singapore property weekly issue 122.pdf
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CONTENTS
p2 4 Outrageous Claims Made by
Property Experts
p8 Singapore Property News This Week
p11 Resale Property Transactions
(September 4 September 10)
Welcome to the 122th edition of the
Singapore Property Weekly.
Hope you like it!
Mr. Propwise
FROM THE
EDITOR
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4 Outrageous Claims Made by Property Experts
By Gerald Tay (guest contributor)
A Business Times article titled Property
Investment Seminars on CEA Rader was
recently published, where PropNex Reality
Chief Executive Mohamed Ismail said:
Theres a need for the authorities to regulatethe content and claims by these speakers. I
support Mr. Ismails call for the authorities to
tighten the content and claims made by these
speakers, be it in property, stocks, or
commodities investment.
More Singaporeans looking at overseasproperty investments
With the implementation of multiple rounds of
cooling measures and the Total Debt
Servicing Ratio (TDSR) framework,
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more Singaporeans are looking at overseas
properties to invest in. From a business point
of view, it is enterprising for some seminar
providers to tap on this demand pool of
potential buyers with enticing claims in theiradvertisements.
Having spent more than two decades in sales
with a majority of that in direct sales, Ive
known and used every sales trick in the book.
Ifyouve been to free seminar previews, you
would know what I mean. Some speakers arein fact more a salesman than the expert they
claim to be.
From my personal wealth background and
experiences, Ill share and debunk four
popular outrageous investment claims by
property experts.
Claim #1: Own Multiple Properties in
Multiple Countries
I suspect the real reason these speakers are
saying to invest in multiple countries is to
make themselves sound like jet setting
international tycoons. They advocate that
ordinary folks should invest in multiple foreign
countries, although they give no reason fordoing so other than their contention that it is
easy and the properties are cheap.
To invest overseas, you have to learn the real
estate tax framework of each country,
numerous real-estate laws and customs and,
worst of all, how to value properties in eachcountry. Its amazing how these speakers
know so much about so many different
countries they claim to invest in when they
neither live nor were born there.
My late multi-millionaire grandfather never
owned any overseas properties outside
Singapore. I mentioned this once and he
asked, What would be the point of investing
in different countries?
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You could get some diversification against
certain nationwide risks like adverse changes
in government policies, but the potential
losses could outweigh the gains.
Also, owning in different countries does not
protect you from multi-national risks like
higher global interest rates or worldwide
recession or depression. I know of a couple of
property investors who have a vacation home
or two in foreign countries, but no competentinvestor wants to own rental properties in
multiple countries.
Some major developers have decided to
conquer the world by doing their thing
outside Singapore. Not everyone is
successful. About the only property investors
who should be in multiple countries are
owners of hotel chains and theme parks like
Disneyland.
Your rental properties generally should be in
one specific country you know very well, i.e
Singapore and maybe two at most.
Claim #2: Own Multiple OverseasProperties with Little or No Money Down
The main reason the mass market gurus
push nothing down is to overcome the
objection ofI dont have any cash to invest
when they try to peddle their expensive boot
camps ormentoring services.
Gurus do not push little or no money down
because it makes sense for an investor.
Rather they push it because it helps them
market their products and services.
I mentioned this advice to one of my USAfriends who is a local multi-millionaire real-
estate investor and he said, In the USA, a
sound,
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long-term investment, in other words, quality
properties in good neighbourhoods, is much
more important than finding a deal with 100%
financing. Even if its 100% financed, a bad
property is a bad property.
From experience, no money down is not the
bed of roses most people think, especially for
foreign investors. The type and quality of the
property offered by sellers willing to finance
you is rarely mentioned. Quality properties in
good markets rarely if ever can be bought with
little or no money down.
An example is my recent successful
acquisition of a US$2.2 million commercial
property in the USA which was financed
partially by a US bank with some cash down-payment. With tight credit financing in the US,
the only reason why banks are willing to
finance such deals is because it is a quality
property deal with a quality tenant.
Unfortunately, many local gurus have made
buying overseas properties with no or little
money down more important than buying a
quality property. Ordinary folks would be better
off in most cases spending the extra timeworking a second job and saving money for a
down payment instead.
Claim #3: Below-Market Value (BMV) Deals
are the Norm
This is an old chestnut of property gurus. Inthe real world, below-market value (BMV) or
under-valued deals are very rare. Experienced
investors regard them with suspicion. They
typically mean the buyer overpaid or the
property is just worth what it is.
Competent investors always pay market priceif it meets their required yield returns. It is
much more time consuming to find BMV
deals, so it is mainly a strategy for those
whose time has little value.
