singapore property weekly issue 223
TRANSCRIPT
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8/20/2019 Singapore Property Weekly Issue 223
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Issue 223Copyright © 2011-2014 www.Propwise.sg. All Rights Reserved.
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CONTENTS
p2 What is Impact of the Renminbi’s Devaluation
on Singapore?
p8 Singapore Property News This Week
p11 Resale Property Transactions
(August 12 – August 18 )
Welcome to the 223th edition of the
Singapore Property Weekly .
Hope you like it!
Mr. Propwise
FROM THE
EDITOR
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SINGAPORE PROPERTY WEEKLY Issue 223
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By Paul Ho (guest contributor)
China is currently Singapore’s biggest export
market, accounting for 14% of our export
value. Therefore a devaluation vis-à-vis the
Singapore dollar will make Singapore’s goods
more expensive to the Chinese.
To put matters into perspective, five years
ago, 1 Singapore Dollar (SGD)traded as high
as 5.33 Chinese Renminbi (RMB). Now
1SGD trades for 4.48 RMB. The RMB hasstrengthened a lot against the Singapore
dollar.
What is Impact of the Renminbi’s Devaluation onSingapore?
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The rise of the US Dollar
The recent rise of the US Dollar (USD)tracks
the United States’ gradual emergence from
the recession with its unemployment ratedropping to 5.3% (as at July 2015) and an
impending rise of Federal Funds Target Rate,
making the USD and US assets attractive.
Hence, many currencies are weakening
against the USD. Given that the US and
Japan have unilaterally devalued their currency via Quantitative Easing (also known
as printing money) while China’s RMB has
strengthened for years against the major
currencies, a slight devaluation of the RMB is
understandable. The fact that China tolerated
years of higher currency value attests to its
new determination to be seen as a
responsible world partner in global
economics.
With its current devaluation, it is still a long
way from its lowest point. China’s RMB has
been spot trading at the lower limit of the 2%
band, hence the ~2% devaluation is in line
with market forces. However what is unknown
is how the market will react when the last
day’s prices will become the midpoint of the
band for the next day for the mid to longer
term.
Capital flight from China?
There should not be too much worry of capital
flight from China. China’s massive foreign
reserves amounting to ~US$3 trillion is more
than sufficient to support the currency and the
Chinese central bank can easily sell USD
treasury bonds for RMB.
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The RMB has risen from June 2010 to May
2013 by over 15% against a trade weighted
basket of some 61 currencies, according to
data from the Bank of International
Settlements. Hence, this devaluation shouldbe seen in the correct perspective. When
market forces recover, it could well
appreciate.
Chart 1: Bank of International Settlements
Impact of the RMB devaluation on
Singapore
As Singapore is an advanced economy,
exports to China may be intermediate or
advanced value-added-products which may
not be as price sensitive and hence it should
be able to withstand some price increase.
If Chinese nationals think that the devaluation
of the RMB is a trend, we may yet see some
exodus of funds from the wealthy Chinese tothe rest of the world. Tom Orik, Chief
Economist at Bloomberg, estimated that a 1%
drop in currency value leads to an exodus of
about $40 billion of funds, with a three month
lag. We may see a fraction of this $40 billion
come onto Singapore’s shores.
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Chart 2: CNY per 1 SGD, XE
The RMB (or Yuan) has gradually devalued
against the Singapore dollars. But in the last
few years the Yuan has been even stronger
against the Singapore dollar.
Will China’s currency weakening cause
SIBOR to rise?
Singapore manages its exchange rate against
a trade-weighted basket of major currencies.
As China is Singapore’s major trading
partner, it is almost certain that China’s RMBis one of the component currencies that
Singapore manages against.
If China’s currency weakens, it could also
drag the Singapore Dollar lower against the
US Dollar as Singapore needs to carefully
manage its currency vis-à-vis a basket of
currencies.
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When the Singapore Dollar drops against the
US Dollar, there is a chance that Sibor
interest rates will have to rise to keep pace
ith the exodus of funds.
Impact on exports and Singapore
companies
I foresee that a 2% devaluation of the RMB
ill not significantly affect Singapore’s
exporters as Singapore is an advanced
economy which exports intermediate goodsand valued added products, hence these
products should be able to withstand a 2%
impact.
In the best case scenario, exports to China
may even rise in value due to RMB
devaluation as many of the factories or
imports may be already contracted and
committed beforehand and probably
denominated in USD.
In the worst case, exports may fall if
exporters are unwilling to adjust prices to
absorb the increase in prices. However do
note that a 2% devaluation against the USD
is not necessarily a 2% devaluation againstthe SGD as the SGD is also devaluing
against the USD.
