Issue 30

Copyright 2011 www.Propwise.sg. All Rights Reserved.

CONTENTS
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Singapore Property News This Week A Look Back on 2011 and Looking Forward to 2012

FROM THE

EDITOR

Welcome to the 30th edition of the Singapore Property Weekly. Hope you like it! Mr. Propwise

p14 Resale Property Transactions

(November 26 December 2)

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SINGAPORE PROPERTY WEEKLY Issue 30

Singapore Property This Week

Residential
Increased demand of commercial and industrial units expected

developments over the next six months.

Far East Organization sold about 15 units at its projects, while City Developments sold a few units at 892-unit The Palette. Buyers seemed to be waiting for the prices to drop despite the stream of viewers at showflats many did not buy anything. This is despite the packages offered by developers such as Far East Organization, Wing Tai Holdings and City Developments to offset the ABSD. Nonetheless, buyers who have purchased units at The Palette or the 583-unit Bedok Residences have not withdrawn their options as a result of the ABSD.

While sales for residential projects have been

slower since the introduction of the Additional Buyer Stamp Duty (ABSD), there are still some buyers. Developers and agents selling

small strata-titled commercial and industrial

units are expecting increased demand from investors who are unwilling to pay the ABSD, and therefore are increasing their marketing

efforts.

One

such

developer

is

Oxley

Holdings, which will launch five industrial, commercial and commercial-cum-residential

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SINGAPORE PROPERTY WEEKLY Issue 30 80% of freehold Charlton Residences sold even before official launch Freehold three-storey Charlton Residences developed by SingXpress Land Ltd has sold 80% of its units even before its official launch in January 2012 despite the new governmental measures. This may be due to its affordable pricing and location, being near Kovan MRT Station and schools. Units ranging from 5,350 to 7,696 sq ft with 6 bedrooms and two car park lots were sold at an average of $2.8 million per unit or about $500 psf. Average condo size has decreased again The average size based on gross floor area (GFA) per home for private condo sites in both the Rest of Central Region (RCR) and Outside Central Region (OCR) has decreased by 5 sq m to 85 sq m and 95 sq m respectively from the H2 2011 programme to the H1 2012 GLS Programme. The average home size for executive condo (EC) sites however remains unchanged at 100 sq m in OCR. The space standards (the average GFA per housing unit) used to estimate the number of homes that can be generated from Government Land Sales sites are regularly reviewed, taking into account the sizes of residential units in housing projects (including ECs) which have obtained planning approvals in recent years. This helps to reduce the possibility of underestimating the supply of homes from the land it sells. There is also a trend towards smaller average home sizes with more singles living on their own. It may also be due to the reduction of sizes of electronic devices.

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SINGAPORE PROPERTY WEEKLY Issue 30 Sing Holdings buys its 4th Robin Road site The freehold 16-unit apartment development located at 2 to 8 Robin Road was sold at $52 million or $1,46 psf ppr based on an allowable plot ratio of 1.54, including balconies. The site has a maximum allowable height of five storeys and could yield a gross floor area of around 135,462.4 square feet. This is the 4th Robin Road site purchased by the developer, bringing the cumulative purchase price and total land area to $176.3 million and 87,962.6 sq ft respectively. The site is located near upcoming Stevens MRT station, and popular schools such as Singapore Chinese Girls' Primary School. Home sales to slow after Novembers rush Private home sale was high in November but this trend is unlikely to continue given the new cooling measures which could slow sales by 20 to 30%. The sales for private homes excluding ECs in November were a 22.3% increase from Octobers figures. However, with the cooling measures in place sales could fall to 1,000 units or fewer per month and rise a little to between 1,100 to 1,200 units after Chinese New Year. The slower sales in December could bring the total sale to last years level, instead of the higher level expected before the new measures.

