singapore property weekly issue 17

8/4/2019 Singapore Property Weekly Issue 17

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Issue 17Copyright 2011 www.Propwise.sg. All Rights Reserved.
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CONTENTSp2 Singapore Property News This Week

p6 Will the Upcoming Supply Cause Property Prices toFall?

p11Resale Property Transactions (August 26-September 1)

p13Singapore Property Classifieds #7

Welcome to the 17th edition

of the Singapore Property

Weekly.

Weve revamped the look of

our magazine. Hope you like

it!

Mr. Propwise

FROM THE

EDITOR
mailto:[email protected]://www.propwise.sg/advertise/http://www.propwise.sg/http://www.propwise.sg/advertise/mailto:[email protected]


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SINGAPORE PROPERTY WEEKLY Issue 17

Singapore Property This Week

Residential News

Contrary to most analysts view, JLLexpects no excess in housing supply in2014 and 2015JLL is confident that there will be no excess inhousing supply in 2014 and 2015 due to stabledemand. Although the average of

approximately 50,000 HDB flats and privatehouses that will be completed in 2014 and2015 equals 2.5 times the average annualstock completed since 2001, JLL does not seethis as an issue as housing prices remainedstable in 1998 when there was high supply.Furthermore, a higher demand is expected as

population growth has exceeded the growthphysical housing stock over the past fewyears. Also, JLL predicted that property priceswill increase by an average of 7.5% annuallyfrom 2011 to 2015.

Ceylon Flats is put up for collective sale at$25.75 million to $27.39 millionAt 22-28C Ceylon Road, three-storey 21-unitwalk-up residential development Ceylon Flatsis put up for collective sale via a tender with anasking price between $25.75 million and

$27.39 million (around $800 psf ppr to $850psf ppr). Judging from the asking price, eachowner can receive about $1.22 million to $1.3million from this sale. The 999-year leaseholdproperty, which currently sits on anapproximate 23,168 sq ft plot, can potentiallybe re-developed into a five-storey residential

project that houses 50 units of 650 sq ft eachor 29 units of 1,100 sq ft each. The tenderends on October 12.

Page | 2Back to Contents


4/15

MND amended its policy: Income ceiling of$12,000 to be extended to all EC projectsMND has decided to extend the income ceilingof $12,000 to all EC projects after looking at

the appeals that it received after itsannouncement that the income ceiling of$10,000 to $12,000 will not be applicable forprojects that are launched for public salebefore August 15. MND mentioned that thisdecision will allow a larger group of intendedpotential buyers to have more projects to

choose from. Although this decision benefitsboth buyers and sellers, ERA Realty believesthat the decision will not have much impact onthe sales of current EC projects due to thecurrent economic uncertainty.

Secondary market showed a slowdown

With investments slowing down and Januaryscooling measures setting in, the secondarymarket has become prominently gloomy. Thenumber of caveats lodged for the resale ofprivate houses (excluding ECs) in January toJuly 2011 dropped 21.2% to 9,149, while

subsale caveats decreased 24.2% to 1,601 ascompared to the same period in 2010. Thegloomy situation in the secondary market canalso be attributed to the increase in supply and

attractive prices of new launches in the primarymarket.

HDB and URA launched four condo sites;these sites can yield up to 1,955 units intotalGovernment agencies URA and HDB launched

four 99-year leasehold condo sites, which canhouse up to 1,955 units in total, for sale via atender. 3 sites, which are located in PunggolCentral/ Edgedale Plains, Yishun Avenue1/Miltonia Close, and Bishan Street 14, arelaunched by HDB. The plots at Punggol andYishun, which measure 20,256.1 sq m and

16,900 sq m respectively, were put up for saleunder the GLS program, while the Bishan plotis placed under the reserve list for H2 2011.Similarly, URA also put an 18,700 sq mresidential site at Chestnut Avenue up for sale.




