singapore property weekly issue 118

7/30/2019 Singapore Property Weekly Issue 118

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Issue 118Copyright 2011-2013 www.Propwise.sg. All Rights Reserved.
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CONTENTS

p2 How to Be a Contrarian Property Investor

p7 Singapore Property News This Week

p12 Resale Property Transactions

(August 7 August 13)

Welcome to the 118th edition of the

Singapore Property Weekly.

Hope you like it!

Mr. Propwise

FROM THE

EDITOR
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SINGAPORE PROPERTY WEEKLY Issue 118

Page | 2Back to Contents

How to Be a Contrarian Property Investor

By Mr. Propwise

While the term Contrarian Investor is typically

used for someone who invests against the

crowd in the stock market, it is also

applicable for property investing. In this post

we'll look at how Contrarian PropertyInvestors think, why it makes sense to be

one, and how to think like one.

What is a Contrarian Investor?

Wikipedia defines a Contrarian Investor as

"one who attempts to profit by investing in amanner that differs from the conventional

wisdom, when the consensus opinion

appears to be wrong.


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In other words, it's a way of thinking. This sort

of thinking can be applied across any

investible asset class. In stocks, a Contrarian

Investor will buy shares when excessive

pessimism about a company's prospects

drives its stock price to unjustifiable lows, and

sell when widespread optimism drives its

stock price to unjustifiable highs.

Similarly, a Contrarian Property Investor

will buy property when prices have beendriven down due to widespread

pessimism about the economy and the

market, and sell when there's over-

bullishness on the property market

despite a large run up.

The essence of being a Contrarian Investor is

captured in this famous Warren Buffett quote:

"We simply attempt to be fearful when

others are greedy and to be greedy only

when others are fearful."

Why be a Contrarian Investor?

Simply put, Contrarian Investing is the most

reliable way over the long run to minimize therisks and maximize the profits of investing.

Making money in investing is simple - Buy

Low and Sell High. Yes, we've heard that a

thousand times. But yet the majority of

investors do the opposite, driven by greed

during Bull Markets to buy after prices have

run up (and in their mind extrapolating this

increase into the infinite future), and then by

fear during Bear Markets to dump the asset

they had paid dearly for because everyone

else is doing so.The skilled Contrarian Investor profits by

placing himself on the other end of this

trade, and makes money not by following

the crowd but by being ahead of it.


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The Pain of Being on the Wrong Side of

the Cycle

There are painful consequences to being on

the wrong side of the cycle (i.e. buying at thepeak and then being forced to sell at the

trough). While this is bad when investing in

any asset class, it is especially traumatic in

property investing because of two factors:

1. The use of leverage

2. The high total price of a property

Because of these two factors, a 10% fall in

property prices could mean wiping out 50% of

your equity due to the leverage, and years of

savings due to the large dollar quantum.

It's not uncommon for ten years' worth of

savings to be wiped out by a bad property

decision. There are many people who

bought Singapore property at the peak in

1996 just before the Asian Financial Crisis

and have only just broken even after 15+

years. If we factor in inflation, interest costs

and the value of lost opportunities, they've

had a negative return after all these years

despite the massive Bull Market in property

these last few years!

How to become a Contrarian Investor

You should know that it's not easy being a

Contrarian Investor. It is far too easy to beswept up by sentiment, whether euphoria or

despair. Sentiment is contagious, and you

can't escape it - you will get infected when

you read the papers, watch the news, or chat

over lunch with your colleagues.

Being a Contrarian Investor requires a

huge amount of courage. You need to

believe that you're right and everyone else is

wrong. You need to believe that you're the


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(investment) genius when everyone thinks

you're crazy.

The question is - how do you know you're not

crazy?

Get on the Right Side of the Cycle

I believe the answer lies in using facts and

data to guide your decisions, not hearsay,

rumours, opinions or gossip.

But it's not easy to wade through theenormous amount of data out there to come

up with your own investing system. A simple

way to do so is to use the Property Market

Cycle Model (PMCM) created by Property

Market Insights (PMI) to help you time your

property investing and get the BIG pictureright.

