Singapore Property Weekly Issue 187

8/10/2019 Singapore Property Weekly Issue 187

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Issue 187Copyright 2011-2014 www.Propwise.sg. All Rights Reserved.
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CONTENTS

p2 Are Property Agents Qualified to Offer

Financial and Investment Advice?

p10 Singapore Property News This Week

p15 Resale Property Transactions

(December 3 December 8 )

Welcome to the 187th edition of the

Singapore Property Weekly.

Hope you like it!

Mr. Propwise

FROM THE

EDITOR
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SINGAPORE PROPERTY WEEKLY Issue 187

Page | 2Back to Contents

By Gerald Tay (guest contributor)

Recently, I chanced upon the blog of a local

property agent. She wrote an article dated

November 2013 that had the title LearnHow

You Can Own 2 Condos with $0 cash of your

own!

In her blog, she shared investment wisdom

on how home owners can monetise the

locked-up profits from their current home

which has appreciated greatly, andsubsequently purchase two properties to

attain financial freedom.

Are Property Agents Qualified to Offer Financial andInvestment Advice?


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Alow riskway to invest?

She advertised herself as a property agent

and posted several other articles and videos

on how to invest in property in a low riskway.

The agent has a video in her blog which

showcases her as an expert investment

speaker and trainer, sharing her four-step

investment system to a large group of

audiences in what looks like an expensiveballroom. And she claims on her video, Id

like to show you an effective system to

generate a consistent and passive source of

income. A system that is not only powerful but

so simple that even a child knows how to

manage it.

Under MAS Regulations: A person who

induces a consumer to invest in a certain

investment product under the guise of running

a training course will generally be regarded

as providing financial advisory services. This

is especially so if the person receives

compensation, directly or indirectly, as a

result of a decision made by a consumer to

buy or sell an investment product based on

the contents of the course.

Under CEA Regulations: Publishing false or

misleading advertisement is a breach of the

Code of Ethics and Professional Client Care,whereby disciplinary action can be taken

against the estate agents or salespersons

concerned.

Her sales pitch, A system that is not only

powerful but so simple that even a child

knows how to manage it and Learn How

You Can Own 2 Condos with $0 cash of your

own! reminded me of those many

unregulated investmentguruswho stoop to


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obnoxious and dishonest sales and marketing

tricks, pedalling meaningless investment

advice to the unwary.

Propertyeducation

by unlicensed gurusObvious to say, to boost her own sales, it

seems the property agent is one among many

purportedly offering investment advice

disguised as property education to the

public via various seminars and free talks.

You might have also seen them eagerlyappearing on national media lately to offer

their so-calledinvestmentexpertise.

The key difference between investment gurus

and property agents who claim they can help

average folks attain some sort of financial

freedom is, the former is highly unregulated

by any legal institutions, while the latter is

supposedly heavily regulated and licensed by

the CEA (Council for Estate Agencies).

The Financial Advisers Act (FAA) regulates

both companies and individuals that provide

advice on investment products to consumers.

Administered by the Monetary Authority of

Singapore (MAS), the FAA sets common

standards for those who give investment

advice by introducing important initiatives to

protect theconsumersinterest.

Individuals acting for a licensed FA (Financial

Advisor) must hold a representativeslicence.Representatives of licensed FAs (Financial

Advisors) and exempt FAs must meet the

same minimum entry and examination

requirements, and similar business conduct

rules.

In addition, it is a regulatory requirement for

every licensed representative to go through a

Know-Your-Client process to find out more

about eachclientsinvestment objectives,


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Source properties within the clientsgiven

requirements

And nothing more!

The prerogative in making any buyingdecisions lies entirely with the buyer, never on

the advice of a property agent.

The "Know-Your-Client" process as required

by the financial industry is obviously non-

existent in the real estate industry. Unlike

buying insurance or shares, a property

requires a buyer to saddle on huge long-term

debt with a large initial cash outlay.