5/15

CapitaLand plans to launch its condoproject at Bishan by Q1 2012 at a minimumof $1,450 psfCapitaLand intends to launch its 99-year

leasehold suburban condo project in BishanCentral by Q1 2012 at a minimum price of$1,450 psf. The breakeven cost for the projectwill fall around $1,300 psf, CapitaLandmentioned. Although units in Bishan and UpperThomson areas fall between $1,300 and$1,400, CapitaLand is confident that buyers

will be attracted to the condos wonderfuldesign. The condo project will consist ofapproximately 500 apartment units in two 38-storey towers.

Property consultants predict that privatehome sale will reach 15,000 to 16,000 by

year-endSeveral property consultants predict that thesales for private houses (excluding ECs) will hit15,000 to 16,000 by the end of 2011, close tothe 16,292 units sold by developers in 2010.

Data from URA showed that developers sold1,348 private homes in August, a 3.6%decrease from the 1,398 units sold in July.However, Credo Real Estate is confident that

demand for property market is still strong, andascribed the fall in August to the Hungry GhostFestival and start of the stock market slip.

Commercial News

Greenwich V reached full occupancy ahead

of its estimated TOPFar East Organisation mentioned that the newlifestyle hub Greenwich V in Seletar is fullyleased ahead of its estimated TOP. The mainattraction of Greenwich V for retailers is itslocation: retailers are likely to build a strongcustomer base and remain competitive as

there was no central shopping mall in Seletardistrict. Some of the tenants for the shoppingmall include Cold Storage and Kopitiam.




6/15

UBS renews its lease for around 150,000 sqft space in Suntec Tower 5 for three yearsUBS, who is the current occupant of the entiretop two floors and some areas in other floors of

18-storey Suntec Tower 5, has renewed itslease for three years. A property agent fromSavills Singapore mentioned that UBS mightbe paying a rent of around $7 to $8 psf pm atSuntec Tower 5, which is higher than theestimated $4 psf pm that UBS has to pay ifthey were to relocate to suburban areas like

Changi. Although rents have begun to stabilize,it remains high amid the gloomy economicoutlook due to high occupancy.

Developers cautiousness set into industrialmarket: industrial plot at WoodlandsAvenue 12 drew only four bids

A 60-year leasehold industrial plot atWoodlands Avenue 12 drew a top bid of $142psf ppr (approximately $71.84 million) fromOKH Development, 6.6% lower than the $152psf ppr OKH paid for a neighboring plot in June2011. Additionally, the tender drew only four

bids as compared to the nine bids the tender inJune drew. The tenders result showed thatdevelopers cautiousness for residential siteshave extended to the industrial sector. CBRE

mentioned that commercial, residential andindustrial sites will experience equal level ofcautiousness from developers amid economicuncertainty.


http://www.propwise.sg/secretsofsingaporepropertygurus/


7/15

Will the Upcoming Supply Cause Property Prices to Fall?

By Mr. Propwise

In an interesting and contrarian report, Dr. ChuaYang Liang of Jones Lang Lasalle argues that thesurge in upcoming supply will not cause propertyprices to fall. In this article I will sum up hisarguments and add some of my own thoughts.

Recently several property analysts have beenarguing that a correction in the Singaporeresidential market is in the pipeline in 2014/2015due to the large stock of housing completionsduring that period (~50,000 public + private unit peryear), which is 2.5 times the average completedsince 2001.

Dr. Chua believes that residential property priceswill not fall despite this large increase in supply forthe following three reasons:



SINGAPORE PROPERTY WEEKLY I 17
http://www.joneslanglasalle.eu/ResearchLevel1/SG-Residential-NewStock-Sep2011.pdfhttp://www.joneslanglasalle.eu/ResearchLevel1/SG-Residential-NewStock-Sep2011.pdfhttp://www.joneslanglasalle.eu/ResearchLevel1/SG-Residential-NewStock-Sep2011.pdfhttp://www.joneslanglasalle.eu/ResearchLevel1/SG-Residential-NewStock-Sep2011.pdfhttp://www.joneslanglasalle.eu/ResearchLevel1/SG-Residential-NewStock-Sep2011.pdfhttp://www.joneslanglasalle.eu/ResearchLevel1/SG-Residential-NewStock-Sep2011.pdfhttp://www.joneslanglasalle.eu/ResearchLevel1/SG-Residential-NewStock-Sep2011.pdfhttp://www.joneslanglasalle.eu/ResearchLevel1/SG-Residential-NewStock-Sep2011.pdf


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1. The Singapore residential market has notcorrected based on supply alone in the lastdecade

Dr. Chua calculates two metrics he terms asthe short-term and long-term balance ofhousing stock. The short-term balancecompares his estimated household demandformation (e.g. from marriages andimmigration) with the housing completionsbased on URA and HDB data. The long-termbalance is the cumulative sum of the short-term balance over time.

