Issue 70

Copyright 2011-2012 www.Propwise.sg. All Rights Reserved.

CONTENTS
p2 p8 p14
QE 3: Operation Screw, the Singapore

FROM THE

EDITOR

Welcome to the 70th edition of the Singapore Property Weekly. Hope you like it!

Property Market and You

Singapore Property News This Week Resale Property Transactions (September 5 September 11)
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SINGAPORE PROPERTY WEEKLY Issue 70

QE 3: Operation Screw the Singapore Property Market and You

By guest contributor Gerald Tay Yes, its Operation Screw all over again. They never learn from the past do they? The same mistakes are repeating all over again. The geniuses at the Federal Reserve have concocted a bold new plan to revive the U.S. economy print a bunch of money, loan it to Americans at super low interest rates so they can speculate on rising real estate prices, extract the appreciated equity and spend it on consumer goods. The last time the Fed tried to create a housing bubble to stimulate the economy, it ended in a global disaster.

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SINGAPORE PROPERTY WEEKLY Issue 70 Throughout history, governments have destroyed economies by destroying currencies. Only this time it will be a major currency crisis in the making, with a huge sovereign debt crisis already underway, and more tears and misery globally. Peter Schiff, one of the few economists who correctly predicted the 2008 financial crisis and worldwide best-selling author of How an Economy Grows and Why It Crashes says, This is a date that will indeed live in infamy, because this is the date that the Federal Reserve went all in on Quantitative Easing (QE). Rather than reviving the economy, the Fed has just sealed its fate and has driven the final nail in the coffin of the U.S. dollar and with it, the entire U.S. economy. Peter points out that in actuality, this decision from the Federal Reserve, their great solution to USA economic woes, is to
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Inflate another housing bubble! Because that worked so well the last time The Fed is going to buy $40 billion worth of mortgagebacked securities every month in an attempt to bring down mortgage interest rates, because they want to spur the housing market. Why?

The Wealth Effect and Rising (Inflated) Property Prices in Singapore

Governments around the world, including Singapore, know rising property prices can be one of the most useful political tools to entice happy voters. When property prices go up, home owners feel wealthier and will therefore spend more money (mostly on things they dont need). Singapores property prices have appreciated tremendously since 2009 from private homes to HDBs, due to a combination of QE1, QE2 and Chinas Trillion Dollar Stimulus Program.
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SINGAPORE PROPERTY WEEKLY Issue 70 Because of this illusionary wealth created in many homes, many went out on a spending spree, upgrading their Toyotas to BMWs (BMW beats Toyota sales for the first time), upgrading from HDB to private homes (with an increasing proportion of local buyers accounting for private transactions), and even to willingly fork out $1 million for a HDB flat. However, there is a fatal flaw here. These people are in fact spending money they have not earned and are borrowing at deceptively low interest rates. Consumers are taking on too much debt and wrecking their personal balance sheets. The governments believe that if they can get home prices to rise, then people will realise they can make money buying houses, and more people will buy houses because they are going up in price, which will encourage more land sales, more property taxes, more taxes through more consumer spending, more happy voters to secure their political seats, and of course rich government coffers. What will QE Do to Ordinary Singaporean Folks? Unsurprisingly, gold, silver, oil, commodities and agriculture is going to go up. In other words, inflation will likely be higher than what it already is today. If you are an employee working for a fixed salary, youre screwed. If youre hoping to retire with your CPF money, youre screwed. If you are a saver, you are screwed. If you own bonds, you are screwed. If youve a savings account, youre screwed. And of course, if you own Dollars, youre screwed.

