Issue 144

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

CONTENTS
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How Much Will Property Prices Fall in 2014?
Singapore Property News This Week Resale Property Transactions (February 5 February 11)

FROM THE

EDITOR

Welcome to the 144th edition of the Singapore Property Weekly. Hope you like it!

Mr. Propwise

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SINGAPORE PROPERTY WEEKLY Issue 144

How Much Will Property Prices Fall in 2014?

By Mr. Propwise Okay so youve read various outlooks for the property market in 2014 and beyond, youve heard everyones arguments about why the property market should go up (yes someone actually predicted that), down or sideways. But what you really want to know is how much will property prices fall (if at all) in 2014? The danger of expert forecasts

Long-time readers of Propwise.sg will know that I dont believe in making forecasts. Instead, I believe we should keep track of where we are in the Property Market Cycle and prepare ourselves for it (HINT: we should be preparing for a bear market ahead).
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SINGAPORE PROPERTY WEEKLY Issue 144 Others have written about the folly of following expert forecasts, but suffice to say that nobody knows what will happen in the future. At best, we can only make an educated guess based on our analysis of the data, and that guess is only one of many possible future outcomes. That being said, I thought it would be helpful to compile the property market forecasts that a wide range of market watchers are making, and share some of my thoughts about them. What the experts are predicting Heres the table of forecasts Ive compiled Ive also included details on the person

making the forecast, organization he or she

belongs to, their position, and the type of organization they belong to. It is sorted roughly in the order from the most positive to most negative.

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SINGAPORE PROPERTY WEEKLY Issue 144

Figure 1 2014 Singapore Residential Property Price Forecasts

We can see a few things from the table above.

First, the range of forecasts is wide, from an increase of 2% to a fall of 20%. This should

tell you something about how predictable the market is not very. Theres a lot of uncertainty due to the myriad factors that influence the market interest rates, employment, supply, taxes, financing rules etc.

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SINGAPORE PROPERTY WEEKLY Issue 144 Second, most of the forecasts are for the property market to fall. And while it is not possible to take a simple average as we will not be making an apples-to-apples comparison, if I had to summarize the forecasts I would say the general range is looking at a 5% to 15% fall in property prices. While a single forecast is likely to be inaccurate, the average of a large number of forecasts is likely to be closer to the eventual outcome, if you believe in the Wisdom of the Crowds. Third, the type of organization matters when trying to determine how reliable a forecast is. When you next hear a forecast, one of the key things you should ask yourself is what vested interest does this person have in the property market? From the table above we can see that the most positive forecasts are from property agencies and developers. Hmm Ill leave you to figure that one out yourself, Sherlock. Cooling measures not going away anytime soon While property developers and agencies were hoping (praying?) for a loosening of property measures after a mild 0.9% quarter-onquarter decrease in the 4th quarter of 2013 (after rising by 61% since mid-2009), their hopes were dashed post the announcement of Budget 2014. Take a look at what Finance Minister Tharman Shanmugaratnam said about the property market: Given the run-up in prices in the last four years, it is too early to start relaxing our measures We are not engineering a hard landing.

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SINGAPORE PROPERTY WEEKLY Issue 144 But neither are we able to eliminate cycles in the property market, with upswings in prices in some years followed by corrections. My read is that the government is not going to support the property market at all costs it will let the cycle play out and try to minimize the damage to Singapores financial system and the impact on household balance sheets. In other words, the government will allow property prices to fall, as long as that fall is not too extreme. When you read news about market watchers calling on the government to relax the cooling measures, think again about the vested interests we discussed above. Who is calling for it and what do they have to gain from it? Wisdom from the Wolf of Wall Street One of the most interesting movies Ive watched in a while, the Wolf of Wall Street, is probably Leonardo DiCaprios and Martin Scorseses finest work. Among the best scenes in the movie, in my opinion, occurs at the beginning when a young Jordan Belfort is taken to lunch by his new boss Mark Hanna (played by Matthew McConaughey). At lunch, Mark gives Jordan some fundamental advice about succeeding in the financial industry, including this gem: First rule of Wall Street, nobody, and I dont care if youre Warren Buffett or Jimmy Buffett, nobody knows if a stocks going up or down, or sideways, least of all stock brokers. But we pretend to know. As you listen to the various forecasts of the market from property experts, just remember that for some it is their job to convince you that they know exactly where it is going to go.
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SINGAPORE PROPERTY WEEKLY Issue 144

Singapore Property This Week

Residential
New launches to boost private housing sales New property launches are expected to give a boost to developers' private housing sales in February and March, after only 565 units being sold in the primary market in January 2014. Although this figure for is higher than the 259 private homes sold in Dec 2013, it decreased 72 percent year-on-year, and is also the lowest figure recorded for the month of January since the 108 units in January 2009 after Lehmans collapse. Developers were thought by market watchers to hold back launches before Chinese New Year due to the weak sentiment since the introduction
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of the Total Debt Servicing Ratio (TDSR) in June 2013. The top-selling project last month was the 281-unit The Hillford in Jalan Jurong Kechil in the Upper Bukit Timah area with a median price of $1,105 psf. (Source: Business Times)
Good Class Bungalow market recovering The Good Class Bungalow market is reported to recover with at least 6 transactions since the start of the year which total about $170 million. Along Margoliouth Road off Stevens Road, an old two-storey bungalow was sold by a retiree couple to Imelda Tanoto for $30.8 million, or $1,696 psf on its land area of 18,161 sq ft.
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SINGAPORE PROPERTY WEEKLY Issue 144 Tanoto is reported to own an adjoining bungalow while her parents own another bungalow nearby. (Source: Business Times) Cooling measures to stay in place Finance Minister Tharman Shanmugaratnam declared last week that it is now too early to start relaxing the property cooling measures given the run-up in prices in the last four years, and that the government will continue to monitor the property market in the coming quarters and adjust the measures when necessary. Property developers and consultants had called for a rolling back of the seven rounds of property cooling since 2009, including the seller's stamp duty (discouraging short-term trading in property), additional buyer's stamp duty (targeting property investors and foreign buyers) and
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lower loan-to-value limits (for those taking their second or subsequent home mortgages). (Source: Business Times) Rivertrees draws strong buyer interest The waterfront condominium project in Sengkang, Rivertrees Residence, received 585 cheques from interested buyers prior to its official launch on Feb 22. It attracted both owner-occupiers and investors across apartments of different sizes. The project is jointly developed by Frasers Centrepoint, Far East Orchard and Sekisui House. In the initial phase, 300 out of 495 units will be launched with the average pricing ranging from $950 to $1,150 psf at a premium of $50-100 psf to its next-door competing project, Riverbank @ Fernvale by UOL Development.