He argues that if you compare this short andlong term balance of housing stock with theURA Property Price Index (PPI), you will findthat the PPI is mainly sentiment and not

supply-driven. For example, the two majorcorrections in the PPI since 1998 were in2000-2001 and 2007-2008, which happeneddue to external shocks and despite the housingbalances indicating a stock shortage.

2. Immigration is likely to continue andsupport the demand for upcoming newsupply

Dr. Chua believes that the recently mentionedpopulation target of 5.5 million by 2050 is toolow, as it suggests a growth rate of just 0.2%per year over the next 40 years, which will beinsufficient to support economic growth.

He thinks in the low case we should use the6.5 million target by 2050 (which was used byURA in the 2000 Concept Plan), and in thehigh case we could hit 5.5 million by 2015(which would involve keeping the residentpopulation growth rate at the same pace as2010 while slightly lowering the foreignpopulation growth rate).

This continued growth in population will thuscreate new demand for the upcoming supply.



SINGAPORE PROPERTY WEEKLY I 17


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3. Residual demand backlog is likely tokeep prices stable

The population has increased from 4.02 millionpeople in 2000 to 5.1 million in 2010, a 2.4%annual compounded increase (with the non-resident population growing at 5.6%compounded). But the total housing stock(private and public) has only grown from956,275 to 1,158,885, or a 1.9% annualcompounded increase.

The net effect is that the size of the averagenational household (Dr. Chua uses totalpopulation divided by total housing stockexcluding worker and student dormitoryhousing, which is different from the Censusdefinition) has increased from 4.21 people in

2000 to 4.37 people in 2010.

Dr. Chua believes that there has in effect beena backlog of demand created by the inabilityof supply to catch up with rising demand over

the past decade, and thus the upcomingsupply (together with immigration) will merelyresult in a relieving of this backlog and abalancing of long term supply and demand,with the average household size falling back toits long term average of 4.08 with a populationof 5.5 million by 2015.

The large upcoming supply will thus not crashthe market but instead help to correct thelonger term shortage of housing, and Dr. Chuaforecasts that the PPI will still record anaverage growth of 1.8% till 2015 (based on apopulation growth target of 6.5 million by2050). If the population increases to 5.5 millionby 2015, Dr. Chua forecasts a continuingdeficit in housing stock, thus pushing up pricesby 7.5% per year.

Dr. Chuas bottomline is that no matter whatthe immigration levels are, we will not see a dipin the PPI (barring an external shock).





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He also recommends that policymakerscontinue to release land to support a supply of16,000 to 24,000 housing units per year.

My thoughts on Dr. Chuas arguments

I think Dr. Chuasresidualdemand argumentis interesting and introduces the notion of along term demand backlog caused by theinability of supply to catch up with ourpopulation growth over the last decade (mainlydriven by immigration).

Im not sure, however, about his forecast of asteadily rising PPI.

First, while the upcoming supply may serve tobalance out the demand backlog in the long

term, I think that in the short term there can stillbe a serious case of indigestion by a largeamount of supply coming onto the market overa short time period.

Second, Dr. Chua takes the current price levelsas fair and then forecasts the matching ofsupply and demand going forward. Could thecurrent price levels already reflect a severesupply shortage situation, and correct tofairer levels when the new supply comesonline? Markets are made at the margin, andprices are determined when marginal demandmeets marginal supply.

Thirdly, there could also be different outcomesfor different segments of the market. Forexample, the rental market for shoebox units ispredicated on the continuing inflow ofprofessional immigrants, which will be affectedif this does not happen.

Fourthly, as Dr. Chua points out himself, in the

short term the PPI is largely driven bysentiment and not by movements in supply.





