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Transcript of Singapore Property Weekly Issue 182
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8/10/2019 Singapore Property Weekly Issue 182
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Issue 182Copyright 2011-2014 www.Propwise.sg. All Rights Reserved.
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8/10/2019 Singapore Property Weekly Issue 182
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CONTENTS
p2 6 Ways Developers Hide Project Discounts
and Why its Bad for the Market
p8 Singapore Property News This Week
p12 Resale Property Transactions
(October 29 November 4 )
Welcome to the 182th edition of the
Singapore Property Weekly.
Hope you like it!
Mr. Propwise
FROM THE
EDITOR
mailto:[email protected]://www.propwise.sg/advertise/http://www.propwise.sg/advertise/mailto:[email protected] -
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By Property Soul (Guest Contributor)
To survive the cooling measures, property
developers have no choice but to constantly
come up with creative ways to move their
units from the shelves, because buyers are a
rare species. Where can they find buyers whopossess all of the following?
- Can afford the hefty cash downpayment of
units in new projects;
- Are willing to pay 5, 7, 10 or 15 percent
Additional Buyer Stamp Duty;
- Dontmind holding the property for 4 years
to avoid paying 4 to 16 percent Additional
Seller Stamp Duty;
6 Ways Developers Hide Project Discounts and Why its
Bad for the Market
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- Dontmind holding the property for 4 years
to avoid paying 4 to 16 percent Additional
Seller Stamp Duty;
- Can pass the TDSR test and obtain thedesired percentage of loan-to-value limit; and
- Have the guts to buy right now when
property prices are on the way down.
Developers are probably sharing the same
thought: Better sell now than later. Better let
go cheaper than get stuck later.
But wait! They cantrock the boat and further
undermine market confidence. And they need
to be fair to the early buyers, namely the VIP
customers or early birds who bought units at
premium prices during better days.Spend a weekend at the sales galleries and
you can spot the tactics deployed by
developers and their marketing agents:
1. Markup then Discount
Simply raise the prices of all the remaining
units by 10 to 15 percent before giving back
15 percent discount. Anyway, not everyonetakes the hassle to check past transactions of
the project.
2.Star Buys
They are units chosen for their bad facing,
inauspicious unit numbers,
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have been unsold or returned, or are leftover
for any other reasons. Projects offering star
buys include the Citron Residences and
Hillion Residences.
The marketing agent may tell buyers that star
buys just started this month or are valid for
this weekend only. Dont be too tempted to
grab the just for today special offer. Check
the recent transacted prices and find out
whats so special about those units underpromotion.
3. Buying Incentives
Developers can package a unit with a car, or
give away renovation, furnishing or travel
vouchers. These gimmicks work to draw
buyers and manage to keep price levels
constant.
4. ABSD Fully Absorbed
Some developers are willing to subsidize
buyers for whatever percentage of Additional
Buyer Stamp Duty they have to pay. Theamount will be reimbursed to the buyers after
sales completion.
5. Rental Guarantee
Rental guarantee is nothing new for high-end
condominiums. Mixed development NeWest
is offering an extra 10 percent discount for
their commercial units. Or alternatively,
buyers can choose to have a 7 plus 7 percent
rental guarantee which is payable in two
years after TOP.
6. Cash Rebates
Some projects simply give cash to buyers. On
top of a 4 percent discount,
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Hillion Residences offers a 6 percent cash
rebate3 percent after exercising the option
and another 3 percent upon TOP of the
project. In other words, buyers are paying 14
percent instead of 20 percent for the
downpayment of their units.
Implications of Hidden Project Discounts
1. Inflated property prices
URA, REALIS and INLIS cover caveats arelodged with the Singapore Land Authority
(SLA). SRX is using the URA data plus sales
transactions from major property agencies.
Both the caveats and the transactions do not
reflect the different types of incentives offered
by developers to buyers. Property pricespublished, apart from resale units, are being
inflated.
