Issue 125

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

CONTENTS
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Should You Apply For Multiple
Loans Before Buying a Property? Singapore Property News This Week Resale Property Transactions (September 25 October 1)

FROM THE

EDITOR

Welcome to the 125th edition of the Singapore Property Weekly. Hope you like it!

Mr. Propwise

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SINGAPORE PROPERTY WEEKLY Issue 125

Should You Apply For Multiple Loans Before Buying a Property?

By Paul Ho (guest contributor) Gone are the days when applying for a bank loan was a breeze all thanks to the MAS rules regarding the Total Debt Servicing Ratio (TDSR) and stricter lending criteria, especially with the clause pertaining to Proof of Debt. What does Proof of Debt mean? Banks are required to enforce the MAS TDSR limit set at 60%, which includes housing loan servicing as well as that of other debt. The burden is on the banks to make sure that they impose the Proof of Debt on potential borrowers.

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SINGAPORE PROPERTY WEEKLY Issue 125 As a result, if your credit report shows that you have several credit cards and if one of the cards shows that payment is not made in full, banks will then require you to print out your credit card statements to ascertain the outstanding loan amount. The banks will then use this amount to impute the minimum sum required by the credit card companies to work out the required monthly servicing amount. This monthly servicing amount affects your TDSR score, and, hence, your total borrowing amount. How to make sure I have a property loan before purchasing? If you are buying a new property, you have to make sure that you have a home loan or commercial loan in hand prior to purchase, just before you make your property buying decisions. This is critical under the TDSR criteria as many people may not be aware of their financial commitments. These property buyers could end up paying the 1% Option to Purchase (OTP) and then fail to obtain a property loan. Home loans or commercial loans approval-inprinciple (AIP) some call it In-PrincipleApprovals (IPA) are a necessary safeguard prior to committing to a property purchase. They are by no means 100% guaranteed, but they do provide a good indication of borrowing ability. Why do bad mortgage brokers encourage you to apply for multiple loan applications? Some mortgage brokers suggest that you should apply for an AIP from one bank first, and sometimes even many banks at the same time.
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SINGAPORE PROPERTY WEEKLY Issue 125 Generally up to three is considered okay. Anything beyond that is bad in our opinion. Some brokers suggest that once you have the AIP in hand, you can then try to apply for more bank loans when you make the property buying decision. This, on the surface, sounds like a fair statement to protect the buyer. But is it really so? curses from customers (even though they do not meet them, and, in most cases, are not even allowed to meet with front-end bankers). Abusing the system created to give you some form of safety by wantonly applying to as many banks as possible for AIP, and subsequently not taking up loans from the banks is not simply a matter of fairness. This abuse has led banks to reduce or scrap AIP outright. Some banks have even imposed or are considering imposing a fee for AIP. Credit officers are overworked and hold a thankless job and the bank cannot easily find sufficient credit officers to handle all the extra workload. In the end, such irresponsible behavior will lead to higher cost for consumers.

What will abuse of the Principle process lead to?

Approval-in-

Lets put it bluntly the AIP takes away valuable resources from the banks as it involves a huge amount of paperwork. By applying for multiple AIPs, this piles on extra workload on bankers, banks, and, especially credit officers in the banks. Credit officers have a thankless and stressful job. They are also on the receiving-end of abuses and

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SINGAPORE PROPERTY WEEKLY Issue 125 What do excessive AIP and home loan applications lead to? When you make excessive AIP or home loan applications, each of these applications invoke a Credit Enquiry. According to the credit bureau, Too Many Enquiries leads to Marginally Increased Risk and degrades your credit score. A bad mortgage broker invokes your greediness to take advantage of the system to protect their own commission. They abuse the goodwill of banks, leading to increased costs for consumers. And worse still, by making Too Many Enquiries, bad mortgage brokers make your credit score worse, demonstrating complete ignorance of credit risks and disregard for your financial wellbeing. In conclusion, you should only apply for an AIP to the top one or two banks that you intend to take up a home loan with after a TDSR analysis.