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We could potentially see external shockscoming from a Developed world recession,European crisis etc., which would impactSingapores open economy negatively.

At the same time, many international investorsare also starting to see Singapore and theSingapore Dollar in particular as a safehaven. This could lead to foreignerscontinuing to support the high end market, asweve seen in Hong Kong with the influx ofChinese buyers.

With so much uncertainty in the markets, Ibelieve investors should adopt a cautiousattitude, but be on the lookout for opportunities as we saw during the last Global FinancialCrisis, the window for buying low can come

and go quickly!



http://www.moneymatters.sg/


12/15

Non-Landed Residential Resale Property Transactions for the Week of Aug 26 to Sept 1

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

1 THE SAIL @ MARINA BAY 1,033 2,680,000 2,594 99

1 THE SAIL @ MARINA BAY 1,959 4,917,000 2,510 99

1 THE SAIL @ MARINA BAY 667 1,500,750 2,249 99

3 CENTRAL GREEN CONDOMINIUM 926 1,450,000 1,566 99

3 DOMAIN 21 926 1,300,000 1,404 99

3 HARVEST MANSIONS 1,023 980,000 958 99

5 VARSITY PARK CONDOMINIUM 1,496 1,660,000 1,109 99

5 WESTCOVE CONDOMINIUM 1,216 1,015,000 834 99

7 SUNSHINE PLAZA 1,044 1,326,000 1,270 99

7 THE PLAZA 840 940,000 1,120 99

8 CITYLIGHTS 893 1,245,000 1,394 99

8 KENT RESIDENCES 775 870,000 1,123 FH8 R66 APARTMENTS 958 1,073,000 1,120 FH

8 KENTISH GREEN 1,044 960,000 919 99

9 THE METZ 1,023 2,557,500 2,501 FH

9 SCOTTS 28 1,098 2,420,000 2,204 FH

9 RIVERGATE 1,798 3,883,680 2,160 FH

9 THE COSMOPOLITAN 1,679 3,500,000 2,084 FH

9 THE TRILLIUM 1,399 2,900,000 2,072 FH

9 THE TRILLIUM 1,798 3,658,930 2,035 FH

9 LEONIE STUDIO 936 1,868,000 1,995 99

9 URBANA 1,313 2,547,220 1,940 FH

9 YONG AN PARK 3,541 5,540,000 1,564 FH

9 OLEANAS RESIDENCE 1,141 1,750,000 1,534 FH

10 ST MARTIN'S RESIDENCES 603 1,537,650 2,551 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

10 LATITUDE 1,324 2,800,000 2,115 FH

10 CUSCADEN RESIDENCES 1,238 2,460,000 1,987 FH

10 THE ASTON 657 1,020,000 1,553 FH

10 PROXIMO 1,119 1,638,000 1,463 FH

10 THE BALMORAL SPRING 1,076 1,568,000 1,457 FH

10 DUCHESS CREST 936 1,263,600 1,349 99

10 MUTIARA VIEW 1,130 1,500,000 1,327 FH

10 GLENTREES 3,670 4,250,000 1,158 999

11 SKY@ELEVEN 1,851 3,072,660 1,660 FH

11 THOMSON 800 1,625 1,990,000 1,224 FH

12 THE MARQUE @ IRRAWADDY 883 1,010,000 1,144 FH

12 CHELSEA GROVE 990 1,060,000 1,070 FH12 OLEANDER TOWERS 893 900,000 1,007 99

12 MOONSTONE RESIDENCES 1,044 930,000 891 FH

12 ST FRANCIS COURT 1,270 920,000 724 99

14 CASA SARINA 1,324 1,215,000 918 FH

14 BLOSSOM VIEW 990 806,000 814 FH

14 BLOSSOM VIEW 1,001 795,000 794 FH

14 BOUGAINVILLA APARTMENTS 1,152 780,000 677 FH

15 TELOK MANSION 893 1,400,000 1,567 FH

15 THE ESTA 1,647 2,150,000 1,305 FH

15 ONE AMBER 1,701 2,211,300 1,300 FH

15 THE AMBROSIA 1,313 1,550,000 1,180 FH

15 COSTA RHU 1,776 1,900,000 1,070 99

15 FERNWOOD TOWERS 1,636 1,700,000 1,039 FH





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Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