Under the Housing Developers Act,
developers are required to disclose all
incentives. But after TOP, developers can
clear unsold units with whatever discounts,
incentives or price levels they please without
informing the public.
In fact, it is not rare to see the price per
square foot of recent caveats lodged at URA
in the same project remain fairly constant, or
sometimes even higher than the previous
transactions.
2. Misrepresented property indices
Developers are also not required to submit
the sales status of their de-licensed projects
after TOP. URA thinks that the low volume of
such transactions does not impact the overallProperty Price Index. This may be true in a
robust market, but is not the case now when
many projects still have tons of unsold units
after TOP, especially in the high-end market.
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Afterall, the lodgment of caveats with SLA is
based on voluntary submission. Have a check
on any sold-out project in the URA caveat
database and one will find that not all the
units and their sales prices are captured.
The incomplete data entries make it difficult
for the public to get a real picture of the
current private property market in Singapore.
All those property indices are, at best, fo
one's information only.
Jim Rogers has this to say about GDP
figures: "First of all its backward looking.
Second of all they make them up. They are
always revised later. I know you have to
report these things on TV, but as an investor I
dontpay any attention.
Maybe it is applicable to Singapore property
figures too.
3. Inaccurate valuation and loan-to-value
limit
If the valuation of residential properties is
based on recent transactions in the same or a
SINGAPORE PROPERTY WEEKLY I 182
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similar development, without factoring in
developers rebates, the figures are likely to
be unrealistically high.
Similarly, if the loan-to-value limit is based on
the valuation of the property, buyers are now
able to borrow a bigger housing loan from the
bank based on the undiscounted purchase
price.
Such practices are going against the
governments determination to ensure greatefinancial prudence among property buyers.
What goes around comes around
The misdeed of not reporting the actual
selling prices and the failure of the authority
to take actions can only hide the truthtemporarily. As the Chinese saying goes, no
one can swathe flames in paper. What the
buyers and sellers of new projects are doing
now may later come back to get them.
Once the government requests submission of
the real transaction prices after rebates,
buyers who enjoyed such incentives earlier
may risk holding a negative equity property,
with their outstanding mortgage higher thanthe fair market value of their properties.
On the other hand, the inflated property price
index can be used as a good excuse for the
government to insist that its too early to
relax property cooling measures, until therare species of buyers gradually becomes an
extinct species.
Or the government may impose harsher rules
to further correct the market, especially when
itstime to please the voters again.
By guest contributor Property Soul, a
successful property investor, blogger, and
author of the No B.S. Guide to Property
Investment.
SINGAPORE PROPERTY WEEKLY I 182
http://propertysoul.com/http://aktive.com.sg/store/no-b-s-guide-to-property-investment/http://aktive.com.sg/store/no-b-s-guide-to-property-investment/http://aktive.com.sg/store/no-b-s-guide-to-property-investment/http://aktive.com.sg/store/no-b-s-guide-to-property-investment/http://aktive.com.sg/store/no-b-s-guide-to-property-investment/http://aktive.com.sg/store/no-b-s-guide-to-property-investment/http://aktive.com.sg/store/no-b-s-guide-to-property-investment/http://aktive.com.sg/store/no-b-s-guide-to-property-investment/http://aktive.com.sg/store/no-b-s-guide-to-property-investment/http://aktive.com.sg/store/no-b-s-guide-to-property-investment/http://aktive.com.sg/store/no-b-s-guide-to-property-investment/http://aktive.com.sg/store/no-b-s-guide-to-property-investment/http://aktive.com.sg/store/no-b-s-guide-to-property-investment/http://aktive.com.sg/store/no-b-s-guide-to-property-investment/http://aktive.com.sg/store/no-b-s-guide-to-property-investment/http://aktive.com.sg/store/no-b-s-guide-to-property-investment/http://propertysoul.com/ -
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Singapore Property This Week
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Residential
Res ale p ric es o f n on -lan ded p riv at e
h o m e s u p 0 .4 % i n O c t o b e r
From September to October, resale prices of
non-landed private homes have increased by
0.4 percent. While prices in the city fringe and
suburbs have increased by 0.6 percent each,
prices of apartments in the city have fallen by
0.3 percent according to SRX. Despite the
slight increase in prices, Wong Xian Yang
from OrangTee believes that overall prices
will decrease due to the effect of the Total
Debt Servicing Ratio framework. According to
the Business Times, resale prices of private
homes have fallen by 4.5 percent year on
year from October 2013. In October this year,
about 451 private homes changed hands,
which was slightly lower than the 461 units
that were resold in September this year.
