Issue 122

Copyright 2011-2013 www.Propwise.sg. All Rights Reserved.

CONTENTS
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4 Outrageous Claims Made by
Property Experts Singapore Property News This Week Resale Property Transactions (September 4 September 10)

FROM THE

EDITOR

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SINGAPORE PROPERTY WEEKLY Issue 122

4 Outrageous Claims Made by Property Experts

By Gerald Tay (guest contributor)
A Business Times article titled Property Investment Seminars on CEA Rader was recently published, where PropNex Reality Chief Executive Mohamed Ismail said: Theres a need for the authorities to regulate the content and claims by these speakers. I support Mr. Ismails call for the authorities to tighten the content and claims made by these speakers, be it in property, stocks, or commodities investment. More Singaporeans looking at overseas property investments With the implementation of multiple rounds of cooling measures and the Total Debt Servicing Ratio (TDSR) framework,
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SINGAPORE PROPERTY WEEKLY Issue 122 more Singaporeans are looking at overseas properties to invest in. From a business point of view, it is enterprising for some seminar providers to tap on this demand pool of potential buyers with enticing claims in their advertisements. Having spent more than two decades in sales with a majority of that in direct sales, Ive known and used every sales trick in the book. If youve been to free seminar previews, you would know what I mean. Some speakers are in fact more a salesman than the expert they claim to be. From my personal wealth background and experiences, Ill share and debunk four popular outrageous investment claims by property experts. Claim #1: Own Multiple Properties in Multiple Countries saying to invest in multiple countries is to make themselves sound like jet setting international tycoons. They advocate that ordinary folks should invest in multiple foreign countries, although they give no reason for doing so other than their contention that it is easy and the properties are cheap. To invest overseas, you have to learn the real estate tax framework of each country, numerous real-estate laws and customs and, worst of all, how to value properties in each country. Its amazing how these speakers know so much about so many different countries they claim to invest in when they neither live nor were born there. My late multi-millionaire grandfather never owned any overseas properties outside Singapore. I mentioned this once and he asked, What would be the point of investing in different countries?

I suspect the real reason these speakers are

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SINGAPORE PROPERTY WEEKLY Issue 122 You could get some diversification against certain nationwide risks like adverse changes in government policies, but the potential losses could outweigh the gains. Also, owning in different countries does not protect you from multi-national risks like higher global interest rates or worldwide recession or depression. I know of a couple of property investors who have a vacation home or two in foreign countries, but no competent investor wants to own rental properties in multiple countries. Some major developers have decided to conquer the world by doing their thing outside Singapore. Not everyone is successful. About the only property investors who should be in multiple countries are owners of hotel chains and theme parks like Disneyland. Your rental properties generally should be in one specific country you know very well, i.e Singapore and maybe two at most. Claim #2: Own Multiple Overseas Properties with Little or No Money Down The main reason the mass market gurus push nothing down is to overcome the objection of I dont have any cash to invest when they try to peddle their expensive boot camps or mentoring services. Gurus do not push little or no money down because it makes sense for an investor. Rather they push it because it helps them market their products and services. I mentioned this advice to one of my USA friends who is a local multi-millionaire realestate investor and he said, In the USA, a sound,

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SINGAPORE PROPERTY WEEKLY Issue 122 long-term investment, in other words, quality properties in good neighbourhoods, is much more important than finding a deal with 100% financing. Even if its 100% financed, a bad property is a bad property. From experience, no money down is not the bed of roses most people think, especially for foreign investors. The type and quality of the property offered by sellers willing to finance you is rarely mentioned. Quality properties in good markets rarely if ever can be bought with little or no money down. An example is my recent successful acquisition of a US$2.2 million commercial property in the USA which was financed partially by a US bank with some cash downpayment. With tight credit financing in the US, the only reason why banks are willing to finance such deals is because it is a quality property deal with a quality tenant.
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Unfortunately, many local gurus have made buying overseas properties with no or little money down more important than buying a quality property. Ordinary folks would be better off in most cases spending the extra time working a second job and saving money for a down payment instead. Claim #3: Below-Market Value (BMV) Deals are the Norm This is an old chestnut of property gurus. In the real world, below-market value (BMV) or under-valued deals are very rare. Experienced investors regard them with suspicion. They typically mean the buyer overpaid or the property is just worth what it is. Competent investors always pay market price if it meets their required yield returns. It is much more time consuming to find BMV deals, so it is mainly a strategy for those whose time has little value.
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SINGAPORE PROPERTY WEEKLY Issue 122 If you always try to source for BMV deals, you would be forced into a few niches where you would wander the land as a sort of beggar pleading with sellers to sell you their properties at below-market price. You dont become rich by being cheap to others. Instead of trying hard to find that magical BMV deal, try asking yourself this: Where can I find under-valued areas to invest in instead? Also, Have I acquired enough financial education to know when that opportunity comes along? Often, the answer lies in your own backyard. Claim #4: Anyone Can Play the Property Game and Become Rich/a Millionaire When property gurus peddle their expensive boot camps or mentoring services to the masses, this makes a very compelling sales pitch. But this is the opposite of the truth. As long as anyone is holding on to a day job as an employee, this dream is forever
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improbable. I do not know anyone attending those expensive boot camps or mentoring services who have become rich or a millionaire. Have you?

