Property Out Look 2014

Market Outlook 2014
Challenges and opportunities:

What to look out for in the year ahead.
Table of Contents
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 2
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 3
Glossary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 4
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 0 5
Forecast: And now in 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2

- More HDB BTOs: Too much of a good thing? ....................... 33
- HDB Resale Market: What goes up must come down .......... 37
- Where are demand and prices in the EC Market headed?.. 41
- The Private Property roller coaster continues ..................... 47
2013: The year in review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 6

Cooling Measures and the reduction

in property demand ....................................................... 07
Transaction volumes take a dip ..................................... 11
- The Guru View for the 2014 ................................................. 53
Japan: Follow the big boys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... .. . . 5 7

Why Thailand deserves a second look . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 9
- The fluctuating nature of prices ..................................... 16
UK: Look outside London . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 1
- Why Executive Condos were highly sought after ........ .. 20
Malaysia in 2014: Still a property hotspot or fading star? .. . . 62
- The vital role that interest rates played ......................... 22
Galloping ahead into the New Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 4
- Housing supply set to increase ....................................... 25
- Property seekers weigh in .............................................. 28
About Us ................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 8
Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .. . 6 9
Credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . . . . .. . 7 0
Preface
Greetings ,
And a warm welcome to property enthusiasts everywhere!
We are very pleased to announce the launch of The PropertyGuru Market Outlook 2014 eBook.
A Singapore first, this book is the culmination of our unique leadership position in property listings, an expansive agent
network, developer partnerships as well as rich consumer and investor relationships.
Leveraging high quality government data and its own unique information, PropertyGuru established a Data Analytics Division
with a simple objective: to make new property analysis and insights available for property buyers, sellers, investors and for
those simply wishing to understand the value of their own homes, or where the market is heading in 2014.
This document analyses and reflects on the property market in 2013 and uses this information to project likely pricing, supply
and property demand and value trends in 2014. It also includes industry expert opinions to provide a comprehensive and
rounded view.
You may also be interested to learn about the changing property sentiment, recommendations for the top property picks in
2014, or the outlook for mortgage rates. While 2013 proved to be a pivotal year for the Singapore market, it set property value
trends in place that are vital to understand in 2014.
Cooling measures, the effect of transaction volumes on the market, access to competitive mortgage finance what all these
will mean for property choices and the prices that people can expect are part of the complete market picture that this eBook
represents.
Our hope is that youll find the information useful, interesting and informative in 2014 - whichever part of the property cycle
you move into. Naturally, we always welcome and encourage your feedback. And remember to visit PropertyGuru.com.sg to
learn more about specific properties, markets and breaking news.
Thank you - and we wish you thoughtful and informative reading!
Steve Melhuish
Co-Founder and Chief Executive Officer
PropertyGuru Group
Glossary of Terms
ABSD
Additional Buyers Stamp Duty
BTO Build-to-order
CCR
Core Central Region
COV
Cash over valuation
ECs Executive condominiums

HDB
Housing Development Board
MAS
Monetary Authority of Singapore
MOP
Minimum Occupation Period
MSR
Mortgage Servicing Ratio
OCR
Outside Central Region
PRs Permanent residents

psf
per square foot
RCR
Rest of Central Region
e-SERS Selective En-bloc Redevelopment Scheme

TDSR
Total Debt Servicing Ratio
Executive Summary
2013 was a pivotal year for the Singaporean property market, displaying
what does this mean for you?
a characteristic relationship between declining transaction volumes and,

later, price declines.
u First-home buyers will be provided with more choice in 2014,

due to the commitment to increase supply dramatically and
u The cooling measures had their intended effect of reducing
existing developer plans to supply more ECs.
demand slowing activity and transaction volumes, then slowly
softening prices.
approach to the market as new supply, declining prices and
u The measures were reflected in declining Q1 and Q2 volumes
cooling measures reduce demand - and prices soften.
followed by a typical lag effect declining prices in Q3 & Q4.
u Investors are expected to be more selective in Singapore
Upgraders may increasingly adopt a more relaxed wait-and-see
as the perception of the market being fully priced and

attractive overseas options remove the urgency to purchase.
2014 will reflect the market trends begun in 2013

u HDBs are expected to see an 8-11 percent decline in prices and a drop
in the number of properties transacted by 15-20 percent.
u Private non-landed properties are forecast to drop by a lesser 6-8
percent and will also see reduced transaction volumes.
u In 2014, overall property supply will increase strongly but this
supply will focus on specific property types, such as HDBs and
Executive Condos (ECs).
u Over the next three years, ECs will experience a large increase in
supply from 2013 levels. Much of this will be in 2015 and 2016;
however, 2014 is expected to see alleviated psf price pressure
due also to the removal of the favoured policy status of ECs.
2013
Last year saw fundamental changes in Singapores property market which
Each of these developments impacted the market in turn, and will continue
have laid the groundwork for the market we can expect to see during 2014.
to affect the market well into 2014. This report looks at these factors
Of particular importance during 2013 were:

u
Government cooling measures.
Declining property transactions.
Average time to transact property increased.
separately, and what they mean for the market. It also considers the likely
consequences and offers the Guru View on the market and what can be
expected for the remainder of 2014.
Property prices peaked, then declined.
u Interest rates bottoming out.

u
Immigration / Population growth.
u Increased property supply.

u Sentiments about property affordability slowly shifting from less
to more positive.
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PropertyGuru Market Outlook 2014
Table of Contents
The year in review
cooling
measures
and the
reduction in
property
demand
2013
REVIEW
2013
can otherwise be known
as the Year of New Regulations for the local

property market. New regulations were introduced
with the aim to reduce demand and rising prices in
key property segments. Heres a look back at how
the newly introduced government measures have
affected property seekers and the market overall.
First-time home buyers
upgraders/local investor
Reduction of maximum loan tenure to 25 years for Housing Development

Board (HDB) flats
The double threat of Total Debt Servicing Ratio

(TDSR) and reduction of maximum loan tenure
Shorter time period means prospective first-time home buyers need to meet higher
Introduction of the TDSR framework would mean a
repayments each month.
property buyers total repayment obligations cannot

exceed 60 percent of his/her income. This, coupled with a
Reduction of the Mortgage Servicing Ratio (MSR) to 30 percent for HDB loans
shorter monthly repayment period of up to 30 years for
Restricting the maximum amount of mortgage debt reduces demand in the market and
bank loans, severely limits the upgraders/investors access
creates a safety margin for the borrower should mortgage rates increase.
to capital and the total amount that he/she is allowed

to borrow.
z
n
Permanent residents (PRs) and FOREIGNERS
market, which drives prices higher. Hence, this new
3-year bar period on the purchase of HDB resale flats
restriction reduces demand and subdues prices for HDBs.
This measure discourages a large portion of PRs from participating in the market for resale HDBs,
thereby reducing demand and upward pressure on prices for that segment.
n Rise in Additional Buyers Stamp Duty (ABSD) for PRs by 5-7 percent for
purchase of first or subsequent properties
Reduction of MSR to 30 percent for HDB loans

This measure reduces the debt leverage in the HDB
Rise in ABSD by 7 percent for purchase of

more than one property
This is a larger tax on purchasing more property, reducing
Another measure to reduce demand and the pressure on prices by making purchases more
demand and price pressures. However, transaction
expensive for PRs, who make up about 10 percent of the total population in Singapore.
volumes remained high after its introduction, indicating
PRs who own a flat are disallowed from subletting the whole flat
that it was a relatively weak measure for cooling the

market.
This measure removes incentive for PRs to buy-for-rent, thereby reducing overall demand and
upward pressure on prices.
PRs must sell their HDB flats within six months of purchasing a private
property
This puts more resale HDBs on the market for sale, thereby increasing their supply, providing more
choice for Singaporeans, and placing downward pressure on prices.
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Cooling measures and the reduction in property demand
his section can be summarised in two words: demand

reduction.
Through these measures, the governments objective was to

deliberately slow the market and also manage the price growth
of certain property types. Combined, they have reduced the total
mortgage debt in the market or the leverage in the industry by:
n
Measuring debt ratios across both mortgage servicing

and the total debt carried.
Calculating ratios at a higher industry-wide standard

interest rate of 3.5 percent.
Altering these rules depending on how many
The measures have curtailed property demand by reducing the

individuals access to new finance to purchase property. This in turn
has reduced the demand for property where the measures have been
targeted.
One immediate effect of these measures was to extend the time taken
to sell property in the market. Effectively, this helped turn a sellers
market into a buyers market. More choices were available to those
buyers that remained in the market.
There was also less time pressure on the purchase, improving the
negotiating position for the buyer who is prepared to wait for the right
property at the right price.
Later sections in this report look at reduced demand and what that
means for the market in 2014. a
properties are owned.

n
Targeting some buyer groups, such as PRs and

foreigners, more than others.
Targeting specifically the HDB and EC segments.
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2013 was the year where the government

made strategic decisions to reduce the price
inflation of HDBs and ECs, and to limit the
purchase of condos by foreigners.
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Table of Contents
Source: PropertyGuru Consumer Sentiment Survey
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10
2013
REVIEW
TRANSACTION
VOLUMES
take a dip
2013

ransaction volumes are critical but often overlooked when

measuring and forecasting trends in a property market. In
2013, the declining trend in transaction volumes provided
just such a forward indicator, with volumes serving as a key market
driver for prices in 2014.
Put simply, transaction volume trends usually precede and drive price
trends. Typically there is also a lag of around six months for this to
occur. This happens in most property markets around the world.
When all other factors are stable, transaction volumes can be a very
reliable predictor of price growth or fall and so volume serves as a
very simple and extremely powerful forward view of expected price
trends for the coming year.
Perhaps this relationship is best illustrated by example, for instance,
Hong Kong - Singapores sister economy.
HONG KONG: An example of the relationship between

transaction volume and price
This is useful when looking at the transaction volumes in Singapore in

