a 10.1% increase in rents.Strata factories,

followed by shops, saw the highest number of

subsale transactions (which are used to

measure the level of speculation) in 2012.

There were 189 subsale deals of strata

factory units in 2012, compared to 70 in 2011,

and 54 subsale deals involving shop units in

2012, compared to 11 the year before. Only

three subsale deals involved offices.

(Source: Business Times)

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Non-Landed Residential Resale Property Transactions for the Week of Jan 9 – Jan 15

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

1 THE SAIL @ MARINA BAY 1,184 2,700,000 2,280 99

3 QUEENS 1,195 1,650,000 1,381 99

3 ALESSANDREA 2,110 2,100,000 995 FH

4 REFLECTIONS AT KEPPEL BAY 1,507 2,900,000 1,924 99

5 PARC IMPERIAL 431 755,000 1,754 FH

5 THE MAYLEA 560 830,000 1,483 FH

5 THE PARC CONDOMINIUM 980 1,300,000 1,327 FH

5 VISTA PARK 926 950,000 1,026 99

5 WEST BAY CONDOMINIUM 893 880,000 985 99

5 PARK WEST 872 820,000 940 99

8 CITY SQUARE RESIDENCES 570 1,070,000 1,876 FH

8 TYRWHITT 139 538 843,800 1,568 FH

8 CITY SQUARE RESIDENCES 1,195 1,830,000 1,532 FH

9 DELFI ORCHARD 1,173 2,700,000 2,301 FH

9 THE PATERSON 1,216 2,588,000 2,128 FH

9 THE OXLEY 710 1,480,000 2,083 FH

9 TRIBECA 1,905 3,760,000 1,974 FH

9 THE PIER AT ROBERTSON 1,119 2,200,000 1,965 FH

9 WATERMARK ROBERTSON QUAY 980 1,760,000 1,797 FH

9 8 @ MOUNT SOPHIA 893 1,480,000 1,657 103

9 PARC EMILY 1,733 2,771,000 1,599 FH

9 ASPEN HEIGHTS 1,119 1,735,000 1,550 999

9 ORCHARD COURT 1,453 1,800,000 1,239 99

10 FOUR SEASONS PARK 2,874 8,600,000 2,992 FH

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

10 BALMORAL HILLS 1,841 3,730,000 2,026 FH

10 THE LOFT 1,496 2,830,000 1,891 99

10 STEVENS LOFT 689 1,202,800 1,746 FH

10 DUET 1,744 2,620,000 1,502 FH

10 ORCHARD BEL AIR 6,512 8,300,000 1,275 99

10 RIDGEWOOD 2,002 2,520,000 1,259 999

10 RIDGEWOOD 2,002 2,500,000 1,249 999

11 VIVA 1,991 4,250,785 2,135 FH

11 NEWTON ONE 1,808 3,180,000 1,759 FH

11 IRIDIUM 764 1,325,000 1,734 FH

11 CITY EDGE 829 1,350,000 1,629 FH

11 TREVOSE PARK 1,690 2,555,000 1,512 FH

11 D' IXORAS 980 1,460,000 1,491 FH

11 THE ARCADIA 3,735 3,950,000 1,058 99

12 PRESTIGE HEIGHTS 334 648,000 1,942 FH

12 D'LOTUS 1,066 1,330,000 1,248 FH

14 LE CRESCENDO 1,184 1,390,000 1,174 FH

14 CASA SARINA 1,109 1,268,000 1,144 FH

14 ASTORIA PARK 1,195 1,250,000 1,046 99

14 CASCATA 1,012 980,000 969 FH

14 SIMSVILLE 1,249 1,185,410 949 99

14 WING FONG MANSIONS 1,130 880,000 779 FH

15 TANJONG RIA CONDOMINIUM 614 815,000 1,328 99

15 WATER PLACE 1,561 2,030,000 1,301 99

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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 ONE FORT 1,055 1,318,000 1,249 FH

15 BUTTERWORTH 8 1,776 2,198,688 1,238 FH

15 PEBBLE BAY 1,894 2,330,000 1,230 99

15 BELLEZZA @ KATONG 861 1,050,000 1,219 FH

15 DE CASALLE 1,292 1,350,000 1,045 FH

15 COSTA RHU 1,399 1,450,000 1,036 99

15 MANDARIN GARDEN CONDOMINIUM 1,528 1,480,000 968 99

15 IDYLLIC RESIDENCES 1,927 1,720,000 893 FH

16 BAYSHORE PARK 936 900,000 961 99

16 CASAFINA 1,163 1,100,000 946 99

16 BEDOK COURT 2,411 1,900,000 788 99

18 RIS GRANDEUR 1,292 1,250,000 968 FH

18 LIVIA 1,539 1,488,888 967 99

18 EASTPOINT GREEN 1,130 1,050,000 929 99

18 EASTPOINT GREEN 1,130 1,017,000 900 99

18 MELVILLE PARK 1,206 880,000 730 99

19 CHILTERN PARK 915 1,058,000 1,156 99

19 CASA RIVIERA 1,389 1,400,000 1,008 FH

19 NOUVELLE PARK 1,550 1,400,000 903 FH

19 ROSALIA PARK 1,690 1,400,000 828 FH

21 THE CASCADIA 1,173 1,994,000 1,700 FH

21 THE CASCADIA 1,173 1,987,000 1,694 FH

21 SUMMERHILL 1,302 1,465,000 1,125 FH

21 THE RAINTREE 1,292 1,350,000 1,045 99

21 PANDAN VALLEY 2,562 2,620,000 1,023 FH

22 LAKEPOINT CONDOMINIUM 1,033 860,000 832 99

22 IVORY HEIGHTS 1,701 1,365,000 803 100

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

23 HILLBROOKS 958 1,010,000 1,054 FH

23 GUILIN VIEW 861 840,000 975 99

23 HILLVIEW REGENCY 1,195 1,145,000 958 99

23 REGENT HEIGHTS 1,163 920,000 791 99

26 BULLION PARK 1,238 1,300,000 1,050 FH

28 SERENITY PARK 1,313 1,148,538 875 FH