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SINGAPORE PROPERTY WEEKLY Issue 70 What will QE Do to the Singapore Property Market? This ridiculous display of incessant money printing will spell higher inflation for our property market. Singapore is one of the destinations people look to as a safe haven. Property prices will continue to climb, more land sales will be expected from the government and property developers will take advantage of this influx of hot funds to sell over-inflated properties to ignorant buyers. Of course, it is too early to ascertain the impact QE3 may have (if any) on the Singapore property market. Last Decembers Additional Buyer's Stamp Duty (ABSD) measure has so far been effective in curbing asset inflation in the property market sector . A Bigger Property Bubble? No government wants a massive asset bubble bursting in their own backyard. It
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certainly does not win political favours with voters. Governments only want more consumer spending, higher GDP growth for foreign investments and more job creation. In other words, the more debt consumers borrow, the more the economy will grow. Credit is the lifeblood of any economy. The government does not want to see you in a financial crisis, They only want you to borrow more on low interest rates and take on more debt. However, things often go the other way like during the 2008 financial crisis, the 1997 Asian financial crisis and the many other crises that have been around throughout history. The Singapore government could well introduce new measures or tweak existing ones to prevent a bubble from forming. But they are also trying to toe a fine line, being mindful of the fact that when you tighten too much you never know how it will unravel.
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SINGAPORE PROPERTY WEEKLY Issue 70 So Will Singapore Property Prices Remain Resilient? I do not know about you but my investments certainly never rely on experts who keep talking about how resilient our property market is. These experts seem to do better selling snakes oil than trying to fortune tell the markets direction. In December 2007, a well-known real estate analyst wrote in the Straits Times, Although sentiment in the residential sector has been hit by concerns over the US sub-prime market, the office sector is expected to remain resilient. Investment sentiment is expected to remain positive in 2008, given continued economic growth. In January of 2008, a very well-known CEO of a large property agency said, Prices of residential property in the outer regions are
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still lagging behind the previous peak recorded in 1996. He said there is more room for growth for private homes in the Outside Central Region and forecasted that the private residential property sector for 2008 will continue to perform well. Thus, the price index for 2008 is predicted to grow in the region of 15 to 18 per cent, he added. We all know what came next. Risks to the Singapore Property Market Like it or not, being a highly dependent export economy, no matter what property measures are introduced, our inflated property prices will always be shocked by global events. Risks to the global economy are rife: a potential global slowdown, the risk of spillover from Europes sovereign crisis, the looming raft of tax increases and spending cuts set to kick in at end of the year unless US congress acts, potential wars in Iran,
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SINGAPORE PROPERTY WEEKLY Issue 70 China and Japan, and of course any dreaded black swan events that may happen. All could shock the economy and send it back into a recession even worse than the 2008 financial crisis. What Does This Mean To You As An Investor? Smart investors always buy properties on immediate cash flow that generates returns higher than current inflation rates. Amateurs will try the market, hoping and waiting for capital gains to happen. With QE3 and even with the four years Seller Stamp Duty, there will still be many foolish investors buying on hope of capital appreciation. Low interest rates make me rich because I buy an asset, borrow for 30 years, rent by the month and put cash flow into my pockets. Unfortunately, low interest rates make most people poor because they borrow and spend future money they do not have, and hope their asset makes them money through capital appreciation. Avoid buying new sales or properties that do not generate cash flow immediately. This is your only defence against the many uncertainties plaguing the global economy today. The property market is too volatile to speculate on capital gains. By guest contributor Gerald Tay, CEO and Chief Trainer at CREi Academy Group.

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SINGAPORE PROPERTY WEEKLY Issue 70

Singapore Property This Week

Residential
Property market may heat up from QE3 With the influx of US$40 billion into the US economy each month under the QE3, there have been worries that this could lead to an influx of foreign funds into the property market in Singapore, potentially leading to more rounds of cooling measure. However, some said that it is too early to be sure of any impact that the QE3 has on the local property market, especially since recent deals sealed usually involved local buyers. The government may also have differential measures in future cooling measures so as to not penalise genuine owner-occupiers. The current demand for property is not solely due to the low interest rates, the large number of
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immigrants, and shoebox units with lower absolute prices also play a part. (Source: Business Times) Private home sales fell by 27% in August 1,421 units excluding ECs were sold by developers in August, a 27% fall from 1,946 in July. This does not come as a surprise since there tends to be slower transactions in the Hungry Ghost month. This is due to the relative lack of new launches (37% fall from July) in the month, leading to buyers turning to projects launched before August. Only a third of the 1,118 homes launched in August were from new projects, which sales took up only 14.5% of the 1,421 units sold. Sales are expected to rise in September since there will
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SINGAPORE PROPERTY WEEKLY Issue 70 be more launches then, with around 1,600 to 1,800 units sold. There was also an increase in sales for projects in the mid- to high-end segment compared with July, with 28% of units sold at prices above $1,500 psf, compared to 18% in July while sales in the Outside Central Region (OCR), fell by 45% to 835 units and sales in the Rest of Central Region grew in August compared to July. A total of 15,295 homes have been sold this year so far, compared with 15,904 for the whole of last year. 118 EC units were sold in August, all of which were from existing projects as there were no new launches during the month, compared to the 124 units sold in July. 2,668 ECs have been sold in the year so far, 7% lower than the 2,883 ECs sold in 2011. (Source: Business Times) Freehold Green Lodge sold for $191.888 million to private investor The 151,075 sq ft site at Toh Tuck Road off Jalan Jurong Kechil in Upper Bukit Timah vicinity was sold for $191.888 million or $907 psf ppr based on the 1.4 plot ratio. Taking into account the 1.4896 approved density of equivalent plot ratio based on a slighter larger original land area which would allow an 8.9% balcony space, the unit land price will be $833 psf ppr since no development charge is payable. However, an $827,000 development charge is payable if it is developed up to 10% balcony space, bringing the breakeven cost for a new development to $1,100 psf. It can be developed into a five-storey condominium. The site is located within 1 km of the popular Pei Hwa Presbyterian Primary School and 800 metres from the future Beauty World