Instead of being swept up by sentiment and

doing the wrong thing at the wrong time,

understanding the property cycle will help you

get on the right side of the wave, potentially

adding hundreds of thousands of dollars (or

more) to your net worth over a cycle, and

saving you from disastrous mistakes.

Property Market Timing in Action

The PMCM is not some BS theory that

sounds good on paper but leaves you

scratching your head as to what to do next. It

tells you where we are in the current cycleand guides your decisions by providing a

historical context of what happened during

similar parts of the cycle in the past.

And I eat my own cooking. When the PMCM

indicated that we were in the Late Bull stage

of the property cycle in late 2011, I put my

property on the market. I was asking for a

fairly high (but not unreasonable) price, but

due to the weak resale market
http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/


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SINGAPORE PROPERTY WEEKLY I 118


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Singapore Property This Week


Residential

BTO flat grant extensions for lower and

middle-incom e households

The government will be extending a variety of

grants for lower and middle-income

households to allow them to pay off their flats

in 25 instead of 30 years. The Special CPF

Housing Grant (SHG) for lower and lower-

middle-income first-timers will be extended

from two-room and three-room flats to include

four-room flats. In his annual National Day

Rally speech, Prime Minister Lee Hsien

Loong said that middle-income households

will also benefit, while a middle-income

household can get up to $20,000 more if they

buy a new flat. Currently, the SHG is given on

top of the Additional CPF Housing Grant for

eligible first-timer families applying to buy a

two-room or three-room standard flat in a

non-mature estate. After the enhancements,

homebuyers using their CPF funds to pay

their loans should be able to pay off their flats

in 25 years instead of 30. Hence, their income

in later years can be used as their retirement

savings. It was reported that although the

grants would probably have no impact on the

private housing market, a small percentage of

people could be drawn away from the resale

market given that they can now get a grant if

they get a BTO flat instead.

SINGAPORE PROPERTY WEEKLY I 118


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Another type of grant, the Step-Up Housing

Grants will be extended to families who can

afford to buy only two-room flats to help them

upgrade to three-room flats later, which is to

ensure that every Singaporean family who isworking can afford a home. PM Lee said that

we could maintain the value of HDB flats over

the years, with flats kept affordable for future

flat buyers so that every Singaporean family

who is working can afford an HDB flat.

(Source: Business Times)

800 ha of land freed up fo r new homes

An 880 ha area will be freed up for new

homes, offices, factories and parks after Paya

Lebar Air Base relocates to a Changi site.

The land area, which is larger than Bishan or

Ang Mo Kio, will provide breathing space for

Singaporeans and rejuvenate a bigger area of

eastern Singapore, going all the way down to

Marina and Marina South.


Luxury h omes m arket st i l l under pressure

The luxury homes market is reported to be

under pressure on rental and price fronts.

Specifically, Singapore was the only market

out of nine featured in the Asia-Pacific to

witness a decline in capital values. According

to the latest Jones Lang LaSalle (JLL)

Residential Index, values of Singapore luxury

homes fell 0.6 percent quarter-on-quarter for

the third consecutive quarter, and 2.1 per

cent year-on-year, as the rounds of cooling

measures continued to affect investor

sentiment. Although price dips have been

slowing in the last few quarters, the

introduction of the total debt servicing ratio

(TDSR) in June has brought in a degree of

downside risk,



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according to Dr Chua Yang Liang, head of

research for Singapore and South-east Asia

at JLL. Dr Chua said he expected capital

values for luxury homes to correct a further 3-

5 per cent in the second half of 2013.


OSIM founders GCB could set new psf

pr ice record

OSIM founder Ron Sim is looking to sell his

Bin Tong Park home for $117 million. Ifsuccessful, he could set a new record price

on a psf basis for a property in a Good Class

Bungalow (GCB) area. The property is made

up of two plots of freehold land together

measured at 46,842 sq ft. The built-up area of

Mr Sim's home is about 22,000 sq ft. MrSims asking price is about $2,500 psf, while

the record price for a property in a GCB area

currently stands at $2,110 psf, and was set

last October when bungalow investor George

Lim sold one in Leedon Park for $33 million.


Allgreen Prop ert ies to s tart River Valley

condo salesAllgreen Properties is releasing its RV

Residences, a seven-storey 999-year

leasehold project on River Valley Road in

front of Valley Park, near the proposed Great

World MRT Station on the Thomson Line.