You can become wealthy through investments, but you might not become rich or a millionaire. Theres a huge difference in those terms. Becoming wealthy means being financially free without having to work (if you dont want to) as you have other recurring income sources. And in property, it means recurring net income after all debts and expenses.
You dont need a large number of properties to become wealthy. All you ever need as an ordinary investor is learn to acquire one or two really good quality properties that will put money in your pocket every month and help pay off your home mortgage and daily expenses.
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SINGAPORE PROPERTY WEEKLY Issue 122 Bottom-Line The more important problem is that the novices these gurus target cannot tell whether the sales pitch is a bad idea or a good idea. There are no magic formulas, secret techniques or fanciful investment strategies to bring you quickly from rags to riches. For Property Wealth, as in any successful business venture, theres only your hard work, constant education and an entrepreneurial mind-set with steep learning curves to successes. I hope youll discard sales advice and get sound advice on property investment through proper education. I welcome your comments if you are one of those who have been ripped off with these over-hyped claims disguised as wisdom.
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By guest contributor Gerald Tay, CEO of CREI Academy Group, who exposes widelyheld property investment myths that have proven highly ineffective in creating wealth, and prevent a comfortable retirement for the ordinary investor.

SINGAPORE PROPERTY WEEKLY Issue 122

Singapore Property This Week

Residential
TDSR continues developer sales to affect August 73 percent of sales and 76 percent of launches. Rest of Central Region made up 15 percent of sales and 13 percent of launches, and Core Central Region took up 12 percent of sales and 10 percent of launches. 726 EC units were sold in August, compared with 112 units sold in July. Developers launched 927 units for sale in August, compared with 557 homes of July. A Religare Capital Markets report said this was the first time that sales have lagged for two straight months since January last year. It is said that TDSR caused sales to take longer to go through due to more detailed financial assessments. (Source: Business Times)

Despite a recovery last month, new private home sales were suppressed in August by the double influence of the TDSR framework and the Hungry Ghost month. According to the data of the Urban Redevelopment Authority (URA), there were 742 private homes transacted in August, not including the hybrid ECs, which was 54 percent higher than that of July, but just over half of 1,427 sales of last August. Mass-market residences dominated August property activities, with Outside Central Region homes accounting for
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SINGAPORE PROPERTY WEEKLY Issue 122 HDB extends interim housing scheme More families now can temporarily rent an HDB flat while waiting for their new one to be ready through a faster and more convenient process. Under HDBs Parenthood Provisional Housing Scheme (PPHS), couples engaged to be married, married couples either as first-time or second-time applicants, and divorced or widowed parents with children are also eligible for applying for these flats, with priority still reserved for married couples. Monthly rentals for 800 flats available are from $800 to $1,900 depending on size and location. All eligible families can now apply for PPHS flats on HDB's website or at e-kiosks at any HDB Hub or branches. They can also move in faster, as they can apply for a PPHS unit right after booking a new flat, instead of having to wait for an Agreement for Lease, which could take a few
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months. HDB expects families to be able to move into their interim homes by the following month. Engaged couples can now apply for the scheme provided that they must produce their marriage certificate within three months of moving into the PPHS flat. It was reported that the latest changes are unlikely to impact the overall housing market much. Since the schemes introduction in January, 327 married couples have moved into PPHS flats. (Source: Business Times) HDB 5-year bond issue sold for $1.45 billion