And if CEA has deemed the "Know-Your-

Client" financial process as unnecessary,

untrained and unqualified propertysalespeople and their estate agencies should

not be allowed to promote properties as

would-be investments to entice buyers with

sexy terminology used by the regulated

financial industry such as:

Future capital appreciation

Wealth creation

Investment value

Return on investment

Portfolio structuring

Even volunteering to help clients calculate

a propertys potential investment value(and more often than not providing

inaccurate facts)

Are property agents allowed to act as

investment consultants?

While licensed money lenders are not allowedto run estate agencies or practise as

salespersons under CEA regulations, are

property agents or their estate agencies

allowed to act as financial and investment

SINGAPORE PROPERTY WEEKLY I 187


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consultantswithout any form of licensing?

If property agents and their estate agencies

are not under the FAA act, why are they

allowed to provide any sort of financial and

investment advice to property buyers in the

first place?

How closely does the CEA monitor the

practises of the estate agencies and their

sales representatives to protect consumers

interests?

Theresan easily arguable grey line between

offering investment advice and education

advicethe latter is often misused.

Does CEA have a tight and extremely specific

framework like FAA and MAS on how asalesperson can conduct business?

LearnHow You Can Own 2 Condos with $0

cash of your own!can be a serious

misrepresentation from a property agent to an

unwary consumer. Does the CEA agree with

such practices by agents to entice buyers?

Buying a property is not a regulated

investment scheme

Unlike REITS, buying a property is not a

regulated investment scheme protected under

MAS regulations. It means if you choose to

participate in a property investment (or

scheme) that is not regulated by the MAS,

you will not have the protection affordedunder the regulatory framework administered

by MAS, particularly if the operators are

based overseas. If you have a complaint

against an unregulated entity, you will also

not be able to approach the Financial Industry

Disputes Resolution Centre (FIDReC) forassistance.

When consumers put their money into such

unregulated schemes, they do so at their own

risk.

SINGAPORE PROPERTY WEEKLY I 187


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In the local real estate industry, consumers do

not have privilege protection. All stakeholders

in the property market, including the

developers, agents, mortgagees and lawyers

have their organizations to represent theirinterests. But what about the buyers,

investors and owners of private properties?

Examples of the organizations for different

groups include:

Property Agents - Institute of EstateAgents (IEA)

Developers REDAS (Real Estate

Developers Association Singapore)

Conveyancing Lawyers The Law

Society of Singapore

Mortgage Service Brokers MFAS

(Mortgage and Financial Association

Singapore)

Salespersons are required to act in the best

interest of their clients. There is a clear

conflict of interest for estate agents to be

involved in offering any sort of financial or

investment advice not within their job scope,as clearly many of them are highly unqualified

to do so, both in terms of training as well as

real life investment experience. As such, they

may not be able to fulfil their obligation to

their clients.

Black sheep should be removed

There are some good honest and

hardworking agents in the industry and Ive

the pleasure of working with some of them.

However, like in any industry, business

integrity and reputation is the key to trust inany business dealings. Black sheep who fail

in delivering on their moral obligations should

be removed.



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Hopefully, the CEA will proceed to issue a

more complete guide for their agents and

estate agencies in the area of providing

financial and investment advice to

prospective clients.

I also hope the CEA will give the general

public a reasonable response on the key

pointsIvemade above.

I welcome all feedback and opinions you

can email me [email protected].

By guest contributor Gerald Tay, who is the

founder and coach at CREI Academy Group

Pte Ltd, an organization dedicated to

empowering retail property investors with

smarter investing philosophy and strategies.

He is a full-time investor with over 13 years of

solid experience in building his wealth

through Property Investment and is financially

wealthy today.

mailto:[email protected]://www.crei-academy.com/http://www.crei-academy.com/http://www.moneymatters.sg/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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Singapore Property This Week


ResidentialBlackstone waiting 5 years for better

returns from Sentosa deal

Blackstone Group, which is taking part in the

financing of luxury Singapore properties, is

prepared to wait up to five years for betterresidential transaction prices. Together with

Malaysia's CIMB Bank, both have agreed to

finance several property development

projects owned by City Developments this

week.