15 CANARY VILLE 1,087 960,000 883 FH

15 VILLA MARINA 1,625 1,180,000 726 99

16 COSTA DEL SOL 1,227 1,570,000 1,279 99

16 RIVIERA RESIDENCES 1,281 1,388,000 1,084 FH

16 CASA MERAH 1,238 1,300,000 1,050 99

16 PARBURY HILL CONDOMINIUM 840 880,000 1,048 FH

16 LANDBAY CONDOMINIUM 1,044 1,088,888 1,043 FH

16 THE BAYSHORE 1,227 1,135,000 925 99

16 PARBURY HILL CONDOMINIUM 1,453 1,330,000 915 FH

16 THE BAYSHORE 980 890,000 909 99

16 THE BAYSHORE 1,184 1,030,000 870 99

16 VILLAS LAGUNA 2,002 1,680,000 839 FH

17 LOYANG VALLEY 1,873 1,180,000 630 99

19 SUNSHINE LODGE 786 700,000 891 FH19 JANSEN SPRING 1,281 1,050,000 820 999

19 REGENTVILLE 1,152 890,000 773 99

19 CHILTERN PARK 1,475 1,050,000 712 99

19 RIVERVALE CREST 1,453 1,030,000 709 99

20 BISHAN 8 1,163 1,330,000 1,144 99

20 THE GARDENS AT BISHAN 883 850,000 963 99

20 CLOVER BY THE PARK 1,604 1,520,000 948 99

21 MAPLEWOODS 1,324 1,580,000 1,193 FH

21 SOUTHAVEN II 1,507 1,460,000 969 999

21 HUME PARK I 904 815,000 901 FH

21 CLEMENTI PARK 1,184 1,065,000 899 FH

21 HUME PARK II 1,023 860,000 841 FH

23 THE MADEIRA 1,668 1,500,000 899 99

23 HILLBROOKS 1,076 950,000 883 FH

23 CENTURY MANSIONS 1,012 868,000 858 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

23 MAYSPRINGS 915 765,000 836 99

23 MAYSPRINGS 818 665,000 813 99

23 THE MADEIRA 1,324 1,059,200 800 99

23 REGENT HEIGHTS 1,163 870,000 748 99

23 REGENT HEIGHTS 1,163 860,000 740 99

23 PARKVIEW APARTMENTS 1,141 825,000 723 99

23 PALM GARDENS 1,206 852,000 707 99

23 MAYSPRINGS 1,313 870,000 662 99

23 THE WARREN 1,862 1,210,000 650 99

27 ORCHID PARK CONDOMINIUM 1,195 820,000 686 99

27 SUN PLAZA 1,313 888,000 676 99

NOTE: This data only covers non-landed residential resale propertytransactions 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.





14/15

Singapore Property Classifieds #7

For Sale

Soho Central 19F Office 883sf ask$2700psf neg. Marina Bay view. Vacant.$1800/Q maint. Also for rent at $9psf. CallS. Ganesh @ 91732881

Luma 1173sf 2BR+2BA ask $2000psf. Bigbalcony, luxury finish, good facilities. $400maint. Also for rent at $6k! Call S. Ganesh@ 91732881

Soho1@Central 9F 635sf ask $2200psfneg. Clarke Quay view. Tenanted till01/12@$5k. $975/Q maint. New rent~$8.5psf. Call S. Ganesh @ 91732881

Waterfront Gold 3BR 1227sf. Face poolM/F. TOP 2014. Mins to Future MRT. BkVal $1.28m Ask $1.26m.Serious seller. CallMelissa Leow 81339866





15/15

D11 Adria @ Derbyshire Rd. 18F 2BR850sf FH ask $2000psf. Novena/NewtonMRT, United Square/Novena Medical

Hub/SJI. Call owner 97505201

For Sale

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Lagoon View for sale, 1647sqft, 3+1spacious, middle floor, tenanted till Dec'11.Call Crystal 94788324 (R007793G)
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singapore property weekly issue 17

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