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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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Issue 88 Copyright © 2011-2012 www.Propwise.sg. All Rights Reserved.
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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
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.
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.
SINGAPORE PROPERTY WEEKLY Issue 87
Page | 4 Back to Contents
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
SINGAPORE PROPERTY WEEKLY Issue 87
Page | 5 Back to Contents
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.
SINGAPORE PROPERTY WEEKLY Issue 87
Page | 6 Back to Contents
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.
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)
SINGAPORE PROPERTY WEEKLY Issue 88
Page | 8 Back to Contents
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
SINGAPORE PROPERTY WEEKLY Issue 88
Page | 9 Back to Contents
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.
SINGAPORE PROPERTY WEEKLY Issue 88
Page | 10 Back to Contents
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
SINGAPORE PROPERTY WEEKLY Issue 88
Page | 11 Back to Contents
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.
SINGAPORE PROPERTY WEEKLY Issue 88
Page | 12 Back to Contents
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.
SINGAPORE PROPERTY WEEKLY Issue 88
Page | 13 Back to Contents
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.
SINGAPORE PROPERTY WEEKLY Issue 88
Page | 14 Back to Contents
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)
SINGAPORE PROPERTY WEEKLY Issue 88
Page | 15 Back to Contents
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
SINGAPORE PROPERTY WEEKLY Issue 88
Page | 16 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 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