Issue 212

Copyright 2011-2014 www.Propwise.sg. All Rights Reserved.

CONTENTS
p2

FROM THE

EDITOR

Is it Game Over for Property as an

Welcome to the 212th edition of the

Singapore Property Weekly.

Investment Tool?

Hope you like it!

p8

Singapore Property News This Week

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Resale Property Transactions

Mr. Propwise

(May 27 May 29 )

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SINGAPORE PROPERTY WEEKLY Issue 212

Is it Game Over for Property as an Investment Tool?

By Gerald Tay (guest contributor)
This weeks article is in the form of an email
from a reader to Gerald Tay about his views
on property as an investment, and his
(lengthened) reply to that reader. Enjoy!
Email From Reader:
Hi Gerald!
I am a subscriber of your blog and often read
your contributions there! Frankly, as Im a
property agent you strike fear in my heart
when you share your dismal views on the
property market.

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SINGAPORE PROPERTY WEEKLY Issue 212

I genuinely want to advise my clients correctly
in the best way to utilize their funds for a
property investment.
May I ask if you find property to be a poor
choice for investment, what would you
suggest otherwise? Putting your hard-earned
cash in the banks and to having it eroded by
inflation is surely a poor alternative and one
that even lax investors would try to avoid.
Would appreciate you sharing your insights.
Hope to hear from you soon! Many thanks!

pragmatism to ordinary buyers and investors.

Second, Ive never said that property is a
poor choice for investment. Its the investor,
not the investment that matters.

Property has been the favorite traditional

investment for Asians. Many believe one
cannot go wrong when buying property for the
long term. This misinformation is terribly
misguided by people with vested interest in
your money. Property buyers do lose money
in property even when holding for the long
term.

Gerald Tays Reply:

The Rich make money in real estate?

Hi J,

You often hear people say, The Rich makes

money in real estate. This is only half true
the Rich make money selling real estate as
property developers and not as retail
buyers.

First, do allow me to clarify that my opinions

in my blogs are never meant to strike fear into
people buying property. Theyre meant to
impart a strong sense of reality and
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SINGAPORE PROPERTY WEEKLY Issue 212

Theres a huge difference in creating real
wealth selling wholesale and buying retail.
As retail buyers, weve to be smart to survive
in the large predatory ocean to avoid getting
eaten!
J, have you tried climbing a mountain before
or driven a race car like a race driver? I
havent, and most likely you and many others
have not either, because we think those
activities are very dangerous and could be
fatal.
But thats not the case for professional
mountain climbers or trained race car drivers.
Why? Because they are trained under the
toughest conditions to help them prepare for
the many unforeseen circumstances, i.e. the
car skidding or the rope breaking halfway up
the mountain. Their training prepares them to

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deal with tough situations. The skill of the

driver or the mountain climber is what
mitigates the risks for them.
Many investors invest their hard earned
money without enough training, education or
any specific knowledge of the investment.
Are there opportunities in the current
market?

Unless one is satisfied with a less than 4%

net ROI with interest rates rising, falling
rentals and rising vacancies, I think buying
now may not be wise if the buyer is looking to
accumulate wealth.
Many investors lack training, education and
skills, and hence will never find that gold at
the end of the rainbow. Instead, they ended
up buying junk properties (both local and
overseas) because of herd mentality.

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SINGAPORE PROPERTY WEEKLY Issue 212

The other silly reason they end up with
worthless properties:insufficient cash for
down-payment in our local market. And so
they buy shoe-box units or cheap overseas
properties with guaranteed yields offered by
developers.
Even if inflation is 4% and bank deposits are
1%, these are not good reasons to buy any
property. But this is what Im seeing many
investors currently doing.
It took me two years of intense due diligence
and research, starting in 2001, before buying
my first investment property in 2003. It took
me three years to partner and trust my
overseas partners, do hard due diligence and
find co-investors before my first successful
overseas joint property purchase in 2013,
followed by another in 2014. How many
investors are doing that today?