2013 and their likely effects going forward.
In Hong Kong, volumes declined significantly in mid-2013. Only some
seven months later in January 2014 there was a double digit market
price decline.
Interestingly, by the middle of 2013 journalists were already confident
enough based on the transaction data to suggest that the drop in
transaction volumes signalled significant price declines to follow.
There are three relevant points for Singapore to note from this:
n The relationship between volume and pricing is a universal
feature of property markets; it is very likely that Singapore prices
will be affected by the same relationships in 2014.
n The relationship is solid enough for commentators to use it
confidently as a price predictor.
n The lag effect between volume and price changes is consistent,
and in a range typically of between five to nine months.
Hong Kong has provided an arguably extreme but instructive example

of the relationship between transaction volumes and future prices.
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Transaction volumes take a dip
HDB Resale Transaction Volumes in 2013

Looking first at HDB resales, we see a distinct downward trend in
volumes from Q3 2012. Over the course of 2013, transaction volumes
continued to decline steadily.
Again, the relationship between transaction volume and price is
clearly visible, with prices peaking some nine months after volumes
peaked. Prices then begin to decline in response to the earlier falling
transaction volumes. The nine-month lag period is very evident.
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The significant transaction volume declines in 2013 of approximately

8 percent in Q4 2012 will continue to influence the prices of HDB
properties, at least well into Q3 of 2014.
Condo Transaction Volumes in 2013

The chart below shows the total volume of transactions in the private
market. These are plotted against the Singapore property price index.
Q1 2013 saw a decline in volumes from previous years. Corresponding
prices peaked in Q3 of 2013 thus following the same pattern.
However, the decline in volumes was not significant until the second
half of 2013. As such, the corresponding decline in prices was also only
slight in the last quarter of the year.
At the same time, it is price that affects upgraders the most, given the
spate of cooling measures imposed on the market. Therefore, some
upgraders may choose to play the waiting game and defer purchases
until market forces dictate that prices drop even further - or when
upcoming launches offer more attractive entry prices to offset the
downside risks in property purchasing.
The two weak quarters of Q3 and Q4 2013 strongly suggest renewed
and much stronger downward pressure on prices in the first half of
2014.
Source: Housing Development Board (HDB)
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Transactions have experienced a significant dip of about 58 percent

since the middle of 2013, at least partly as a result of market sentiment
turning cautious and the inability to actually borrow sufficient amounts
to buy. These effects have followed the announcement of tighter
Monetary Authority of Singapore (MAS) financing regulations, namely
TDSR and MSR in late June, and their earlier ABSD changes.
Whats interesting is that not only have these measures resulted in
consecutive quarters of decline in transactions in Q3 and Q4, but they
have also caused total volume to return to 2008 levels in the condo
market.
WATCH VIDEO: Industry analysts share their inisghts into how the CCR,
RCR and OCR regions fared in 2013
(Alice Tan, Associate Director & Head of Consultancy and Research, Knight
Frank; Alan Cheong, Senior Director, Savills; Christine Li, Head, Research &
Consultancy, OrangeTee)
Source: Urban Redevelopment Authority (URA)
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Table of Contents
Condo Transaction Volumes - By Area

Condo transaction volumes in 2013 did not match the record number
of transactions seen in 2012. They declined some 38.6 percent
reflecting weakening buyer sentiments for private properties, in part
due to MAS regulations.
However, the drop in transactions differs from region to region. The
transactions in the Core Central Region (CCR) trended down the most
severely, registering an average of a 40 percent decrease quarter-onquarter.
Of particular note for the regions in 2013:
n In Q2 2013 the Rest of Central Region (RCR) and Outside
Central Region (OCR) regions grew transaction volumes
by a healthy 44 percent and 18 percent respectively from
the previous quarter despite the introduction of the
ABSD. However the new TDSR and MSR in the second half
of the year curtailed these volumes.
n In the RCR, property seekers purchased a total of 2,062 units in
Q3 and Q4 2013 combined, being half the level of a year prior.
While down significantly, these volumes were a better result than
those recorded by the CR and OCR.
n Despite most buying activity occurring in the OCR, the area saw
transactions decline from 4,673 units to 3,105 units between Q2
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and Q3 2013 and further drop to around 1,430 by Q4. This

made the volumes in Q4 just 30 percent (approximately) of the
level they were six months prior.
n The CCR and the OCR regions recorded the largest percentage
decline in volume from the peak in 2012 and through 2013.
n Despite transaction volume ratios that would indicate that the
OCR will experience the worst pricing pressures, many analysts are
expecting this effect to be offset largely by significant new demand
in this area. a
15
2013
REVIEW
The
FLUCTUATING
nature of
prices
2013

he declining transaction volumes of the last two quarters

of 2013 finally drove down price levels in Q4. Until Q3 2013,
prices continued to defy gravity as the gap between prices
and their supporting volumes grew larger.
From the previous sections, we recognise that this is a text book
market response to declining volumes, where prices can remain
elevated for two or more quarters before plateauing and
then declining.
The predictable relationship between volume and price

Many factors influence the time lagged relationship between volumes
and prices. However, one of the strongest is also one of the simplest. It
is also the most constant in any property marketplace in the world. It is
human behaviour.
Humans have an entirely understandable and common tendency
to hold on to their properties rather than to accept lower offers.
They typically do this for many months as the offers dry up before
reluctantly accepting lower offers and recognising in turn that the
market has moved.
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The fluctuating nature of prices
This behaviour helps explain why, during the period of declining

transaction volumes, the average time it takes to sell a property
also increases.
Expanding time on market and declining transaction volumes are
forward indicators of coming softness in prices and usually go hand
in hand. Significantly, both were apparent in the Singapore market in
the latter half of 2013.
During 2013, the Singaporean market behaved very predictably in
response to the financing restrictions and corresponding transaction
declines. This augers well for predicting trends in 2014.
Reading the 2013 data, we can confidently expect to see further
downward pressure on prices into 2014 providing other factors
remain stable. Despite the fact that many other micro and macro
factors can influence prices, these forces will need to be particularly
strong now to offset the well-entrenched price decline process that has
been set in play by the declining transaction volumes of late 2013.
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2013 Price Outcomes: HDBs VS Condos

From the chart below, both property types saw price declines in 2013.
However, HDBs led the way ahead of condos. From earlier sections we
also recognise that the earlier price declines of HDBs were preceded by
earlier transaction volume declines.
By Q3, the HDB market had begun to sag under the new cooling
measures aimed specifically at curtailing the availability of mortgage
credit to the market and placing other restrictions on purchasers.
However, it was not until Q4, led by the mild declines in volumes that
were seen in Q1 2013, that the condo market began to correct.
These pricing forces were accompanied by the first of the new supply
coming online - and some mild reductions in the rates of population
growth. Additionally, restrictions governing the purchase of HDB resale
properties by Singapore PRs, introduced in August, played a role in
reducing effective demand for HDBs and also contributed to their
faster price declines.
The largest contributing factors in 2013 were the new purchasing
restrictions and the implementation of the MSR, TDSR and ABSD policy
changes. These effectively reduced both the eligibility of individuals for
new mortgage debt and increased the purchasing costs at the
same time.
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Source: Urban Redevelopment Authority (URA), Housing Development Board (HDB)
Locality-based fluctuations in the Condo market

In 2013, the price changes and transaction volume of condos varied
between regions. Below, we compare the CCR, the OCR and RCR.
The CCR registered a decline of 2.1 percent, while prices in the RCR and
OCR increased by 0.3 percent and 6.8 percent respectively.
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Significantly, the CCR registered a price fall across the last three
quarters of 2013. This fall also coincided with the introduction of
the ABSD in Q1, which saw higher taxes on second and subsequent
properties imposed on a majority of potential buyers, including highnet worth individuals and foreigners.
The downward trend of luxury properties appeared to be further
exacerbated with the TDSR changes introduced in late June. These
resulted in a price fall of 2.2 percent by Q4 2013, a rate of decline that
was seven times larger than the 0.3 percent decline in the previous
quarter.
The RCR region also witnessed price declines for the first time since
Q1 2012. This was after the TDSR came into effect. However unlike the
CCR, the RCR maintained positive market activity throughout 2013. This
was spurred by the launch of units that were competitively priced at
the level of affordability that buyers were comfortable with.
The OCR continued to be the fastest growing market segment, which

contributed much to the increase in the overall private property price
index. In spite of a decline of 0.9 percent in Q4 2013, the first after
almost two years, the rate of price growth for the OCR in 2013 was 20
percent higher than the levels in 2012 - which registered only a 5.4
percent rise. a
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19
why
executive
condos
were highly
sought after
2013
REVIEW
2013

report compiled by PropertyGuru found that the market

value of fully and partially privatised ECs grew strongly in
2013.
Examples from the report:

n Unit prices at Eastvale in Pasir Ris, the first EC in Singapore,
increased from $454 per square foot (psf) in September 1996 to
$909 psf by November 2013. This translates to a rise of 100
percent.
n Two partially privatised ECs also located in Pasir Ris - The Esparis
and Whitewater - showed higher growth of 130 percent and 140
percent respectively. In January 2002, the Esparis had a psf of
$370 and reached $859 psf by November 2013.
n Similarly, prices at Whitewater, which was completed in 2005,
increased to $883 psf in December 2013 from an initial price of
$362 psf in December 2002.
These very strong 2013 price increases provide clear evidence to
suggest why the government has elected to increase the supply of ECs
in the market by an average of 330 percent over the next three years,
compared to 2013.
Demand for ECs contributed strongly to rapid price growth

