singapore property weekly issue 115

7/27/2019 Singapore Property Weekly Issue 115

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CONTENTS

p2 Top 3 Dangers of Buying Low-Cost

Single Family Homes in the USA

p7 Singapore Property News This Week

p11 Resale Property Transactions (July 17 July 23)

Welcome to the 115th edition of the

Singapore Property Weekly.

Hope you like it!

Mr. Propwise

FROM THE

EDITOR
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3/13

SINGAPORE PROPERTY WEEKLY Issue 115

Page | 2Back to Contents

By Gerald Tay (guest contributor)

I recently shared my insights on the USA real

estate market to local investors and readers.

Unsurprisingly, I received many emails from

them, in particular on buying low-cost USA

Single-Family Homes (SFH) for investment.Some investors shared with me that they are

currently facing serious issues on these low-

cost properties, and wanted to find ways to

resolve them. My direct answer was: If you

can find buyers for such properties, sell at

whatever price ASAP!

With our expensive local property market,

financing restrictions and low deposit rates,

many Singaporean investors are eagerly

Top 3 Dangers of Buying Low-Cost Single Family Homes in the USA


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umping on the wagon (like everyone else) to

buy low cost properties in foreign countries

such as USA for investment. But is this a

smart move?

Reasons these low cost properties look

enticing

Here are some reasons why these foreign

properties look enticing to investors:

1. Low purchase cost a Single-Family

home in the USA (landed property) can

be bought for USD$50,000 or lower

2. Potential double-digit investment returns

as high as 15%-20% a year (on paper)

3. The property will be in safe hands of a

property manager (a terrible

misconception)

In this article, Ill explain some of the

problems youll have to deal with if youre

intent on going ahead with your low-cost

foreign purchase.

Danger #1 Section 8 Properties are

rented to potentially undesirable tenantsMost low-cost properties are under the USA

government housing scheme called Section

8.

Section 8 provides housing assistance to

individuals with low or no incomes and the

high rental income is almost guaranteed to

landlords by the US government for a reason

these properties are avoided by most

American investors like the plague.

The king of Section 8 landlords is the US

housing authority. Other than the fact youhave absolute no say in dictating how much

you want to rent your property for, there are

potential trouble-making tenants to deal with,

complicated tenant application processes


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which can sometimes take months to approve

by the housing authorities, and severe

property inspections landlords have to adhere

to every year.

Unless youre living near the property, owning

such low cost foreign properties is definitely

not worth your time and investment money.

Unlike Singapore, most USA states have

housing laws that favour tenants more than

landlords. Apart from Section 8 properties,there are low-cost properties that are

tenanted by undesirable tenants who may

cause many legal problems and rental issues

for landlords.

Evicting undesirable tenants is like getting rid

of a leech as most will simply not leave. A

landlord may need to go through a lot of

trouble to apply for legal assistance that will

cost thousands of dollars in legal fees alone.

I know of a Singaporean investor who was

shocked to find out he has a criminal as his

tenant. The problem is that the tenant is on

the state police wanted list, but the complex

housing regulations that protect tenants from

being homeless or evicted without going

through proper legal proceedings.

Danger #2 Potentially Huge Property

Maintenance Costs

Low-cost properties are often very old, someas old as 50 years! Youll face expensive and

extensive property structural repairs for

broken rooftops, corroding wooden

reinforcement pillars, old broken water pipes

and other potential damages that cannot be

easily assessed at first glance.

Even small repairs or replacement for broken

doors and choke sinks can get on your

nerves, especially as a foreign landlord.


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Labour is very expensive in the USA, and

even finding a simple plumber can cause you

infuriating frustration with an inflated repair bill

on your hands.

Danger #3 Property Managers

Negligence

Hiring a property manager does not

guarantee that your property issues will go

away like magic.

Unless you are a local familiar with the real

estate market, finding a credible and

trustworthy property manager to manage your

foreign property in a large country like the

USA is equivalent to finding a needle in a hay

stack without any relevant property contacts

and network.

Even if you do find one, it does not guarantee

the property manager will be 100% focused

on your one small property.

In the USA, a property manager easily gets

paid $1,000 a month or more for managing

much larger properties like apartments and

commercial buildings, while the same

property manager gets paid only $100 a

month for managing one small property with

so much trouble. Which property do you think

he would rather focus his time and effort on?

Advice for would-be foreign investors

Be smart about your investments. As Iverepeatedly advised many buyers of foreign

properties, invest based on Partnership, not

Salesmanship. What this means is that if you

really intend to invest in a foreign country you

dont know well, find and partner a credible

knowledgeable local of that country who hassufficient local investing experience to advice

you on the pros and cons of the market. This

partner will have skin in the game with you. If

you dont have access to such credibility


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or partnership, my advice is to stay away

from that foreign investment or that

salesman.

I see many local property seminars andexhibitions cashing in on the overseas-buying

hype. Many of them are marketing and

selling low-cost foreign properties with

illusionary returns as high as 20% a year to

unwitting mass market buyers. If I may say

so, you should be careful when buying fromthem as these marketing companies are not

regulated by our Monetary Authority of

Singapore (MAS) in selling investments to

the public. In other words, there is no

recourse or any financial protection for you

as an investor. If you are buying on your own

directly, do note the above inherent dangers

youll be facing by yourself.