Both Blackstone and CIMB will receive a fixed

5% coupon for 5 years and other cash flows

from the Sentosa project, as well as proceeds

from the sale of luxury residential units on

Sentosa. Blackstone is taking advantage of aslowdown in the Singapore housing market

following government curbs since 2009, and

has accelerated investments in Asia this year.

According to Kishore Moorhani, managing

director of Blackstone's Tactical Opporunities

Group, the property investor will not besatisfied with just a 5% return on its Sentosa

investment and instead, are targeting the long

term potential of these residential properties.

The Singapore government has been

controlling the property market since 2009.

Residential prices fell 0.7% in the 3 months,

culminating in a 4% drop this past year.

Condo prices in Sentosa are close to their

lowest level since 2006 end according to



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Maybank Kim Eng Securities. Figures from

URA shows that some house prices have

halved since 2012.

(Source: Business Times)

Increased flat supply leads to increased

HDB deficit

The Housing and Development Board's net

deficit increased to S$1.97 billion when its

fiscal year ended in March 2014 as it spent

more to increase the supply of public flats. In

the previous year, its net deficit was S$797

million

The net deficit in fiscal year 2013/2014 was

caused by a S$1.93 billion shortfall on its

home ownership programme, a result of moreBTO projects being awarded and higher

development costs.

HDB built 16,900 residential units in FY13/14,

46% more compared to the 11,500 built in the

previous year. HDB's annual deficit is fully

covered by government grants. Besides

government grants, HDB operations are also

funded by government loans as well asbonds.


Commercial

Increased transparency for retail rental

expected soon

Retailers and landlords can expect greater

retail rental transparency after the details of

the Fair Tenancy Consideration Framework

are revealed. This framework consists of

three components: data transparency,education and awareness, as well as a

mediation process.



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Data transparency will make retail rent data

transparent, according to Kurt Wee, president

of the Association of Small and Medium

Enterprises (ASME). ASME proposed greater

transparency via availability of more rentdetails, but full transparency will be difficult to

achieve.

Education and awareness consist of making

available contract templates, as well as a

series of guides which tenants can refer to in

the event of uncertainty, as well as helping

them understand the terms behind their

contracts.


Watershed year as investment sales

slump to S$17-18 billion

Investment sales of property this quarter are

at their lowest since the global crisis, with

previous year sales reaching S$30 billion.

According to Ian Loh, head of investment and

capital markets at Knight Frank, this slump

can be attributed to expectations of rising

interest rates and a persistent lack of

confidence caused by the total debt servicingratio framework introduced in late June 2013.

Desmond Sim, CBRE head of research,

Singapore and SEA suggests that the

decreased contribution of investment sales

deals from the public sector can also be due

to a decreased number of residential sites on

the confirmed list of Government Land Sales

programme this year.

Steve Ming, deputy director at Savills

Singapore predicted similar lacklustre

performance for 2015 if there continues to bea lack of new market drivers. Ming expects

investment sales between S$17-20billion for

2015. However, despite these grim

expectations, Ming believes that Singapore



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remains of interest as a real estate

investment destination locally and globally.

The office sector was the bright spot in the

market this year, having reached S$4.8

billion, comparable to last year's performance

of just slightly over S$4 billion. However, this

trend is not expected to continue in 2015 as

few office buildings are available for sale.

Savills' analysis of 4th quarter data also

revealed another potential point for optimism residential sales from the private sector

increased by 50%, hitting S$460 million. In

addition, Savills also report a huge increase

in private sector sales of industrial properties

from S$180 million in the third quarter of this

year to S$1.01 billion this quarter.


Colliers expects increase in Asian

property transactions in 2015

Colliers stated in a recent report that real

estate transactions in Asia will probably

increase in 2015, driven by greater supply

that is finally matching the strong demand.

One of the primary drivers is the significant

number of property funds that are due to

expire in 2015, and hence the assets they

need to divest will be added to the supply.

