Issue 64

Copyright 2011-2012 www.Propwise.sg. All Rights Reserved.

CONTENTS
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4 Painful Lessons From a Loss-Making Property

FROM THE

EDITOR

Welcome to the 64th edition of the Singapore Property Weekly. Hope you like it! Mr. Propwise
NOTICE: Please note that Propwise.sg is a property of Aktive Group Pte. Ltd., which is not associated or affiliated in any way with Ascendant Assets Pte. Ltd. or Getty Goh, who is a guest contributor.

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Singapore Property News This Week

Resale Property Transactions

(July 25 July 31)

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SINGAPORE PROPERTY WEEKLY Issue 64

4 Painful Lessons From a Loss-Making Property

By guest contributor 2ycapital My first foray into the property market was via the most common route the HDB flat. There werent any HDB grants during my time and we couldnt afford one near our parents as we had only started working. We couldnt afford an Executive Condominium either, as my starting pay was only $1,850 per month. At the time, we had only three choices: Woodlands, Jurong or Sengkang. We selected Woodlands, the cheapest location in the north zone as Sengkang was much more expensive. The problem with picking Woodlands was that it was very far from our parents place and once the baby came, we had to move closer to them. In the end, we hardly stayed in the flat.
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SINGAPORE PROPERTY WEEKLY Issue 64 The problem was that under HDB rules, we could buy any property within five years and could not lease out our flat either. The rules were extremely strict. In the end, we kept it empty for almost five years. And to top up our stupidity, we spent $40,000 on renovations. we bought and sold our flat. We bought exactly at the peak and sold at the bottom. What perfect timing! We bought the HDB executive flat for $380,000, and adding on the $40,000 we spent on renovations, it cost us a total of $420,000. We hardly stayed there. You can see the market was in the doldrums from 2001 to 2005. Lesson 1 - Buy a property only if you intend to stay in it or to rent it out We couldnt stay in it due to the baby and we couldnt rent it out due to the rules. It was basically a white elephant. We could have secretly rented it out but it was illegal to do so. Having said that, if you own an HDB flat today and are eligible to rent it out, my advice is that you keep the goose that lays the golden egg, unless the offer is too compelling and you have better use for the proceeds.
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The graph above shows you the points where

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SINGAPORE PROPERTY WEEKLY Issue 64 The yield from an HDB flat is one of the highest you can find. Lesson 2 Dont buy a property that comes with so many restrictions The second lesson I learnt was that I should buy a property with fewer restrictions. I could not buy another property or sell my flat within five years. The restrictions were imposed to ensure that I did not abuse the market subsidy I supposedly received when I bought the HDB executive flat. Lesson 3 Dont be greedy when buying an HDB flat It is funny to see peoples reactions when I tell them I lost money from buying an HDB flat. Most do not believe it. I was greedy and I thought to myself, HDB sure can make money if you buy directly from them. I could not have been more wrong. I bought the
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biggest flat available to me instead of the four or five room flats, and the executive flat received the lowest market subsidy from the government. After five years, I decided to sell my flat at a loss and move on, but there were many unsold units at my block even after five years. At the time when I was selling my flat, the HDB was selling the unsold units in my block for between $220 thousand to $280 thousand. It took me more than 10 months to finally find a buyer, who was a PR family that offered me $295 thousand for my HDB executive flat. The real joke was HDB writing a letter to me wanting an explanation why I sold my flat for $295 thousand when the valuation was $340 thousand. I replied that I would love to sell it to them for $340 thousand if they were willing to buy it.
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SINGAPORE PROPERTY WEEKLY Issue 64 (As a side note, my brother-in-law bought a four room flat in Sengkang and after five years, sold it for a good profit.) Lesson 4 - Cut your losses and move on By 2005, I had lost enough money from the stock market to know how to cut loss and learn about market cycles. I wanted to free up my CPF to buy properties at better locations and catch the next property cycle. The fact that I didnt even stay there and couldnt rent it out provided the catalyst for me to do something about it. As you can see, my first foray into the property market was a painful one. I lost at least $100 thousand including the cost of renovations. It was painful lesson which I will never forget, but I will treat the $100 thousand as an expensive school fee. There
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are no better schools to teach you about reality.

By guest contributor 2ycapital, a CFA and CPA who blogs about his Singapore property experiences at 2Y Real Estate Fund.