By guest contributor Gerald Tay, CEO of

CREI Academy Group, who exposes widely-

held property investment myths that have

proven highly ineffective in creating wealth,

and prevent a comfortable retirement for the

ordinary investor.

SINGAPORE PROPERTY WEEKLY I 115
http://www.crei-academy.com/http://aktive.com.sg/wealth-summit-2013-mountains-of-money-from-streams-of-income/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/


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Singapore Property This Week


Residential

J u r o n g E C p l o t b i d b r e ak s r e c o r d

An all-time record price for EC land has been

made for a plot in Jurong, which has long

been starved of new EC supply. The 99-year

leasehold plot near Jurong Country Clubreceived a top bid of $418.53 psf ppr with

strong participation of 16 bidders. The buzz in

the location after the strong sales at J

Gateway condo last month has also been

attributed to cause the strong demand for the

EC plot. However, two other EC sites inPunggol did not bring about such good

bidding price they only fetched top bids of

$355 psf ppr and $356 psf ppr, which wasslightly higher than the $351 psf ppr bid of

another plot at Punggol Field Walk / Punggol

East. It was reported that developers were

more mindful of a saturation of EC and 99-

year private condo projects in the

Punggol/Sengkang location. All three EC siteshad simultaneous tender closings thanks to

the governments efforts to temper tender

bids. Yet peoples opinions have been divided

on the similar tender closings time: some

believed the governments attempt has failed

to temper tender bids, while others suggestedit is too early to jump to conclusions.

(Source: Business Times)

SINGAPORE PROPERTY WEEKLY I 115


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H D B t o h e l p m o r e s i n g l e s a n d f a m i l i es b u y

t h e ir f i r st H D B f la t

The Housing and Development Board will set

aside up to 30 percent of two-room flat supply

in the latest Build-to-Order (BTO) exercise to

help eligible singles to apply for their new

flats. A total of 519 flats in Yishun and

Sengkang will be offered, with 301 units in the

new BTO projects and 218 units from the

previous BTO exercise. It has been predicted

that these flats, although located in non-

mature estates, will be well received by

singles who cannot afford the cash-over-

valuation (COV) for resale flats in the open

market. BTO was first announced in March

this year to allow first-time single Singapore

citizens aged 35 years and above who earn

up to $5000 per month to buy new two-room

standard flats in non-mature estate directly

from HDB.


H D B l a u n c h e s 3 , 8 6 1 B T O f l a t s i n Y i s h u n ,

S en g k a n g a n d B u k i t M e r a h

The HDB has launched 3,861 flats in fourprojects in Yishun, Sengkang and Bukit

Merah for sale under the July BTO exercise,

and another 218 units of two-room flats in

Yishun and Sengkang of the previous BTO

exercise. As for the four projects, two are in

Yishun: Angsana Breeze @ Yishun with 958units of three- to five-room flats of starting

prices between $159,000 and $334,000; Vine

Grove @ Yishun with 696 units of two- to

four-room flats of starting prices between

$76,000 and $258,000. As for Sengkang,

Fernvale Riverwalk has 727 units of two- tofour-room flats with starting prices between

$76,000 and $251,000.




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Fr eeh o ld c o n d o Th e Tem b u s u o p en f or

p r e vie w

Property developer Wing Tai Holdings'

freehold condominium project The Tembusu

has been open for preview this week to those

who had indicated an interest earlier. The

337-unit development is situated at Wing Tai

Holdings' former headquarters at 105 and

107 Tampines Road, 400 metres away from

Kovan MRT station. The Tembusu has one tofour-bedroom apartments, dual-key units and

penthouses in five blocks that range from 474

sq ft to 3,886 sq ft for the penthouse units.

The price of a three-bedder, which is a

common apartment type at the condo, starts

from $1,388 psf.


R e a l e st a t e cycle t o r e a ch in f le xio n p o in t

According to Real Estate Developers

Association of Singapores (Redas) head Mr.

Chia Boon Kuah, Singapores real estate

cycle is reaching an important inflexion point

with two trends increased market volatility

and a maturing property cycle. He said that

record low interest rates and sustained

inflation growth have driven buyers towards

property which is now a strong magnet as astore of wealth. On the other hand, risks in

the real estate market still remain which

include a potential pullback on the US easy

monetary policy which will increase interest

rates, Chinas recalibration of domestic

policies which will affect the global economy,and a steady supply of real estate which will



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be available in Singapore in the next four

years.


Ho m e p r ic es an d h o u si ng aff or d ab i li ty

w i t h i n r e a s o n

Contrary to Moodys assertion that rapid loan

growth and rising real estate prices have put

the health and stability of the resident

property market at stake, the Singapore Real

Estate Exchange (SRX) said that home prices

and housing affordability, measured by the

mortgage debt servicing ratio (MDSR), are

both within reason. This means Moodys

assertion could be highly questionable. Prices

of Singapore's non-landed residential homeshave increased by 104 percent between

January 2000 and June 2013.


