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Contribute Do you have articles and insights and articles that youd like to share with thousands of readers interested in the Singapore property market? Send them to us at info@propwise.sg, and if theyre good enough, well publish them here, on our blog and even on Yahoo! News. Advertise Want to get your brand, product, service or property listing out to thousands of Singapore property investors at a very reasonable cost? Head over to www.propwise.sg/advertise/ to find out more. CONTENTS p2 An Example of Bad Property Advice p9 Singapore Property News This Week p14 Resale Property Transactions (April 23 April 29) Welcome to the 155 th edition of the Singapore Property Weekly. Hope you like it! Mr. Propwise FROM THE EDITOR SINGAPORE PROPERTY WEEKLY Issue 155 Page | 2 Back to Contents By Gerald Tay (guest contributor) I can't help it. I read some bad advice recently and have to say something. I'll try to keep it positive, but my tongue is already bleeding from biting it. In Singapore, inflation is on the rise, but this one thing is still offered for free advice. Its really funny to observe people taking it so lightly. But only the advice that makes you profit in reality (i.e. real profit not imaginary) is good, otherwise its useless or even disastrous. Most people dont know the difference between advice from rich people and advice from sales people. An Example of Bad Property Advice SINGAPORE PROPERTY WEEKLY Issue 155 Page | 3 Back to Contents Most get their financial advice from the latter people who profit even if you lose. In this post, I explore why one recently written article by experts (sales people in disguise) will prove disastrous for both average investors and home buyers. Your task is to look for any hidden agenda. An example of bad property advice The article, Why 2014 is going to be the best year in buying property, appeared in Yahoo Singapore News on 16th April, 2014. The article aims to sell readers three benefits of buying a suburban condo today: 1. Because You Can Afford a Better First Home Than You Realize BAD ADVICE: The monthly salary needed to get the most out of your property purchase is $10,000 to $12,000. I know, its not the easiest number to reach. But if you and your spouse can climb your way to this number, youll be in a prime position to afford a fantastic first home. BAD ADVICE: According to ERA key spokesman Eugene Lim, depending on whether your income is fixed and your finances are well within the Total Debt Servicing Ration (TDSR) framework, you should be able to afford properties priced between $600,000 and $1.2 million. REALITY CHECK: Having a combined income of $10,000 to $12,000 for married couples does not justify a worthwhile reason to own an expensive suburban condominium as their first home. The purchase is more conspicuous spending than financial prudence. SINGAPORE PROPERTY WEEKLY Issue 155 Page | 4 Back to Contents Most married couples I know simply live from pay-check to pay-check servicing expensive home and car loans to keep up with societys expectations. If one spouse loses his/her job, their financial position gets tougher with kids along the way. Suburban condos that are priced lower than $1 million today are very small units, either the 1-bedders or 2-bedders, spaces that may be too small for a married couple who wants to start a family. Todays $1.2 million condos do not get you much space either, only larger mortgage payments. Even at a low 1.5% interest rate for a 30-year loan tenure on a 20% down-payment, a couple would have to fork out $3,300 every month. With interest rates at 3.5%, the mortgage payments jump to $4,300 every month. REALITY CHECK: Total Debt Servicing Ratio (TDSR) guidelines are meant to serve the business interests of a lending bank to a borrower. They are not meant to serve as financially prudent advice for buyers. Most couples with a combined income of $10,000 to $12,000 would do a lot better financially buying less expensive re-sale HDB flats instead. They could use that savings to acquire financial freedom instead of paying through their noses for a cage in the sky. SINGAPORE PROPERTY WEEKLY Issue 155 Page | 5 Back to Contents 2. Because Falling Prices Make the Additional Buyers Stamp Duty (ABSD) Less Scary BAD ADVICE: What a 7% property drop would save you on ABSD - As you can see, falling property prices take the bite out of ABSD when it comes to purchasing a second or third property. Youll even be able