HDB had its largest bond sale ever last week, when its $1.45 billion five-year bonds were sold amid a volatile market. This proves that demand is always strong for a solid Singapore issuer. The HDB, a statutory board and frequent issuer, initially wanted to put the
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SINGAPORE PROPERTY WEEKLY Issue 122 issue at $1 billion, but then increased it to $1.45 billion given the strong demand. The deal was priced at 2.365 per cent, 55 basis points above the five-year swap offer rate (SOR) at 1.815 per cent. HDB usually sells tranches of $400 million to $500 million under its $22 billion multi-currency medium term note programme, but in January it had a $1.2 billion deal. and $12.00 psf. In this sub-segment, smaller office spaces received high demand from smaller companies who were previously located in serviced offices and are moving back to traditional office space. CapitaGreen, the latest premium Grade A office development, is now open for interested tenants with asking rents between $13 and $14 psf. Other Raffles Place Grade A office rents also increased by 0.6 percent quarteron-quarter to between $9.30 and $10.45 psf. Outside the CBD, Orchard Roads average office rents for Grade A space increased by 0.6 percent quarter-on-quarter, to between $7.00 and $10.90 psf. Average rents in the Suntec/Marina Centre/City Hall area rose 0.5 percent quarter-on-quarter, while rents in the Beach Road/Middle Road decreased by 0.4 percent quarter-on-quarter. (Source: Business Times)
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(Source: Business Times)

Commercial Prime office rents increases by 1.4% in Q3 A report released by Knight Frank revealed that prime office rents increased in Q3 amid higher leasing enquiries. On contrary to seven consecutive quarters of decreased or flat growth, prime Grade A+ rents in Marina Bay and Raffles Place went up by 1.4 percent quarter-on-quarter, standing at between $9.90
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SINGAPORE PROPERTY WEEKLY Issue 122

Non-Landed Residential Resale Property Transactions for the Week of Sep 4 Sep 10
Postal District 3 8 8 9 9 10 10 11 11 12 15 15 15 15 15 15 15 15 16 16 16 16 17 18 Project Name MERAPRIME PARC SOMME CITY SQUARE RESIDENCES GRANGE INFINITE ILLUMINAIRE ON DEVONSHIRE VALLEY PARK JERVOIS GROVE NINETEEN SHELFORD ROAD THE ARCADIA TREVISTA WATER PLACE VILLA MARINA SERAYA BREEZE BLU CORAL MOUNTBATTEN SUITES HOMEY GARDENS BLU CORAL LAGOON VIEW COUNTRY PARK CONDOMINIUM THE CALYPSO COUNTRY PARK CONDOMINIUM BAYSHORE PARK CARISSA PARK CONDOMINIUM LIVIA Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,313 1,900,000 1,447 99 441 706,000 1,600 99 1,518 2,000,000 1,318 FH 2,680 6,378,000 2,380 FH 721 1,660,000 2,302 FH 1,216 2,050,000 1,685 999 1,410 1,900,000 1,347 FH 915 1,350,000 1,476 FH 3,810 4,000,000 1,050 99 1,281 1,800,000 1,405 99 1,227 1,600,000 1,304 99 1,249 1,410,000 1,129 99 1,001 1,128,000 1,127 FH 1,163 1,300,000 1,118 FH 700 750,000 1,072 FH 1,744 1,700,000 975 FH 2,056 1,680,000 817 FH 1,647 1,270,000 771 99 1,389 1,700,000 1,224 FH 764 933,888 1,222 FH 1,173 1,400,000 1,193 FH 1,292 1,448,000 1,121 99 1,378 1,298,000 942 FH 1,539 1,460,000 949 99

Postal District 18 18 19 20 20 20 21 21 21 21 21 22 23 23 23 26 27

Project Name DOUBLE BAY RESIDENCES MELVILLE PARK THE SPRINGBLOOM THE GARDENS AT BISHAN SIN MING PLAZA FLAME TREE PARK THE CASCADIA SUMMERHILL SHERWOOD CONDOMINIUM SIGNATURE PARK CLEMENTI PARK THE MAYFAIR PARK NATURA HILLINGTON GREEN PALM GARDENS BULLION PARK EUPHONY GARDENS

Area Transacted Price Tenure (sqft) Price ($) ($ psf) 3,111 2,700,000 868 99 990 835,000 843 99 1,130 1,280,000 1,133 99 883 1,031,000 1,168 99 1,442 1,620,000 1,123 FH 1,862 2,080,000 1,117 FH 1,421 2,579,000 1,815 FH 1,604 1,815,000 1,132 FH 915 1,000,000 1,093 FH 1,690 1,760,000 1,041 FH 1,345 1,400,000 1,041 FH 1,163 1,120,000 963 99 1,378 1,600,000 1,161 FH 990 1,088,000 1,099 999 1,206 940,000 780 99 1,873 1,850,000 988 FH 732 668,000 913 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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