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SINGAPORE PROPERTY WEEKLY Issue 64

Singapore Property This Week

Residential
Khaw cautions against buying beyond means Minister for National Development Khaw Boon Wan advises against buying homes against financial means and taking up loans with 50-year loan terms. He also noted that first-timers are more successful in their BTO applications for flats in non-mature estates and that second-timers can also rely on the government for help, adding that he would be focusing on second-timers and improving their chances on getting new flats. (Source: Business Times)

20,000 new flats to be launched in 2013

HDB will be building at least 20,000 new flats in 2013, in addition to the 8,000 new flats and 3,000 balance flats that will be launched by the end of 2012. First-timer application rates for the July BTO launch was similar that of Mays at 1.7, while the second-timer application rate has increased from 9.5 to 11.4. Since the first-timer application rates remained below 2.0, it meant that almost all first-timers will get the chance to select a flat when they apply, especially in non-mature estates. 11,634 applications have been submitted for the July BTO launch, including studio apartments. (Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 64 99-year-leasehold Bright Hill Drive private residential plot attract top bid of $291.5 million unit condominium on the site with a breakeven price of around $1,100 psf, and possibly an average selling price of around $1,250-$1,300 psf. (Source: Business Times) Commercial Expression-of-interest exercise for 60-year leasehold Toa Payoh industrial site The 44,906 sq ft site located along Lorong 5 Toa Payoh is asking for $23 - 25 million. A four-storey light industrial building with an 83,342 sq ft GFA and a 58,194 sq ft NLA sits on the site, which is zoned "Business 1" with a 2.5 gross plot ratio and a 112,265 sq ft allowable GFA. The sites attractiveness lies in its proximity to the Toa Payoh MRT station and bus interchange, and the residential areas, as well as its 850m frontage along

The top bid of $291.5 million or $719.9 psf ppr from UVD Pte Ltd, a joint venture company between Singapore Land and UOL Group, exceeded the earlier expectations of a $550$620 psf ppr top bid. The 144,635.6 sq ft site with a maximum GFA of 404,979.7 sq ft is zoned for condominium; or flats; or a combination of flats and strata landed houses subject to approval. Despite the high bid, there were only a modest six bids for the site (probably as a result of the irregular layout and narrow access), though the site has attractive attributes such as the view of MacRitchie Reservoir, proximity to amenities like Thomson Plaza and Ai Tong School, the affluent neighbourhood, and the lack of supply. UVD plans to build a 20-storey, 420Back to Contents

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SINGAPORE PROPERTY WEEKLY Issue 64 Lorong 5 Toa Payoh which can be used for display purposes. The exercise closes at 3pm on Sept 18. (Source: Business Times) Cautious market sentiment in Q2 According to the latest survey by the Real Estate Developers' Association of Singapore (Redas) and the National University of Singapore (NUS), the market sentiment has improved slightly. The Composite Sentiment Index, which indicates the overall real estate market sentiment, increased from 4.6 in Q1 to 4.7 in Q2, while the Current Sentiment Index which compares the current overall Singapore real estate market conditions with the conditions six months earlier, and the Future Sentiment Index which overall property conditions over the next six months both increased by 0.1 to 4.9 and 4.5 respectively in
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Q2. The survey results also indicated the top three potential risks that may adversely impact market sentiments - a slowdown in the global economy and oversupply of new property launches and new development land. There is a general cautious market sentiment though the hotel sector has a net positive sentiment of 33% while the office sector has a net negative sentiment of 31 per cent. (Source: Business Times)

Tuas South industrial sites popular with bidders but Mandai Link site less so
The tender for the four plots zoned for Business-2 development closed with mixed results with the 30-year leasehold 240,745.62 sq ft plot with 2.5 GPR at Mandai Link drawing only two bids and the three Tuas South sites drawing eight to 13 bids.
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SINGAPORE PROPERTY WEEKLY Issue 64 The top bid of $45.29 million or $75.25 psf ppr for the Mandai Link site is from Soilbuild Group.

Meanwhile, the three 23-year plots at Tuas South Street 7 and 8 have done well. 48,987.63 sq ft Plot 13 at Tuas South Street 7 attracted 12 bids, with the highest bid of $3.82 million or $77.84 psf ppr from Chip Eng Seng Contractors. 32,680.31 sq ft Plot 15 on Tuas South Street 8 attracted 13 bids with the top bid of $1.79 million or $54.72 psf ppr from Transco-Pac Transport & Environmental Pte Ltd while the 32,679.23 sq ft Plot 17, also on the same street, attracted eight bids with the top bid of $1.49 million or $45.58 psf ppr from P-One.
Most bids are from end-users who are actively bidding for these sites since such sites are in limited supply. The relative lack of developers is likely due to the shorter leases. (Source: Business Times)
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SINGAPORE PROPERTY WEEKLY Issue 64