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If you always try to source for BMV deals, you
would be forced into a few niches where you
would wander the land as a sort of beggar
pleading with sellers to sell you their
properties at below-market price. You dontbecome rich by being cheap to others.
Instead of trying hard to find that magical BMV
deal, try asking yourself this: Where can I find
under-valued areas to invest in instead? Also,
Have I acquired enough financial education
to know when that opportunity comes along?
Often, the answer lies in your own backyard.
Claim #4: Anyone Can Play the Property
Game and Become Rich/a Millionaire
When property gurus peddle their expensive
boot camps or mentoring services to themasses, this makes a very compelling sales
pitch. But this is the opposite of the truth. As
long as anyone is holding on to a day job as
an employee, this dream is forever
improbable. I do not know anyone attending
those expensive boot camps or mentoring
services who have become rich or a
millionaire. Have you?
You can become wealthy through
investments, but you might not become rich or
a millionaire. Theres a huge difference in
those terms. Becoming wealthy means being
financially free without having to work (if you
dont want to) as you have other recurring
income sources. And in property, it means
recurring net income after all debts and
expenses.
You dont need a large number of properties
to become wealthy. All you ever need as an
ordinary investor is learn to acquire one or tworeally good quality properties that will put
money in your pocket every month and help
pay off your home mortgage and daily
expenses.
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Bottom-Line
The more important problem is that the
novices these gurus target cannot
tell whether the sales pitch is a bad idea or a
good idea. There are no magic formulas,
secret techniques or fanciful investment
strategies to bring you quickly from rags to
riches.
For Property Wealth, as in any successful
business venture, theres only your hardwork, constant education and an
entrepreneurial mind-set with steep learning
curves to successes. I hope youll discard
sales advice and get sound advice on
property investment through proper
education.
I welcome your comments if you are one of
those who have been ripped off with these
over-hyped claims disguised as wisdom.
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 theordinary investor.
SINGAPORE PROPERTY WEEKLY I 122
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Singapore Property This Week
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Residential
TDSR c o n t in u es t o aff ec t A u g u s t
developer sales
Despite a recovery last month, new private
home sales were suppressed in August by
the double influence of the TDSR framework
and the Hungry Ghost month. According to
the data of the Urban Redevelopment
Authority (URA), there were 742 private
homes transacted in August, not including the
hybrid ECs, which was 54 percent higher than
that of July, but just over half of 1,427 sales of
last August. Mass-market residences
dominated August property activities, with
Outside Central Region homes accounting for
73 percent of sales and 76 percent of
launches. Rest of Central Region made up 15
percent of sales and 13 percent of launches,
and Core Central Region took up 12 percent
of sales and 10 percent of launches. 726 EC
units were sold in August, compared with 112
units sold in July. Developers launched 927
units for sale in August, compared with 557
homes of July. A Religare Capital Markets
report said this was the first time that sales
have lagged for two straight months since
January last year. It is said that TDSR caused
sales to take longer to go through due to
more detailed financial assessments.
(Source: Business Times)
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H D B ex t e n d s i n t e r im h o u s i n g s c h e m e
More families now can temporarily rent an
HDB flat while waiting for their new one to be
ready through a faster and more convenient
process. Under HDBs Parenthood
Provisional Housing Scheme (PPHS),
couples engaged to be married, married
couples either as first-time or second-time
applicants, and divorced or widowed parents
with children are also eligible for applying for
these flats, with priority still reserved for
married couples. Monthly rentals for 800 flats
available are from $800 to $1,900 depending
on size and location. All eligible families can
now apply for PPHS flats on HDB's website or
at e-kiosks at any HDB Hub or branches.They can also move in faster, as they can
apply for a PPHS unit right after booking a
new flat, instead of having to wait for an
Agreement for Lease, which could take a few
months. HDB expects families to be able to
move into their interim homes by the following
month. Engaged couples can now apply for
the scheme provided that they must produce
their marriage certificate within three monthsof moving into the PPHS flat. It was reported
that the latest changes are unlikely to impact
the overall housing market much. Since the
schemes introduction in January, 327 married
couples have moved into PPHS flats.
(Source: Business Times)
H DB 5-y ear b o n d i ss u e s o ld f or $1.45
b i l l i o n
HDB had its largest bond sale ever last week,
when its $1.45 billion five-year bonds were
sold amid a volatile market. This proves that
demand is always strong for a solid
Singapore issuer. The HDB, a statutory board
and frequent issuer, initially wanted to put the
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issue at $1 billion, but then increased it to
$1.45 billion given the strong demand. The
deal was priced at 2.365 per cent, 55 basis
points above the five-year swap offer rate
(SOR) at 1.815 per cent. HDB usually sellstranches of $400 million to $500 million under
its $22 billion multi-currency medium term
note programme, but in January it had a $1.2
billion deal.