In 2013, the top ECs were concentrated in certain districts, particularly
in the developing areas of the west and the central areas of Ang Mo
Kio and Bishan. As detailed in the chart below, we can see that, for
example, in the case of Bishan Loft and Nuovo, the values of these
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Why executive condos were highly sought after
Source: Urban Redevelopment Authority (URA), PropertyGuru Analysis
specific properties are valued at approximately 150 percent of the

average psf of private properties within the same district, District 20.
This chart indicates that some ECs in 2013 exhibited high psf growth,
and now command very high psfs.
The scarcity of ECs in certain localities has enabled some to command
higher psfs than the average private district psf. However, the
age of the property psfs needs to be considered when making a
determination. A strong EC supply increased and the policy changes
that remove the EC-favoured status are expected to rectify some of the
price inbalance going forward in 2014. a
21
the vITAL
ROLE
that interest
rates played
2013
REVIEW
2013

xamination of the 2013 market requires an investigation of

the important role that interest rates and the cost of capital
have on the property sector.
The interest rate and the outlook for interest rates represents the
effective and expected cost of servicing the mortgage debt. In 2013,
the cost of servicing a mortgage remained at near record lows.
Though ultra-low rates were a primary driver in the 2013 market, they
cannot necessarily be assumed to remain as positive for the market
during 2014.
The chart below looks in more detail at the most recent rate influences
on the market in 2013.
The Singapore Interbank Offered Rate, or SIBOR, is set by the

Association of Banks in Singapore. Mortgage rates are effectively set by
the base SIBOR rate plus a bank margin.
The majority of mortgage debt in Singapore is variable and where
fixed, it is fixed for a maximum period of five years. This is significant
as other countries allow longer periods of fixed term mortgages. The
U.S., for example, typically has 30-year fixed loans.
Combined with the high personal debt levels carried by property
buyers in Singapore, the very high percentage of Singaporeans on
variable mortgage rates makes the property market highly susceptible
to changes in interest rates
As at 2013, the interest rate environment remained very
accommodative, being directly influenced by the bond buying (QE) of
the U.S. Federal Reserve. Singapore effectively has its ultra-low interest
rate environment driven by the U.S.
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Source: Monetary Authority of Singapore (MAS)
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The vital role that interest rates played
The three-month SIBOR rate has fallen from approximately 1.8 percent
in Q3/Q4 2008, to the historically low values at present. This most
recent behaviour is uncharacteristically stable, given that SIBOR rates
have displayed much volatility over the past 25 years.
The ultra benign interest rate environment over the last five years
has increased the capacity of consumers and investors to borrow
large sums cheaply. This has allowed Singapores property markets to
flourish after the global market correction in 2009 and for the very
strong market to continue into 2013.
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The vital role that interest rates played
W hile PropertyGuru does not see an imminent

reversion to the historical interest rate mean of
around 3 percent, it does see a slow tightening
process occurring during the course of 2014.
However, owing to the nascent recovery of the
U.S. economy, we expect that rates will rise only
at a slow pace over the coming years.
While this will not provide an additional stimulus
to the market as it did in 2013 - it will also not
Access to finance in 2013
be a significant drag on the market. In summary,

the interest rate environment of 2013 is expected
In 2013, the access to finance, or the amount that people could borrow,
was curtailed by cooling measures. This was a simple and efficient
effort by the government to reduce effective property demand.
to continue into 2014 with only a gradual rise
Property sectors that attract the highest proportion of mortgage debt

to finance the purchase were hit hardest by the measures.
However, the reduced access to finance through
The sector that was especially susceptible to the cooling measures, and
showed the biggest correction, was the HDB resale market. a
prudential policy measures remain the only
and with average mortgage rates finishing the

year beneath 2.25 percent.
cooling measures is expected to continue to

be a drag on prices. These government macroeffective financial instrument the Singapore
government has to alleviate rising property
prices. Introduction of the TDSR framework is
recognition of this. It was a game-changer in the
market in 2013 and unlikely to be relaxed in 2014.
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24
hOUSING
SUPPLY
set to
increase
2013
REVIEW
2013

Table of Contents
Housing supply set to increase
n a recent government report, Singapores population is said

to have risen by 1.6 percent between 2012 and 2013, the
slowest growth rate in the past nine years. This brings several implications for public policy, one of them being the supply of
sufficient housing.
Looking at the charts below, we can see how the demographic
composition of Singapores population has changed in the last
five years. What it tells us is that, while the overall population has
increased to 5.4 million since 2008, some groups Singapore Citizens,
PRs and non-residents have grown at different rates.
Between 2008 and 2013, the Singaporean citizen population climbed
by 4.4 percent to more than 3.31 million, much slower as compared to
the growth rate in the number of PRs and non-residents, which grew
8 percent and 28.4 percent respectively. In total, this illustrates that,
over time, the pool of Singapore Citizens has declined as a proportion
of the total population, dropping from initially 68 percent to 61
percent now. On the other hand, PR figures remained stable at 10
percent and non-residents rose slightly to 29 percent by 2013.
Non-residents typically rent, so their increasing proportion has driven
increased demand for rental properties. This, in turn, has created
demand for the investor segment, with yields of between 3 to
3.5 percent.
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Source: Department of Statistics Singapore
Concurrently, borrowing costs have remained typically around 1.5

percent to 2 percent. This has created a yield spread of around 1.5
percent being the difference between the two. Therefore an investor
could typically borrow at 1.6 percent, acquire a property and then rent
it out for up to 3.5 percent creating an obvious incentive to invest
in property.
26
Housing supply set to increase
Table of Contents
This has fuelled increased demand for property in 2013, which was not
curtailed until the second half of the year when cooling measures fully
impacted the market.
Based on the assumption that all population sub-groups continue to
follow their growth trajectories closely, we can well expect more than
129,000 more non-residents and PRs to enter the market by 2015.
On a side note, what also needs to be stressed is that, although
Singapore Citizens will exhibit slower growth when compared to the
other two groups, there will still be sufficient demand in absolute terms
for places to stay in 2015, especially for HDB Built-to-order units (BTOs).
Increased property supply

To cope with these population changes, the Singapore government,
through the Ministry of National Development, has outlined plans to
launch more than 200,000 new properties by 2016, with a mix of HDBs,
ECs and private condominiums.
What is key here is the composition of that new supply. As illustrated
in the graph below, the Singapore governments focus is centred on
redressing the imbalance away from private property and towards
providing affordable public housing.
Increasing the supply of any property type will, if all other factors
are stable, lead to downward pressure on prices. The majority of
Share
Source: Ministry of National Development (MND)
this new supply will come over the next three years. New supply in
2013 alleviated some upward pricing pressures in the private condo
market a sector which saw supply increase from 9,000 units to more
than 15,000 units over the course of the year. This was a 75 percent
increase in supply over the previous year, and so contributed to the
decline in prices in the latter half of 2013.
While the absolute number of all property types will continue to rise,
they are going to increase at different rates with the biggest supply
effects felt in the HDB and EC markets. a
27
property
seekers
weigh in
2013
REVIEW
2013

ince the property boom in 2012, there have been widespread

questions raised about the affordability of housing as fervent
buying activity drove prices across all property types. Moving
into 2014, lingering concerns surrounding overpriced properties continued to weigh down public sentiments.
This can be seen from the Property Affordability Index, the quarterly
benchmark for property affordability in Singapore. The chart below
takes into account survey measurements for overall satisfaction, future
price perceptions and intention to purchase property, as well as perceived government effort.
We can see that public opinion deteriorated sharply at the height of the
property cycle from Q2 2012 to Q1 2013 with the index dipping from
112 to 80.
A reading below 100, the baseline index, indicates a less affordable
outlook for property.
Government intervention was thus inevitable with successive rounds
of cooling measures being implemented in an attempt to mitigate the
sustained increase in transaction numbers. Singaporeans were, and
still are, generally supportive of the governments actions in influencing
real estate demand and supply.
This is indicated by the upswing in the index for the first time in nine
months, from mid-2013 onwards. By the end of Q4 2013, property
seekers were becoming more optimistic about affordability in the
property market, with the index hitting a record high of 120 - a stark
contrast to a year ago, when sentiments were at their lowest ebb.
Share
29
Table of Contents
Property seekers weigh in
Certainty over no increases in property prices

Further indicative of the public being bullish about the property
market is the expectation that prices will not experience a rise in
the next six months. Data from the survey suggests that there is a
strong inverse correlation between affordability and price increases;
perceptions of property affordability will dip as more people anticipate
prices to continue to climb and vice versa.
Following this logic, we see from the graph below that the drop in
perceived affordability of property mentioned earlier from Q3 2012
to Q1 2013 corresponds with the increase in respondents foreseeing
a prolonged rise in prices during the same period. This is illustrated in

a decrease in the percentage of respondents, from 54 percent to 30
percent, who felt that there will be no growth in property prices.
A precursor for more measures to temper the active market, ABSD set
the stage for a reversal in expectations of price increase trends. More
respondents slowly began to feel that little or no further price rise
would occur from Q2 2013 onwards.
What is most startling is the significant jump of 17 percent between Q3
and Q4 2013. This highlighted stronger public confidence that prices
would not continue to increase in the months ahead and into the start
of 2014.
A casual explanation for this occurrence points towards the strength of
the TDSR framework. After coming into effect late-June 2013, it slashed
the quantum of private property units sold - particularly in the CCR and
RCR.
On the HDB resale front, TDSR, together with the contraction of the
MSR on HDB loans to 30 percent, also helped to control this market
segment by softening and shifting demand from larger to smaller
flats. As price estimates for both non-landed private property and HDB
resale units began to trend downwards, so too did overall perceptions
on price stability.
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30
Table of Contents
Table of Contents
Prudence before purchasing property