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SINGAPORE PROPERTY WEEKLY Issue 64

Non-Landed Residential Resale Property Transactions for the Week of Jul 25 Jul 31
Postal District 1 1 1 2 3 3 4 4 5 5 5 5 5 7 9 9 9 9 9 9 9 9 9 9 10 Project Name THE CLIFT ONE SHENTON THE SAIL @ MARINA BAY THE ARRIS RIVER PLACE TANGLIN VIEW THE BERTH BY THE COVE HARBOURLIGHTS VENTANA VILLA DE WEST NORMANTON PARK PALM GREEN BUONA VISTA GARDENS SOUTHBANK ORCHARD VIEW VISIONCREST THE INSPIRA THE INSPIRA 2 RVG ROBERTSON 100 TRENDALE TOWER BELLE VUE RESIDENCES ASPEN HEIGHTS HORIZON TOWER ZENITH Area (sqft) 527 581 893 980 1,033 1,249 1,173 1,270 1,302 1,012 1,270 1,109 2,325 958 2,530 904 1,216 1,216 689 1,152 3,208 4,252 1,324 2,583 743 Transacted Price ($) 1,170,000 1,190,000 1,720,000 1,665,000 1,380,000 1,600,000 1,935,450 1,728,000 1,585,000 1,020,000 1,275,000 940,000 1,950,000 1,620,000 8,020,000 1,880,000 2,180,000 2,100,000 1,160,000 1,920,000 5,300,000 6,420,000 1,940,000 3,190,000 1,500,000 Price Tenure ($ psf) 2,218 99 2,047 99 1,925 99 1,700 FH 1,335 99 1,281 99 1,650 99 1,360 FH 1,217 FH 1,008 FH 1,004 102 848 FH 839 FH 1,691 99 3,171 FH 2,079 FH 1,792 FH 1,727 FH 1,684 FH 1,667 FH 1,652 FH 1,510 FH 1,465 999 1,235 99 2,020 999 Postal District 10 10 10 10 10 10 10 10 10 10 11 11 11 11 11 11 12 12 12 12 12 13 13 14 14 Project Name BALMORAL HEIGHTS THE MARBELLA THE MARBELLA THE TESSARINA RISING SUITES VALLEY PARK D' DALVEY CHATELET DUCHESS CREST THE ASTON RESIDENCES @ EVELYN 1 MOULMEIN RISE 1 MOULMEIN RISE SKY@ELEVEN EVELYN MANSIONS MANDALE HEIGHTS ECOVILLE PAPILLON THE CALLISTA RITZ MANSIONS BALESTIER POINT BLOSSOMS @ WOODLEIGH BLOSSOMS @ WOODLEIGH D' PALMA CASSIA VIEW Area (sqft) 549 1,496 1,582 1,615 1,432 1,216 1,668 1,130 1,733 1,765 1,141 1,249 1,238 2,713 883 1,345 1,184 936 592 1,593 1,152 1,195 3,035 1,001 2,411 Transacted Price ($) 1,000,000 2,380,000 2,430,000 2,430,000 2,100,000 1,775,000 2,250,000 1,520,000 2,230,000 1,930,000 2,020,000 1,950,000 1,930,000 4,230,000 1,325,000 1,530,000 1,388,000 1,070,000 650,000 1,600,000 1,120,000 1,485,000 2,106,960 1,150,000 2,650,000 Price Tenure ($ psf) 1,822 FH 1,591 FH 1,536 FH 1,505 FH 1,467 FH 1,459 999 1,349 FH 1,345 FH 1,287 99 1,093 FH 1,770 FH 1,562 FH 1,559 FH 1,559 FH 1,501 FH 1,137 FH 1,172 FH 1,143 FH 1,098 999 1,004 FH 972 FH 1,243 FH 694 FH 1,149 FH 1,099 FH

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SINGAPORE PROPERTY WEEKLY Issue 64