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SINGAPORE PROPERTY WEEKLY Issue 70 MRT Station on the Downtown Line. (Source: Business Times) 99-year Dairy Farm Rd residential plot attracts $244.32m top bid The 188,861.2-sq-ft private housing site on Dairy Farm Road drew a total nine bids, with the surprising top bid of $244.32 million or $616 psf ppr from a First Shine Properties and Meadows Bright Development tie-up. The site has a maximum GFA of 396,617.4 sq ft, a part-five-part-15-storey height restriction and can be developed into no more than 526 units. Its attractiveness could be due to the relative limited supply of residential sites in the Bukit Timah area, its proximity to the future Hillview MRT Station on the Downtown Line, and an expectation of increasing private property prices as a result of the QE3. (Source: Business Times)
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99-year-leasehold eCO in Bedok South Avenue 3 proved popular Over 220 of the 262 released units at the 748unit project has been sold at an average of $1,250 psf to mainly Singaporeans and PRs, with those who bought on the first day enjoying up to 18% discounts. The current 14% discount brings the average selling prices up to $1,300 psf. There are 246 suites, 220 Soho (small-office-home-office) apartments, 34 townhouses and 248 condominium units in the project, with prices starting at $745,000 for a 549-sq-ft suite with one bedroom. The 581 sq ft to 1,098 sq ft two-bedroom units were sold the fastest. (Source: Business Times) 90% of units at freehold Gambir Ridge sold at preview 70 of the 77, or 90% of the units (ranging from
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SINGAPORE PROPERTY WEEKLY Issue 70 one- to four-bedroom units) at Gambir Ridge, a freehold condominium at Bartley Road, were sold at above $1,400 psf at their preview. There are one-bedroom units (570732 sq ft), two-bedroom units (710-1,130 sq ft), three-bedroom units (915-1,119 sq ft), four-bedroom units (1216-1,442 sq ft) and penthouse units (1,119-1,938 sq ft) in two five-storey blocks of residential units and a basement car park in the development, which also features barbecue terraces, a rooftop lap pool, a jacuzzi and a gym. Its appeal is attributed to its attractive pricing, its proximity to Bartley and Woodleigh MRT stations, as well as Nex Mall, Heartland Mall and myVillage (formerly Serangoon Garden Village). (Source: Business Times) Commercial CPF Board to sell its space at freehold 79 Anson Rd CPF Board is selling its 88,636 sq ft NLA of space (office space from levels 16-23 and a ground-floor retail unit facing Anson Road) at 23-storey 79 Anson Road, which is located 250 metres from Tanjong Pagar MRT Station, through an expression of interest exercise closing on Oct 23. It is expected to achieve price of $200 million or $2,000 psf on the 100,007 sq ft strata area, which comprises 17 strata titles. Most levels have two separate strata titles of about 4,746 sq ft and 6,339 sq ft each. The remaining 117,423 sq ft strata area consisting of 22 strata titles on levels 1 and 5-15 may also be sold by owner SEB. Its existing 289,185 sq ft GFA exceeded the

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SINGAPORE PROPERTY WEEKLY Issue 70 275,369 sq ft GFA based on the 8.4 plot ratio designated for the 32,782 sq ft site zoned for commercial use under Master Plan 2008. The site can be built up to 35 storeys. However, even if a buyer purchase the both the space offered by CPF Board and SEBs space, the property cannot be redeveloped immediately as an anchor tenant that occupies around 75% of CPF Board's space recently renewed its lease till early 2016. The space offered by CPF Board is currently fully leased at an average of $5.84 psf per month, a 3% net yield. The development also offers 145 car park lots on levels 2-4. (Source: Business Times) Mandarin Orchard Singapore Mandarin Gallery may be sold and diligence. Mandarin Orchard Singapore (valued at $1.18 billion at the end of last year) and the adjoining Mandarin Gallery (valued at $520 million at the end of last year) both sits on a site with a remaining lease term of about 44 years. The 1,051-room Mandarin Orchard Singapore comprises a 37-storey tower and a 39-storey tower while Mandarin Gallery has a 152-metre long frontage on Orchard Road and a 196,337 sq ft GFA. (Source: Business Times)

