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CONTENTS
p2 Is It Time to Roll Back the Property
Cooling Measures?
p8 Singapore Property News This Week
p13 Resale Property Transactions
(June 18 - June 24 )
Welcome to the 163th edition of the Singapore Property Weekly.
Hope you like it!
Mr. Propwise
FROM THE
EDITOR
SINGAPORE PROPERTY WEEKLY Issue 163
Page | 2Back to Contents
By SG Proptalk (guest contributor)
The Total Debt Servicing Ratio (TDSR)
framework, which aims to deter borrowers
from accumulating too much debt, hit its one-
year mark recently. The measure, together
with the Additional Buyer's Stamp Duty
(ABSD), has hammered demand in the
market. New home sales in the first five
months of 2014 has plunged 52% to 3,894
units from the same period a year ago,
according to fresh estimates from URA.
Is It Time to Roll Back the Property Cooling Measures?
SINGAPORE PROPERTY WEEKLY Issue 163
Page | 3Back to Contents
So is it an opportune time to review and make
adjustments to the cooling measures that are
currently in place?
NO, says our Ministry of National
Development, as it is too early, given that
prices have remained relatively stable despite
decreased home sales. MND noted that
private home prices have surged 60% during
the most recent market upswing that began in
mid-2009. Any premature removal of cooling
measures could result in a sharp increase in
demand and housing prices. And quoting
from the research head of a local property
agency: "Mass market units were about $700
to $800psf four years ago. The more
attractively priced units nowadays are already
nearly $1,000 psf. Upgraders from Housing
Board flats in particular will still prefer a
steeper price correction."
YES, says property developer Kwek Leng
Beng, who fears that Singapore could lose its
edge as an investment destination.
Foreigners were choosing to plough their
investment dollars into countries like Britain,
Australia and the US over Singapore, while
Singaporeans have been investing abroad.
This is despite the higher risk profiles
associated with these foreign properties. Mr.
Kwek had urged the Government during the
earlier part of this year to consider lifting the
hefty stamp duties imposed on foreigners and
locals as the measures had cooled the
market.
YES, says PropNex chief executive
Mohamed Ismail, as it is unlikely that more
speculative buying will be encouraged with
the removal of ABSD. This is because with
the TDSR, buyers already cannot overstretch
themselves financially.
SINGAPORE PROPERTY WEEKLY Issue 163
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Is there a case to review the cooling
measures?
Some have argued about the actual intention
of TDSR, on whether the objective and
implementation of the TDSR is really a
measure to cool the property market, or more
of a move to discourage Singaporeans from
overburdening themselves with more debt
than they can actually afford. To us at least,
this is immaterial. The fact remains that the
TDSR has had the single largest impact in
moderating property prices as compared to
the previous seven rounds of cooling
measures.
But as Mr. Ong Kian Teck at Jones Lang
LaSalle had pointed out, similar moves to
cool the property market in 1996 did cause
prices to ease gradually at first, but the
market crashed when the Asian financial
crisis hit in 1997. So the question becomes:
are we at the point of "overkill" in terms of
cooling measures being stacked on the
market that we are becoming vulnerable to a
major adverse event? The concern is
especially valid when 50,000 or so new
apartments are expected hit the market over
the next 2 years.
Do the ABSD and SSD still make sense?
We will leave this debate to the experts
(which we are not), but the wife and I would
like to offer the following food for thought: Are
the ABSD and SSD really the most
appropriate measures to "complement" the
TDSR in reining property prices going
forward? We said "complement" because
prior to the TDSR, both the ABSD and SSD
were not doing that good a job in curbing
price increases. Yes, demand had fallen
somewhat but prices continued to inch
upwards until the TDSR was implemented.
SINGAPORE PROPERTY WEEKLY Issue 163
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The ABSD and SSD were based on the
notion that “if you hit the buyers where it hurts
most, aka their pockets, they will think twice
about buying.” But given an environment
where interest rates are low, the market is
flushed with liquidity and there are few
investment alternatives with risks that the
average investor can understand/stomach,
people will continue to buy into the property
market despite the lower returns and longer
holding periods. There is also the pertinent
question (we are probably opening a can of
worms here) of whether the ABSD/SSD
actually did more good to increase the
Government's coffers than it did to cool the
market.
