Issue 31

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

CONTENTS
p2 Singapore Property News This Week p10 Property Market Outlook 2012 A Wrap Up

FROM THE

EDITOR

Welcome to the 31th edition of the Singapore Property Weekly. Hope you like it! Mr. Propwise

p15 Resale Property Transactions

(December 3 December 9)

p17 Singapore Property Classifieds #21

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SINGAPORE PROPERTY WEEKLY Issue 31

Singapore Property This Week

Residential
A need for clearer ABSD guidelines The Additional Buyer's Stamp Duty (ABSD) is the latest governmental measure aimed at cooling the residential market. The ABSD is imposed on foreigners and companies buying any residential property (including residential land), permanent residents buying their second and subsequent property and Singapore citizens buying their third and subsequent property at 10%, 3% and 3% of the purchase price or market value, whichever is higher, respectively. This measure to restrict investment purchase of residential properties is in addition to the extension of the Seller's Stamp Duty (SSD) on residential properties
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acquired on or after Jan 14, 2011 and sold within four years of acquisition, with the duty being 16%, 12%, 8% and 4%respectively for properties sold in the first, second, third and fourth year after acquisition. The ABSD and SSD have different impacts on licensed and non-licensed developers. Licensed developers need not pay an SSD when selling residential properties developed by them and if they complete and sell all the residential units within five years, they need not pay an ABSD either. Non-licensed developers need not pay an SSD if they are registered companies or businesses and are lawfully carrying on the business of housing development but non-licensed developers

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SINGAPORE PROPERTY WEEKLY Issue 31 who buy land that is not capable of being developed into at least five residential units have to pay an ABSD. development, landed housing areas for semidetached house and bungalow, the minimum land area required to build five units are 750 sqm, 1,200 sqm and 2,000 sqm respectively. Should the plot size be smaller, the developer has to pay the ABSD. Good Class Bungalow areas have an additional requirement of 34m plot width in addition to the minimum plot area of 7000 sqm. Even when using one's personal name to purchase such property, one cannot avoid paying the additional stamp duty since individuals cannot apply for remission of the SSD. As such projects usually take at least two years for completion; the SSD he has to pay is 8%, higher than the 10% ABSD he has to pay. It is also possible to amalgamate the plot with neighbouring plots so that it can be developed into at least five residential units but this depends on whether the owners of
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Allowing remission by licensed developers eliminates the additional cost to the project since the ABSD is targeting end-buyers; not allowing remission for non-licensed developer will increase the cost of developing small sites of between two and four residential units, disadvantaging owners of small land plot in both landed and non-landed housing areas. The latter would have been spared the ABSD should there not be a minimum plot size requirement of 1,000 sqm for new flat development island-wide on Nov 23, 2011.
Whether the land plot will be affected by the ABSD also depends on what form of landed housing they have been safeguarded for. In mixed landed housing and non-landed housing areas for cluster terrace housing
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SINGAPORE PROPERTY WEEKLY Issue 31 these plots are willing to cooperate. The ABSD is likely to drive up the prices for landed housing rather than lowering it, since developers may be less willing to take on new landed housing projects, leading to a smaller supply. ABSD aims to curb investment demand of private residential properties and is targeted at end buyers but owners of small land plots have also suffered because demand for their land comes from non-licensed developers disadvantaged by the ABSD. Non-licensed developers are not treated the same under the SSD as a licensed developer under the ABSD despite having the same conditions attached - proof of piling and foundation works within two years and all units to be disposed of within five years. Clearer guidelines on ABSD are also needed for certain cases such as industrial properties in Hillview and Jalan Ampas, commercial and hotel properties which can be changed to residential use. ABSD also needs to make clear on what will be considered the material date of acquisition if there is amalgamation with land bought much later. There are also questions of whether a piece of land purchased by an individual is considered a third property. Developers may also find themselves in a situation where they bought a piece of land with a proposal for a five-unit project but URA does not approve, resulting in them owing the ABSD. HDB resale prices to decrease by 1-5% Despite the expected marginal decrease of the COVs (cash-over-valuation) which could