Shares of Singapore exporters which have a
big component of China sales will be
impacted. China’s stock markets may seeimpact from the exodus of funds, but it is hard
to estimate the effect now.
What is the impact on the property
market?
I doubt the devaluation would impact
Singapore’s real estate market in a big way,
unless China’s wealthy start to move their
funds to Singapore by purchasing commercial
or industrial properties.
SINGAPORE PROPERTY WEEKLY I 223
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Positive development from China’s
removal of a pegged mid-point
China's central bank generally sets a daily
midpoint for the yuan, around which the
currency can move up and down within 2%.
But on Tuesday 11 Aug 2015, the People's
Bank of China surprised markets by
announcing that going forward, the midpoint
ill be based on the previous day's closing
price.This moves China towards greater exchange
rate flexibility and a more freely traded
currency. With this move, China moves one
step closer towards having the RMB included
into the IMF’s basket of special drawing rights
currencies, an elite group of currencies used
to value reserve assets. One day, the RMB
may become the world’s top reserve
currency.
While China still can intervene in the currency
market, the exchange rate is now more freely
traded as the mid-point price is determined by
the previous day’s closing price. Market
forces will dictate how much the currency will
trade. China’s central banks can intervene
when the need arises.By Paul Ho, holder of an MBA from a
reputable university and editor of
www.iCompareLoan.com, Singapore’s first
Cloud-based Home Loan reporting platform
used by Property agents, financial advisors
as well as Mortgage brokers.
SINGAPORE PROPERTY WEEKLY I 223
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Singapore Property This Week
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Residential
N o n - la n d e d p r i v a t e h o m e p r i c es s t a b i li s e d
a fter th r e e mo n th s o f d e c l i n e s
According to flash estimates by the National
University of Singapore, prices of completednon-landed private homes have stabilised
after three consecutive months of decline.
The overall Singapore Residential Price Index
(SRPI) fell 0.3% month-on-month in April,
0.6% month-on-month in May and 0.1%
month-on-month in June. Nicholas Mak from
SLP International said that prices may
continue to fall in the coming months as the
supply of completed private homes is
expected to increase. Mak predicts that the
full-year decline in the overall SRPI would be
around 3 to 4%. In July, the SRPI sub-index
for central region increased 0.2% month-on-
month, while the SRPI for non-central regionfell by 0.2% in the same period. Wong Xian
Yang from OrangeTee believes that the price
drop in the non-central region could be due to
landlords’ lowered rental expectation and
increased vacancy rates.
(Source: Business Times)
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HDB an d EC in co m e c ei l in g w ill b e
i nc r eas ed
Income ceilings for both HDB flats and
executive condominiums (ECs) will be raised
from $10,000 to $12,000 and $12,000 to
$14,000 respectively. According to Prime
Minister Lee Hsien Loong, this increase in
income ceiling will allow more Singaporeans
to buy new HDB flats and ECs as incomes
have increased since 2011 when the ceilingas last raised. Not only so, couples are
marrying later and hence are more likely to
have crossed the income ceiling by the time
they settle down. Besides that, the Special
CPF Housing Grant (SHG) will be extended
to cover households with income ceilings thatare not above $8,500. The current maximum
SHG amount has also been doubled to
$40,000. To help second-timer rental
households own a two-room flat, the Fresh
Start Housing Scheme was also
implemented. These flats will have shorter
leases and stricter resale conditions thus
making them more affordable. According to
Desmond Sim from CBRE, higher incomeceilings and grants will help increase
demand.
(Source: Business Times)
247 un i t s s ol d at S ol A c r es
247 units out of the 1,327 units at Sol Acres
have been sold—making it the best-selling
executive condominium project thus far this
year. Located at Choa Chu Kang Grove, units
at the executive condominium have been
released for sale at an average price of $780
psf. The project which includes three
clubhouses, three swimming pools and two
tennis courts is located near two LRT
stations.
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One-bedders are priced from $356,000, two
bedders cost about $452,000, three-bedders
cost at least $667,000, and four-bedders cost
about $866,000 while five-bedders are priced
from $1.028 million at Sol Acres.
(Source: Business Times)
Commercial
Weak d em an d f o r i n du st r ial s ites in
T ampi nes and U bi
Two sites that have been zoned for Business
2 development at Tampines Industrial Drive
(Plot 6) and Ubi Avenue 1 have not been well-
received by developers. Both sites which
have short tenures have received low bidding
interest. The Tampines site which was 0.47ha large and a 20-year tenure received a top
bid of $4.94 million or $69.21 psf ppr. The
other site which was 0.6 ha large and has a
30-year tenure received the highest bid of
$19.86 million or $120.91 psf ppr. Nicholas
Mak from SLP International said that due to
the size of the site, the buyer may develop it
into facilities for its own use. Market experts
believe that since the implementation of cooling measures such as the seller’s stamp
duty and the total debt servicing ratio
framework, developers’ interest in industrial
sites may have fallen.
