singapore property weekly issue 182

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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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
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SINGAPORE PROPERTY WEEKLY Issue 182

Page | 2Back to Contents

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


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.


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.




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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.


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.




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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.


http://www.moneymatters.sg/


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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

singapore property weekly issue 182

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