Issue 141

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

CONTENTS
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Should You Believe Expert Forecasts?
Singapore Property News This Week Resale Property Transactions (January 15 January 17)

FROM THE

EDITOR

Welcome to the 141th edition of the Singapore Property Weekly. Hope you like it!

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SINGAPORE PROPERTY WEEKLY Issue 141

Should You Believe Expert Forecasts?

By Gerald Tay (Guest Contributor) If I have noticed anything over these 60 years on Wall Street, it is that people do not succeed in forecasting whats going to happen to the stock market." Benjamin Graham (Warren Buffetts teacher) As happens every year, property firms including property agents, mortgage lenders, property gurus, and property analysts have released their end-of-year predictions for where prices will go in 2014. Many pundits expect prices to rise slightly this year, but not by much. These expert forecasters seemed to possess the I know-it-all investment mentality and offer to share their prophecies
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SINGAPORE PROPERTY WEEKLY Issue 141 with the public. Human fascination with the future can be traced back to prehistoric times. People have always wanted to predict the future for psychological reasons (to reduce their fear and anxiety about the unknown). The human desire to foresee the future has been exploited by some for profit, fame, or power. Selling Prophecies for Profit, Fame, and Power since Ancient Times The Temple of Delphi was the richest institution in ancient Greece and was the forecasting analyst of ancient times. Its power of prophecy was widely believed in. Delphi is perhaps best known for the oracle at the sanctuary, because it was attributed to Apollo, God of the Sun, who could see and therefore foretell the future for all those who could afford the services of his oracle.
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The oracle gave her predictions in such a way as to make their invalidation difficult. Those seeking advice were often told what they were expecting to hear. If that was not possible, the prophecies were equivocal: their wording was obscure, were general, or were impossible to check against reality. Delphi was not the only place selling prophecies. Since the dawn of civilization priests, astrologers, prophets, fortune tellers and the like have sought to satisfy the human need to predict the future. The Temple of Delphi became the best known and most successful of all because of the uncanny shrewdness of the priests who ran it. They were full-time employees, the first professional forecasters, who had an obvious interest in making people believe that their oracle could foretell the future.

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SINGAPORE PROPERTY WEEKLY Issue 141 Their livelihood and prosperity depended on that accomplishment. Judging from the unquestioned acceptance of their prophecies, the richness of their holdings, and their lasting influence (more than 500 years), we must conclude that theirs was a success story, although many today would say that the predictive power of their prophecies was zero. unless immediate remedial action is taken, the results will be catastrophic. Obscure: Markets can often seem perverse. But recent weeks have added a bizarre new twist. Lehman Brothers is only a freak event and we may see market rebounding to normal again. Cannot be checked against reality: Carbon dioxide will increase the earth's temperature resulting in the melting of the polar ice in 30,000 years and sink Singapore. Another failed prophecy: Gold price will hit $2,500 per ounce by end of 2013, predicted by a gold expert in end 2012. Whether the experts are wrong or right in their predictions of the future is not the main issue. Rather the more worrying problem is that ordinary investors are simply taking those predictions and investing based on what
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Are things any different at present?

Examples of Present-Day Prophecies Fore-telling what we want to hear: The Property Market will continue to rise by another 10% by the middle of next year. (Forecasted by a well-known property expert in late 2007 before the severe market correction of 2008) Double meaning: All evidence indicates that a great correction is in the making, and
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SINGAPORE PROPERTY WEEKLY Issue 141 the experts (or other people) say. So if an expert says the property market will rise and reach certain levels this year, unwitting investors will jump the gun and start queuing at property show-flats and buy like a herd of lemmings. One of the greatest myths of investing One of the greatest myths about investing in property, stocks or other investments, is that in order to be successful, you must be able to predict the market's movements. Why people assume this is beyond my utter comprehension! naive investors fail to ignore many other crucial factors involved that are intricately connected like a spiders web in the rise and fall of property prices in Singapore.

For others, the desire to predict is borne out of human nature, which puts a premium on certainty. We love to know what will happen in advance. Hence, it is usually assumed by the beginning investor that to be successful, one must first become an expert at forecasting future market trends. Experienced investors know, in fact, that nothing could be further from the truth.
People consider experts superior beings while forgetting that they are normal human beings who have the same mind that any human being has. What most experts fail to notice is that past experience is never an indication of future results. Just watch how experts give
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Take property many falsely assume that any property is a sure-win investment due to the single factor of demand and supply in land scarce Singapore with a growing population. They conclude that regardless of whatever price they buy at, prices will rise indefinitely in the future and guarantee them a profit. These
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SINGAPORE PROPERTY WEEKLY Issue 141 recommendations about stocks and you will laugh. When they recommend a stock that keeps falling they shortly change their minds and recommend selling it, and when it starts going up again they quickly recommend buying it. How to succeed by disregarding expert opinion and advice Like other successful investors, I refused to conform to societys norms and beliefs. Neither will I follow expert advice. Just like ordinary people, most experts know little and are usually wrong. The only expert advice Ill ever ask for and listen to are from people who have succeeded in both actions and words. I could have decided to believe the experts and invest based on their opinions and advice; I would have been much poorer today!
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Forgive me for ending with more investing clichs, but there is another old adage that is very much worth repeating: "What's obvious is obviously wrong." This means that knowing a little bit and simply tagging on the advice and actions of others will only have you following the crowd like a lemming. Like anything worth anything, successful investing takes hard work and effort.

Becoming rich is not about luck, starting big or being intelligent in forecasting the future. Its all about having certain beliefs about money and life.
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.