The wife and I concur that TDSR is probably
the way forward to curb escalating property
prices (although the 60% ratio should not be
set in stone). But instead of retaining the
ABSD/SSD and fiddling with these, are there
any other measures that can be explored as a
complement to the TDSR?
Two recommendations to replace the
ABSD and SSD
In this respect, the wife and I would like to
offer two "tongue-in-cheek" recommendations
as a complement to the TDSR:
1. Foreigners can only purchase private
homes in the resale market that are above a
certain size (e.g. 1,300sqft – arbitrary for the
sake of this discussion), while those units that
falls below can only be resold to locals/PRs.
This will certainly provide a test on the
resiliency of demand for small units
(especially shoeboxes). It may even alter
developers’ dynamics and their current
strategy of building primarily small units in an
attempt to prop up psf prices.
SINGAPORE PROPERTY WEEKLY Issue 163
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2. For new mass market projects (say,
$1,200psf or below – again arbitrary just for
this discussion), cap the number of units
within each development that foreigners/PRs
can purchase (say, 20% - arbitrary). This is
not only in-line with the “Singaporeans first”
call by a large majority of our locals, it will
also appease those who complained that
foreigners are jacking up prices. It may even
help promote better integration of
foreigners/PRs with our locals, given the
smaller foreigners/PRs-to-locals ratio within
each development.
Some may view the above as discriminatory
but so is the 15% additional duty currently
imposed on foreign buyers. And as someone
once told us: "No one said life was fair, now
get on with it!"
Ok, enough of our pipe dream. So when will
we finally see an easing of the current
property cooling measures? According to an
analyst on last night's "News 5 Tonight", this
will be "probably sometime nearer to the end
of 2015." The wife and I are waiting with
bated breath...
By The Folks @ SG Proptalk, a blog and
forum on buying Singapore property.
SINGAPORE PROPERTY WEEKLY Issue 163
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SINGAPORE PROPERTY WEEKLY Issue 163
Singapore Property This Week
Page | 8Back to Contents
Residential
HDB resale prices fall 1.3% in Q2
HDB resale prices have fallen again for the
fourth quarter due to cooling measures
implemented by the government, said market
analysts. According to flash estimates by
HDB, housing prices were down by 1.6 per
cent in Q1 this year; and prices have fallen by
another 1.3 per cent in Q2. Ong Kah Seng
from R’ST Research believes that the revised
mortgage servicing ratio, which caps loans to
30 per cent of borrowers’ monthly income,
limits potential buyers’ ability and willingness
to make purchases. Echoing Ong’s opinion,
Mohamed Ismail, PropNex chief, said that it is
more difficult for buyers to purchase larger
flats because of the smaller loans. According
to Ong, resale prices have fallen by 5.1 per
cent from Q2 2013, and prices are expected
to continue falling for a total of 4 to 8 per cent
by the end of the year. Nonetheless, the price
fall is expected to be gradual, said Ong.
(Source: Business Times)
Private homes price index rise in May
According to the National University of
Singapore’s (NUS) price indices, the price
index for non-landed private homes has risen
by 0.8 per cent month on month in May, after
falling one per cent from March to April.
SINGAPORE PROPERTY WEEKLY Issue 163
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Since August 2013, this was the first time that
the price index has appreciated. Nonetheless,
a year on year comparison shows that May’s
index this year is still lower than the previous
year by 6 per cent. Lum Sau Kim from the
Department of Real Estate at NUS said that
the higher price index in May 2014 could be
due to more sales in the primary market that
month. However, he predicts that the overall
Singapore Residential Price Index will shrink
in June. This view is corroborated by Nicholas
Mak from SLP International who said that
demand in June may fall due to the school
holidays and the World Cup season.
(Source: Business Times)
Private home prices to come down further
The private home price index has slipped by
3.2 per cent, following three straight quarters
of decline this year. According to flash
estimates by the Urban Redevelopment
Authority (URA), there was a 1.1 per cent
quarter on quarter fall in private home prices
in Q2 this year. URA’s subindex has also
showed that landed home prices have fallen
by 1.5 per cent in Q2 this year. Mohamed
Ismail from PropNex believes that the Total
Debt Servicing Ratio has muted private home
sales. CBRE executive director Joseph Tan
agrees and said private home prices in Q2
are slipping as developers have brought
down prices in the primary market. Tan also
believes that prices in the secondary market
have fallen as property owners are lowering
their prices to reflect the market’s demand
and supply. Adding on, Eugene Lim from ERA
explains that the weakening rental market
could have contributed to the falling home
prices.