While the respondents polled painted a rosier outlook for the local
property market in 2014 - as compared to 2013 - home buyers are
still staying on the sidelines to assess and evaluate how the market is
going to fare as we move forward into 2014.
Despite prices coming down and property affordability gaining ground,
as many as three out of five respondents highlighted that they would
not be keen on purchasing a new, or another, residential unit within
the next six months.
In fact, as seen in the chart below, property purchase intent has
been declining over time with only 14 percent showing interest in
purchasing property at the end of 2013. Of respondents who indicated
that they are willing to buy a new property, half are upgraders who
wish to buy non-landed private property.
What are the reasons behind more home buyers adopting a more
selective approach towards property purchasing?
On the other hand, it is the behavioural nature of home buyers

sitting on the fence and studying the market before diving into a costly
decision which may affect them in the long term. a
On the one hand, it can be said that TDSR has limited the purchasing
power of upgraders to finance further investment in private property,
thereby curtailing their demand temporarily.
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31
2014...
With so much uncertainty in the Singapore property market, many people are asking:
u Whether now is the right time to buy, or the right time to sell?
u Where is the market heading and what kind of price correction, if any, can be expected?
u Are HDB resales a good option or should I be considering ECs?
u Overseas property looks very tempting but where should I be looking?
PropertyGuru will answer these and other questions, and also reveal places both local and
overseas that you might want to consider for your next property purchase.
Share
32
Table of Contents
And now to
More HDB
BTOs:
Too much of a
good thing?
e
The decision to raise the release of new
BTO units, at an average of more than 32,000 units

per year until 2016, have some predicting a looming
public housing oversupply. Should this be a cause for
concern?
2014
FORECAST
At a glance:
v
Based on our projections of slowdown in population

growth and lower number of BTO applicants, a
potential oversupply issue might occur in 2016.
Analysts believe this may not be the case, as the

government will monitor the situation closely while
rolling out new supply.
More HDB BTOs: Too much of a good thing?
In an effort to address the issue, the government has been committed

to constructing over 90,000 HDB BTOs till 2016. This injection of new
supply is an increase of 50 percent - as compared to the number of
units which were released for sale in the last three years. However,
in spite of the good intentions behind the announcement, there is
a real risk of oversupply in the HDB BTO residential market - as a
consequence of the slow population growth of Singapore Citizens.
Currently, the Singapore Citizen population increased at its slowest
pace in nine years reaching more than 3.3 million in 2013, up 0.65
percent from 3.29 million the year before.
If we were to plot the population growth rate against the proposed
number of HDB BTOs planned to be built, we will see from the chart
below that, by 2016, there is a possibility that the supply of housing
will outstrip the total number of Singapore Citizens as a whole. This
slowdown in population growth could lead to higher vacancy rates,
placing a strain on public resources.
Application rates from first-time buyers for new BTO flats taking a
tumble - from 2.4 in January 2013 to 1.3 in November - also suggest
that demand itself is already slowly being rectified. Does this, coupled
with more than 28,000 HDB units planned for completion in 2014
alone, signal that there is a real danger that the HDB market is heading
for a supply glut?
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Table of Contents
he Singapore government has been determined to ensure

that first-home buyers are able to realise their dream of procuring an HDB unit to call their own - at an affordable price.
To a large extent, they have succeeded in doing so.
Source: Ministry of National Development, Department of Statistics Singapore, PropertyGuru Analysis
According to analysts, this scenario is unlikely to occur.

Getty Goh, Director of real estate research firm Ascendant Assets said,
Even though 28,000+ flats due to be completed in 2014 may seem like
a large number, if we take a long-term view, the demand for housing
will be spread out - given the fact that the government is trying to
increase the overall population figure to 6.9 million by 2030.
Alan Cheong, Head of Research for Savills, added, New BTO flats
are likely to be almost all taken up in the next few years to cover
the backlog of demand. Most of these will go towards newly-formed
families; therefore the seemingly large number of BTO flats expected
for completion in 2014, and the near future, is not a worrying issue.
34
As public housing is mainly for owner occupation, it comes with a

Minimum Occupation Period (MOP) to prohibit its sale until the buyer
occupies it over a certain number of years. The government can have
the option to extend the MOP further if an oversupply is imminent,
she said.
Should we be worried?
The government will pay close attention to both the demand and
supply of public housing, implementing strategies to tackle the delicate
act of balancing the two. By virtue of their commitment towards
building more BTOs, we have seen that the government has begun
taking steps to address the short-term deficit of residential units over
the course of the next few years.
In the same vein, should these additional units prove to be more than
the market needs, the government can always recalculate the total
supply to provide, or tweak a variety of HDB measures to stabilise
the market. This is already evident from Minister Khaw Boon Wans
recent mention of cutting back on the construction of larger, three- or
more bedroom HDB units by about 18 percent in response to fewer
applicants.
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Table of Contents
Citing alternative measures the government can take to alleviate

concerns of oversupply, Christine Li, Head of Research and Consultancy
for Orange Tee mentioned, The government can simply accelerate the
Selective En-bloc Redevelopment Scheme (e-SERS) and demolish more
flats in the event that there is a risk.
Unlike private properties,

it is always the governments
intent that HDB flats are for
accommodation as well as long-term
asset accumulation. This means that
prices and supply of HDB flats will
be appropriately managed to remain
steady in the long run.
- Getty Goh, Director of Real Estate Research, Ascendant Assets
35
Table of Contents
More for singles in the city

Together with plans to reduce the supply of BTO units for newly
married couples and families, the government looks set to ramp up
the number of two-room flats in non-mature estates from previous
estimates of 2,600 to 5,000 units in 2014. This will aim to re-distribute
the allocation of resources from where demand is comparatively
weaker (young families) towards a demographic with a higher number
of applications, which will likely remain in the double digits in 2014.
Goh said, This is a political decision made by the government to cater
to another demographic of Singaporeans who wish to own a home.
In the bigger scheme of things, this policy is not going to have any
significant impact on the HDB market, as there are more than 900,000
HDB units in total and 2,500 units make up less than 0.5 percent of the
overall HDB stock.
While singles could consider buying resale HDB units in the past,
prices of resale flats have gone up significantly in the last few years;
and many singles are presently finding it a challenge to afford
something from the resale market. Hence, allowing them to buy
directly from HDB is a timely move as it addresses the housing
aspirations of this specific group of people, he quipped.
Li added, The new ruling allowing singles to purchase two-room
(BTO) flats provides those who cannot afford a resale flat a chance
to purchase a home. While the intention is to look after the needs of
those who have been previously side-lined, the government might also
want to strike a balance between providing singles with more housing
and encouraging Singaporeans to start a family. a
Share
36
HDB Resale
Market:
What goes up
must come
down
e
Transaction and price falls in 2013 set the
stage for a soft landing in the HDB resale market.

We investigate why this is the case.
2014
FORECAST
At a glance:
v
The government has managed to subdue the

HDB resale market, with transactions, Cash
over valuations (COVs) and prices of resale
flats appearing to continue on a
downward trend.
Key factors that contributed to this

decline include the restrictions placed on
purchase by PRs and their ownership of
resale units, as well as the new TDSR and
MSR policies.
illion-dollar HDB units are now relatively rare, with resale

prices taking a tumble following the introduction of
cooling measures: particularly the cap of 30 percent for
MSR and a 25-year limit for HDB mortgage loans.
In addition, the government reiterated its stance on providing
affordable housing to all by ramping up the supply of BTO flats. With
low or even no COVs becoming a common occurrence now, a soft
landing for the HDB resale market appears imminent.
Predictions of further declines

On the back of HDB estimates indicating resale prices falling 1.3
percent in Q4 2013, the major news story in 2014 is likely to be an
even quieter year for the resale market, with prices expected to spiral
downwards even further.
On one hand, this is due to more home buyers adopting a cautious

approach in the market. However, it can also be attributed to new
regulations stipulating that newly-minted PRs will have to wait three
years before they can purchase a resale flat. As a result, purchasing
of resale units by PR households fell by half at an average of 176 units
per month, in contrast to an average of 323 units per month prior to
the introduction of the new ruling.
Commenting on the effects of the restrictions, Nicholas Mak, Research
Head at SLP International Property Consultants, said, Based on
preliminary figures from HDB, the drop in demand from PRs will
continue to affect the resale market by reducing overall demand by
about 10 percent during 2014.
However, while activity is expected to be muted in the first half of
2014, both demand and buying activity might pick up in the latter part
of the year - a reaction to falling prices as more buyers are enticed by
more affordable choices in the market. a
Although overall the resale price index dipped by 0.4 percent, the
large dip in prices in Q4 sets the stage for prices in this segment to
drop by between 5 to 8 percent in 2014, said Mohamed Ismail, Chief
Executive Officer of Singapore real estate agency PropNex Realty.
Transaction volume figures will follow a similar trend to 2013, which
saw one of the lowest in years at around 17,200 to 18,500 resale
transactions compared to more than 24,000 to 37,000 over the last
five years.
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38
Table of Contents
HDB resale market: What goes up must come down
Table of Contents
Places of interest:
Areas home buyers should consider