(Source: Business Times)
98% o f al l u n it s at L ak e L i fe h av e b een
s o l d s i n c e i t s l a u n c h
521 out of the 534 units at Lake Life have
been sold since its launch. Lake Life is the
first executive condominium project that has
been launched in Jurong in the last 17 years.
Vincent Ong from Evia Real Estate said that
the condominiums prime location drew
buyers. The 99-year leasehold project is
priced from $799 to $930 per square foot.
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On average, a two bedroom unit is sold at
$685,000; a three bedroom unit is priced at
$898,000; a three bedroom premium unit is
priced at $984,000 and a four bedroom unit is
sold for an average price of $1.07 million.Additionally, a four bedroom premium unit is
sold for $1.088 million, while a five bedroom
unit is priced at $1.388 million.
(Source: Business Times)
N o n -l an d e d p r i v at e h o m e r en t al s s l i p p ed
1 .1 % f r o m Q 2 t o Q 3
According to the Business Times, non-landed
private home rentals have slipped by 1.1
percent from 14Q2 to 14Q3. Rental in the
core central region took the hardest hit. Other
districts such as those at Novena and Middle
Road did not experience any significant
changes in rental prices. On the other hand,
rental prices in 7 districts have increased from
Q2 last year to Q2 this year. For example,
District 20 which includes Bishan and Ang Mo
Kio saw rental prices increase by 15.9
percent from Q2 last year to Q2 this year. The
number of rental transactions in those areasincreased to 209 units in Q2 this year from
the previous year, said Nicholas Mak from
SLP International. Lee Lay Keng from DTZ
believes that the accessibility to public
amenities in mature estates like Ang Mo Kio
and Bishan could have resulted in higher
rental prices. Lee expects that there will be an
increase in supply of rental units in the
suburban area in the next year. However, as
policies on foreign hiring tighten, demand for
rental units is expected to fall. This increase
in supply in the next year and the decrease in
demand for rental homes is expected to drive
rental prices down.
(Source: Business Times)
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H D B r e n t a ls f a l l b y 1 .7 % f r o m D e c 2 01 3
According to SRXs flash estimates, HDB
rents have fallen by 1.7 percent in October
this year, from December 2013. According to
SRX estimates, about 1,559 HDB flats were
rented out in October. This was 0.8 percent
higher than in September. Yet, the year-on-
year rental volume in October this year has
fallen by 2 per cent from the previous year.
Ong Kah Seng from RSTResearch predicts
that HDB rents will continue to fall by up to 4
percent by the end of the year. Not only so,
he believes that HDB rents will fall by as
much as 8 percent in the following year.
Eugene Lim from ERA Realty said that the
HDB rental market has weakened as pricesfor private homes in suburban areas have
fallen to as low as $2,500 a month.
Nonetheless, Lim believes that the HDB
rental market will continue to attract tenants
who have a rental budget that is below
$2,500.
(Source: Business Times)
C o o l in g m e as u r es w i l l c o n t i n u e t o a ff ec t
p r o p e r t y m a r k et
Market experts believe that cooling measures
will continue to shrink demand in the property
market. The weak property market has
affected sales at Sing Holdings, Hotel
Properties Limited and Design Studio Group.
In Q3 this year, Sing Holdingsnet profit fell
by 90.9 percent to $307,000. Similarly, Hotel
Properties Limited experienced a reduction in
net profit in Q3 this year as revenue shrank
from $180.1 million to $146 million. Market
experts believe that as the market shrinks
and as foreign labour supply is tightened,
property sales volume will continue to fall.