Commercial

Ch in es e in ves tm en ts in Sin gap or e

in cr e a se

More and more Chinese capital is pouringinto Singapore real estate, and this is not only

in the residential segment. Data of investment

transactions above $50 million from CBRE

showed that Chinese capital invested in

Singapore was just short of $5 billion

following the global financial crisis. For

investments above $50 million, Chinese

capital also accounted for 69 percent of all

foreign capital invested in Singapore for the

first half of 2013, compared to only 27

percent in H1 2012 and 67 percent in H2

2012.




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Non-Landed Residential Resale Property Transactions for the Week of Jul 17 Jul 23

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

2 ICON 969 1,780,000 1,837 993 DOMAIN 21 560 950,000 1,697 99

5 BOTANNIA 1,270 1,630,000 1,283 956

5 WEST BAY CONDOMINIUM 893 970,000 1,086 99

5 THE MAYLEA 1,722 1,860,000 1,080 FH

5 REGENT PARK 915 938,000 1,025 99

5 FABER CREST 1,335 1,333,000 999 99

8 RESIDENCES @ SOMME 420 740,000 1,763 FH

9 HELIOS RESIDENCES 1,281 4,856,600 3,792 FH

9 GRANGE HEIGHTS 1,905 3,100,000 1,627 FH

9 WATERFORD RESIDENCE 1,399 2,230,000 1,594 999

10 VIZ AT HOLLAND 495 940,000 1,898 FH

10 DUCHESS RESIDENCES 1,615 3,050,000 1,889 999

10 SOMMERVILLE PARK 1,948 3,350,000 1,719 FH

10 BELLERIVE 1,001 1,720,000 1,718 FH

10 SOMMERVILLE PARK 1,302 2,120,000 1,628 FH

10 CASABELLA 1,313 2,050,000 1,561 FH

10 HOLT RESIDENCES 2,056 3,160,000 1,537 FH

10 VALLEY PARK 1,658 2,536,740 1,530 999

10 THE MERASAGA 1,356 1,950,000 1,438 99

10 DORMER PARK 1,270 1,800,000 1,417 FH

11 SKY@ELEVEN 1,851 2,918,888 1,577 FH

11 CHANCERY COURT 926 1,320,000 1,426 99

11 SHELFORD VIEW 2,669 3,800,000 1,424 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

12 EURO-ASIA APARTMENTS 2,443 2,403,000 983 FH14 CENTRAL GROVE 1,227 1,193,000 972 99

14 ATRIUM RESIDENCES 1,141 1,100,000 964 FH

14 THE ARIZON 947 760,000 802 FH

15 MEYER RESIDENCE 1,066 1,660,000 1,558 FH

15 STUDIOS@TEMBELING 786 1,150,000 1,464 FH

15 VERSILIA ON HAIG 1,313 1,755,000 1,336 FH

15 OCEAN PARK 1,302 1,678,000 1,288 FH

15 COSTA RHU 1,765 2,268,025 1,285 99

15 HAIG COURT 1,453 1,850,000 1,273 FH

15 COSTA RHU 2,056 2,550,000 1,240 99

15 BUTTERWORTH VIEW 1,216 1,460,000 1,200 FH

15 THE BALE 1,066 1,208,000 1,134 FH

15 VILLA MARINA 1,475 1,263,000 856 99

18 THE TROPICA 1,238 1,090,000 881 99

19 KOVAN MELODY 915 1,190,000 1,301 99

19 KENSINGTON PARK CONDOMINIUM 1,658 1,920,000 1,158 999

19 RIVERVALE CREST 936 830,000 886 99

19 RIO VISTA 1,249 1,080,000 865 99

19 EVERGREEN PARK 1,087 920,000 846 99

19 EVERGREEN PARK 1,173 945,000 805 99

20 GRANDEUR 8 1,216 1,338,000 1,100 99

21 THE CASCADIA 1,184 2,185,000 1,845 FH

21 SYMPHONY HEIGHTS 1,206 1,380,000 1,145 FH



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NOTE: This data only covers non-landed residential resale propertytransactions with caveats lodged with the Singapore LandAuthority. Typically, caveats are lodged at least 2-3 weeks after apurchaser signs an OTP, hence the lagged nature of the data.

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

21 HILLVIEW GREEN 1,593 1,685,000 1,058 999

21 SIGNATURE PARK 1,389 1,400,000 1,008 FH

22 THE CENTRIS 936 1,135,000 1,212 9922 LAKEHOLMZ 1,033 1,090,000 1,055 99

22 PARC OASIS 1,507 1,430,000 949 99

22 PARC VISTA 1,615 1,500,000 929 99

23 CASHEW PARK CONDOMINIUM 1,152 1,200,000 1,042 999

23 HAZEL PARK CONDOMINIUM 1,335 1,330,000 996 999

23 GUILIN VIEW 1,259 1,150,000 913 99

25 ROSEWOOD 1,173 1,030,000 878 99

25 ROSEWOOD 2,153 1,520,000 706 99

27 ORCHID PARK CONDOMINIUM 980 860,000 878 9928 SERENITY PARK 1,324 1,038,000 784 FH
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singapore property weekly issue 115

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