In lieu of falling HDB resale prices and COVs, we have pinpointed several
areas that may be attractive options for a first time home buyer or upgrader
wishing to purchase a four- or five-room resale flat in 2014.
On the whole, COVs will continue to fall across all HDB areas in 2014. Punggol
currently comes out top in terms of lowest COVs for the more popular fourand five-room units. This is a result of drastic falls in both quarter-on-quarter
and yearly prices.
Top 3 areas with the lowest median COV

Top 3 areas with the lowest median COV
4-room flats (as of Q3 2013)

TOWN
CURRENT
MEDIAN COV
% CHANGE
(compared to
last quarter)
% CHANGE
(compared to
start of year)
CURRENT
MEDIAN COV
% CHANGE
% CHANGE
Punggol
$8,000
-73.33%
-75.38%
Sembawang
$11,500
-52.08%
-65.15%
Woodlands
$15,000
-44.44%
--55.75%
TOWN
Punggol
$10,000
-59.18%
-76.74%
Sengkang
$15,000
-50.00%
-61.04%
Woodlands /
Bukit Panjang
$13,000
-48.00%
-56.67% (Woodlands) /
-48.00% (Pasir Panjang)
(compared to
start of year)
Share
(compared to
last quarter)
39
Top 3 areas with the lowest median resale price

TOWN
Current Median
Resale Price
% change
% change
Yishun
$404,000
-3.00%
-1.70%
Woodlands
$415,000
-1.78%
-1.19%
Sembawang
$426,000
-3.40%
-4.48%
(compared to
last quarter)
(compared to
start of year)
In this regard, Punggol will be attractive to price-conscious buyers

in 2014. However, in the longer term, it will prove to be even more
sought-after with the development of the area into a Waterfront
Town for the 21st Century under the Punggol 21 initiative.
The Northern areas of Woodlands and Sembawang also offer a
similar story.
At a median COV of $13,000 for a four-room flat, as well as $15,000
and $11,500 respectively for a five-room flat, Woodlands and
Sembawang are good buys - especially for upgraders who are
strapped for cash due to TDSR. These areas also show a lot of
potential for capital appreciation in the next 10-12 years following
the development of the Woodlands Regional Centre.
Table of Contents
Interestingly, the top three locations with the lowest median prices
for resale flats all belong in the northern part of Singapore, ranging
from $404,000 to $426,000 for a four-room flat and $473,000 to
$515,000 for a five-room flat.
One reason for Yishun, Sembawang and Woodlands to be
consistently demonstrating lower demand, and hence lower
transaction prices, is the longer travel distances to the city. However,
if we were to look at the bigger picture, these areas present great
opportunities for first-time home buyers and upgraders to consider
in 2014. When new amenities, transportation networks and
recreational facilities are constructed in the near future, high returns
on investment can be expected. a
Top 3 areas with the lowest median resale price

Current Median
Resale Price
(compared to last
quarter)
% change
% change
Woodlands
$473,000
-1.46%
Sembawang
$490,000
-1.71%
-2.00%
Yishun
$515,000
-1.34%
TOWN
(compared to
start of year)
Share
40
Where are
demand and
prices in the
EC Market
headed?
e
The recent EC measures have put a damper on
market sentiments that may last well into 2014.
2014
FORECAST
At a glance:
v
A 30 percent cap on the MSR will largely influence

buying patterns of the upgrader segment,
potentially causing demand and transaction
volumes to decline.
Taking into account the prospect of lower buyer

activity, developers are expected to respond with
greater prudence in their pricing strategies.
xecutive condominiums are a public-private housing hybrid

designed to meet the housing needs of the sandwich classes.
This group of home buyers aspire to live in private homes but
cannot afford such property due to skyrocketing prices. They are also
unable to buy HDB flats due to their above average income.
ECs bridge this gap by granting the prospect of luxury living made
affordable through financial assistance from government schemes. It
is therefore not surprising that ECs have become increasingly popular
over the last two years, subsequently causing prices to rise strongly.
upgraders feeling the heat

With ECs showing much promise in 2013, does it mean that we will see
demand further escalating for this type of property in 2014?
Some analysts expect this is not likely, given the recent EC cooling
measures imposed.
According to Thomas Tan, Principal Trainer at Real Centre Network,
As everyone knows, ECs are generally priced lower than private
condominiums, hence they are attractive options and a good step
forward for upgraders to realise that goal.
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In my view, the EC market might remain an active one in 2014 because

of this difference in price; however potential buyers will take stronger
note of the MSR of 30 percent - which will severely affect affordability
and could prevent them from purchasing their desired units, he said.
Upgraders those who wish to sell their pre-existing HDB units for
an EC will be the most severely affected, especially so if they have
existing debt payments. This is because, in addition to the TDSR, this
buyer segment will need to factor in the 30 percent cap on MSR for
mortgage loans, which previously applied only to buyers of resale and
BTO flats.
What this means for upgraders with lower incomes is that they either
have to fork out more cash upfront for their purchase, or simply search
for cheaper alternatives in the market, potentially lowering the number
of purchases, and therefore transaction volumes for ECs.
The new EC measures will mean that there could potentially be a
drastic drop of 50 percent in purchasing power, which will severely
dent an upgraders aspirations. Upgraders may find that some EC
units currently available for sale above $1 million will be beyond their
budget, as the loan quantum required from them is much higher,
said Mohamed Ismail, Chief Executive Officer of Singapore real estate
agency, PropNex Realty.
43
Table of Contents
Where are demand and prices in the EC Marcket headed?
Table of Contents
Developers paying closer attention to the EC market

Ismail suggested that developers will remain cautious as they are
already reeling from the effects of inflation, a tight labour market and
rising construction costs.
That, together with increasing competition in the market and the
reduced purchasing power of the upgrader segment, means that there
could be more aggressive bidding wars for upcoming EC tenders. By
the same token, developers with existing land sites for such projects
may be severely affected if they submitted high bids.
The aim of the EC cooling measures is to equalise the playing field
between public housing and ECs prompting developers to adjust
their land bid prices accordingly by taking into account the potential
buyers purchasing ability. The likelihood is that developers may build
smaller units so that overall quantum remains affordable for buyers.
This will result in a compromise between price and size of living space,
Ismail added.
Subsequent EC land bids will be keenly watched to see if the new
measures will bring down the number of bids per site and/or affect the
quantum of the winning bids given the strong offers for recent state
tenders and the continued healthy take-up rate for ECs.
Also, 2014 may see more developers, including foreign players, eyeing
and possibly entering the EC segment, given that mid- to high-end
private properties are now also seeing a slowdown after the impact of
successive rounds of cooling measures, he noted.
Share
WATCH VIDEO: Insights into how the EC market will fare in 2014
(Thomas Tan, Principal Trainer, Real Centre Network)
With the new Cooling Measures,

EC developers must adjust their land bid
prices accordingly to take into account
the potential buyers purchasing ability.
- Mohamed Ismail, CEO of PropNex Realty
44
Table of Contents
Which areas should we look at in 2014?

HDB upgraders should expect the next batch of EC supply to hit the market
only in August 2014, at the earliest.
No more than five EC launches are slated for release in 2014, to keep in line
with the governments aim of maintaining supply for this unique property
segment.
Three projects to be launched will be located in the North-Eastern region of
Sengkang and Punggol; followed by one each in Woodlands and Jurong West.
It will be interesting to see how the two ECs launched in Sengkang and
Punggol will fare. District 19 shows much promise because of major
developments such as the Punggol 21 initiative. However, much prudence
should be exercised when deciding whether investing in an EC in this area will
be a wise choice.
WATCH VIDEO: Why do ECs in Punggol continue to be

popular options?
(Keith Cheong, Head of Research and Analytics,
PropertyGuru Group)
Given that there are already six ECs slated for construction in Punggol and
three in Sengkang, the addition of three more in the area might bring fierce
competition for capital gains in the long term. a
Share
45
The pRivate
property
roller coaster
continues
2014
FORECAST
At a glance:
v
All regions will see a decline in demand for private

property, with the OCR seeing the majority of sales
transactions due to the lower price quantum for
properties there.
Buyers are influenced by attractive pricing and location

before determining their private property choices.
In 2014, developers will most likely move towards

the construction of smaller units to cater to the
shrinking purchasing power of home buyers.
Buying activity for non-landed private residential

properties is expected to be muted in 2014, with cooling
measures continuing to scale down the robust growth
seen in recent years. We examine why this is the case,
and analyse which areas will still attract demand over the
coming months.
The private property roller coaster continues
Table of Contents
uying patterns in 2014 are set to echo those of 2013, with

capital values of new luxury homes in the CCR continuing to
soften due to the effects of the ABSD, TDSR and MSR inhibiting transaction volumes. The number of local and overseas high net
worth buyers entering the high-end market will still remain low, with
some opting to look elsewhere in the region for more affordable options.
Based on the news of 23 sites announced on confirmed and reserved
lists of the 1H 2014 Government Land Sales programme, 21 are
earmarked for future development into private residential units, with
the OCR accounting for more than 62 percent, followed by 31 percent
allocated to the RCR. Only one site is gazetted as a white site in the
CCR.
A lukewarm response from property buyers

