Issue 295

Copyright 2011-2016 www.propwise.sg. All Rights Reserved.

CONTENTS
p2

FROM THE

EDITOR

3 Danger Signs for Singapore Property in the

Welcome to the 295th edition of the

Singapore Property Weekly.

Year of the Rooster and Beyond

Hope you like it!

p5

Resale Property Transactions

Mr. Propwise

(January 9 January 13)

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SINGAPORE PROPERTY WEEKLY Issue 295

3 Danger Signs for Singapore Property in the

Year of the Rooster and Beyond
By Gerald Tay (guest contributor)
So much is going on in the global economy
that I find very interesting and disturbing at
the same time. Weve seen incredible
changes in governments, economies, stock
markets, currency and real estate.

I am not making a forecast that a crash is

going to occur
My best guess is there are unavoidable, short
to long-term economic forces that are about
to deal a devastating blow to our real estate
market, economy and society. I am not bullish
on Singapores real estate market in the near
or long term.
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SINGAPORE PROPERTY WEEKLY Issue 295

Looking back at the lessons of the past, it had
been oversupply, speculative buying, lack of
affordability, and lack of sustainable
investment that have really deflated the
market.

society. Notice the obvious growth decline

over the decades.

I am still 100 percent pro real estate no

matter how bearish you think I am. But it
would be irresponsible to wildly claim that
there are no clouds on the horizon near and
far, when building cranes are casting very
visible shadows on the market. I believe there
are currently three danger signs in the
market.

1971 1975: 7.58%

2001 2005: 3.67%

Danger Sign
Contraction

#1

Per

Capita

GDP

The industry might lie, but the numbers dont

deceive. Below is a historical real per capita
GDP growth rate for Singapores aging

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1961 1965: 4.52%

1966 1970: 10.71%

1976 1980: 7.2%

1981 1985: 4.26%
1986 1990: 6.35%
1991 1995: 5.46%
1996 2000: 3.12%

2006 2010: 2.93%

(Source: World Bank
Economic Development)

and

Singapores

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SINGAPORE PROPERTY WEEKLY Issue 295

The most recent number for 2016 GDP
growth rate was 1.8%. What do you think
your property values might be moving forward
if you bought into the peak of the market?
Danger Sign #2 Rise of the US
Economy And (Likely) Slowdown of
Asian Economies
The US economic trends are the opposite of
Singapores and Asias economy and so is
their real estate markets. Mortgage rates in
the US are currently at an all-time low, around
4.5%p.a.
The US economy continues to improve, so
much so we now know the FED is projecting
to raise interest rates three times instead of
twice in 2017. Its going to take quite a while
before interest rates revert back to their
previous norms and some years before we
see another 2008 type of bubble.
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As the US economy continues its uptrend,

Asian economies like Singapore will continue
its downtrend. The Singapore property market
will likely fall further as the US real estate
market improves. Gurus who opine that it is
currently a good time to enter the Singapore
property market because prices are down
11% from peak are either in serious denial,
lying or misinformed.
Danger Sign #3 Diminishing Longer
Term Prospects

All investments consist of two components:

risk and reward. But all real estate investment
books and experts and authorities I know
of consist of only one component: Reward.
Risk? Whats that?
The current weak housing market is not a
cyclical issue.

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SINGAPORE PROPERTY WEEKLY Issue 295

It is one impacted by long-term changes in
global economic issues, such as an aging
population. It has little room left for
accelerated growth. The mantra real estate
values always go up has therefore become a
fundamentally flawed belief for the changing
markets of the future.

A recent McKinsey Economic Report by world

central banks and economists suggest
diminishing returns will be the new norm for
at least the next two to three decades.
For Singapores real estate market, Im not
inferring a local market-crash or bubblebursting scenario. The real danger comes not
from within our shores, but from a turbulent
world outside. Our government cannot
prevent an external crisis from happening and
a fast-evolving geopolitical it can only seek
to minimize the harm with good policies.

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As expected of a mature economy, economic

growth rates will be lower. In the past decade,
Singapores annual real GDP per capita
growth has slowed to about 3% to 3.5%. We
can assume a rather a more optimistic real
property growth of 3% and slower real growth
rate of 0.5% to 2% from the recovery of a
major recession. This is quite a reversal from
the bygone golden years of 6 to 8% annual
growth.
A slow economy and moderate real estate
price growth is likely to be the new normal
going forward and it may not be such a bad
thing.
Should You Sell or Hold?

Due to the lack of positive economic news,

we are expecting that prices will generally
continue their decline.

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SINGAPORE PROPERTY WEEKLY Issue 295

However, buyers may capitalise on this
continued window of falling prices to snag
some attractive deals, said Eugene Lim, Key
Executive Officer of ERA Realty Network,
who expects private home prices to drop by 3
to 3.5 percent this year.
If property prices are on an uptrend, they sell
you the idea of not missing out on future
gains. If property prices are on a downtrend,
they sell you the idea of not missing out on
discounts.