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SINGAPORE PROPERTY WEEKLY Issue 31 lead to a slight decrease of HDB resale prices by 1-5%, the prices for HDB resale are likely to be stable otherwise. However, there are also analysts who believe that resale prices are likely to increase by 5-6% for the first half of 2012, given the limited supply in the market. The limited supply might have been due to new policies implemented. One policy requires private property owners who buy resale flats to dispose of their private homes within six months of the resale purchase. The Minimum Occupation Period (MOP) of nonsubsidised flats was also increased from three to five years, resulting in HDB upgraders reluctance to sell their HDB flats for fear of not being able to purchase another in the future. Instead, they will likely rent out their flats, limiting the supply of resale flats. With the raising of income ceiling and increased supply for ECs and BTO flats, many buyers (including first-time buyers) may turn away from resale flats to ECs and BTOs instead. However, home buyers may still opt for resale flats as they are better accessibility to amenities and larger floor area. The ABSD which may cause prices for private housing to drop may also result in less transactions in the resale market when home buyers who previously cannot afford private housing now finding it affordable. Two 99-year leasehold projects drawing Singapore buyers While developers are worrying over whether they ought to release new projects since the introduction of the ABSD, the two developers of The Hillier in the Hillview area and

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SINGAPORE PROPERTY WEEKLY Issue 31 The Nautical in Sembawang have decided to preview these two projects. Far East Organization, the developer of The Hillier has collected more than 100 cheques for its 500 to 800-plus sq ft apartments with a flexible floor plan and a 3.4-metre ceiling height, mainly from Singaporeans. The mixeduse development with 528 Soho apartments above a two-storey retail and lifestyle podium is located near the future Hillview MRT station. It achieved an average price of $1,150 psf, after absorption of the standard 3%buyer's stamp duty and a furniture voucher. Hao Yuan Investment, developer of The Nautical located at Jalan Sendudok in Sembawang, have issued options for about 50-plus units. The buyers are mainly Singaporean HDB upgraders. After a 5%
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early-bird discount, the average price for the 435-unit five-storey project consisting of one, two, three and four-bedroom units and penthouses (including 32 dual- key units) is about $860 psf. A typical unit without private enclosed space or roof terrace will cost between $850-880 psf on average. Absolute prices range from $409,000 for a 420 sq ft one-bedder t o slightly over $1.5 million for a 1,916 sq ft penthouse. 3 residential sites potentially yielding 1,325 units released by URA The three sites released by URA could potentially yield 1,325 units, bringing the total number of units launched for sale under the Government Land Sales (GLS) programme in 2011 to around 22,900 units and providing developers and home-buyers more choices for private housing.
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SINGAPORE PROPERTY WEEKLY Issue 31 The two 99-year leasehold sites - one at Bedok South Avenue 3 and the other at Jervois Road are released under the confirmed list of the government land sales programme for the second half of 2011. The first site located next to Bedok Court and near the MRT has a 647,491 sq ft maximum gross floor area, and is expected to yield about 595 units. The winning bid is predicted to be around $470 to $500 psf with a potential selling price of $1,000 to $1,050. The latter located at Jervois Road has a maximum gross floor area of about 135,000 sq ft, and is expected to yield 140 units. Being smaller than the first site, it is expected to garner good response with the winning bid at $900 to $950 psf and a potential selling price of $1,600 to $1,650. The third site a 99-year leasehold site at Boon Lay Way offered under the reserve list. It has
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a maximum gross floor area of 523,879 sq ft and could yield around 590 units. While being an attractive site with its easy accessibility to Jurong East MRT station, the ABSD may deter developers from triggering the site. Tender for sites at Jervois Road and Bedok South Avenue 3 will close at 12 noon on Feb 2 and 9, respectively. Commercial JTC launched CPT for fifth phase of Fusionopolis A concept and price tender (CPT) for the fifth phase of Fusionopolis has been launched by JTC Corporation. Based on a two-envelope system where the price and non-price criteria are evaluated separately, the tender for the 207,560 sq ft 60-year leasehold site located above the one-north MRT station may not be given to the highest bidder.
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SINGAPORE PROPERTY WEEKLY Issue 31 The site has a 3.5 plot ratio, with a maximum of 15% of its 726,456 sq ft maximum gross floor area allowed for commercial type activities. The site is likely to draw good response as a result of its location, being near an MRT station and major expressways. It also has a higher potential yield since it is a mixed use site. Freehold MacPherson industrial site up for sale The 30,157 sq ft freehold site located at the junction of MacPherson Road and Howard Road is asking for between $33 million and $35 million, or $438 to $464 psf ppr. With a 2.5 plot ratio of, the allowable gross floor area is around 75,393 sq ft. It could be redeveloped into 66 industrial strata units, assuming an average 1,000 sq ft unit size and an 88% building efficiency. Zoned 'Business 1', the site near Tai Seng MRT
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station is suitable for various uses, such as light industry, clean industry or telecommunications. Bids are expected to be in the range of $350 to $450 psf ppr, with potentially five or less bidders as a result of the sites long and narrow layout. However, there may be a better response if the market shows that the rental yield could be between 4 to 6%.

