Issue 184

Copyright 2011-2014 www.Propwise.sg. All Rights Reserved.

CONTENTS
p2

FROM THE

EDITOR

What is a MeaningfulCorrection of

Welcome to the 184th edition of the

Singapore Property Weekly.

Property Prices?

Hope you like it!

p7

Singapore Property News This Week

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Resale Property Transactions

Mr. Propwise

(November 12 November 18 )

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SINGAPORE PROPERTY WEEKLY Issue 184

What is a MeaningfulCorrection of Property Prices?

By Property Soul (Guest Contributor)
Deputy Prime Minister and Finance Minister
TharmanShanmugaratnam recently told the
press that there is "some distance to go in
achieving a meaningful correction, hinting
that the property cooling measures are here
to stay.
I am surprised by MrTharmans creative use
of the word meaningful. It is an adjective or a
descriptive word that leaves much room for
imagination. It is up to the target audience to
figure out the real meaning behind it.

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SINGAPORE PROPERTY WEEKLY Issue 184

When the government replies with a definite
yes or no answer, you are certain what is
next.
When the government replies with a vague
answer, you are confused what to do next.
When the government replies with a
descriptive answer, you are fearful of what will
happen next.
- Property Soul

How to define meaningful?

The word meaningful means significant or
serious, meaning to say that the government
would like to see a sizable market correction
before they consider reversing any of the
cooling measures.
So, what does meaningful mean? Is it a
major correction in price level? A massive
slump in transaction volumes? A prolonged

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depressed market? A big drop in the number

of first-time or multiple-property buyers? Is it
more meaningful to measure in percentage,
values, dollars or length of time?
Waiting for the meaningful time
When the Singapore government will call for
an election is everyones guess. The timing of
the next election also gives any lifting of the
cooling measures a whole new meaning.
When many voters find private properties
unattainable or overpriced, it is meaningful to
sacrifice the interests of a comparatively
smaller group namely the stakeholders in
the real estate industry, including the
developers, agents and consultants. After all,
it is a great opportunity to narrow the
widening gap between the haves and have
not sin society.

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SINGAPORE PROPERTY WEEKLY Issue 184

On the other hand, if the relaxation of cooling
measures comes too late, and the property
market continues to correct, it can make the
final withdrawal meaningless.
I'm afraid that if you look at a thing long
enough, it loses all of its meaning.
- Andy Warhol, American artist
Take the example of a primary school student
who needs to do corrections for a wrong
answer. There are still mistakes after the
correction and he is asked to redo the
correction again. But there is still room for
improvement so the teacher asks the student
to redo it again and again. When the teacher
finally puts that long-awaited tick there, the
whole thing has long become meaningless in
the eyes of the student.

were countless introductions of property

purchase incentives suspension of land
sales, lifting of capital gains tax, property tax
rebates, lower cash deposits, higher loan-tovalue limits up to 90 percent, cash rebates
and interest-free loans from the banks, etc.
But the market responded with a lower PPI
(Property Price Index) and transaction volume
compared with the last quarter.

Property, like comedy, is all about timing.

Action is futile when it comes too early or too
late.
What it means for different parties

We all have our own vested interest. Every

time there is a new policy, we give it thumbs
up or down depending on how we can benefit
from it.

From 1998 to 1999 and 2001 to 2005, there

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SINGAPORE PROPERTY WEEKLY Issue 184

1. The public deserves some meaningful
data
Both the URA and SRX data do not reflect the
rebates and subsidies from developers to
buyers. Lodgment of caveats is also based on
voluntary submission. Property data is
incomplete and PPI is inflated. What is the
meaning of reporting the data when they do
not represent the full picture?
2. Home buyers are
meaningful correction

waiting

for

MinisterTharmans words that the government

cannot let property prices run ahead of the
growth of household incomes over the long
term are as sweet as honey to people
looking to buy an affordable private property.
His comment especially means something to
the home upgraders. They are all waiting for
property prices to fall back to a level in par
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with general affordability again.

3. Sellers find cooling measures too mean
The cooling measures coincide with a market
softening and the expected oversupply over
the next two years. No one likes the feeling of
being left holding the hot potato when the
music stops. Over-stocked developers and
desperate sellers are the most likely parties
who will trigger the domino effect in a market
correction.
4. Investors are waiting for meaningful
hints to enter market again
National Development Minister Khaw Boon
Wan mentioned that there is still room for
prices to moderate. The worse the market
sentiment, the more often the developers,
agents and sellers tell the media that market
shows signs of recovery, prices will pick up
next year, market has reached bottom, etc.
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SINGAPORE PROPERTY WEEKLY Issue 184

The contradicting comments are confusing
investors who are holding their horses.

survive a meaningful correction with their

meaningless investment.