to save money, as the example above shows. BAD ADVICE: If property prices drop by 7% to 10% over the course of 2014, which everyone expects will happen the pain of ABSD actually gets nullified. REALITY CHECK: I have received many emails from readers telling me they have gotten a great price on a property. One particular lady approached me excitedly about discounted developer prices for a project called Sky Habitat in Bishan recently. How good is the price? I asked During launch, developer is selling units at $1,600 to $1,800 psf. And now they are selling only at $1,300 psf. What do you think? Is it a good buy? How would I know? I replied. All you have given me is the price. SINGAPORE PROPERTY WEEKLY Issue 155 Page | 6 Back to Contents Yes! she squealed. Now my husband and I can afford it. Only cheap people buy on price. Just because something is cheap or cheaper doesnt mean its worth the cost. One of my most basic money principles: I buy value. I will pay more for value. If I dont like the price, I simply pass. If the seller wants to sell, he will come back with a better price. I let him tell me what he will accept. I know some people love to haggle; personally, I dont. If a person wants to sell, they will sell. If I feel what I am buying is of value, Ill pay the price. Value rather than price has made me rich. Whether you pay ABSD or not constitutes a small part of whats important in the scheme of things. Looking at the overall picture of what really constitutes a quality investment is a better gauge than simply looking at savings and price alone. REALITY CHECK: Banks do not lend money to borrowers because theyve bought the property at discounted prices or cheaper than their neighbour. Banks lend solely based on the ability of the borrower to repay the loan. They dont care if you bought the property with great savings by buying at discounted prices, cheaper or less expensive than your neighbour. The banks only concern is, Is the borrower able to service his/her loan on time? 3. Because Youll Be Able to Purchase Additional Properties with Little or No Financing BAD ADVICE: But theres another way to purchase property in this buyers market buying property from new launches through SINGAPORE PROPERTY WEEKLY Issue 155 Page | 7 Back to Contents the progressive payment scheme. BAD ADVICE: In most new launches, units priced below $1 million are usually purchased quickly. Thats because payment for new developments is made progressively, allowing buyers who arent severely affected by tighter loan rules to buy smaller units with cash instead of financing larger units. REALITY CHECK: If a buyer decides to buy a smaller unit because he/she is severely affected by tighter loan rules, it simply shows he/she may already be overstretching on finances, never mind a smaller unit. This is the equivalent of saying, If I cannot afford a Ferrari, I will throw my money modifying a cheap Toyota Vios to look and sound like one. If I cannot afford a second property in Singapore, Ill just throw my money into a cheap overseas property Ive never seen before. Many experts have given advice that suggests buying with no or little money down is more important than buying a quality investment property. In your overall investment analysis, how you finance the property isnt as important as buying one that will be a sound, long-term investment, i.e. quality properties that have positive cash- flow. Even if its 100% financed, a bad property is a bad property! When you look at the noise out there, you will come across numerous suggestions on what you should do, and have to determine the legitimacy of every idea presented to you. SINGAPORE PROPERTY WEEKLY Issue 155 Page | 8 Back to Contents Its often not easy to differentiate between good advice and a bad advice, so take care before you act on it. By guest contributor Gerald Tay, CEO of CREI Academy Group, and a professional real estate investor whose real estate portfolio is now worth over $8 million and generates a 6-figure sum in rental income annually. He exposes widely-held property investment myths that are highly ineffective in creating wealth and prevent a comfortable retirement for the ordinary investor. SINGAPORE PROPERTY WEEKLY Issue 155 Singapore Property This Week Page | 9 Back to Contents Residential 14 out of 18 HUDC estates have been privatized Serangoon North HUDC Estate is the fourteenth out of eighteen HUDC estates to be privatized. Out of the remaining four estates, three estates at Hougang North