Issue 155

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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
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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
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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.
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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.
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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.
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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
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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.
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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
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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.
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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
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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
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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,
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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 $232.5 million last year is a
10-storey freehold building that will lease out
about 63,000 square foot of retail space.
(Source: Business Times)
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Non-Landed Residential Resale Property Transactions for the Week of Apr 23 Apr 29
Postal
District
Project Name
Area
(sqft)
Transacted
Price ($)
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
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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
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