Singapore Property Weekly Issue 36

8/3/2019 Singapore Property Weekly Issue 36

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Issue 36Copyright 2011-2012 www.Propwise.sg. All Rights Reserved.
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CONTENTS

p2 Singapore Property News This Week

p9 Property Prices at a Turning Point

p14Resale Property Transactions

(January 7 January 13)

Welcome to the 36th edition

of the Singapore Property

Weekly.

Hope you like it!

Mr. Propwise

FROM THE

EDITOR
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SINGAPORE PROPERTY WEEKLY Issue 36

Singapore Property This Week

Page | 2Back to Contents

ResidentialStrong sales at Watertown project in

Punggol

215 of the 596 released units at 99-year

leasehold 992-unit Watertown project was

sold over the Chinese New Year longweekend, bringing the total number of units

sold to slightly above 500. The units sold so

far have a price range of $980 to $1,500 psf

and was sold mainly to locals, with

Singaporeans making up 90% of the buyers.

The mixed residential-and-retail project willinclude 11 13- to 14-storey towers as the

residential component and a four-storey retail

component connected to the Punggol MRT

station. The latter, named Waterway Point, willconsist of two basement levels and two other

levels that make up 370,000 sq ft worth of net

lettable area with a 40-30-15-15 tenant mix for

retail, food and beverage, entertainment and

others such as educational institutions, banks

and community amenities.Evidence that ABSD is achieving its

intended effect

Sales figures for recently launched projects

have shown that the ABSD is achieving its

intended effect of curbing foreign demand. In

the recently launched Watertown project in

Punggol, over 90% of the units sold were

purchased by Singaporeans, up from an


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average of 80% of similarly suburban condos

sold in 2011, such as The Tennery and The

Greenwich. In another recent launch, The

Hillier in Hillview area, 80% of the buyerswere Singaporeans. The higher proportion of

non-Singaporean buyers may be due to the

location, which offers easy access to Bukit

Timah and better-known schools such as

Nanyang Girls School and Hwa Chong

Institution.

An upcoming slew of property launches

There are several property launches to look

out for, including ECs and private condos.

99-year leasehold five-storey Parc Rosewood

located in Woodlands, a private residential

project consisting of 689 units has been

launched. The units are likely to go for an

average price of $1,000 psf, with one-

bedroom units starting from 431 sq ft priced

at around $400,000, two-bedroom units at

$570,000 and the rarer three-bedroom unitsfor almost $800,000.

The Tampines Trilliant, an EC project

developed by Sim Lian, is set to be released

soon. The project will consist of 670 units in

12 15- and 16-storey towers, with mostly

three-bedroom or three-bedroom-plus-utility

units with 127 units of the first ranging from

872 to 1,141 sq ft and 397 units of the latter

with a size of 1,001-1,378 sq ft. Other units

will either be four-bedroom units ranging from

1,302-1,593 sq ft or penthouses.Another upcoming EC is 728-unit Twin

Waterfalls located near Punggol MRT which


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will be launched in February. Developed by

Fraser Centrepoint, the project consists of 17-

storey towers housing 914 sq ft three-

bedroom units, 1,378 sq ft four-bedroom dualkey units and penthouses with sizes up to

1,928 sq ft, with an estimated average price

of around $700 psf.

Another project under Fraser Centrepoint due

for release soon, either within Q1 or early Q2,

is the 99-year leasehold seven-storey Palm

Isles at Flora Drive in the Upper Changi area,

which will consist of 450 units to be sold at an

estimated price of $900-950 psf.

Other upcoming projects include 103-year

leasehold 62-unit Greenwood Mews, a clusterhousing development located near Bukit

Timah, and 99-year leasehold 416-unit Hillsta,

a condominium development in Choa Chu

Kang as well as 99-year leasehold 702-unit

Bartley Residences, a condominium project

located near Bartley MRT Station.

Sim Lian launches 99-year leasehold EC

The Tampines Trilliant

The 670-unit development sits a 236,805 sq ft

site located along Tampines Central 7, and

will consist of 12 blocks housing 127 three-

bedroom units ranging from 872 sq ft to 1,141sq ft, and 397 three-bedroom-plus-utility units

with sizes of 1,001-1,378 sq ft, with the rest

being four-bedroom units ranging from 1,302-

1,593 sq ft and penthouses of sizes 1,841 -

2,465 sq ft. Prices start from $682,000 or

$782 psf for a 872 sq ft three-bedroom unitand $971,000 or $746 psf for a 1,302 sq ft

four-bedroom unit. Being located near

Tampines MRT Station and shopping malls


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such as Tampines 1, Tampines Mall and

Century Square, it is expected to draw much

interest.