Neighbourhood 3, Hougang North Neighbourhood 7 and Potong Pasir are in the process of privatization; while another at Braddell View is in the midst of garnering support. Such privatization requires support from at least 75 per cent of the residents. En bloc sales in mature sites such as Serangoon North HUDC are still attractive to developers due to the sheer difficulty in applying for such land parcels under government land sales programmes. (Source: Channel NewsAsia) Aprils HDB resale prices continues to soften From March to April, HDB resale prices for three, four and five-room flats have fallen 0.2 per cent, 0.8 per cent and 0.4 percent respectively. While prices of executive flats have surged by 1.2 per cent, overall prices are 0.2 per cent lower this April, as compared to in March. In April, prices plummeted despite a 4.4 per cent month-on-month increase in resale transactions, resulting in a total of 1,484 transactions. SINGAPORE PROPERTY WEEKLY Issue 155 Page | 10 Back to Contents HDB resale prices also saw a drop of 5 per cent year-on-year in April, as total resale transactions dipped by 14.4 per cent year-on- year, according to the Singapore Real Estate Exchange. The overall median transaction over X-value, which measures how much people pay over recent prices, have been pushed down even further from a negative $3,000 in March to negative $4,000 in the April. This is expected to keep resale prices low and is likely to attract more buyers according to Eugene Lim, key executive officer of ERA Realty. (Source: Business Times) Home buyers unsure about how TDSR affects loan applications According to a survey by UOB, one in three home buyers are unfamiliar with the total debt servicing ratio (TDSR) framework. While some are unsure of how the TDSR framework would affect loan applications, others do not understand how the new ruling would apply to them. Through the TDSR framework, the Monetary Authority of Singapore aims to encourage Singaporeans to borrow judiciously. Introduced in June 2013, the framework states that a maximum of 60 per cent of ones gross monthly income can be used to service loans. (Source: Business Times) Prices for The Panorama slashed by 10% Following price cuts by its competitors, Wheelock Properties may be slashing prices for The Panorama, a condominium at Ang Mo Kio. At its re-launch, unit prices may be as much as 10 per cent lower than at the initial launch. Depending on unit size, The Panorama will be sold from $1,100 to $1,310 SINGAPORE PROPERTY WEEKLY Issue 155 Page | 11 Back to Contents per square foot. One-bedders at The Panorama which are between 431 and 474 square feet will start from $565,000; two- bedders between 678 to 700 square feet are marketed from $820,000; and three bedroom units will sell from $1,175,000 for 990 to 1,066 square feet. Previously, 58 of the 698 units at The Panorama were sold for a median price of $1,343 psf in January. However, the show flat was closed in mid- March due to poor turnout. (Source: Business Times) Minister says studio apartments make a lot of sense for seniors In his blog, Housing Matters, Minister for National Development Khaw Boon Wan said that senior citizens profit about $200,000 by selling their old flats and moving into studio apartments. This is possible if outstanding loans have been paid off and if the new studio apartment is fully paid for. Thus, according to Minister Khaw, it is practical for senior citizens to move into studio apartments, especially if their children have moved out, as the net sale proceeds may support retirement needs. Beyond that studio apartments, which are elderly-friendly, are more conveniently located within HDB towns. Minister Khaw suggested that besides moving into a studio apartment, senior citizens may also rent out available rooms in their old flats so as to support their retirement. (Source: Business Times) Commercial CBRE releases early-bird discount for Parkway Centre office units Located at Parkway Centre, 22 strata office units that are between 732 square feet and SINGAPORE PROPERTY WEEKLY Issue 155 Page | 13 Back to Contents 1,356 square feet are on sale. Marketed by CBRE at a three per cent early-bird discount, from $1,649 to $1,746 per square feet, the units have leases that will expire between November this year and July 2017. The 22 office units which are located between the third and thirteen floors are part of an office complex that has a 66-year lease remaining. They are part of the 51 units that were acquired