With the majority of the sites allocated for development located in the
OCR (mass market), we can anticipate more supply of affordable private homes to be built in these areas. However, in light of the restrictions to secure more loans, prospective upgraders and investors will
remain selective in their purchases - at least until mid-2014.
There will still be domestic demand though, but, as always, pricing is
key.
Share
WATCH VIDEO: Industry analysts share their thoughts on the factors that
buyers take into consideration before making a property purchase
(Alice Tan, Associate Director & Head of Consultancy and Research, Knight
Frank; Alan Cheong, Senior Director, Savills; Christine Li, Head, Research &
Consultancy, OrangeTee)
Moving forward into 2014, Mohamed Ismail, the Chief Executive Officer
of Singapore Real Estate agency PropNex Realty, said, It was the
attractive pricing that set the tone for the sale of recent new launches,
and it gives the strongest signal for developers to sensitively price their
new launches to attain high take-ups.
48
His sentiments were shared by other analysts such as Alice Tan,

Associate Director and Head of Consultancy and Research, Knight
Frank, who added, Price is the biggest consideration for property
seekers right now as they are constrained by the amount of loans they
can take under the TDSR framework.
Developers becoming more cautious

Savvy developers keen to tap into opportunities will only build what
they know they can sell and, ultimately, appropriate pricing strategies
in the weeks prior to any launch will drive sales volumes.
Projects which are value for money and have price points that
potential home buyers are comfortable with will likely be a good draw.
To be well-received, an ideal price range that developers should price
a private residential unit at will have to be between $1 million and
$1.3 million, especially if they want to attract the interest of middle- to
upper middle-income buyers, she added.
But thats not all. Location also plays an important role in determining
success.
Alan Cheong, Senior Director at Savills, said, There is an observation
that buyers traditionally come from, or live within, areas near the
vicinity of a new project launch, and I believe that this behaviour will
continue well into 2014 and even into 2015.
Tan added, Home buyers will be searching for projects in locations
which have positive attributes, such as being fairly well-connected via
public transport, and close to retail amenities or up-and-coming growth
areas. They would then weigh these factors with their launch prices
before making a decisive choice.
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WATCH VIDEO: Industry analysts give their opinions on trends which we

will see happening in the property market in 2014
(Alan Cheong, Senior Director, Savills; Christine Li, Head, Research
& Consultancy, OrangeTee; Alice Tan, Associate Director & Head of
Consultancy and Research, Knight Frank)
49
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Table of Contents
As such, developers will be careful when bidding for the new GLS sites
in view of the reduced purchasing power of property seekers.
At the same time, in lieu of the projected lacklustre demand in 2014,
developers will have to be prudent in their judgement when marketing
their new launches to gain public favour. That said, they will have to
work harder to maintain the tight balancing act of managing profit
margins with costs incurred from constructing sufficient units within a
limited land space.
One way developers will be aiming to meet these objectives is through
the creation of smaller units. Working within the land area available,
developers have the opportunity to build more small units that can be
competitively priced to potential upgraders.
A definite trend that we will see more often in 2014 is the launch of
smaller units, typically compact three-bedroom units priced slightly
below $1 million. This will become a norm going forward, said
Christine Li, Head of Research and Consultancy for OrangeTee.
WATCH VIDEO: Hear which districts analysts think will shine in 2014
(Christine Li, Head, Research & Consultancy, OrangeTee; Alice Tan,
Associate Director & Head of Consultancy and Research, Knight Frank;
Alan Cheong, Senior Director, Savills)
Small units, comprising three bedrooms with an average of 800-1,000

sq ft in size, will still see a steady demand because of price quantum
considerations, she added.
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50
Table of Contents
Private property hotspots in the OCR:

Blazing the trail in 2014
If you are thinking of purchasing a private property in 2014, here
are some suggestions in the OCR that you might want to consider
based on their greater capital appreciation potential in the future:
District 25: Woodlands, Admiralty

Woodlands and Admiralty are expected to attract much interest
in the next few years. In line with the Urban Redevelopment
Authoritys (URA) draft Master Plan, the district will house the
creation of the Woodlands Regional Centre, as well as provide
an integral transport hub not only within the island, but also
between the mainland and Malaysia.
Key upcoming developments
North Coast Innovation Corridor catering for small and medium enterprise (SME) business, linked with Seletar Regional Centres and the
Learning Corridor/Creative Clusters at Punggol.
More than 100ha of land around Woodlands MRT dedicated for commercial and residential use.
Better connectivity between Woodlands North MRT station in Singapore and Tanjung Puteri station in Johor Bahru, with the Rapid Transit
System (RTS) by 2018/19. Transport to Kuala Lumpur/Penang via the High-Speed Rail (HSR) is expected to cut travel time to Malaysian cities
to a mere 90 minutes.
Share
Woodlands MRT station will serve as an interchange connecting the North-South Line with the new Thomson Line.
Completion of the North-South Expressway (NSE) by 2020, slicing travel time to the city centre by 30 percent.
51
Table of Contents
District 19: Punggol, Sengkang, Hougang

Punggol is earmarked to become Singapores largest housing
estate, twice the size of Ang Mo Kio today and estimated
to have its population grow to 100,000 households by
2030. Punggol, together with Sengkang, holds prospect for
increased buyer activity as these areas continue to develop
into a vibrant new town.
Extension of The North-East Line extending into the New Punggol

Downtown, represented by seven distinctive districts that are
connected by green fingers linking residents to the waterfront.
Seletar Aerospace Park located nearby provides employment

opportunities to residents in the neighbouring regions of
Sengkang & Punggol.
District 22: Jurong Lake District

A major regional centre in the west, Jurong
Lake district promises to become even livelier with the
decision to transform the area into a hub incorporating a
mix of commercial, leisure and residential spaces for work
and play. a
Dubbed as Singapores biggest lakeside destination for business

and pleasure, the district will bring new opportunities for
amenities such as office buildings, hospitals, hotels and more.
The creation of Jurong Gateway, or what will otherwise be known

as the next commercial hub for doing business - the biggest
outside of the Central Business District.
Share
Lakeside area to undergo a facelift to offer a waterfront

playground with retail and entertainment amenities close to
nature.
52
The
guru view
for 2014
2014
FORECAST
At a glance:
v
HDBs are expected to see an 8-11 percent decline in

prices and a drop in the number of properties
transacted by 15-20 percent.
Private non-landed properties are forecast to drop by

a lesser 6-8 percent and will also see reduced
transaction volumes.
ECs will experience a large (330 percent) increase in

supply, from 2013 levels, in the next three years. Much
of this will be in 2015 and 2016; however, 2014 is
expected to see alleviated psf price pressure due
also to the removal of the favoured policy status of ECs.
Table of Contents
The Guru View for 2014
he combination of 2013 market and trend data, customer

sentiment data, overseas market comparisons, the views
and data of our industry partners - and micro and macro
market forces, has allowed PropertyGuru to confidently project what
the 2014 property market is likely to have in store.
HDB: 2014 transaction volume & price forecast

The Guru View of HDBs in 2014 is formed on the basis of several
assumptions. These are:
n That the cooling measures will be maintained throughout 2014.
n That the cooling measures target the HDB segment particularly.
n That the declining transaction volume trend is likely to trend
lower before finding a floor.
n That supply of HDB new housing in 2014 will be double that of
2013.
n That mortgage rates will rise only marginally by 0.25 percent,
but as the market is particularly interest rate-sensitive, this
small change will have an effect.
n That there will not be any new, strong, sources of indigenous
HDB demand; and that the number of Singapore Citizens as a
percentage of the total population will continue to slowly
decline.
Share
Source: Housing Development Board (HDB), PropertyGuru Analysis
Based on these assumptions for 2014, the

Guru View is:
n An 8-11 percent decline in prices of HDB.
n A 15-20 percent decline in transaction
volumes, following on from the existing
trend that began in Q3 of 2013.
54
n A near 20,000 increase in private property supply compared to

2013, equal to a 33 percent increase.
n An increasing recognition of alternative markets in the region
representing value.
This represents an initial decline of some 33 percent on the Q4
volumes of 2013 but ending the year just 11 percent down on the
last quarter of 2014 - with the anticipation of some bargain hunting
and buying in Q4.
Source: Urban Redevelopment Authority (URA), PropertyGuru Analysis
PRIVATE: 2014 transaction volume and price forecast

The Guru View on private transaction volumes is that they are likely to
continue to correct down to approximately 3,000 per quarter in the first
half of the year, before recovering moderately at the end the year to
approximately 4,000 transactions per quarter.
The primary factors that are considered to drive this are:
n Cooling measures that are likely to remain in place, limiting the
ability to gain finance.
n A slight forecasted increase in interest rates (approximately 0.25
percent), driven primarily out of the trend in the U.S. 30-year
bond market, which has doubled its yield in the last six months.
Share
In the private sector pricing trend, the Guru

View is that there will be a further deterioration of some 6-8 percent by year end, from
Q4 in 2013.
This is expected to be driven primarily by:
n The continued softness in volume
transactions, as above.
n The increased choice and availability of
new units from a 33 percent supply
increase.
n A slight worsening in finance availability
and the cost of finance with a .25 percent
rate increase.
n The maintenance of the cooling measures
and expectation that they will remain for
2014.
n External macro economic factors likely to
shift capital out of Asian markets and
Asian investments.
55
Table of Contents
Table of Contents
interest rates: 2014 forecast