This coincides with CBRE's October report

titled "The Great Wave of Fund Expiration",

which describes that a batch of 50 funds are

expected to terminate in 2015 and 2016.

Another driver is the increase in new

developments in several Asian citiesaccording to Colliers.



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These properties are more attractive due to

their excellent accessibility in terms of

transport connectivity.

In terms of demand, increased capital willlikely be put to work in Asia as investors

increase asset allocations in 2015 due to the

attraction of increased stock available for sale

at decent prices.

For Singapore, Colliers expects to see more

transactions in 2015 compared to 2014. In

contrast, Singapore institutions and investors

will most probably continue investing

overseas to diversify their portfolio.


http://www.anthonyrobbinssg.com/propwise


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S G O O ssue 8


Non-Landed Residential Resale Property Transactions for the Week of Dec 3 Dec 8

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

1 THE SAIL @ MARINA BAY 614 1,210,000 1,972 99

3 ASCENTIA SKY 958 1,650,000 1,722 99

3 THE METROPOLITAN CONDOMINIUM 786 1,130,000 1,438 99

3 TANGLIN VIEW 1,152 1,400,000 1,216 99

5 CLEMENTIWOODS CONDOMINIUM 1,410 1,460,000 1,035 99

5 BANYAN CONDOMINIUM 1,582 1,446,800 914 FH

5 PARK WEST 1,894 1,350,000 713 99

8 VANADIUM 2,088 1,770,000 848 FH

9 RESIDENCES AT EMERALD HILL 1,658 3,564,700 2,150 FH




9 THONG SIA BUILDING 2,034 3,500,000 1,720 FH

9 GRANGE HEIGHTS 3,003 3,880,000 1,292 FH

10 LATITUDE 1,324 2,680,000 2,024 FH

10 DUCHESS MANOR 1,119 1,880,000 1,679 999

10 THE MONTANA 872 1,400,000 1,606 FH

10 RIDGEWOOD 1,722 2,150,000 1,248 999

11 NEWTON ONE 1,808 3,300,000 1,825 FH

11 SKY@ELEVEN 2,713 4,600,000 1,696 FH

11 NINETEEN SHELFORD ROAD 893 1 ,360,000 1,522 FH

12 8 RAJA 1,572 2,018,888 1,285 FH

12 SUNVILLE 936 938,888 1,003 FH

12 AVA TOWERS 1,281 1,150,000 898 FH

14 CRYSTAL MANSIONS 1,259 840,000 667 FH

15 THE SEA VIEW 1,216 2,088,000 1,717 FH

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

15 THE SEA VIEW 1,518 2,480,000 1,634 FH

15 COSTA RHU 1,970 2,400,000 1,218 99

15 PEACH GARDEN 2,766 3,115,000 1,126 FH

15 N.A. 1,442 1,450,000 1,005 FH

15 VERSAILLES 1,507 1,400,000 929 FH

15 SHEBA LODGE 1,636 1,500,000 917 FH

16 TANAMERA CREST 1,195 1,090,000 912 99

16 TANAMERA CREST 1,206 1,075,000 892 99

17 LOYANG VALLEY 1,485 828,000 557 99

19 RIO VISTA 1,238 950,000 767 99

20 FABER GARDEN 2,120 2,300,000 1,085 FH

21 THE CASCADIA 2,368 2,530,000 1,068 FH

21 THE CASCADIA 2,519 2,679,000 1,064 FH

21 SIGNATURE PARK 1,399 1,388,000 992 FH

21 THE RAINTREE 1,270 1,250,000 984 99

21 BEAUTY WORLD CENTRE 1,873 1,490,000 796 99

22 PARC OASIS 1,378 1,200,000 871 99

23 THE WARREN 1,270 1,135,000 894 99

23 REGENT HEIGHTS 1,163 850,000 731 99

23 PALM GARDENS 1,206 820,000 680 99

25 PARC ROSEWOOD 581 718,000 1,235 99

27 YISHUN EMERALD 1,023 822,000 804 99

Documents

Singapore Property Weekly Issue 187