After early-bird discounts, the average price isexpected to be below $2,000 psf for the initial

batch of units, which are expected to number

50-80. The development is expected to

receive Temporary Occupation Permit in the

second quarter of 2014. With 248 units, RV

Residences have one-bedroom apartments tofive-bedroom penthouses. Absolute prices will

range from $833,000 for a 419 sq ft one-

bedder on the second floor. The most

expensive unit, a 1,539 sq ft penthouse,



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will cost about $2.8 million. The duplex unit

will have five bedrooms and a study corner.

The project also includes a gym, swimming

pool and garden. DTZ is the project's

marketing agent. Meanwhile, in SengkangWest, City Developments Ltd (CDL) had sold

289 units or 76 per cent of its 380-unit EC

project Lush Acres with an average price of

$785 psf. Absolute prices range from

$704,000 to $1.275 million. The development

includes three to five-bedroom units. Unitsizes are from 915 sq ft for a three-bedroom

apartment to 1,722 sq ft for a five-bedroom

apartment.


Commercial

CapitaLand could have strata sales at

Westgate Tow er

Contrary to its announcement a year ago that

it will be moving to Westgate Tower in Jurong

East, CapitaLand announced that it will retain

its corporate headquarters at Capital Tower in

CBD. However, CapitaLand was silent on its

plan for Westgate Tower, the 20-storey officeblock which is part of a retail-office project on

a 99-year leasehold site near Jurong East

MRT Station set to be completed in late 2014.

CapitaLand could have occupied half of

Westgate Tower. But all 320,000 sf NLA in the

tower is now available.


CAG in new partnership w ith CapitaMalls

As ia for Project Jewel

Changi Airport Group (CAG) has decided to

embark on a partnership with CapitaMalls

Asia (CMA) for Project Jewel, after it

considered bids from six local and

international real estate firms.


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Non-Landed Residential Resale Property Transactions for the Week of Aug 7 Aug 13

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

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

1 THE CLIFT 527 1,250,000 2,370 99

3 THE METROPOLITAN CONDOMINIUM 721 1, 261,750 1, 750 99

3 REGENCY SUITES 980 1,630,000 1,664 FH

4 THE RESIDENCES AT W SINGAPORE SENTOSA COVE 1,658 4,518,648 2,726 99

9 LEONIE STUDIO 936 1,800,000 1,922 99

9 CAIRNHILL PLAZA 2,293 4,200,000 1,832 FH

10 ASTRID MEADOWS 3,800 7,000,000 1,842 FH

10 HOLLAND PEAK 1,313 1,800,000 1,371 FH

11 PARK INFINIA AT WEE NAM 1,421 2,760,000 1,943 FH

11 28 SHELFORD 840 1,308,000 1,558 FH

11 WATTEN HILL 2,626 3,480,000 1,325 FH

12 THE TIER 495 800,000 1,616 FH

12 THE ARTE 1,399 1,982,000 1,416 FH

15 THE MAKENA 926 1,338,000 1,445 FH

15 HERITAGE EAST 495 710,000 1,434 FH

15 COSTA RHU 1,345 1,550,000 1,152 99

15 FORTUNE SPRING 2,390 1,828,000 765 FH

16 THE TANAMERA 947 873,000 922 99

17 FERRARIA PARK CONDOMINIUM 936 950,000 1,014 FH

17 CHANGI GARDEN 1,475 1,050,000 712 FH

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

18 SAVANNAH CONDOPARK 1,023 1,020,000 997 9918 RIS GRANDEUR 1,356 1,330,000 981 FH

19 CHUAN PARK 710 810,000 1,140 99

19 CHUAN PARK 1,173 1,230,000 1,048 99

19 EVERGREEN PARK 1,023 840,000 821 99

21 PINE GROVE 1,927 1,640,000 851 99

22 PARC OASIS 1,227 1,275,000 1,039 99

22 PARC VISTA 1,281 1,080,000 843 99

27 THE SENSORIA 1,001 992,000 991 FH

28 SERENITY PARK 1,098 1,100,000 1,002 FH

singapore property weekly issue 118

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