5. More owners will end up with a

meaningless investment.

By guest contributor Property Soul, a

successful property investor, blogger, and
author of the No B.S. Guide to Property
Investment.

With the impact of falling rental demand

starting to surface, more landlords are feeling
the pain of their already humble return of
under 3 percent. It is meaningless to hold
onto an investment that cant generate a
positive return.
Owners are also under the constant threat
from the continuing softening of the market,
inevitable hike in interest rates, and the
potential onset of another recession. Those
with little holding power are just hoping to

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SINGAPORE PROPERTY WEEKLY Issue 184

Singapore Property This Week

Residential
HSR: HDB resale flat prices may drop to
2008 affordability levels by 3Q2015
According to HSR Research, if HDB resale
prices continue to fall, it may soon reach the
affordability levels in 2008 by Q3 next year.
This suggests that cooling measures may be
lifted by Q3 2015, said market experts. HDB
resale prices need to fall by another 6 percent
in order for it to reach the affordability levels
in 2008, before significant increases took
place in 2009, said HSR. Affordability has
been defined by HSR as the ratio of the
average annual household income to the

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prices of HDB or private non-landed

residential units. The calculations were made
based on the perspective of a first-time buyer.
HSR said that currently, a typical 1,000 sqft
resale HDB flat would cost about five times
the average annual household income of
HDB dwellers. On the other hand, private
resale condos of 1,000 sqft cost about 4.9
times the average annual household income
of apartment dwellers. HSR added that HDB
resale prices have decreased at a compound
monthly rate of 0.6 percent while resale
condo prices have fallen by 0.4 percent.
(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 184

Redas: intervention needed to prevent
market from slowing down
Chia Boon Kuah from the Real Estate
Developers Association of Singapore (Redas)
said that the government needs to intervene
with supportive measures when the property
market spirals downhill. He added that since
the implementation of the total debt servicing
ratio framework, developers have been
concerned about the shrinking market. Chia
argued that the residential market will suffer
from additional pressure when 68,000 new
residential units are completed in the
subsequent few years. The implementation of
the cooling measures has also lead to the
adoption of a wait-and-see attitude in
potential buyers, said Chia. Chong Chou Yen
from Tuan Sing group suggested that the
government could look into lifting the cooling
measures for mass-market mid-end homes to
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maintain their affordability.

(Source: Business Times)
Commercial
Grade A CBD office rent increased by
19.8% this year
Moray Armstrong from CBRE said that the
increase in office rentals may have been
driven by tight supply rather than increased
demand. Chris Archibold from JLL said that
financial institutions are choosing not to
expand thus demand for office space has
fallen. According to the Business Times, CBD
office rents have increased by 19.8 percent
this year and it is expected to increase by
another 7 percent in 2015. JLL estimated that
there will be a 4.2 percent quarter-on-quarter
increase in average gross monthly rental
value for Prime Grade A CBD office space in
the fourth quarter of this year.
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SINGAPORE PROPERTY WEEKLY Issue 184

Nonetheless, as the economy slows,
occupancy rates are also expected to fall,
said Armstrong.
(Source: Business Times)
Singapore Grade A office rental growth
highest in Asia-Pacific region
According to Cushman & Wakefield, rental
growth for Grade A office space is the highest
among 13 countries in Asia- Pacific.
Cushman had estimated Singapores office
rental growth to be 10.88 percent by the end
of the year. This is significantly higher than
the 7.69 percent for Tokyo and 3.02 percent
for Hong Kong. Cushman believes that at the
end of 2014, Grade A monthly rental value will
be as high as $10.45 psf, and it will increase
to $11.04 psf by end-2015. Sigrid Zialcita
from Cushman said that the strong economic
sentiments in Singapore have increased its
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competitiveness compared to the other

markets in Asia. Zialcita also predicts that the
vacancy rates will fall greater in Singapore
than in other core markets in Asia.
(Source: Business Times)
Derby Court released for en bloc sale
Derby Court, which is a condominium that is
located at Novena has been put up for en
bloc sale. The 12-storey condominium
comprises of 20 apartments and has an
allowable gross floor area of 53,094 sq ft. Its
tender will close on Jan 20, 2015. The site
has been zoned for residential use and it has
a plot ratio of 2.8 under the 2014 Master
Plan. According to Savills Singapore, the site
can be developed into 70 apartments of about
753 sqft each. The site has been given an
indicative price of $68.28 million or $1,286
psfppr. Suzie Mok from Savills Singapore
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SINGAPORE PROPERTY WEEKLY Issue 184

expects that investors would be attracted to
Derby Courts prime location.
(Source: Business Times)