Freehold Upper Paya Lebar industrial building up for sale

Eight-storey Tropical Industrial Building at 14 Little Road off Upper Paya Lebar Road, has been put up for sale with an indicative price of $32 million, or $513 psf ppr. There are eight strata-titled units with 50,289 sq ft total strata floor area and a total GFA of 62,375 sq ft in the building. No development charge is
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Owner of the two properties, Overseas Union Enterprise (OUE), is said to have given exclusivity to a potential buyer to perform due
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SINGAPORE PROPERTY WEEKLY Issue 70 payable to redevelop the 22,126 sq ft site to its full potential of 62,375 sq ft GFA, based on its 2.5 plot ratio. It is likely to appeal to endusers seeking a standalone property and developers seeking industrial sites for strata development. The site is expected to be popular since it is centrally located, near residential areas and eateries at the shophouses at the junction of Upper Paya Lebar Road and Little Road. (Source: Business Times) URA to launch 0.66 ha white site at Thomson Rd The white site at Thomson Road/Irrawaddy Road which can be put to commercial, residential or hotel use was triggered by a commitment of $211.3 million, or $700 psf ppr. However, at least 30% of its 301,852 sq ft maximum permissible GFA must be set aside for hotel use. It is expected to draw five to eight bids, all above $1,000 psf ppr, given its proximity to Novena MRT Station, medical centres such as Tan Tock Seng Hospital, Novena Medical Centre and Mount Elizabeth Novena Hospital, and commercial developments such as Velocity @ Novena Square, United Square and Square 2. The site will likely be developed into a project with serviced apartments, hotel, and retail to cater to the medical facilities in the area. The public tender will be launched in two weeks and last for eight weeks. (Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 70

Non-Landed Residential Resale Property Transactions for the Week of Sep 5 Sep 11
Postal District 1 3 3 3 3 3 4 4 4 5 5 5 5 5 8 8 8 8 9 9 9 9 9 9 9 Project Name THE SAIL @ MARINA BAY MERAPRIME TANGLIN VIEW THE ANCHORAGE ALESSANDREA CENTRAL GREEN CONDOMINIUM MARINA COLLECTION CARIBBEAN AT KEPPEL BAY CARIBBEAN AT KEPPEL BAY ONE-NORTH RESIDENCES HERITAGE VIEW DOVER PARKVIEW FABER CREST PARC REGENCY CITY SQUARE RESIDENCES CITYLIGHTS CITYLIGHTS CITIGATE RESIDENCE HELIOS RESIDENCES HELIOS RESIDENCES HELIOS RESIDENCES PARC SOPHIA CASA CAIRNHILL CLAREMONT PARC CENTENNIAL Area Transacted Price Tenure (sqft) Price ($) ($ psf) 883 1,173 1,163 1,378 1,098 1,528 2,185 1,335 1,281 1,313 1,163 936 1,270 1,690 570 570 893 1,184 1,668 2,002 1,668 667 1,572 1,163 1,163 1,722,000 1,710,000 1,500,000 1,660,000 1,316,000 1,678,000 6,227,250 2,040,000 1,835,000 1,835,000 1,320,000 1,030,000 1,175,000 1,420,000 985,000 950,000 1,370,000 1,350,000 6,110,700 7,069,500 5,719,500 1,200,000 2,700,000 1,860,000 1,700,000 1,951 1,457 1,290 1,205 1,199 1,098 2,850 1,528 1,433 1,397 1,135 1,100 925 840 1,727 1,665 1,533 1,140 3,663 3,531 3,428 1,798 1,718 1,600 1,462 99 99 99 FH FH 99 99 99 99 99 99 99 99 FH FH 99 99 FH FH FH FH FH FH FH FH Postal District 10 10 10 10 10 10 10 11 11 11 11 11 11 12 12 12 12 14 14 14 14 15 15 15 15 Project Name ARDMORE PARK BEVERLY HILL THE EQUATORIAL THE SIXTH AVENUE RESIDENCES THE TESSARINA TANGLIN REGENCY EWE BOON REGENT PARK INFINIA AT WEE NAM SHELFORD SUITES NINETEEN SHELFORD ROAD NOVENA COURT SUFFOLK PREMIER HILLCREST ARCADIA TREVISTA OLEANDER TOWERS AVA TOWERS AVA TOWERS DAKOTA RESIDENCES THE HELICONIA CENTRAL GROVE SIMSVILLE THE SEAFRONT ON MEYER ARTHUR 118 CAMELOT BY-THE-WATER ONE AMBER Area Transacted Price Tenure (sqft) Price ($) ($ psf) 2,885 3,778 1,507 1,787 1,561 1,109 1,496 1,442 1,292 646 861 1,076 1,711 463 893 1,173 1,281 1,044 1,335 1,206 1,249 1,604 1,001 2,745 1,378 9,050,000 7,800,000 2,650,000 2,800,000 2,220,000 1,338,000 1,500,000 2,436,980 2,170,000 970,000 1,233,000 1,450,000 1,600,000 755,000 960,000 1,150,000 1,200,000 1,450,000 1,280,000 1,100,000 1,080,000 2,530,000 1,430,000 3,800,000 1,890,000 3,137 2,064 1,759 1,567 1,422 1,207 1,003 1,690 1,680 1,502 1,432 1,347 935 1,631 1,075 980 937 1,389 959 912 865 1,577 1,428 1,384 1,372 FH FH FH FH FH 99 FH FH FH FH FH FH 99 99 99 FH FH 99 FH 99 99 FH FH 99 FH