The tender for the site will close on Jan 12, at 3pm.
Landlords offering more incentives to attract tenants

Given the slowing office leasing market as a result of increased supply and decreased demand from the global economic uncertainty, landlords are expected to offer more incentives such as rent-free periods and fit-out capital contributions in the first half of 2012.
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SINGAPORE PROPERTY WEEKLY Issue 31 They may also offer more flexible lease terms. Agent commissions for a two or three-year lease have also been increased from one month's rental to between 1.2 months and two months' rent. Some may even adjust the rents to market rates. There are different predictions as to how the market would fare, with some expecting a 15% contraction of rents while others expecting a less dramatic change. Prime retail rents to stay stagnant next year The retails rents have remained stagnant in Q4 2011, and the prime retail rent is likely to be flat the next year. The Q4 average gross fixed rent of prime first-storey space in the Orchard/Scotts Road area was $40.20 psf per month, the same as Q3s and a 1% year-onyear increase. There has been less demand for retail spaces as retailers have more considerations about expanding and selecting new spaces as a result of the economic outlook, but there are new tenants in the form of international retailers seeking to expand in Asia and escape the lower consumer demand in the West. Stable rents are predicted for Q1 next year, with a potential decrease after that, which may be alleviated b y expected increased retail sales, tourism and limited stock. Rents in prime, first-storey retail space in other city areas as well as suburban areas remained unchanged in Q4, the latter as a result of increased supply. The supply is expected to continue to increase to around 4.6 million sq ft of net lettable area from 2012 to 2016, with more than 50% in suburban areas, restricting the suburban retail rental growth next year.

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SINGAPORE PROPERTY WEEKLY Issue 31

Property Market Outlook 2012 A Wrap Up

By Mr. Propwise As 2011 comes to an end (how time flies!), we polish our crystal ball, take stock of the key takeaways from some of our previous articles, and try and peer into 2012 to see what the new year will bring for the Singapore property market. Worrying trends in 2011 In a previous article Worrying Trends in the Singapore Property Market I highlighted four disturbing trends in the Singapore market: 1. HDB prices are rising faster than private property prices 2. Private home buyers are in a cautious mood, especially in the high end segment
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3. Developers are turning cautious too 4. Investors are going into industrial and commercial properties I think these trends are signalling that we are near a turning point in the property bull market. The insiders are turning cautious while the man on the street average investors are still rushing in. Middle income families are rushing to buy high-priced HDB flats and mass market residential properties and small-time investors are snapping up shoebox industrial units with a fairly ambiguous rental market. At the same time the wealthy and developers (the insiders) are turning cautious on the market, and the weakening global economic situation means
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SINGAPORE PROPERTY WEEKLY Issue 31

that the yields of the industrial and commercial properties could be at risk. Which group do you think has a better grasp of what is going on in the market? Property market turning point likely in 2012 The argument that we are reaching a turning

point in the market is also backed up by the

eight straight quarters of decelerating growth in the URAs Property Price Index till 3Q11, which is likely due to concern over the slowing economy, worrying global economic situation especially with the troubles in Europe and weak growth in the US, combined with the dampening measures. effect of the government

We had previously seen this decelerating price growth trend preceding the property bear markets that began in 3Q2000 and 3Q2008 (but not the one in 3Q1996). Property consultant and developer Getty Goh is also calling for a property bear market based on his proprietary Ascendant Assets Indicator.