URA: at least 70% of site at Beach Road

must be for offices
A commercial site at Beach Road, which has
a 99-year leasehold, will not be allowed to be
developed into small strata units or retail
units. 70 percent of the site has to be for
offices
according
to
the
Urban
Redevelopment Authority (URA). The site will
be launched in H2 2014 under the
Government Land Sales Programme. The
land parcel is 2.1 ha and can be developed
into a gross floor area of 950,592 sq ft.
665,424 sqft has to be set out for office use
while 86,111 sqft could be used for retail
purposes. Not more than three strata units
can be developed from this site said URA.
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Chua Yang Liang from JLL predicts that the

site will attract bids between $1,300 and
$1,500 psfppr.
(Source: Business Times)
Tender for Serangoon site won at $276.8
million
Since the implementation of new productivity
regulations, a 99-year leasehold mixed-use
site at Upper Serangoon Road has had the
highest tender bid price. According to the
Urban Redevelopment Authority, ASSET
Legend had offered $276.8 million or $848.84
psfppr for the site. This was higher than
experts predicted bid price of between $670
to 750 psfppr. Not only so, the winning bid
was 15 percent higher than the next highest
bid of $240 million. Chua Yang Liang from
JLL is surprised by the winning margin given
the current market sentiments.
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SINGAPORE PROPERTY WEEKLY Issue 184

Other market experts have expected
developers to be more cautious with their bids
due to the prefabrication requirements
implemented by the government, which would
push construction costs up. Nonetheless,
Ong Kah Seng from RST Research said that
foreign developers tend to place higher bids.
(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 184

Non-Landed Residential Resale Property Transactions for the Week of Nov 12 Nov 18
Postal
District
3
4
5
8
9
9
9
10
10
11
11
12
12
14
15
15
15
15
15
15
15
15
15
15

Project Name
TANGLIN VIEW
THE INTERLACE
DOVER PARKVIEW
KERRISDALE
THE METZ
THE SUITES AT CENTRAL
TRIBECA
GRANGE RESIDENCES
PALM SPRING
VILLA CHANCERY
THE ANSLEY
8 RAJA
SUNVILLE
ASTON MANSIONS
SIGLAP V
THE ESTA
PARC ELEGANCE
PRESTIGE LOFT
TESSA LODGE
SUNSHINE MANSIONS
MANDARIN GARDEN CONDOMINIUM
OCEAN PARK
HUA XIN COURT
RISING COURT

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Area
(sqft)
1,249
2,357
969
1,485
570
1,001
3,563
2,852
1,485
2,659
1,302
2,024
1,130
1,195
581
1,399
398
527
936
786
732
2,110
1,970
1,432

Transacted
Price ($)
1,500,000
2,941,510
1,010,000
1,690,000
1,550,000
2,300,000
5,350,000
7,450,000
2,450,000
4,100,000
1,718,000
2,800,000
1,220,000
1,000,000
900,000
2,150,000
600,000
725,000
1,200,000
870,000
780,000
2,225,000
2,000,000
1,200,000

Price
Tenure
($ psf)
1,201
99
1,248
99
1,043
99
1,138
99
2,717
FH
2,298
FH
1,502
FH
2,612
FH
1,649
FH
1,542
FH
1,319
FH
1,384
FH
1,079
FH
837
99
1,548
FH
1,536
FH
1,507
FH
1,375
FH
1,281
FH
1,107
FH
1,066
99
1,055
FH
1,015
FH
838
FH

Postal
District
15
16
17
17
18
18
19
20
20
21
23
23
23
23
28

Project Name
KATONG PARK TOWERS
OPTIMA @ TANAH MERAH
FERRARIA PARK CONDOMINIUM
ESTELLA GARDENS
MELVILLE PARK
TAMPINES COURT
EVERGREEN PARK
FLAME TREE PARK
FAR HORIZON GARDENS
ASTOR GREEN
HILLINGTON GREEN
HAZEL PARK CONDOMINIUM
HILLVIEW PARK
THE MADEIRA
GRANDE VISTA

Area
(sqft)
3,391
1,098
958
969
1,345
1,722
1,044
1,593
1,292
1,485
1,528
1,389
1,227
1,238
2,024

Transacted
Price ($)
2,640,000
1,230,000
910,000
770,000
950,000
890,000
805,000
1,808,000
900,000
1,450,000
1,650,000
1,450,000
1,170,000
1,130,000
1,698,888

Price
Tenure
($ psf)
779
99
1,120
99
950
FH
795
FH
706
99
517
101
771
99
1,135
FH
697
99
976
99
1,079 999
1,044 999
953
FH
913
99
840
999

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.

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