(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 144 Development in Moulmein up for collective sale Despite expectations of a quiet en bloc market in 2014, residents of a freehold Moulmein Road development have put the site up for sale by public tender at more than $40 million, or $1,687 psf ppr for the 16,936 sq ft site with a plot ratio of 1.4. The 16apartment development is located at 165165Q Moulmein Road, and is marketed by CBRE. (Source: Business Times) Commercial Country Club expire in 2021, 2024 and 2021 respectively. The leases for both Keppel Club and Marina Bay will not be renewed, while the Orchid Country Club's lease will be renewed for nine years until 2030 after which there will be no further extension. Parts of the fairways at Tanah Merah Country Club (TMCC) and National Service Resort and Country Club (NSRCC) will be acquired by end of 2014 for the expansion of Changi Airport. One of Singapore Island Country Club's (SICC) golf courses will be made public, and SICC can decide which golf course to give up. (Source: Business Times) Singapores prime office rents up 19% in 2013 Singapores office rents in the central business district (CBD) were reported to increase 19 percent in 2013.
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200 ha of golf course freed for other uses

The government announced that some 200 hectares of golf course land will be freed up for other uses after the land leases for Keppel Club, Marina Bay Golf Course and the Orchid
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SINGAPORE PROPERTY WEEKLY Issue 144 However, office space in Singapore is still considered more affordable compared to other major financial centers. Singapores 803 Euros (S$1,389) psm per year was lower than London's West Ends 2,122 Euros, Hong Kong's Central districts 1,432 Euros, Tokyo CBDs 1,003 Euros, and New York Madison and 5th Avenues 993 Euros. Cushman & Wakefield said that rental growth in Singapore was demand-driven and led by the professional services and technology sectors. Its increases were also tempered by tenants' aggressive focus on reduced budgets and operational expense discipline. Yet rents will remain competitive due to the Singapore government's strong urban planning and a healthy supply pipeline. (Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 144

Non-Landed Residential Resale Property Transactions for the Week of Feb 5 Feb 11
Postal District 5 5 5 8 9 9 9 10 10 10 10 11 11 12 14 15 15 15 15 15 16 16 16 16 Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,313 1,555,000 1,184 99 1,356 1,290,000 951 FH 1,335 1,238,000 928 FH 893 1,390,000 1,556 99 1,324 2,738,000 2,068 FH 732 1,340,000 1,831 FH 1,324 2,180,000 1,647 999 2,228 3,438,000 1,543 FH 1,324 1,800,000 1,360 FH 1,679 2,170,000 1,292 99 1,206 1,500,000 1,244 999 4,930 10,800,000 2,191 99 1,679 2,398,000 1,428 FH 1,044 1,200,000 1,149 FH 1,163 900,000 774 FH 1,163 1,450,000 1,247 FH 861 1,030,000 1,196 FH 1,044 1,020,000 977 99 1,055 960,000 910 FH 1,819 1,400,000 770 FH 1,001 1,005,000 1,004 FH 969 969,000 1,000 99 1,249 1,239,000 992 99 1,313 1,270,000 967 99
Postal District 16 16 17 18 19 20 21 21 21 21 21 22 23 23 23 Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,249 1,200,000 961 FH 1,227 1,140,000 929 99 1,464 1,550,000 1,059 FH 904 975,000 1,078 99 1,302 1,450,000 1,113 99 1,195 1,290,800 1,080 99 1,668 1,980,000 1,187 FH 1,033 1,140,000 1,103 FH 1,647 1,800,000 1,093 FH 1,044 1,100,000 1,054 FH 1,055 1,060,000 1,005 FH 947 935,000 987 99 1,259 1,148,000 912 99 958 818,000 854 99 1,087 918,000 844 99

Project Name HERITAGE VIEW PARC REGENCY PASIR PANJANG COURT CITYLIGHTS THE COSMOPOLITAN PARC SOPHIA ASPEN HEIGHTS CHELSEA GARDENS OLINA LODGE QUINTERRA RIDGEWOOD SOLEIL @ SINARAN MORIMASA GARDENS CASA FORTUNA ESCADA VIEW SANTA FE MANSIONS PALM GALLERIA LEGENDA AT JOO CHIAT DUKU APARTMENTS AXIS @ SIGLAP CHANGI GREEN THE BAYSHORE EAST MEADOWS THE CLEARWATER

Project Name THE TROPIC GARDENS AQUARIUS BY THE PARK THE GALE NV RESIDENCES THE SPRINGBLOOM RAFFLESIA CONDOMINIUM SYMPHONY HEIGHTS SIGNATURE PARK PANDAN VALLEY SIGNATURE PARK GOODLUCK GARDEN THE MAYFAIR GUILIN VIEW PALM GARDENS NORTHVALE

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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