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SINGAPORE PROPERTY WEEKLY Issue 31 To recap, the basic premises of the AAI are (1) there is a lead-lag relationship between the stock and property market and (2) we are able to tell how the property market is performing by analysing the correlation between the stock and property market. Based on the URAs 3Q11 numbers the AAI has dropped, indicating a change in market sentiments. Simplistically speaking, we can observe that the URA PPPI index in the yellow zone after each green zone has contracted during the last two cycles (red boxes), and it is probable that it will do so

And I believe that the Governments recent

announcement of the Additional Buyers Stamp Duty (ABSD) will be the straw that breaks the camels back. The impact of the ABSD is that the transaction cost for investors

going forward.

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SINGAPORE PROPERTY WEEKLY Issue 31 will increase substantially, killing investment demand. Thus transaction volumes will fall and prices are likely to be impacted. Foreigners will shrink as a percentage of all buyers, with the impact on the high-end market larger than for the other segments. How much will prices fall? Beyond just the price movement, we have to worry about things like the large upcoming supply of completed private and public housing that may flood the market and global economic uncertainty due to the troubles in the U.S. and Europe. foreign investor perception of Singapore as a safe haven to park their money in. Thus while we can know with some certainty what the medium term supply is going to look like, the big unknown is demand. Demand is influenced by many factors market sentiment, unemployment levels, immigration policy of the government etc. In fact, some analysts have argued that the upcoming surge in supply will not cause property prices to fall. So if youre expecting prices to fall significantly, dont hold your breath as it may not happen.

So while Im pretty confident that property prices will not increase significantly (if at all) in 2012, it is much harder to predict the amount of downside in the market. There are also supportive forces in the market, including the current low interest rate environment, and
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Getty Goh thinks that the best-case scenario is that private property prices remain stable while non-residential property prices could still increase, but it is possible in the worst-case scenario for Singapore property prices for all sectors to tank.

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SINGAPORE PROPERTY WEEKLY Issue 31

As I have been doing for a while, I caution all investors to study the market carefully before and do your sums before committing your

hard earned cash and credit to a property

investment. The outlook for 2012 may seem especially uncertain, but for the well-prepared investor, it may be a year of great bargains as well!

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SINGAPORE PROPERTY WEEKLY Issue 31