As noted earlier, Singaporean rates are largely inherited from overseas
specifically the U.S. Therefore, to estimate the future path of Singapore
mortgage rates, one must look to the likely scenario for rates in the U.S.
The expected scenario for average mortgage rates in Singapore in 2014 is
that they increase marginally by 0.25 percent.
This assessment is made on the following factors:
n The U.S. 30-year bond yield is trending up and has doubled in the
last six months.
n There has recently been an increased and stated commitment by
the U.S. Federal Reserve to wind back, or taper, their extraordinary
bond purchase programme (QE) within the first six months of 2014
and that this programme has artificially suppressed some bond
yields to date.
n Local banks are expected to increase their mortgage margins - as a
recent downgrading by an international ratings agency in 2013 high
lighted their low margins as a risk factor. a
Share
56
Table of Contents
Overseas
Review
of 2013
Japan: Follow the big boys

In its Emerging Trends in Real Estate Asia Pacific 2014 report published
by PricewaterhouseCoopers (PwC) and the Urban Land Institute, Tokyo
re-emerged as the number one choice for more than 250 industry
professionals working in developer, private equity and real estate firms
around the region.
Choo Eng Beng, Partner and Real Estate Leader, PwC Singapore said,
The generally positive outlook for many markets throughout the Asia
Pacific region is highlighted by the re-emergence of Japan. After a
five-year absence from dominating the financial league tables, Japan is
rebounding as a favoured market for investment and development.
The country is one of the largest beneficiaries of capital flows from
other regions within Asia, notes the report. Its increasing popularity is
attributed to the governments massive economic stimulus plan, which
Share
has resulted in a flurry of property purchases in anticipation of rapidly

rising prices.
In addition to Tokyo being singled out as Top Investment Market for
2014 after the introduction of economic reforms, secondary cities
including Osaka, Fukuoka and Sapporo are fast gaining investor appeal
as well. Transaction volumes picked up significantly in 2013 with buying
expecting to continue in 2014.
With the Japanese economy on the fast track for recovery and growth,
demand for residential properties among Singapore investors has
grown.
This is partially driven by Japans attractive terms of rental yields and
price.
57
Table of Contents
Japan: Follow the big boys
Private property units in Singapore of around 1,000 sq ft and smaller

garner an estimated 3 3.5 percent rental yield. In comparison,
popular apartments in Japan have the potential to obtain above 5
percent yield.
Singapore home buyers and investors will have more opportunities
to view Japanese real estate as the number of Japan-themed property
exhibitions in the city-state is set to increase this year.
Sophia Leung, Senior Sales and Marketing Manager for ECG said,
The Tokyo market is picking up and many buyers are looking to
transact ahead of the planned consumption tax increase. Whilst many
Singaporeans purchase Tokyo property for capital gains, there are
those who buy to house their children studying in Tokyo.
Leung added that her company plans to hold 30 Japanese property
exhibitions in Singapore this year, and is confident that the stability of
the country together with the forthcoming 2020 Olympics will play a big
part in influencing buying decisions. a
Share
58
Table of Contents
Overseas
Review
of 2013
Why Thailand deserves a second look

The turbulent street protests in Bangkok that were flashed
around the world on the front pages of newspapers will do little
to boost confidence in the kingdoms property markets at least
from an overseas buying perspective.
In December, Thailand was named one of the top ten mostsearched countries by one of Europes top property portals.
While the protests have been largely good natured and free from
significant violence, anyone looking at investing in the country
will certainly be having second thoughts.
Many unseasoned Thailand observers may assume that periods
of political instability will see a drop in the value of property.
Certainly theres no evidence that will happen as, surprisingly,
prices actually continued to rise significantly during the street
violence of 2008 and 2010.
Share
Source: Bank of Thailand
59
For many, its also been business as usual, contrary to what many in the
media would have you believe.
Suphin Mechuchep, Managing Director of Jones Lang LaSalle (Thailand),
said, In terms of our business operations, JLL hasnt seen much impact
from the situation. Our head office on Sathorn Road remains open as
normal.
For those who understand Thailand, they will know that this is the way
that Thais do things. Many will not be put off investing in property in
Thailand even given the uncertain short-term future.
Ultimately, the kingdom offers great value for property investors and is
a genuinely nice place to live. With prices generally 20 percent of those
in Singapore on a like-for-like basis, the kingdom is still worthy of close
attention from overseas property buyers and investors. a
Our residential selling and buying enquiries have remained normal.

The only thing we have seen is that most project owners are
postponing their high-cost marketing campaigns until the situation has
been resolved.
The reason why property prices in Thailand will not be impacted by any
short- or even medium-term period of political instability is that Thais
who make up at least 90 percent of property buyers in Thailand will
continue to buy.
The foreign-buying market will suffer it did in the past and it will again
but its just a small, although, until recently, growing part of Thailands
property sector. Many developers, especially those listed on the Stock
Exchange of Thailand, have already announced a reduction in new
projects for the forthcoming year, so any decline in buyers may well
already be factored into the equation.
Share
60
Table of Contents
Why Thailand deserves a second look
Table of Contents
Overseas
Review
of 2013
UK: Look outside London

The United Kingdom has been a perennial favourite with Singaporeans,
so much so that in 2012 they were joint leading overseas buyers of
off-plan projects in central London. Whilst the latest data has yet to
be published, theres no doubt that there has been little decline in
Singaporeans love of London.
What were likely to see in 2014, and to a certain extent its already
started, is a move away from zones one and two. Why? Quite simply, the
answer is price. London has become extremely expensive and investors
who have their minds set on buying in the United Kingdom are being
forced to buy further away from the centre of the capital. Even other
parts of the country have been attracting interest from Singaporeans for
the first time in 2013, and that trend will continue this year.
One spanner in the works for pure investors will be the April 2015
planned implementation of a foreign capital gains tax for the first
time. British buyers have been paying up to 28 percent, and the U.K.
Share
government has announced it will close the loophole whereby

property gains by non-UK owners remained untaxed. Its still too
early to tell the impact this will have on UK property purchases by
overseas buyers, but many market watchers expect minimal change
in transaction numbers. a
I think 2014 will be an interesting year as Singaporeans

will continue to look abroad for investments, and London
will be their top choice now as a new tax law will deter
investors from buying - when its implemented in 2015.
Therefore, I think 2014 will be a good year to invest in
London. And those who purchased a number of London
properties may want to consider selling before 2015.
- Doris Tan, Head of Overseas Residential Sales, JLL Singapore
61
Table of Contents
Overseas
Review
of 2013
Malaysia in 2014: Still a property

hotspot or fading star?
Malaysias property sector was one of the best performing sectors in
2013, and looks set to be closely watched this year.
At the same time, property developers will be prohibited from

implementing projects that have features of the Developer Interest
Bearing Scheme (DIBS), to prevent them from incorporating interest
rates on loans into house prices during the construction period. This
will prohibit financial institutions from providing final funding for
projects involved in the DIBS scheme.
In a bid to curb the robust growth and increasing prices in Malaysias

property market, The Malaysia 2014 Budget, announced in October
2013 by the countrys Prime Minister and Minister of Finance Datuk Seri
Najib Tun Razak, saw significant changes made to property purchases,
especially among overseas buyers.
Measures bring uncertainties for foreign investors
Of these policies, two stand out for those seeking to invest in the
country. One is the raising of the minimum price of property that can
be purchased by overseas buyers to RM1 million from the previous
RM500,000. The other is pegging of the Real Property Gains Tax (RPGT)
for non-Citizens at 30 percent on the gains from properties sold within
five years, and five percent for subsequent years thereafter.
These policies are expected to slow Malaysias property market, with

a decline in the level of home sales in the short term. Given that
Singaporeans came top of the list of overseas buyers in Malaysia, prior
to the introduction of the cooling measures, the bulk of this drop in
transactions can be attributed to reactions by Singaporean investors to
the measures, come January 2014.
Share
62
Demand and interest will wane in the next six months or so as

Singaporeans are adopting a wait-and-see approach on how the new
measures will affect them, said Khalil Adis, Founder and Property
Journalist of Khalil Adis Consultancy.
regions in Malaysia look set to flourish. For example, Kuala Lumpur

will see a lot more commercial projects being offered due to the
Malaysian governments efforts in ramping up supply for more
office and retail spaces.
This will cause buyers to stay away from the market until the
Malaysian government releases further details on how these measures
will be implemented.
In addition, according to MP Data, a Malaysian real estate business

intelligence company, the Klang Valley - with its prime locations,
such as Mont Kiara, Bangsar and Damansara Heights, will continue
to remain popular, as many foreign investors tend to value the
capital appreciation of the high-end residential properties located in
these areas.
This could spell trouble for properties in popular regions such as

Iskandar, where some analysts have already noted a slowing down of
demand in the past few months. With waning interest anticipated, a
price correction is likely to occur within the next six months after the
new RPGT rate was implemented on 1 January.
As Khalil mentioned: Iskandar (in Johor) will be the most affected.
We are already seeing a significant drop in interest for new launches
- unlike a year ago when buyers were flocking to snap up units in the
region.
However, we are going to see property launches in Medini zone
continuing to be popular in 2014 because it is the only place in
Malaysia where foreigners can enjoy a tax break and buy below RM1
million without paying the RPGT.
Other regions show prospect