Postal District 14 14 14 14 14 14 14 15 15 15 15 15 15 15 15 15 15 15 15 16 16 16 16 16 16 16 16 16 Project Name SIMS DORADO ASTORIA PARK SIMSVILLE STARVILLE CENTRAL GROVE THE TRUMPS MERA EAST THE WATERSIDE DE CENTURION THE BEACON EDGE WATER PLACE SANCTUARY GREEN THE AMARELLE SPRING @ KATONG MALVERN SPRINGS TAIPAN GRAND MANDARIN GARDEN CONDOMINIUM GALAXY TOWERS NEPTUNE COURT CASA MERAH CASA MERAH THE BAYSHORE EAST MEADOWS BAYSHORE PARK THE CLEARWATER THE BAYSHORE AQUARIUS BY THE PARK THE BAYSHORE Area (sqft) 861 861 980 1,238 1,259 1,109 2,002 2,174 775 990 1,281 1,356 1,615 1,195 1,625 1,227 1,528 1,421 1,270 1,249 1,345 1,012 1,195 936 1,270 947 893 1,184 Transacted Price ($) 900,000 835,000 910,000 1,140,000 1,150,000 890,000 1,600,000 3,280,000 1,100,000 1,348,880 1,480,000 1,550,000 1,800,000 1,290,000 1,730,000 1,220,000 1,500,000 1,280,000 1,020,000 1,395,000 1,460,000 1,050,000 1,155,000 905,000 1,220,000 910,000 848,000 1,100,000 Price Tenure ($ psf) 1,045 FH 970 99 929 99 921 FH 913 99 803 99 799 FH 1,509 FH 1,419 FH 1,362 FH 1,155 99 1,143 99 1,115 FH 1,080 FH 1,064 FH 994 FH 981 99 901 FH 803 99 1,117 99 1,085 99 1,038 99 967 99 966 99 961 99 961 99 949 99 929 99 Postal District 16 16 16 16 16 16 16 16 17 18 18 18 19 19 19 19 20 20 20 20 21 21 21 21 21 21 21 21 Project Name BAYSHORE PARK CHANGI GREEN THE CLEARWATER SUNHAVEN THE CLEARWATER STRATFORD COURT AQUARIUS BY THE PARK APOLLO GARDENS EDELWEISS PARK CONDOMINIUM LIVIA MELVILLE PARK TAMPINES COURT KOVAN MELODY RIVERVALE CREST HOUGANG GREEN REGENTVILLE THE GARDENS AT BISHAN THE GARDENS AT BISHAN BRADDELL VIEW THOMSON VIEW CONDOMINIUM GARDENVISTA PANDAN VALLEY THE RAINTREE SPRINGDALE CONDOMINIUM HIGHGATE SIGNATURE PARK PANDAN VALLEY SIGNATURE PARK Area (sqft) 2,196 1,216 1,475 1,292 1,345 1,152 1,227 1,830 1,453 2,680 1,206 1,701 1,249 947 1,141 1,163 861 1,227 1,453 2,024 947 1,335 1,335 1,130 1,227 1,399 2,325 1,055 Transacted Price ($) 2,038,800 1,100,000 1,280,000 1,120,000 1,155,000 980,000 1,000,000 1,412,888 1,270,000 2,100,000 842,000 1,050,000 1,300,000 810,000 780,000 770,000 860,000 1,195,000 1,240,000 1,650,000 1,168,000 1,450,000 1,400,000 1,150,000 1,230,000 1,400,000 2,320,000 1,020,000 Price Tenure ($ psf) 928 99 904 FH 868 99 867 FH 858 99 851 99 815 99 772 FH 874 FH 784 99 698 99 617 101 1,041 99 855 99 684 99 662 99 999 99 974 99 853 99 815 99 1,233 99 1,086 FH 1,049 99 1,018 999 1,002 FH 1,000 FH 998 FH 967 FH

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SINGAPORE PROPERTY WEEKLY Issue 64

Postal District 21 21 21 21 22 22 22 22 23 23 23 23 23 23 23 23 25 26 27 Project Name SIGNATURE PARK PINE GROVE REGIS MANSIONS SHERWOOD TOWER THE CENTRIS THE CENTRIS THE LAKESHORE LAKESIDE TOWER GLENDALE PARK MERAWOODS MAYSPRINGS THE WARREN REGENT HEIGHTS MAYSPRINGS MAYSPRINGS MONTROSA CASABLANCA THE CALROSE YISHUN EMERALD Area (sqft) 1,421 1,755 1,206 1,830 1,066 936 1,109 1,970 1,033 1,345 904 1,238 1,163 1,399 1,302 3,122 893 1,259 1,001 Transacted Price ($) 1,325,000 1,490,000 950,000 1,350,000 1,268,888 1,055,000 1,150,000 960,000 1,080,000 1,300,000 775,000 998,000 900,000 1,050,000 972,000 2,000,000 770,000 1,463,800 800,000 Price Tenure ($ psf) 933 FH 849 99 788 FH 738 99 1,191 99 1,127 99 1,037 99 487 99 1,045 FH 966 999 857 99 806 99 774 99 750 99 746 99 641 999 862 99 1,162 FH 799 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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SINGAPORE PROPERTY WEEKLY Issue 64

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