Lower COVs indicating a weaker HDBresale market

Q4 2011 showed lower cash-over-valuation

(COV) figures, with the median COVs falling

for all flats except for five-room and executive

flats in some towns. This shows that the HDB

resale market is weakening. This decrease

can be attributed to buyers being more

conscious of the additional costs required to

renovate resale HDB flats, particularly in light

of the negative economic outlook.

The large supply of build-to-order (BTO) flatshave also helped to stabilise HDB resale

prices, which increased by 1.7% from Q3 to

Q4, compared to 3.8% from Q2 to Q3. The

median resale prices have also decreased for

mainly four-room and five-room flats in more

mature estates such as Bukit Merah. While

prices of resale flats in other estates have

continued to increase, they may fall as supply

of new fats increases. Other possible reasons

for the potential fall in prices is the relative

attractiveness of the BTO flats, which are

affordable and now afford a high rate of

success and shorter waiting time.Resale volumes have also fallen, for in Q4

2011, resale transactions increased by 0.3%

from Q3, and brought the total transactions

for the year to 24,633, a 24% decrease from

2010s figures.

Generally, COVs are expected to fall to

around $25,000-40,000 and sale transactions

are expected to fall by 3-5%.


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Prices and rents for private properties

stagnate

According to data released by URA, Q4 2011

saw a 0.2% increase from Q3s benchmarkprivate home price index and 5.9% year-on-

year increase from 2010 to 2011, lower than

the 17.6% increment from 2009 to 2010. The

landed property sub-index increased by a

mere 0.1% from Q3 to Q4 with the price index

for semi-detached houses falling by 0.6%,

when the non-landed property sub-index

increased by 0.3%. Nevertheless, the

differential price fall for semi-detached

houses in different regions (some 1.6%, some

1.3%) showed that there is price resistance in

some regions.

For the overall rental index for private homes,

it registered a 0.4% q-on-q increase from Q3

to Q4, lower than the 0.8% increase from Q2

to Q3. Similar to the trend for the price index,

the rental index increment for 2011 was also

much smaller than that for 2010, 3.8%

compared to the earlier 17.9%.

Some analysts believes that prices will fall by

5-15%, with the luxury sector taking the brunt

of it and the mass-market sector less

affected, particularly with the ABSD and the

uncertain economic outlook to curb demand.

Other analysts however, believe that it is hard

to conclude whether the peak has been

reached. This is because there are many

large developers who are able to resist price

cuts. Furthermore, earlier cooling measures

implemented in the last couple of years did

not manage to cool the market, making it

hard to predict and conclude whether prices

SINGAPORE PROPERTY WEEKLY I 36


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will fall Some believe that while the ABSD will

lead to a price fall, prices are just as likely to

increase again as interest rates are expected

to remain low.

The much lower sales volume in the

secondary market (decrease of 27.6% in

2011) compared to that in the primary market

(a fall of 2.4%) could also worsen the price

decrease. The latter is more attractive tobuyers because of the showflats and

advertisements by developers and installment

payment plans buyers can choose, not an

option when purchasing property in the

secondary market. The increase in the supply

of ECs has also hampered the growth of

rental rates.

Commercial

Industrial rents to decrease as supply

booms

After reaching the peak of its growth in 2011,

where multi-user and warehouse price and

rental indices have increased by 16% and

22% respectively, growth of industrial rents

and capital values may slow down or even fall

this year, with an upcoming supply of 9.59

million sq ft worth of industrial space. This is

not helped by the negative economic outlook

for the year, which would further discourage

demand for industrial spaces. A fall of 15% is

predicted as demand for both existing andupcoming spaces decreases.

SINGAPORE PROPERTY WEEKLY I 36


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With more land expected to be released

under the Industrial Government Land Sales

Programme (IGLS), some with shorter

tenures, the situation is not expected toimprove. New conditions such as restrictions

on strata subdivision on selected plots of land

will further discourage higher bid prices.

However, capital values may not be affected

as much since the recent cooling measures in

the residential market may result in investors

turning their attention to the industrial market,

particularly to multi-user factory space and

high-specs buildings.

Singapore takes the 6th spot in JLLs Top

30 list for commercial property investment

In Jones Lang LaSalle's list of top 30 cities for

direct commercial real estate investment for

2010 to Q3 2011, Singapore takes the sixth

spot, having about US$15 billion worth of

such transactions in this period. Direct

commercial real estate investment includes

office, retail, industrial, hotel and mixed-used

properties but excludes land deals, residential

properties and all transactions below US$5

million.

http://www.valueinvestingsummit.com/propwise.html


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Property Prices at a Turning Point

By Mr. Propwise

From the URAs recent release of the 4Q2011

private residential property index, property

price increases in Singapore have almost

screeched to a halt. Prices were up just 0.2%

in 4Q2011 on a quarter-on-quarter basis and

5.9% on a year-on-year basis.