(Source: Business Times)
SINGAPORE PROPERTY WEEKLY Issue 163
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Commercial
Woodlands industrial plot sold for lower-
than-expected price
An industrial plot at Woodlands Avenue 12
was sold at a lower-than-expected price,
despite already conservative price estimates.
The site which can yield about 1 million
square feet of industrial space, did not garner
high price estimates previously due to its
large size. According to Nicholas Mak from
SLP International, larger land plots do not
fetch higher prices as the developer may take
a longer time to sell off all the strata units in it.
Also, the supply of industrial space zoned for
Business-1 development in the North region
was high. Thus, consultants had estimated a
conservative price for the winning bid. Yet, the
winning bid, which was made by Wee Hur
Development for $76.9 million or $72.86 per
square foot per plot ratio (psf ppr), was still
$80 to $100 psf ppr lower than what property
consultants predicted.
(Source: Business Times)
Strata-titled industrial market shrinks
Demand for strata-titled industrial land has
shrunk according to property consultants from
DTZ Research. In Q2, 224 strata-titled factory
units have been sold, which brings the total
resale transactions in H1 2014 to 523 units.
This is 57 per cent lower than the number of
transactions made in H1 last year.
Nonetheless, according to DTZ Research,
there was negligible price movement for
conventional industrial spaces such as the
traditional factories. The conventional
industrial average capital values for first-
storey spaces in Q2 remained at $627 per
square feet and $470 per square feet for
those in the upper storeys.
SINGAPORE PROPERTY WEEKLY Issue 163
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On the other hand, prices for industrial
properties with shorter tenures are falling, as
they are seen to be less appealing than units
with longer leases.
(Source: Business Times)
99.4% occupancy rate in Shenton Way
Demand for office spaces in Q2 is high
according to Colliers International. Grade A
office micro-markets across Singapore are at
least 95 per cent occupied while the
occupancy rate at Shenton Way/Tanjong
Pagar is the highest at 99.4 per cent. This
was up from 97.2 per cent in Q1. Not only so,
there are interests in new office projects such
as the CapitaGreen, which has a 12 per cent
pre-commitment rate in June. According to
Marcus Loo from Colliers International, the
higher office occupancy has pushed up rental
prices. This has led to an increase of 3.5 per
cent in rental growth island-wide.
Nonetheless, Loo said that higher rents may
discourage tenants from relocating. Chia
Siew Chuin, Colliers International’s director of
research and advisory predicts that the office
property market will continue to expand with
the economy. Chia said that the limited office
space supply till 2016 is also expected to
push rental prices further thus benefiting
existing landlords.
(Source: Business Times)
Club Street shophouses priced at $22m
Five shophouses along Club Street, which
have land tenures of about 80 years left, have
gone on sale for $22 million. The shophouses
are located at Nos 1, 3, 5, 7 and 9. The
former three are three storeys high and have
an attic while the latter two are only two
storeys high.
SINGAPORE PROPERTY WEEKLY Issue 163
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Marketed by both JLL and Historical Land Pte
Ltd, the shophouses are sold as a package
for $3,230 per square foot for its 6,800
square feet. Under the Urban Redevelopment
Authority’s (URA) Master Plan 2014, the Club
Street shophouses have been rezoned for
commercial use recently. Nonetheless,
according to a June 10 circular by URA,
shophouse owners and tenants are still
encouraged to use the upper storeys of the
shophouses for residential or institutional use.
(Source: Business Times)
Property alliance formed to compete with
larger competitors
SLP International, OrangeTee, HSR
International and Dennis Wee Realty have
banded together to form an alliance to rival
traditional powerhouses, ERA Realty and
PropNex Realty. The alliance will expand its
buyer reach and focus on local residential
projects. According to Anne Tong, chief
executive officer from HSR International, the
alliance will benefit the agencies as they will
have access to a wider network of home
buyers and resources. However, PropNex
believes that given its track record, it will
continue to be the choice marketing agency.