Given the uncertain global economy and the new measures, homes sales in are expected to be between 9,000 and 11,000 units. The full effect of the ABSD might only be seen in February as most developers are adopting a wait and see approach. Prices of luxury/prime residential properties and mass-market homes could fall by 10 to 15% and 5 to 10% respectively in 2012,
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SINGAPORE PROPERTY WEEKLY Issue 30 whereas landed home prices may fall by less than 5% given the limited supply and restrictions on foreigners purchasing such properties. Bid prices for 99-year leasehold residential site shows effect of cooling measures The provisional tender results the site near Punggol MRT Station show that the cooling measures implemented are working now. Despite the 13 bids it received, the top bid by Wee Hur Development of $354.37 psf of potential GFA was 12.8% lower than the $406 per square psf ppr that Sim Lian paid for a nearby site in December last year. The breakeven cost is about $740-760 psf since Wee Hur is in the construction trade. Massmarket condo prices might decrease by 10% next year as a result of decreased demand due to the ABSD. Nevertheless, the 13 bids
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attracted by the site showed that developers felt that the mass-market sector is less likely to be affected by the ABSD, since buyers are likely to be either HDB upgraders or first-time private home buyers. Commercial Three 999-year conservation shophouses at Liang Seah Street up for sale The indicative price for the 2,694 sq ft site put up for sale through an expression-of-interest exercise is $30 million or $2,602 psf, based on the total floor area of 11,529 sq ft. The part three, part five-storey development served by a passenger lift could be converted into a hostel or a budget hotel. It is expected to attract investors who wish to capitalise on its location - near Bugis Junction area which will attract retailers or investors who collect conservation shophouses.
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SINGAPORE PROPERTY WEEKLY Issue 30 Freehold GRTH Building up for sale 22,147 sq ft seven-storey freehold GRTH Building located at 66 East Coast Road is asking for $82 million. Zoned for 'commercial' use, it has a gross plot ratio of up to 3.0 with a potential gross floor area of 66,440 sq ft, it could redeveloped into a commercial or residential cum commercial development. The selling price could increase from $1,094 psf ppr to $1,234 psf ppr if approval is granted to purchase an adjoining 1,420 sq ft plot of state land. The tender will close at 3pm on Feb 15, 2012.

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SINGAPORE PROPERTY WEEKLY Issue 30

A Look Back on 2011 and Looking Forward to 2012

By Getty Goh
2011 has been quite an eventful year for properties. With the year drawing to a close, it

have been rising in spite of the numerous

rounds of property anti-speculation measures. The good news is that most of those who bought a private residential property several

is timely for us to look back on how property

prices have performed in the last 12 months and for me to share my views of how I see the market in 2012. Overview of the Singapore Private

quarters ago will likely be sitting on decent

profits right now. The not so good news is that those who are looking to buy a private property have been having a hard time finding

something that is affordably priced.

Property market On 8 Dec 11, the government introduced yet another round of anti-speculation measures

The URA Private Property Price Index (PPPI)

is presently at an all time high. This indicates that private property prices across the board

Additional

Buyers

Stamp

Duty

(ABSD).

Under the new regulations, foreign buyers will have to pay an additional 10% stamp duty for

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SINGAPORE PROPERTY WEEKLY Issue 30 their property purchase, while PRs buying a second property and Singaporeans buying a third property will have to pay an additional 3% stamp duty. I have been suggesting to those who are looking to invest in the Singapore property market to stay away as the price growth has reached a point where it was starting to be unsustainable. In the last few quarters, price appreciation has been slowing down and my companys indicator, the AAI, suggests that the time is ripe for the index to come down from its peak (see Figure 1). Without going into the math behind the graphs and by simple observation, do you notice that the URA PPPI index in the yellow zone after each green zone is always contracting (see
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the red boxes in Figure 1)? Looking at trends that have occurred during the last 2 downturns, is it not reasonable to expect the URA PPPI to behave in a similar way as before? We suspect that the latest measures will be the straw that breaks the camels back and cause prices to start dropping. Figure 1: Ascendant (correct as at 2011Q3) Assets Indicator

Source: URA and Ascendant Assets Pte Ltd

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SINGAPORE PROPERTY WEEKLY Issue 30 Overview of the Singapore Non-Residential Property market With more measures in place to dampen the demand for private residential properties, investors interest has shifted to the nonresidential property market. When we compare the URA Index for Private Residential Properties with Office Properties in Figure 2 and Industrial Properties in Figure 3, we can tell that prices for non-residential properties have also risen. However, it can be seen from the charts that there is still much scope for non-residential property prices to catch up with residential property prices. Figure 2: Comparing URA Index for Private Residential Properties with Office Properties (1975Q1 to 2011Q2)