At the current levels the price index is 16.2%

above the previous 2Q2008 peak, and 13.7%

above the previous all time high in 2Q1996. Figure 1 URA Property Price Index



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What is interesting to note is that the rateof

growth of the PPI has been slowing for 9

quarters, i.e. property price growth has been

decelerating continuously, and is already

close to zero. This is likely due to concern

over the slowing economy, worrying global

economic situation especially with the

troubles in Europe and weak growth in the

US, combined with the dampening effect of

multiple rounds of government measures.

Figure 2 Change in Property Price Index

I believe that residential property prices in

Singapore are at a turning point and we are

likely to see a quarter-on-quarter decline in

the next 1Q2012 Property Price Index

disclosure. Some analysts have estimated

that prices were already down on a month-

on-month basis in December 2011.

The uncertainty is whether we will see a

sharp decline as during the 1997-1998 Asian

Crisis and 2008-2009 Financial Crisis, or

whether it will be a more gradual decline as

we saw during the 2000-2004 Post-Dotcom

Bubble and SARs era.



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Can Low Interest Rates Prop Up Property

Prices?

However some believe that the abundant

global liquidity situation could blunt or even

reverse the decline in Singapore property

prices. Led by the European Central Bank

and Fed, governments around the world have

been easing monetary policy and keeping

interest rates low to prevent another crisis

triggered by too much debt.

Figure 3 Straits Times Index

Weve already seen a New Year rally in the

Straits Times Index, and if you believe that

the stock market is a leading indicator for the

property market, then we could see property

prices supported in the coming quarters.

Anecdotally, mass market launches are still

going strong and local investors appetite for

property is still strong even as the Additional

Buyers Stamp Duty has kept most of the

foreigners away. For example, the recentlaunch of Parc Rosewood (by Fragrance

Group and World Class Land) in Woodlands

saw 165 of the 236 launched units sold at the

$925-998 psf price range, 8-10% lower than

initially guided. This followed the strong take

up of Watertown in Punggol.

But dont forget that this decelerating price

growth trend preceded the property bear



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markets that began in 3Q2000 and 3Q2008

(but not the one in 3Q1996). So regardless of

whether you are more a technical or

fundamental investor (or both), it pays to be

cautious in this market.

Supply in the Pipeline is at a Record High

Supply, at 77,089 uncompleted private

residential units from projects in the pipeline,

is at an all-time high since the URA started

recording this data in 1999. At the same time

volumes are falling 4Q2011 sales of 3,603

new units (down 15% quarter-on-quarter) and

2,962 units (down 24% quarter-on-quarter)

are both significant decreases.

Of this record supply, 39,184 units remainunsold as at 4Q2011 this could present an

overhang on the market for many quarters to

come.

Weve also seen widespread declines or Cash

Over Valuations in the HDB market, which is a

foreshadowing of a weaker private propertymarket.

How Much Could the Market Fall?

I did a study of the previous 3 property market

corrections and found that the PPI corrected

in the range of 19.9% to 44.9% and that thecorrection lasted from 4 to 15 quarters:

2Q1996 Peak to 4Q2008 Trough 44.9%

decline over 10 quarters







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If history is anything to go by, what this

means is that the correction could be longer

and stronger than what most people are

expecting. However, I believe that we willonly see similar levels of price declines if

there is an external crisis to cause a sense of

panic, which we had in each of the previous 3

declines (e.g. Asian Crisis, Dotcom Bubble,

Global Financial Crisis).

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


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Non-Landed Residential Resale PropertyTransactions for the Week of Jan 7 Jan 13

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

15 ONE AMBER 1,270 1,644,650 1,295 FH

16 COSTA DEL SOL 1,475 2,060,000 1,397 99

21 MEADOWLODGE 1,335 1,323,000 991 99

19 PARRY COURT 1,098 848,000 772 999

19 PEOPLE'S GARDEN 1,195 941,888 788 999

15 WATER PLACE 1,216 1,267,000 1,042 99

9 RIVERGATE 1,507 2,789,800 1,851 FH

3 THE ANCHORAGE 1,604 1,680,000 1,047 FH

19 THE SUNNYDALE 1,216 875,000 719 99

15 BLU CORAL 2,110 1,650,000 782 FH17 CARISSA PARK CONDOMINIUM 1,324 1,050,000 793 FH

23 THE MADEIRA 1,249 950,000 761 99

23 NICON GARDENS 2,013 908,000 451 99

27 EUPHONY GARDENS 1,184 780,000 659 99

5 ONE-NORTH RESIDENCES 592 980,000 1,655 99

9 LEONIE STUDIO 689 1,300,000 1,887 99

20 CLOVER BY THE PARK 1,292 1,268,000 982 99

17 BLUWATERS 2 1,206 1,280,000 1,062 946

12 BALESTIER PLAZA 1,001 900,000 899 FH
http://www.moneymatters.sg/

Documents

Singapore Property Weekly Issue 36