Its chief, Mohamed Ismail, believes that the
alliance may run into teething problems as its
officers may have to report to different key
executive officers.
(Source: Business Times)
SINGAPORE PROPERTY WEEKLY Issue 163
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Non-Landed Residential Resale Property Transactions for the Week of Jun 18 – Jun 24
NOTE: This data only covers non-landed residential resale property
transactions with caveats lodged with the Singapore Land Authority.
Typically, caveats are lodged at least 2-3 weeks after a purchaser
signs an OTP, hence the lagged nature of the data.
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
3 DOMAIN 21 1,281 1,765,000 1,378 99
4 HARBOURLIGHTS 732 1,050,000 1,435 FH
5 ONE-NORTH RESIDENCES 570 968,000 1,697 99
7 THE BENCOOLEN 883 1,220,000 1,382 99
9 THE ORCHARD RESIDENCES 2,465 9,736,750 3,950 99
9 HELIOS RESIDENCES 1,281 3,480,000 2,717 FH
9 ESPADA 667 1,775,375 2,660 FH
9 ESPADA 667 1,750,000 2,622 FH
9 THE REGALIA 1,216 1,830,000 1,505 FH
9 GRANGE HEIGHTS 3,025 3,800,000 1,256 FH
10 WHITE HOUSE RESIDENCES 3,595 8,500,000 2,364 FH
10 ONE JERVOIS 1,604 2,480,000 1,546 FH
10 VIZ AT HOLLAND 947 1,390,000 1,467 FH
10 DORMER PARK 1,690 2,400,000 1,420 FH
10 DUCHESS CREST 936 1,315,000 1,404 99
10 DUCHESS CREST 1,701 2,320,000 1,364 99
10 MILL POINT 2,067 2,750,000 1,331 999
10 GLENTREES 2,616 3,100,000 1,185 999
11 PARK INFINIA AT WEE NAM 2,002 3,800,000 1,898 FH
11 THE AXIS 1,141 1,600,000 1,402 FH
11 THOMSON 800 1,744 2,100,000 1,204 FH
12 SCENIC HEIGHTS 915 1,025,000 1,120 FH
14 LE CRESCENDO 1,173 1,360,000 1,159 FH
14 CASSIA VIEW 1,206 1,360,000 1,128 FH
14 THE TRUMPS 1,356 1,490,000 1,099 99
14 D'HERITAGE CASTLE 1,206 1,080,000 896 FH
15 THE BELVEDERE 1,259 1,950,000 1,548 FH
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
15 COSTA RHU 1,776 2,180,000 1,227 99
15 CELESTIA 872 980,000 1,124 FH
15 COTE D'AZUR 1,550 1,700,000 1,097 99
15 DUNMAN VIEW 1,216 1,188,888 977 99
15 THE GERANIUM 990 943,888 953 FH
15 THE PROMINENCE 1,163 1,000,000 860 FH
16 BAYSHORE PARK 936 960,000 1,025 99
16 TANAMERA CREST 1,173 980,000 835 99
16 KEW GREEN 3,843 2,575,000 670 99
18 OASIS @ ELIAS 980 955,000 975 99
18 RIS GRANDEUR 1,066 1,020,000 957 FH
19 RIO VISTA 1,238 1,010,000 816 99
20 CLOVER BY THE PARK 1,765 2,100,000 1,190 99
20 BISHAN 8 1,163 1,328,000 1,142 99
21 THE CASCADIA 1,421 2,415,700 1,700 FH
21 CLEMENTI PARK 1,959 2,060,000 1,052 FH
21 HIGH OAK CONDOMINIUM 1,023 970,000 949 99
23 HILLVISTA 947 1,215,000 1,283 FH
23 CHANTILLY RISE 1,270 1,238,000 975 FH
25 LA CASA 1,195 935,000 783 99
25 WOODGROVE CONDOMINIUM 1,184 830,000 701 99
26 THE CALROSE 1,572 1,880,000 1,196 FH
27 ORCHID PARK CONDOMINIUM 1,249 880,000 705 99
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