Non-Landed Residential Resale Property Transactions for the Week of Dec 3 Dec 9
Postal District 1 1 1 1 3 3 3 3 4 7 8 9 9 9 9 9 9 9 10 10 10 10 10 11 11 Project Name THE SAIL @ MARINA BAY THE SAIL @ MARINA BAY THE SAIL @ MARINA BAY PEOPLE'S PARK COMPLEX THE METROPOLITAN CONDOMINIUM TWIN REGENCY YONG SIAK VIEW THE ANCHORAGE CARIBBEAN AT KEPPEL BAY BURLINGTON SQUARE CITY SQUARE RESIDENCES VISIONCREST WATERMARK ROBERTSON QUAY CAIRNHILL PLAZA 8 @ MOUNT SOPHIA 8 @ MOUNT SOPHIA ASPEN HEIGHTS TOWNHOUSE APARTMENTS MELROSE PARK STUDIO 3 VALLEY PARK VALLEY PARK RIDGEWOOD PAVILION 11 THE TREVOSE Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,184 2,604,800 2,200 99 667 1,334,000 1,999 99 861 1,584,240 1,840 99 1,119 800,000 715 99 721 1,100,000 1,525 99 1,776 2,532,800 1,426 FH 980 1,135,000 1,159 FH 1,765 1,900,000 1,076 FH 893 1,405,000 1,573 99 829 1,070,000 1,291 99 570 900,000 1,578 FH 915 1,820,000 1,989 FH 1,066 1,998,000 1,875 FH 3,305 5,575,000 1,687 FH 1,109 1,850,000 1,669 103 1,550 2,380,000 1,535 103 1,593 2,280,000 1,431 999 3,175 3,100,000 976 99 1,701 2,866,185 1,685 999 549 900,000 1,639 FH 818 1,170,000 1,430 999 1,249 1,780,000 1,426 999 2,002 2,250,000 1,124 999 1,485 2,130,000 1,434 FH 1,281 1,600,000 1,249 99 Postal District 11 12 12 12 13 14 14 14 14 15 15 15 15 15 16 16 16 16 16 16 16 16 16 17 17 Project Name THE ARCADIA PINNACLE 16 THE BELLEFORTE ROCCA BALESTIER BLOSSOMS @ WOODLEIGH VISTAYA VIEW THE HELICONIA ESCADA VIEW WING FONG MANSIONS ONE AMBER OCEAN PARK CELESTIA MANDARIN GARDEN CONDOMINIUM THE TREELINE COSTA DEL SOL CASA MERAH CHANGI COURT LAGUNA GREEN CHANGI COURT TANAH MERAH MANSION EAST MEADOWS EASTWOOD CENTRE KEW GREEN ESTELLA GARDENS ESTELLA GARDENS Area Transacted Price Tenure (sqft) Price ($) ($ psf) 3,757 3,980,000 1,059 99 581 855,000 1,471 FH 1,335 1,408,000 1,055 FH 1,109 1,060,000 956 FH 1,195 1,365,000 1,142 FH 1,076 1,165,000 1,082 FH 1,345 1,224,860 910 FH 1,356 933,000 688 FH 1,130 760,000 672 FH 570 950,000 1,665 FH 2,110 2,320,000 1,100 FH 1,367 1,350,000 988 FH 1,572 1,450,000 923 99 1,884 1,550,000 823 FH 1,561 2,290,000 1,467 99 1,227 1,288,888 1,050 99 969 940,000 970 FH 1,701 1,585,000 932 99 1,184 1,000,000 845 FH 904 750,000 829 FH 1,335 1,080,000 809 99 1,012 735,000 726 99 3,025 1,980,000 655 99 958 753,000 786 FH 1,259 945,000 750 FH

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SINGAPORE PROPERTY WEEKLY Issue 31

Postal District 18 18 18 18 18 18 19 19 19 19 19 20 21 21 21 21 21 23 23 27 27 27 Project Name RIS GRANDEUR MELVILLE PARK MELVILLE PARK MELVILLE PARK ELIAS GREEN TAMPINES COURT THE QUARTZ THE QUARTZ THE QUARTZ HOUGANG GREEN COMPASS HEIGHTS BRADDELL VIEW SUMMERHILL ASTOR GREEN SPRINGDALE CONDOMINIUM PINE GROVE SHERWOOD TOWER NORTHVALE THE MADEIRA THE SENSORIA YISHUN EMERALD SEMBAWANG COTTAGE Area (sqft) 1,356 1,066 1,206 1,345 1,528 1,701 1,195 1,066 1,163 764 1,550 1,561 1,259 1,066 1,130 1,755 1,561 1,259 1,356 1,076 990 1,884 Transacted Price ($) 1,220,000 795,000 810,000 902,000 930,000 980,000 1,185,500 1,028,000 1,080,000 660,000 1,295,000 1,150,000 1,310,000 1,080,000 1,055,000 1,580,000 1,250,000 980,000 988,000 908,000 758,000 1,180,000 Price Tenure ($ psf) 900 FH 746 99 672 99 670 99 608 99 576 101 992 99 965 99 929 99 864 99 835 99 737 99 1,040 FH 1,013 99 933 999 901 99 801 99 778 99 728 99 844 FH 765 99 626 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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SINGAPORE PROPERTY WEEKLY Issue 31

Singapore Property Classifieds # 21

For Sale D23 FREEHOLD TERRACE @ HILLVIEW 2 sty, 4BR+maid room, Land 2222sf Build in approx 2800sf. Move in condition. Call Md Alman 91090033 to view Bliss Residences @ Kembangan. FH 1500+sf 3+1BR Penthouse. Only $1000psf. 1 min to MRT, 15 min to CBD. Rooftop pool and BBQ. TK Tan 98206228.

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