Source: URA and Ascendant Assets Pte Ltd

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SINGAPORE PROPERTY WEEKLY Issue 30 Figure 3: Comparing URA Index for Private Residential Properties with Industrial Properties government has warned that Singapores GDP is expected to be between 1% and 3% for the next few years and unemployment rates will likely increase in the near term. How well the markets will perform will depend a lot on how the European Union and United States handle their mounting debt. Due to less demand from the Western countries, Chinas economy is also showing signs of a slowdown. Compounding the concerns that the slowdown would be severe, Chinas efforts to cool the countrys property market are taking effect and property prices in China have started to drop. When we put all these factors together, the property outlook for 2012 seems highly precarious. There are many permutations on how 2012 would pan out; however, this is how I envisage the best- and worst-case scenario to be
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Source: URA and Ascendant Assets Pte Ltd So what is going to happen in 2012? Many analysts have predicted that 2012 will be a challenging year for the global and Singapore economy. Even the Singapore
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SINGAPORE PROPERTY WEEKLY Issue 30 Best-Case Scenario: Private Property Prices remain stable while Non-residential Property Prices increase Under the best-case scenario, countries affected by the sovereign debt crisis will flood the global financial system with huge bouts liquidity to avert any potential crisis. This will be akin to actions taken during the 2008 Global Financial Crisis. If that happens, it is foreseeable that much of these funds would find its way to Singapore as the country is internationally recognised as an investment safe-haven. With excess liquidity in the Singapore financial system, mortgage rates will remain low and homeowners will be able to hold on to their properties without having to off load them at fire-sale prices. As a result of the antispeculation measures already in place (and
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even more that could come to prevent irrational price escalation for private properties), most of the new funds flowing into the Singapore market will find their way into the non-residential property market, i.e. commercial and industrial properties. As prices in the non-residential markets have not risen as much in the recent recovery, the government will likely not take any drastic action to cool those markets down. This will cause assets in those markets to see a significant increase in prices, making 2012 the year for commercial and industrial properties. Worst-Case Scenario: Singapore property prices for all sectors tank In todays world, all markets are closely connected and no sector or country will be unscathed. Under this scenario, it is envisaged that the major economies are not
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SINGAPORE PROPERTY WEEKLY Issue 30 able to solve the financial issues and negative sentiments tailspin out of control. Akin to what happened in 2008, it is envisaged that lending from financial institutions (FIs) slow to a trickle as FIs do not want to increase their risk exposures by making non-performing loans. correlation between the URA indexes for private property, industrial property, office space and shop space (see Figure 4). Figure 4: Correlation

As a result, even though the demand for property is still there, purchasers are unable to proceed as they are not able to secure financing. In addition, a drop in commercial asset valuation would likely be triggered by a drop in rental income from the slow down of business activities while the drop in residential valuation would be triggered by a sizable exodus of foreigners and PRs who are not able to find work. When a severe recession hits Singapore, no property sector will be unaffected. This can be inferred from the high

Source: URA and Ascendant Assets Pte Ltd

Conclusion When the ABSD was announced, some property analysts had forecasted that prices could drop by as much as 30%. This is not an entirely outrageous projection as the

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SINGAPORE PROPERTY WEEKLY Issue 30 URA PPPI dropped by about 25% during the 2008 Global Financial Crisis while prices dropped by 45% during the 1997 Asian Financial Crisis. Investor concern is palpable after the recent round of cooling measures was announced.

However, if we look past the doom and gloom, it means that there are opportunities in the horizon. Warren Buffett famously commented, I simply attempt to be fearful when others are greedy and greedy when others are fearful. With so much uncertainty in the air, perhaps it is timely for those holding on to excess liquidity to start shopping around.
By Getty Goh, Director of Ascendant Assets, a real estate research and investment consultancy firm.
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SINGAPORE PROPERTY WEEKLY Issue 30