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SINGAPORE PROPERTY WEEKLY Issue 141

Singapore Property This Week

Residential
Developers more cautious in EC bidding Analysts say that developers are now showing more caution in bidding for executive condominium (EC) sites after the tender for a 99-year leasehold site at Canberra Drive. The highest bid out of six bidders was $226 million, or $350.04psfppr, from a joint venture between Verwood Holdings, a unit of City Developments, and TID Residential. This bid was in line with earlier estimates of between $320 and $380 psfppr, and was 4.4 percent higher than the second highest of $216.5 million, or $335.33 psfppr, from MCL Land (Brighton).
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(Source: Business Times) Completed condo prices dropped in 2013: NUS According to the National University of Singapore's Overall Singapore Residential Price Index (SRPI), prices of completed nonlanded private homes decreased 0.6 percent for the whole of 2013, compared with an increase of 4.2 percent in 2012. This drop followed the previous five consecutive monthon-month declines. The biggest decrease was the SRPI for Central Region (excluding small units), or districts 1 to4 (including the financial district and Sentosa Cove) and the traditional prime districts 9, 10 and 11.
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SINGAPORE PROPERTY WEEKLY Issue 141 The sub-index for Non-Central Region (excluding small units) increased 0.9 percent, while that for small apartments (up to 506 sqft) also increased 2.8 percent in 2013. The index rose 8.7 percent in 2011, 11.7 percent in 2010 and 22.7 percent in 2009. (Source: Business Times) Braddell View for privatization land parcel will have to be topped up to be on a par with the newer one with a required payment of land premium the amount of which will be determined by the Chief Valuer Office. (Source: Business Times) Commercial 700 Beach sold for $120m Eight-storey boutique office block 700 Beach has been sold for about $120 million and the buyers are planning to redevelop the 18,400 sqft site into a 15-storey hotel with about 300 rooms. The development is currently located between Golden Mile Complex and Golden Mile Tower and near Nicoll Highway MRT Station with a balance lease term of 89 years. The buyers are reported to have had negotiations with UK hospitality group

The Ministry for National Development (MND) announced that HUDC estate Braddell View with 918 flats and two shops, the last of 18 HUDC estates, has been designated for privatisation. The estate's managing committee will have to get the requisite 75 percent mandate to privatise, and then harmonise the leases for the estate because Braddell View was developed in two phases on two separate land leases with different expiry dates. So the land lease of the older
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SINGAPORE PROPERTY WEEKLY Issue 141 Whitbread to manage the proposed hotel under Whitbreads Premier Inn brand. Premier Inn is one of the UK's biggest budget hotel chains with a market capitalisation of about 6.9 billion (S$14.5 billion), and also operates restaurants and coffee shops. (Source: Business Times) Half stake sold in Finexis Building for $2,300 psf An offshore fund is reported to have bought a half-stake in the 12-storey freehold office block Finexis Building at 108 Robinson Road for $123.8 million, or $2,300 psf on the building's strata area of 53,830 sqft, close to its total net lettable area. Back in 2011, another offshore fund acquired the other 50 per cent in Finexis Building for $110 million, or $2,043 psf on strata area. Both transactions were conducted through a sale
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of shares in Robinson Land Pte Ltd, which owns the property. (Source: Business Times)

MBFC owners win property tax refund appeal

The owners of Marina Bay Financial Centre (MBFC) Towers 1 and 2 won an appeal to recover $6.9 million in property tax refunds. The Court of Appeal ruled that vacancy refunds extend to fitting-out periods; and that BFC Development, after having secured tenants for a number of units in MBFC, was entitled to vacancy refunds including renovation period because the units were deemed unoccupied, and neither the owners nor the tenants had obtained any beneficial use of the property. Given the removal of the property tax refund provision for vacant properties from Jan 1, 2014,
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SINGAPORE PROPERTY WEEKLY Issue 141 the property owners can still claim vacancy refunds for the period between Nov 1, 2012 and Dec 31, 2013, including for the fitting-out periods. (Source: Business Times) Prudential Tower deal draws different views The potential deal of Prudential Tower on Cecil Street has drawn different views from analysts. Although it has been previously considered a possible divestment target for Keppel Reit (K-Reit), the Reit management announced that it is too early to comment, and that it may consider the possibility of divesting one of its older assets to partially fund the Marina Bay Financial Centre (MBFC) Tower 3 acquisition if there is such a transaction. Earlier, Bloomberg reported that the Reit had raised a $531 million, or $2,400 psf, price on its 30-storey Prudential Tower, which is 8.3 percent higher than its valuation of $490 million as of end-2013. (Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 141

Non-Landed Residential Resale Property Transactions for the Week of Jan 15 Jan 17

Postal District 9 9 9 11 14 15 18 19 21 22 27

Project Name THE INSPIRA ONE OXLEY RISE WATERMARK ROBERTSON QUAY BUCKLEY 18 ASTOR FERNWOOD TOWERS SAVANNAH CONDOPARK KENSINGTON PARK CONDOMINIUM ASTOR GREEN THE CENTRIS THE ESTUARY

Area (sqft) 936 1,066 1,733 2,131 1,109 1,636 1,227 2,239 1,087 936 1,453

Transacted Price ($) 1,850,000 1,930,000 3,000,000 2,980,000 1,030,000 1,750,088 1,158,000 2,110,000 1,200,000 1,210,000 1,480,000

Price Tenure ($ psf) 1,976 FH 1,811 FH 1,731 FH 1,398 FH 929 99 1,070 FH 944 99 942 999 1,104 99 1,292 99 1,018 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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