(Source: Business Times)
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Commercial
C DL : D em a n d f o r G ra d e A o f fi c e s p a c e i s
in cr e a sin g
Kwek Leng Beng from City DevelopmentLimited (CDL) said that the demand in the
residential market has remained low due to
the implementation of cooling measures.
Kwek said that mortgage borrowers who are
affected by lower rentals may find it difficult to
finance their loans. This may lead to forcedfire sales. Nonetheless, Kwek believes that
property agents can rely on the office and
hotel markets as both markets have been
doing well this year. Particularly, demand for
Grade A office space has increased and the
capital value for hotels is also on the rise. Infact, in Q3 this year, CDL made a profit of
$87.59 million from the hotel market.
(Source: Business Times)
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Non-Landed Residential Resale Property Transactions for the Week of Oct 29 Nov 4
NOTE: This data only covers non-landed residential resale property
transactions with caveats lodged with the Singapore Land Authority.Typically, caveats are lodged at least 2-3 weeks after a purchasersigns an OTP, hence the lagged nature of the data.
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
3 QUEENS 1,195 1,500,000 1,255 995 THE FOLIAGE 969 1,200,000 1,239 FH
5 CARABELLE 1,292 1,450,000 1,123 956
5 BLUE HORIZON 969 1,050,000 1,084 99
5 CARABELLE 1,292 1,350,000 1,045 956
9 TRIBECA 1,378 2,690,000 1,952 FH
9 RESIDENCES @ KILLINEY 1,055 1,925,000 1,825 FH
9 ST THOMAS SUITES 2,013 3,600,000 1,788 FH
9 YONG AN PARK 3,143 5,500,000 1,750 FH
9 OLEANAS RESIDENCE 1,636 2,538,800 1,552 FH10 ORION 1,507 3,300,000 2,190 FH
10 RV EDGE 377 776,888 2,062 FH
12 TRELLIS TOWERS 710 1,020,000 1,436 FH
12 TRELLIS TOWERS 1,163 1,558,000 1,340 FH
14 WATERBANK AT DAKOTA 1,259 1,510,000 1,199 99
14 STARVILLE 1,216 1,140,000 937 FH
15 SUITES @ EASTCOAST 377 612,000 1,624 FH
15 RIVEREDGE 1,335 1,650,000 1,236 99
15 MARINE VIEW MANSIONS 2,088 2,450,000 1,173 FH15 BUTTERWORTH 8 1,464 1,712,880 1,170 FH
15 BUTTERWORTH 8 1,507 1,600,000 1,062 FH
15 LEGENDA AT JOO CHIAT 1,399 1,260,000 900 99
15 PENG'S COURT 980 860,000 878 FH
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
16 WATERFRONT WAVES 1,292 1,420,000 1,099 9916 EAST MEADOWS 1,195 1,140,000 954 99
16 THE CLEARWATER 1,496 1,338,000 894 99
16 AQUARIUS BY THE PARK 1,098 868,000 791 99
17 EDELWEISS PARK CONDOMINIUM 947 830,000 876 FH
18 TROPICAL SPRING 1,335 1,200,000 899 99
18 EASTPOINT GREEN 1,130 1,005,000 889 99
18 SAVANNAH CONDOPARK 1,238 1,100,000 889 99
18 THE TROPICA 1,313 1,068,000 813 99
19 THE SUNSHINE 1,227 1,225,000 998 FH19 HOUGANG GREEN 764 742,000 971 99
22 PARC OASIS 1,076 990,000 920 99
23 PARKVIEW APARTMENTS 980 823,000 840 99
26 BULLION PARK 1,259 1,210,000 961 FH
27 EUPHONY GARDENS 1,518 910,000 600 99
28 SELETAR SPRINGS CONDOMINIUM 1,335 1,120,000 839 99