By Paul Ho, holder of an MBA from a reputable university and editor of www.iCompareLoan.com, Singapores first Cloud-based Home Loan reporting platform used by Property agents, financial advisors as well as Mortgage brokers.
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SINGAPORE PROPERTY WEEKLY Issue 125

Singapore Property This Week

Residential
3 pilot HDB estates to have mechanised carparks Three HDB estates in Bukit Panjang, Yishun and Changi Village have been chosen as pilot sites to display mechanized parking systems to see how carpark shortages can be addressed in a pilot project by the Government Parliamentary Committee (GPC) for National Development. It was reported that GPC and HDB have studied the suitability and potential of mechanized carparks as additional parking solutions because they can provide additional parking lots in estates with site constraints, especially older estates with no space to build more lots.
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However, not all HDB estates are appropriate for mechanized parking systems. The three pilot sites, therefore, allow further evaluation, including users acceptance before extending it to other sites in the future. The new mechanized carparks operate like an automated multi-storey garage, with a lift for cars. Once a driver parks his car and exits the lift, the system will determine where to take the vehicle and will move the car into place. It is estimated that the cost of installing and maintaining mechanized parking is higher than that for multi-storey or surface car parking. (Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 125 Five houses and 506-unit EC up for sale in Sembawang Three terraced houses and two semidetached homes were launched for sale by tender, while e-applications for SkyPark Residences, a 506-unit executive condominium (EC), were also open this week in Sembawang region. The three terraced houses in Kerong Walk range from 2,187 sq ft to 2,946 sq ft in size. The pair of semidetached houses on Wak Hassan Drive are 3,775 square feet and 4,661 sq ft in size. Together, the five houses in the Sembawang Park neighbourhood have a guide price of $15 million, or $943 psf. The guide price for the semi-detached houses ranges from $850 to $900 psf, and the terrace houses guide price are between $950 and $1,100 psf. The owners will consider both individual bids and offers for permutations of the properties. The
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tender exercise for the five houses closes at 3pm on Oct 31. The marketing agent for the sale is CBRE, which said that the houses are unique in design catering needs of modern families with lush natural surroundings. As for SkyPark Residences, market watchers expect the project, the first EC with a 100m skypark, to be around $750 and $820 psf. The development will give a third of its groundlevel common space to water facilities. It has nine 15-storey towers of apartments with between three and five bedrooms and maisonettes with five bedrooms. Most units will have three or four bedrooms. Threebedroom units are available in 1,141-sq-ft and 1,152-sq-ft sizes. The three-bedroom premiums are 1,238 sq ft in size. Fourbedroom units range from 1,302 sq ft to 1,356 sq ft in size. The four-bedroom premiums are 1,528 sq ft and 1,582 sq ft sizes.
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SINGAPORE PROPERTY WEEKLY Issue 125 There are also 28 five-bedroom maisonettes with 1,722 sq ft in area. (Source: Business Times) property deal would improve the ICPs cash flow and earnings, including the $2.3 million gain from the disposal. Proceeds would be used for working capital, investment and acquisition opportunities. (Source: Business Times)

Commercial
Poyang factory building and leasehold land to be sold for $11.8m ICP Ltd announced on Oct 7 that it would be selling its factory building and leasehold land at 5 Loyang Drive of 6,931.2 sq m to Chang Hua Construction Pte Ltd for $11.8 million. For the financial year ended June 30, 2013, the net book value of the property was $9.5 million. The sale was driven by continuous losses for the last three financial years of the groups electroplating business carried out in the property. The electroplating business would be stopped, while the proposed

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SINGAPORE PROPERTY WEEKLY Issue 125