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SINGAPORE PROPERTY WEEKLY Issue 70

Postal District 15 15 15 15 15 15 15 15 15 15 15 15 15 16 16 16 17 17 17 18 18 18 19 19 19 19 21 21 Project Name AMBER POINT OCEAN PARK COSTA RHU ST PATRICK'S COURT SANCTUARY GREEN THE MAKENA AMBER RESIDENCES SANCTUARY GREEN CRESCENDO PARK VILLA MARINA SANCTUARY GREEN NEPTUNE COURT ASPEN LOFT BAYSHORE PARK THE CALYPSO KEW GREEN ESTELLA GARDENS LIGHTHOUSE DAHLIA PARK CONDOMINIUM SAVANNAH CONDOPARK EASTPOINT GREEN MELVILLE PARK THE QUARTZ THE QUARTZ KENSINGTON PARK CONDOMINIUM ROSYTH VILLE THE HILLSIDE GARDENVISTA Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,668 1,302 1,399 969 1,399 1,582 6,717 2,207 1,227 1,916 3,875 1,270 2,099 936 1,259 3,025 657 1,119 1,453 1,238 1,173 1,345 1,141 1,055 1,485 1,087 1,044 1,249 2,200,000 1,620,000 1,600,000 1,100,000 1,580,000 1,780,000 7,388,414 2,350,000 1,280,000 1,700,000 3,300,000 1,078,000 1,550,000 980,000 1,270,000 1,850,000 668,000 958,000 1,188,000 1,033,000 975,000 945,000 1,210,000 1,050,000 1,470,000 1,030,000 1,168,000 1,393,000 1,319 1,244 1,143 1,135 1,129 1,125 1,100 1,065 1,043 887 852 849 738 1,046 1,008 612 1,017 856 818 835 831 702 1,060 995 990 947 1,119 1,116 FH FH 99 FH 99 FH FH 99 FH 99 99 99 FH 99 FH 99 FH 99 FH 99 99 99 99 99 999 999 FH 99
Postal District 21 21 21 22 23 23 23 23 23 25 26 26 26 28 Project Name PINE GROVE PINE GROVE BEAUTY WORLD CENTRE THE LAKESHORE GLENDALE PARK HILLVIEW REGENCY THE WARREN REGENT GROVE MAYSPRINGS ROSEWOOD THE CALROSE CASTLE GREEN SEASONS PARK SERENITY PARK Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,668 1,798 1,873 1,109 1,658 1,195 1,259 1,163 1,302 1,173 1,238 947 1,292 1,109 1,620,000 971 1,540,000 857 1,530,000 817 1,250,000 1,127 1,590,000 959 1,050,000 879 1,050,000 834 850,000 731 950,000 729 920,000 784 1,460,000 1,179 810,000 855 1,066,800 826 980,000 884 99 99 99 99 FH 99 99 99 99 99 FH 99 99 FH

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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