(Source: Business Times)
SINGAPORE PROPERTY WEEKLY Issue 223
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Non-Landed Residential Resale Property Transactions for the Week of Aug 12 – Aug 18
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
1 MARINA BAY RESIDENCES 1,636 4,390,000 2 ,683 99
3 MERAPRIME 840 1,185,000 1,411 99
3 ASCENTIA SKY 1,851 2,578,888 1,393 99
3 TIONG BAHRU ESTATE 1,658 1,260,000 760 9999
5 THE ROCHESTER 1,701 2,330,000 1,370 99
5 THE ROCHESTER 1,216 1,635,000 1,344 99
5 THE VISION 1,302 1,530,000 1,175 99
5 THE INFINITI 1,270 1,180,000 929 FH
5 PALM GREEN 1,292 1,200,000 929 FH
5 FABER CREST 2,088 1,625,000 778 99
8 SOHO @ FARRER 495 700,000 1,414 FH
9 THE METZ 570 1,380,000 2,419 FH
9 CENTENNIA SUITES 1,238 2,525,000 2,040 FH
9 THE IMPERIAL 2,077 4,125,000 1,986 FH
9 CAIRNHILL CREST 1,733 3,220,000 1,858 FH
9 LUMA 743 1,263,100 1,701 FH
9 CLAREMONT 1,206 1,830,000 1,518 FH
9 ASPEN HEIGHTS 1,582 2,325,000 1,469 999
10 GOODWOOD RESIDENCE 1,970 4,300,000 2,183 FH
10 ST MARTIN RESIDENCE 624 1,308,000 2,095 FH
10 G RANGE RESIDENCES 2,583 5,350,000 2,071 FH
10 THE SIXTH AVENUE RESIDENCES 1,356 2,000,000 1,475 FH
10 MONTVIEW 1,679 2,150,000 1,280 FH
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
11 TRILIGHT 1,195 2,233,888 1,870 FH
11 NINETEEN SHELFORD ROAD 904 1,375,000 1,521 FH
11 GILSTEAD 38 980 1,430,000 1,460 FH
12 TREVISTA 1,808 2,100,000 1,161 99
14 WATERBANK AT DAKOTA 581 795,000 1,368 99
14 VACANZA @ EAST 1,023 1,215,000 1,188 FH
14 ASTOR 1,109 948,000 855 99
15 SILVERSEA 980 1,580,000 1,613 99
15 THE SEA VIEW 1,518 2,300,000 1,515 FH
15 JUPITER 18 388 585,000 1,510 FH
15 THE MAKENA 1,636 2,350,000 1,436 FH
15 CAMELODGE 840 910,000 1,084 FH
15 THE HACIENDA 2,196 2,196,000 1,000 FH
16 BAYSHORE PARK 936 960,000 1,025 99
16 THE BAYSHORE 1,023 800,000 782 99
17 DAHLIA PARK CONDOMINIUM 1,119 815,000 728 FH
18 S AVANNAH CONDOPARK 1,453 1,218,000 838 99
18 THE TROPICA 1,227 988,000 805 99
18 TAMPINES COURT 1,658 890,000 537 101
19 KOVAN RESIDENCES 1,798 2,100,000 1,168 99
19 SUNGLADE 1,044 1,117,000 1,070 99
19 KOVAN MELODY 1,227 1,250,000 1,019 99
19 REGENTVILLE 980 810,000 827 99
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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.
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
19 KOVAN LODGE 1,776 1,380,000 777 FH
19 RIO VISTA 1,238 950,000 767 99
19 RIO VISTA 1,249 935,000 749 99
20 BISHAN POINT 936 1,028,000 1,098 99
20 THE WINDSOR 1,927 1,835,000 952 FH
21 THE HILLSIDE 1,302 1,323,000 1,016 FH
21 GRAND REGENCY 1,119 1,100,000 983 FH
21 LE WOOD 1,259 1,080,000 858 99
21 PINE GROVE 1,324 960,000 725 99
22 CASPIAN 1,399 1,400,000 1,000 99
22 LAKEHOLMZ 1,238 1,118,000 903 99
22 PARC OASIS 1,227 1,050,000 856 99
23 THE WARREN 1,259 888,000 705 99
27 EUPHONY GARDENS 2,056 1,310,000 637 99
28 SELETAR SPRINGS CONDOMINIUM 2,067 1,300,000 629 99
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