Non-Landed Residential Resale Property Transactions for the Week of Sep 25 Oct 1

Postal District 2 3 5 5 5 8 9 9 9 9 9 9 9 10 10 10 10 10 10 10 10 10 10

Project Name INTERNATIONAL PLAZA TANGLIN VIEW VILLA DE WEST THE INFINITI THE INFINITI CITYLIGHTS SCOTTS SQUARE RIVERGATE SCOTTS 28 SCOTTS HIGHPARK ROBERTSON 100 BELLE VUE RESIDENCES UE SQUARE GRANGE RESIDENCES THE MONTANA THE MONTANA THE MONTANA THE MONTANA DUCHESS RESIDENCES THE MONTANA BELMOND GREEN GALLOP GABLES THE BALMORAL

Area (sqft) 861 1,249 1,528 1,302 1,270 678 1,249 1,033 1,744 1,744 678 2,045 1,238 2,852 947 1,324 1,141 1,141 1,464 947 1,055 1,733 7,642

Transacted Price ($) 1,020,000 1,640,000 1,660,000 1,368,888 1,328,888 1,100,000 3,871,900 2,360,000 3,750,000 3,662,400 1,280,000 3,800,000 1,800,000 8,570,000 1,875,070 2,600,000 2,169,900 2,159,600 2,760,000 1,754,670 1,940,000 3,100,000 12,000,000

Price Tenure ($ psf) 1,185 99 1,313 99 1,086 FH 1,051 FH 1,046 FH 1,622 99 3,101 FH 2,284 FH 2,151 FH 2,100 FH 1,888 FH 1,858 FH 1,454 929 3,004 FH 1,980 FH 1,964 FH 1,902 FH 1,893 FH 1,885 999 1,852 FH 1,839 FH 1,789 FH 1,570 FH

Postal District 10 10 11 11 14 14 14 15 15 15 15 15 15 15 15 16 16 16 16 17 17 18 19

Project Name THE TESSARINA MONTVIEW BUCKLEY 18 ZEDGE D'OASIA LE CRESCENDO THE SUNNY SPRING THE SEA VIEW ONE AMBER HAIG RESIDENCES THE MAKENA PARK EAST LAGUNA PARK NEPTUNE COURT MANDARIN GARDEN CONDOMINIUM BAYSHORE PARK AQUARIUS BY THE PARK THE CLEARWATER CASAFINA CARISSA PARK CONDOMINIUM LOYANG VALLEY MELVILLE PARK COMPASS HEIGHTS

Area (sqft) 1,033 1,227 1,055 1,238 861 1,539 1,410 1,518 1,302 452 1,152 1,722 1,615 1,636 1,572 1,076 1,227 1,356 2,024 2,110 1,991 936 1,109

Transacted Price ($) 1,615,000 1,870,000 1,825,000 1,580,000 1,150,000 1,710,000 1,350,000 2,520,000 1,952,888 640,000 1,500,000 1,800,000 1,630,000 1,485,000 1,350,000 1,100,000 1,200,000 1,270,000 1,650,000 2,020,000 1,480,000 835,000 1,118,888

Price Tenure ($ psf) 1,563 FH 1,524 FH 1,730 FH 1,276 FH 1,335 FH 1,111 FH 957 FH 1,660 FH 1,499 FH 1,416 FH 1,302 FH 1,045 FH 1,010 99 908 99 859 99 1,022 99 978 99 936 99 815 99 957 FH 743 99 892 99 1,009 99

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SINGAPORE PROPERTY WEEKLY Issue 125

Postal District 19 19 20 20 20 21 21 23 23 27 27

Project Name HOUGANG GREEN REGENTVILLE BRADDELL VIEW LAKEVIEW ESTATE FAR HORIZON GARDENS GRAND REGENCY CLEMENTI PARK GUILIN VIEW HILLVIEW REGENCY SELETARIS ORCHID PARK CONDOMINIUM

Area (sqft) 764 1,152 1,615 1,615 1,948 818 1,873 1,259 1,119 1,647 1,249

Transacted Price Tenure Price ($) ($ psf) 720,000 942 99 935,000 812 99 1,450,000 898 99 1,348,000 835 99 1,450,000 744 99 1,007,000 1,231 FH 1,950,000 1,041 FH 1,180,000 937 99 1,000,000 893 99 1,430,000 868 FH 968,000 775 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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