On the brighter side, despite the buying outlook for residential
property in Johor expected to be subdued in 2014, prospects in other
Share
Table of Contents
Malaysia in 2014: Still a property hotspot or fading star?
Penang will be another location worth paying attention to because

of the strong interest from foreign investors that the state continues
to attract - particularly for high-end projects in good locations. This
is due to potential buyers being accustomed to Penangs own RM1
million minimum purchase price for condos enacted two years ago.
Malaysia will still be an attractive location for property investment
in 2014, but investors must take a long-term investment horizon.
This is because Malaysian properties remain relatively affordable
compared to properties in Singapore, driven by the weakening RM
against the Singapore dollar.
Also, Malaysia continues to be one of the few countries that allows
foreigners to own freehold properties, an incentive for Singaporeans
who wish to procure more affordable residences outside of the citystate, Khalil concluded. a
63
Lifestyle
Review
of 2013
Table of Contents
Galloping Ahead
into the New Year
With 2014 being the year of the Horse, we ask Master Lynn Yap,
Singapores Feng Shui Queen, to give a glimpse into how we
should place our bets in 2014.
What will the Year of the Horse bring for property investments?
From the feng shui point of view, the Horse year will focus on three main areas, such
as emotion, infectious illnesses and property matters.
It is known as a Jia Wu year meaning that the first half of the lunar year has yang
wood while the later half has yin fire.
This will be very challenging for property, as it is predominantly a strong fire year
with no water element . Water elements are very important when it comes to
auspicious property investments.
Since the earth will be very dry, property, which is an earth element, will see prices
start to fall sharply in the first half of the year.
Share
64
Although it is a Horse year and the Horse typically signifies galloping,

it will be a year where property prices will gallop downwards. Those in
the property business like property agents and bankers will be busy
trying to sustain and deliver on forecast projections. It is important,
though, that we remember not to whip the Horse but to gallop along
with it.
There can be many reasons for this sharp fall, mainly due to stricter
cooling measures, higher interest rates and stricter loan requirements as well as the 2014 feng shui charts.
Already, in the last quarter of the Snake year in 2013, we began to see
property prices falling. And once the Horse year officially arrives in Li
Chun on 4 February 2014, we may experience a sharper fall in property
prices.
In the second half of the year, the yin fire is strong. This can cause
property prices to rise a fair bit and then remain stable towards the
end of the year.
This is because the yin fire supports the earth element, which
represents property. Therefore property prices would start to rise, but
not at the same rate that overall property prices will fall in the first half
of 2014.
Share
If there is the presence of SARS or related illnesses, other infectious

diseases, or a big fall in the American stock market in the Horse year,
property prices could continue to fall sharply in the second half of
the year.
Who will be most affected negatively/positively in a financial

sense?
Not a favourable year for property sellers and renters.
Those planning to sell property in the lunar year 2014 will have to be
prepared to make less profit from the sale, as compared to years prior
when the property market was on the upswing.
Those planning to sell property in 2014 have

to be prepared to reap less profits from the
sale, as compared to previous years when the
property market was on the upswing.
- Master Lynn Yap, Feng Shui Queen
65
Table of Contents
Lifestyle: Galloping ahead into the New Year
If one waits too long into the year to sell, there is a risk of losing
even more.
The advice is to not be too stubborn when it comes to selling a property.
Simply make enough and move on. There will always be an opportunity
to ride the property cycle, but only from 2019, the Year of the Pig,
onwards. Gains in capital appreciation will be substantial gains due to
steep rises in property prices, just like in 2007.
The year, 2014, will also not favour the rental market as rental prices
will start to fall quite significantly as well. However, do hold on to your
property even if rental income cannot cover the mortgage.
The year 2014 will favour buyers.
This is because falling property prices may be enticing for property
buyers, however like any investment, buyers needs to weigh the pros
and cons before making their decisions.
Are there tips on how to grow wealth in 2014?

Hold on to your cash! This is because money is tangible in value and will
not be adversely subjected to large fluctuations in the market. a
Share
Table of Contents
Lifestyle: Galloping ahead into the New Year
About Master Lynn

Master Lynn Yap, also known as Singapores
Feng Shui Queen (registered mark, 2000), is
a veteran practitioner of the art and science of
metaphysics.
She holds a degree in Business Administration
from National University of Singapore and is no
stranger to offering advice and consultations
to different strata of society.
Over the years, her personal well-being has improved tremendously. So too,
have the lives of the many people from all walks of life who have consulted
her vast knowledge and expertise in this field.
Every year, Master Lynn is invited by many business practitioners and
organisations to give feng shui talks as well as deliver her predictions for
the year. Currently, she writes for PropertyKaiser.com, a property portal
on a fortnightly basis, on top of her consultation work on
www.fengshuiqueen.com.
She also writes a very successful blog, The Fengshui Savvy Investor at
www.lynnyap8888.blogspot.com.
66
About Us
PropertyGuru is Asias leading online property portal group, used by almost 11 million
property buyers, viewing over 89 million property pages and generating over 350,000
enquiries for real estate developer and agent advertisers every month.
Headquartered in Singapore, PropertyGuru was founded in 2006 by two entrepreneurs
with a vision to simplify the property search process and help buyers, sellers and investors
make better property decisions faster. Taking advantage of Asias growing affluence,
property demand and online explosion, the company received its first VC investment
funding in 2008 and secured approximately $60m investment in 2012 from Deutsche
Telekom, South East Asias largest digital investment to date.
The award winning company focuses heavily on innovation. Over the last two years, the
Company has developed and launched 16 mobile applications in four countries and three
languages. These applications have received over a million downloads. Almost 50 percent
of PropertyGurus visits in Singapore now originate from a mobile device.
PropertyGuru was also the first to integrate its website with social media, first to launch
Singapores only dedicated property newspaper - with over 100,000 copies circulated
island-wide every month. The company has also developed a property events platform,
with approximately 30 shows held annually across four countries, addressing 30,000
potential property buyers on the ground.
68
Disclaimer
This report and other research materials may be found on our website at www.
propertyguru.com.sg. Questions related to information herein should be directed
to PropertyGuru at the number indicated below. This document has been prepared
by PropertyGuru for general information only. PropertyGuru makes no guarantees,
representations or warranties of any kind, expressed or implied, regarding the information
including, but not limited to, warranties of content, accuracy and reliability.
Whilst facts have been rigorously checked, PropertyGuru does not take responsibility for
any damage or loss suffered as a result of any inadvertent inaccuracy within this report.
This report should not be relied upon as a basis for entering into transactions without
seeking specific, qualified, professional advice. Any interested party should undertake their
own inquiries as to the accuracy of the information.
PropertyGuru excludes unequivocally all inferred or implied terms, conditions and
warranties arising out of this document and excludes all liability for loss and damages
arising there from.
This publication is the copyrighted property of PropertyGuru Pte. Ltd. 2014.
All rights reserved.
Information contained herein should not, in whole or part, be published, reproduced
or referred to without prior approval. Any such reproduction should be credited to
PropertyGuru.
69
Credits
Steve Melhuish
Co-Founder and Chief Executive Officer
Andrew Batt
International Group Editor
andrew@propertyguru.com.sg
Adam Rahman
Senior Marketing Executive
adam@propertyguru.com.sg
Romesh Navaratnarajah
Senior Editor
romesh@propertyguru.com.sg
Carl Hampel
Head of Data Business
Keith Cheong
Head, Research and Analytics
Sue Ellen Manalo

Creative Designer
Oscar Vidal
Data Engineer
Niko Nyrhila
Software Engineer
PropertyGuru Pte. Ltd.

51 Goldhill Plaza, #11-03/05
Singapore 308900
Tel: (65) 6238-5971
Fax: (65) 6534-9544
70

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Market Outlook 2014

Challenges and opportunities:

Forecast: And now in 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2

2013: The year in review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 6

Cooling Measures and the reduction

- The Guru View for the 2014 ................................................. 53

Japan: Follow the big boys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... .. . . 5 7

- The fluctuating nature of prices ..................................... 16

UK: Look outside London . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 1

- Why Executive Condos were highly sought after ........ .. 20

Malaysia in 2014: Still a property hotspot or fading star? .. . . 62

- The vital role that interest rates played ......................... 22

Galloping ahead into the New Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 4

- Housing supply set to increase ....................................... 25

- Property seekers weigh in .............................................. 28

Additional Buyers Stamp Duty

Core Central Region

Cash over valuation

ECs Executive condominiums

Housing Development Board

Monetary Authority of Singapore

Minimum Occupation Period

Mortgage Servicing Ratio

Outside Central Region

PRs Permanent residents

per square foot

Rest of Central Region

e-SERS Selective En-bloc Redevelopment Scheme

Total Debt Servicing Ratio

what does this mean for you?

a characteristic relationship between declining transaction volumes and,

u First-home buyers will be provided with more choice in 2014,

u The cooling measures had their intended effect of reducing

existing developer plans to supply more ECs.

demand slowing activity and transaction volumes, then slowly

approach to the market as new supply, declining prices and

u The measures were reflected in declining Q1 and Q2 volumes

cooling measures reduce demand - and prices soften.

followed by a typical lag effect declining prices in Q3 & Q4.

u Investors are expected to be more selective in Singapore

Upgraders may increasingly adopt a more relaxed wait-and-see

as the perception of the market being fully priced and

2014 will reflect the market trends begun in 2013

Last year saw fundamental changes in Singapores property market which

Of particular importance during 2013 were:

Government cooling measures.

Declining property transactions.

Average time to transact property increased.

Property prices peaked, then declined.

u Interest rates bottoming out.

Immigration / Population growth.

u Increased property supply.

PropertyGuru Market Outlook 2014

The year in review

can otherwise be known

as the Year of New Regulations for the local

First-time home buyers

Reduction of maximum loan tenure to 25 years for Housing Development

The double threat of Total Debt Servicing Ratio

Introduction of the TDSR framework would mean a

repayments each month.

property buyers total repayment obligations cannot

shorter monthly repayment period of up to 30 years for

bank loans, severely limits the upgraders/investors access