(Source: Business Times)
Commercial
Prime of f ice rent s increases by 1. 4% in Q3
A report released by Knight Frank revealed
that prime office rents increased in Q3 amid
higher leasing enquiries. On contrary toseven consecutive quarters of decreased or
flat growth, prime Grade A+ rents in Marina
Bay and Raffles Place went up by 1.4 percent
quarter-on-quarter, standing at between $9.90
and $12.00 psf. In this sub-segment, smaller
office spaces received high demand from
smaller companies who were previously
located in serviced offices and are moving
back to traditional office space. CapitaGreen,the latest premium Grade A office
development, is now open for interested
tenants with asking rents between $13 and
$14 psf. Other Raffles Place Grade A office
rents also increased by 0.6 percent quarter-
on-quarter to between $9.30 and $10.45 psf.Outside the CBD, Orchard Roads average
office rents for Grade A space increased by
0.6 percent quarter-on-quarter, to between
$7.00 and $10.90 psf. Average rents in the
Suntec/Marina Centre/City Hall area rose 0.5
percent quarter-on-quarter, while rents in theBeach Road/Middle Road decreased by 0.4
percent quarter-on-quarter.
(Source: Business Times)
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Non-Landed Residential Resale Property Transactions for the Week of Sep 4 Sep 10
NOTE: This data only covers non-landed residential resale propertytransactions with caveats lodged with the Singapore LandAuthority. Typically, caveats are lodged at least 2-3 weeks after apurchaser signs an OTP, hence the lagged nature of the data.
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
3 MERAPRIME 1,313 1,900,000 1,447 99
8 PARC SOMME 441 706,000 1,600 99
8 CITY SQUARE RESIDENCES 1,518 2,000,000 1,318 FH
9 GRANGE INFINITE 2,680 6,378,000 2,380 FH
9 ILLUMINAIRE ON DEVONSHIRE 721 1,660,000 2,302 FH
10 VALLEY PARK 1,216 2,050,000 1,685 999
10 JERVOIS GROVE 1,410 1,900,000 1,347 FH
11 NINETEEN SHELFORD ROAD 915 1,350,000 1,476 FH
11 THE ARCADIA 3,810 4,000,000 1,050 99
12 TREVISTA 1,281 1,800,000 1,405 99
15 WATER PLACE 1,227 1,600,000 1,304 99
15 VILLA MARINA 1,249 1,410,000 1,129 99
15 SERAYA BREEZE 1,001 1,128,000 1,127 FH
15 BLU CORAL 1,163 1,300,000 1,118 FH
15 MOUNTBATTEN SUITES 700 750,000 1,072 FH
15 HOMEY GARDENS 1,744 1,700,000 975 FH
15 BLU CORAL 2,056 1,680,000 817 FH
15 LAGOON VIEW 1,647 1,270,000 771 99
16 COUNTRY PARK CONDOMINIUM 1,389 1,700,000 1,224 FH
16 THE CALYPSO 764 933,888 1,222 FH16 COUNTRY PARK CONDOMINIUM 1,173 1,400,000 1,193 FH
16 BAYSHORE PARK 1,292 1,448,000 1,121 99
17 CARISSA PARK CONDOMINIUM 1,378 1,298,000 942 FH
18 LIVIA 1,539 1,460,000 949 99
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
18 DOUBLE BAY RESIDENCES 3,111 2,700,000 868 99
18 MELVILLE PARK 990 835,000 843 99
19 THE SPRINGBLOOM 1,130 1,280,000 1,133 99
20 THE GARDENS AT BISHAN 883 1,031,000 1,168 99
20 SIN MING PLAZA 1,442 1,620,000 1,123 FH
20 FLAME TREE PARK 1,862 2,080,000 1,117 FH
21 THE CASCADIA 1,421 2,579,000 1,815 FH
21 SUMMERHILL 1,604 1,815,000 1,132 FH
21 SHERWOOD CONDOMINIUM 915 1,000,000 1,093 FH
21 SIGNATURE PARK 1,690 1,760,000 1,041 FH
21 CLEMENTI PARK 1,345 1,400,000 1,041 FH
22 THE MAYFAIR 1,163 1,120,000 963 99
23 PARK NATURA 1,378 1,600,000 1,161 FH
23 HILLINGTON GREEN 990 1,088,000 1,099 999
23 PALM GARDENS 1,206 940,000 780 99
26 BULLION PARK 1,873 1,850,000 988 FH
27 EUPHONY GARDENS 732 668,000 913 99