Beware of the hubris of those in charge

There are no attractive deals in a market
when every important indicator points
DOWNWARDS falling rents, falling prices, a
potentially devastating recession on the
horizon, and rising interest rates.
As a savvy asset-buyer, you only want to buy
into a recession since prices always revert
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back to their fundamental values. Leave the

measly discounts (and the balloting) and
cheapskate marketing ploys for penny wise,
pound foolish buyers.
SELL or HOLD are the only actions for
property owners and buyers today. Theres no
but or if unless you want to be kicked in
the butt when things go further south.
What Should You Do Now?
From 1960 to 2013, there were eight major
economic crises in the Singapore market.
This means recessions occur roughly once
every 6.6 years. Our present economic
expansion has lasted far longer than seven
years. The last recession ended in June
2009, about seven and half years ago. Even
though certain indicators look amazing today,
if history is any guide, we are due for another
economic downturn.
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SINGAPORE PROPERTY WEEKLY Issue 295

Economic theories, such as works by
economist Hyman Minsky, explain that the
longer an expansion continues, the more
likely a recession becomes. Whatever the
reasons that expansions end, Singapore has
rarely had an expansion that lasted longer
than seven years in the last 50 years. There
was only one exceptional period from 1986 to
1996.
The economy is like a game of musical chairs
at a party. Everyone has a wonderful time
until the music stops and then everyone
wants to sit down simultaneously. Then
suddenly the euphoria becomes a panic, and
the boom becomes a slump.
No individual has the power to stop a
recession. However, by planning you can
mitigate the impact an economic downturn
has on you and your family. Right now most

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people are enjoying good economic times.

They will not last forever. Save some money
now. Pay down credit card debt and other
loans. Give yourself a financial cushion that
will protect you in the event of an economic
downturn.
Make some plans now for the next downturn.
Even if I am wrong, the worst thing that will
happen is that you will have less debt and
more money saved. Is that so bad?
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.
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SINGAPORE PROPERTY WEEKLY Issue 295

Non-Landed Residential Resale Property Transactions for the Week of Jan 9 Jan 13
Postal
District
3
5
5
5
8
9
9
9
9
10
10
10
10
10
10
11
12
14
15
15
15
15
15
15
15
15
16

Project Name
QUEENS
THE STELLAR
VARSITY PARK CONDOMINIUM
WESTCOVE CONDOMINIUM
KENTISH GREEN
URBAN SUITES
TIARA
TIARA
CAIRNHILL PLAZA
GRANGE RESIDENCES
GRANGE RESIDENCES
THE BOULEVARD RESIDENCE
VIZ AT HOLLAND
RV EDGE
SYLVAN LODGE
HILL PARK
RIVERSIDE MELODIES
WING FONG MANSIONS
THE MAKENA
ONE FORT
THE GLACIER
FIRST POINT SUITES
EAST BAY GARDENS
LAGOON VIEW
LAGOON VIEW
NEPTUNE COURT
CASA MERAH

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Area
(sqft)
1,195
1,313
1,830
1,098
1,324
2,045
1,302
1,345
2,820
2,852
2,669
2,034
861
936
786
5,942
1,076
700
1,152
1,055
1,335
1,819
1,528
1,647
1,647
1,270
1,249

Transacted
Price ($)
1,410,000
1,455,000
1,938,800
830,000
1,180,000
5,150,000
2,050,000
1,888,000
3,660,000
8,300,000
6,850,000
4,400,000
1,328,000
1,350,000
950,000
10,600,000
1,377,000
400,000
1,450,000
1,280,000
1,410,000
1,700,000
1,250,000
1,140,000
1,100,000
828,000
1,200,000

Price
Tenure
($ psf)
1,180
99
1,108 FH
1,060
99
756
99
891
99
2,518 FH
1,574 FH
1,403 FH
1,298 FH
2,910 FH
2,566 FH
2,163 FH
1,542 FH
1,442 FH
1,209 FH
1,784 FH
1,279 FH
572
FH
1,259 FH
1,213 FH
1,056 FH
935
FH
818
99
692
99
668
99
652
99
961
99

Postal
District
16
16
16
17
18
18
19
19
19
19
19
20
21
21
21
21
23
23
23
26
27
28

Project Name
CHANGI GREEN
THE BAYSHORE
TANAH MERAH MANSION
HEDGES PARK CONDOMINIUM
TROPICAL SPRING
OASIS @ ELIAS
A TREASURE TROVE
THE MINTON
RIVERSAILS
CHUAN PARK
RIO VISTA
SKY VUE
SUITES AT BUKIT TIMAH
GARDENVISTA
SYMPHONY HEIGHTS
THE RAINTREE
THE WARREN
REGENT HEIGHTS
GUILIN VIEW
CASTLE GREEN
EUPHONY GARDENS
SELETAR PARK RESIDENCE

Area
(sqft)
1,335
926
1,324
872
1,389
1,302
1,044
1,216
1,109
1,851
1,055
495
377
1,173
926
1,281
1,238
1,023
1,259
1,302
1,044
872

Transacted
Price ($)
1,280,000
770,000
1,065,000
825,000
1,150,000
980,000
1,070,000
1,220,000
1,075,000
1,650,000
808,000
800,000
600,000
1,350,000
950,000
1,256,888
1,002,000
810,000
985,000
910,000
739,998
1,060,000

Price
Tenure
($ psf)
959
FH
832
99
804
FH
946
99
828
99
752
99
1,025
99
1,003
99
970
99
891
99
766
99
1,616
99
1,593 FH
1,151
99
1,026 FH
981
99
809
99
792
99
782
99
699
99
709
99
1,216
99

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 purchaser
signs an OTP, hence the lagged nature of the data.
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SINGAPORE PROPERTY WEEKLY Issue 295

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