Non-Landed Residential Resale Property Transactions for the Week of Nov 26 Dec 2
Postal District 1 2 3 5 8 9 9 9 9 9 10 10 10 10 10 10 10 10 10 10 10 10 10 11 11 Project Name THE SAIL @ MARINA BAY ICON CENTRAL GREEN CONDOMINIUM ISLAND VIEW CITYLIGHTS RIVERGATE WATERMARK ROBERTSON QUAY TIARA ASPEN HEIGHTS EMILY RESIDENCE FOUR SEASONS PARK NASSIM JADE BELMOND GREEN BOTANIC GARDENS MANSION ASTRID MEADOWS ASTRID MEADOWS CHELSEA GARDENS JERVOIS LODGE TANGLIN REGENCY NATHAN PLACE GLENTREES THE LEGEND ALLSWORTH PARK THE AXIS MANDALE HEIGHTS Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,033 2,980,000 2,884 99 570 1,008,888 1,768 99 947 1,050,000 1,108 99 3,595 3,700,000 1,029 FH 893 1,283,000 1,436 99 1,507 3,100,000 2,057 FH 1,076 1,950,000 1,812 FH 1,507 2,450,000 1,626 FH 1,324 1,980,000 1,495 999 667 980,000 1,468 FH 2,874 8,100,000 2,818 FH 2,260 5,300,000 2,345 FH 969 1,750,000 1,806 FH 1,755 3,033,000 1,729 FH 1,690 2,670,000 1,580 FH 2,433 3,688,000 1,516 FH 2,508 3,750,000 1,495 FH 958 1,380,000 1,441 FH 883 1,236,200 1,401 99 1,464 2,000,000 1,366 FH 2,594 3,380,000 1,303 999 1,496 1,900,000 1,270 FH 1,959 2,300,000 1,174 999 1,141 1,450,000 1,271 FH 764 970,000 1,269 FH Postal District 11 14 14 14 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 16 16 16 16 16 17 Project Name THE ARCADIA SUNFLOWER MANSIONS WANG LODGE WING FONG MANSIONS PEBBLE BAY THE SEAFRONT ON MEYER SUITES @ AMBER ESTERINA COTE D'AZUR PALM OASIS HAIG COURT TANJONG RIA CONDOMINIUM POH HENG COURT VERSAILLES MANDARIN GARDEN CONDOMINIUM UNITED MANSION NEPTUNE COURT VILLA MARINA TORIE MANSIONS CASA MERAH THE BAYSHORE THE BAYSHORE EASTWOOD GREEN CASCADALE JLB RESIDENCES Area Transacted Price Tenure (sqft) Price ($) ($ psf) 6,566 6,850,000 1,043 99 1,087 850,000 782 FH 1,012 685,000 677 FH 1,238 825,000 666 FH 2,766 4,600,000 1,663 99 1,615 2,600,000 1,610 FH 635 995,000 1,567 FH 517 680,000 1,316 FH 1,141 1,350,000 1,183 99 753 850,000 1,128 FH 1,442 1,555,000 1,078 FH 1,281 1,250,000 976 99 1,701 1,630,000 958 FH 1,485 1,328,000 894 FH 2,024 1,805,000 892 99 1,238 1,100,000 889 FH 1,270 1,100,000 866 99 1,087 920,000 846 99 1,442 1,188,000 824 FH 1,572 1,510,800 961 99 1,012 920,000 909 99 1,184 1,050,000 887 99 1,173 950,000 810 99 1,550 1,140,000 735 FH 1,442 1,360,000 943 946

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SINGAPORE PROPERTY WEEKLY Issue 30

Postal District 17 17 18 18 18 19 19 19 19 19 19 19 20 20 20 20 21 21 21 21 21 21 22 22 22 22 22 Area Transacted Price Tenure (sqft) Price ($) ($ psf) 829 735,000 887 999 1,755 1,278,000 728 FH 1,292 1,120,888 868 FH 1,345 960,000 713 99 1,399 950,000 679 99 1,249 1,190,000 953 99 1,066 988,000 927 FH 1,270 1,150,000 905 FH 1,087 980,000 901 FH 1,238 1,100,000 889 FH 980 750,000 766 99 1,249 938,000 751 99 1,270 1,168,000 920 99 2,314 2,000,000 864 99 1,701 1,325,000 779 99 1,798 1,250,000 695 99 1,345 1,670,000 1,241 99 1,130 1,340,000 1,186 99 1,701 1,850,000 1,088 FH 1,345 1,325,000 985 FH 1,636 1,530,000 935 FH 1,206 850,000 705 FH 1,270 1,190,000 937 99 1,356 1,080,000 796 99 1,249 925,000 741 99 1,701 1,190,000 700 100 3,875 1,570,000 405 99

Project Name WATERCREST AVILA GARDENS RIS GRANDEUR MELVILLE PARK MELVILLE PARK CHILTERN PARK 8 EDEN GROVE CHERRYHILL KOVAN ESQUIRE CASA RIVIERA REGENTVILLE RIO VISTA BISHAN POINT GRANDEUR 8 BRADDELL VIEW BRADDELL VIEW GARDENVISTA GARDENVISTA SIGNATURE PARK CLEMENTI PARK PARC PALAIS REGIS MANSIONS THE LAKESHORE THE MAYFAIR PARC VISTA IVORY HEIGHTS LAKESIDE TOWER

Postal District 23 23 23 23 23 23 23 23 23 25 26

Project Name MAYSPRINGS GLENDALE PARK HILLVIEW REGENCY HAZEL PARK CONDOMINIUM THE WARREN GUILIN VIEW HILLTOP GROVE NORTHVALE REGENT GROVE CASABLANCA SEASONS PARK

Area Transacted Price Tenure (sqft) Price ($) ($ psf) 807 730,000 904 99 1,367 1,200,000 878 FH 947 820,000 866 99 1,335 1,100,000 824 999 1,206 940,000 780 99 1,259 980,000 778 99 1,238 958,888 775 99 1,173 840,000 716 99 1,163 823,000 708 99 1,119 885,000 791 99 1,044 835,000 800 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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