in 2012 by the Parkway Investment Holdings. In 2012, units in the office complex were priced from $1,600 to $1,810 per square feet. (Source: Business Times) 50% cut in lease for prepared industrial land Although net allocation of prepared industrial land (PIL) is positive, their leasing and rental to companies is 50 per cent less than in Q1 2014 said JTC Corporation. Gross allocation of PIL dipped from 118.1 hectares in Q4 2013 to 48 hectares in the following quarter. According to JTC, this was due to lower gross allocation in the generic land and Jurong Island segments; not only so, take-up rates were higher in the chemical and logistics sectors in the following quarter. Nonetheless, the gross allocation in the earlier quarters of 2013 was an average of 50 ha per quarter. This is comparable to the gross allocation this quarter. (Source: Business Times) New operator wanted for newly revamped hotel along Robertson Quay The Gallery Hotel at Robertson Quay is looking for a new operator after it has undergone a facelift. RB Capital, which manages the 223 rooms at the Gallery Hotel, SINGAPORE PROPERTY WEEKLY Issue 155 Page | 13 Back to Contents has appointed JLLs Hotel & Hospitality Group to launch a Request For Proposal exercise from hotel management companies to operate the hotel. RB Capital has invested $50 million to $70 million to give a new life to the hotel, and to integrate the retail podium of The Quayside with the hotel. The hotel which was acquired for $232.5 million last year is a 10-storey freehold building that will lease out about 63,000 square foot of retail space. (Source: Business Times) SINGAPORE PROPERTY WEEKLY Issue 155 Page | 14 Back to Contents Non-Landed Residential Resale Property Transactions for the Week of Apr 23 Apr 29 Postal District Project Name Area (sqft) Transacted Price ($) Price ($ psf) Tenure 2 THE BEACON 1,163 1,540,000 1,325 99 5 HERITAGE VIEW 969 1,120,000 1,156 99 8 CITYLIGHTS 1,356 1,730,000 1,276 99 9 MARTIN PLACE RESIDENCES 1,421 2,750,000 1,935 FH 9 THE PATERSON 1,216 2,350,000 1,932 FH 9 THE INSPIRA 1,561 2,880,000 1,845 FH 9 THE INSPIRA 1,259 2,290,000 1,818 FH 9 RIVERSIDE 48 797 1,200,000 1,507 FH 10 ST REGIS RESIDENCES SINGAPORE 1,959 4,700,000 2,399 999 10 ONE JERVOIS 990 1,700,000 1,717 FH 10 TANGLIN REGENCY 1,109 1,443,000 1,302 99 10 RIDGEWOOD 1,744 2,010,000 1,153 999 11 TREVOSE PARK 1,701 2,600,000 1,529 FH 11 SHELFORD SUITES 893 1,360,000 1,522 FH 12 TRELLIS TOWERS 1,141 1,510,000 1,323 FH 12 DE ROYALE 1,281 1,675,000 1,308 FH 12 PAPILLON 936 1,080,000 1,153 FH 12 PAPILLON 1,238 1,360,000 1,099 FH 12 THE ABERDEEN 1,399 1,500,000 1,072 FH 14 LA BRISA 409 625,000 1,528 FH 14 STARVILLE 1,238 1,200,000 969 FH 14 ASTOR 872 760,000 872 99 Postal District Project Name Area (sqft) Transacted Price ($) Price ($ psf) Tenure 15 AMBER RESIDENCES 1,163 1,977,100 1,701 FH 15 THE SEAFRONT ON MEYER 1,604 2,580,000 1,609 FH 15 COTE D'AZUR 840 1,150,000 1,370 99 15 KATONG GARDENS 1,948 2,608,000 1,339 FH 15 VERSILIA ON HAIG 1,130 1,460,000 1,292 FH 15 POSHGROVE EAST 990 1,240,000 1,252 FH 15 MANDARIN GARDEN CONDOMINIUM 1,528 1,600,000 1,047 99 15 STILLZ RESIDENCE 1,528 1,578,000 1,032 FH 15 MANDARIN GARDEN CONDOMINIUM 1,528 1,400,000 916 99 15 VILLA MARINA 2,024 1,670,000 825 99 15 KNOX VIEW 2,207 1,800,000 816 FH 16 CHANGI COURT 969 1,010,000 1,043 FH 16 LAGUNA GREEN 1,141 1,180,000 1,034 99 17 CARISSA PARK CONDOMINIUM 1,324 1,200,000 906 FH 18 CHANGI RISE CONDOMINIUM 1,130 985,000 872 99 18 SAVANNAH CONDOPARK 1,238 1,080,000 872 99 18 CHANGI RISE CONDOMINIUM 1,281 1,090,000 851 99 18 CHANGI RISE CONDOMINIUM 1,130 950,000 841 99 18 SAVANNAH CONDOPARK 2,045 1,550,000 758 99 19 STADIA 743 880,000 1,185 FH 19 KENSINGTON PARK CONDOMINIUM 1,658 1,900,000 1,146 999 19 CHUAN PARK 1,528 1,330,000 870 99 SINGAPORE PROPERTY WEEKLY Issue 155 Page | 15 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 District Project Name Area (sqft) Transacted Price ($) Price ($ psf) Tenure 20 BISHAN 8 1,528 1,575,000 1,030 99 21 THE BLOSSOMVALE 840 1,200,000 1,429 999 21 CLEMENTI PARK 1,722 1,850,000 1,074 FH 21 THE HILLSIDE 1,302 1,320,000 1,013 FH 22 THE CENTRIS 1,001 1,190,000 1,189 99 22 THE LAKESHORE 1,184 1,350,000 1,140 99 23 YEWTEE RESIDENCES 850 938,000 1,103 99 23 THE WARREN 1,238 1,100,000 889 99 23 THE WARREN 1,055 930,000 882 99 23 PALM GARDENS 1,345 1,125,000 836 99 23 HILLTOP GROVE 1,485 1,000,800 674 99 27 ORCHID PARK CONDOMINIUM 958 728,000 760 99
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