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Many investors I know simply take a queue

number or ballot, take two minutes or two
hours to make an investment decision on the
spot without even understanding exactly what
the investment is!
Is property
inflation?

good

hedge

against

High inflation can erode ones savings. But

losing your money in a bad investment choice
can multiply that loss.
$300,000 of cash today combined with an
inflation rate of 4% per annum will be worth
roughly $250,000 in 5 years. Your loss is
$50,000 ($10,000 a year). A bad investment
choice, on the other hand, can lose the
investor much more than just $50,000 if you
factor in all mortgage interest, expenses,
selling the property at below what was
bought, renting at a negative cash flow every
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SINGAPORE PROPERTY WEEKLY Issue 212

month, and the mental stress!
Losing money to inflation may be a painful
inescapable alternative when theres a
sudden huge oversupply of money in the
markets, but losing money in a wrong
investment due to greed and impatience is
just stupid. Patience is one important key to
wealth.

Be wary of the gurus who are paid to boost

the market. Take, for example, the recent
announcement of the Jurong Lake District
and the upcoming HSR (High Speed Rail)
connecting Jurong and Malaysia. These
gurus say dont wait any longer and its a
good time to buy properties in the locality
now. I strongly think otherwise new launch
prices or sellers in that location will ask (or
have already asked) for future prices because

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of the media reporting and hype, thus

negating any investment potential.
Slow growth ahead

There will be at least a decade of muted

growth in the Singapore economy due to low
productivity. The government trimmed GDP
growth expectations to just 2 to 4 per cent
until 2020 and beyond. By 2030, an ageing
population will further curb prices due to lower
buying activities. Where do you think property
prices will be then? Just look at Japan and
youll see whats in store.
Many forecasters have an agenda that
reflects the interests of the people who pay
their salaries. If they are paid to be positive,
they will be positive. If they are paid to be
negative, they will be negative.

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SINGAPORE PROPERTY WEEKLY Issue 212

Forecasters do not have crystal balls, they
simply have bills to pay. Markets (stocks, real
estate, bonds) only make money when we
trade in them.
Im a career investor. My investments dictate
my net worth. My livelihood depends greatly
on making sensible investment decisions.
I can be brutally honest, but my honesty is
meant to serve as a wake up call to the many
gullible investors out there. I hope they do not
lose
money
because
of
their
ignorance.Property is not a dismal investment
tool as long as the buyer is educated. That is
why financial knowledge is so important. You
can only rely on you.

By guest contributor Gerald Tay, who is the

founder and coach at CREI Academy Group
Pte Ltd, an organization dedicated to
empowering retail property investors with
smarter investing philosophy and strategies.
He is a full-time investor with over 13 years of
solid experience in building his wealth
through Property Investment and is financially
wealthy today.

I hope this helps answer your question.

Regards,
Gerald Tay
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SINGAPORE PROPERTY WEEKLY Issue 212

Singapore Property This Week

Residential
Mays condo resale price remains flat
According to the Business Times, the resale
price of condominium units has remained flat
in May from the previous month. In the core
central region, resale prices of condominium
units fell by 1.2%, however resale prices in
both the city fringe and suburbs increased by
0.8% and 0.3% respectively from April to May.
According to SRX, the median transaction
over X-value showed that transactions made
in District 9 were negative $20,000. As such,
majority of the units in District 9 have been
sold for an average of $20,000 less than the
market value estimated by SRX. Eugene Lim

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from ERA Realty said that prices seem to

have stabilised in the resale market. Lim
added that prices from December to May
have fallen marginally as home owners prefer
to sell their houses due to difficulties in
securing a tenant.
(Source: Business Times)
Mays condo rental falls by 0.6% monthon-month
Rentals for condominium units have fallen by
0.6% month-on-month in May from April.
Market experts believe that this downwards
trend will persist till 2016. Nicholas Mak from
SLP International said that rental prices have

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SINGAPORE PROPERTY WEEKLY Issue 212

been pushed down due to an oversupply of
private condominium units, especially in the
suburbs. To retain tenants, home owners
have been more willing to lower prices, said
the Business Times. In May, rents of
condominium units in the central area rose by
0.2% month-on-month, while rentals in the
city fringe and suburbs fell by 0.6% and 1.5%
in the same period of time. Rentals of
condominium units in the core central region
have risen as tenant are choosing to move to
better-located premises when their leases
expire, said Mak. Eugene Lim from ERA
Realty believes that the less than stellar
rental prices indicate that the residential
market has not recovered. Ong Kah Seng
from RST Research echoes Lims concerns
and pointed out that the overall leasing
demand is still weak.

Government cuts private housing land

supply
According to the Business Times, the
government has cut the land supply of private
housing in H2 this year, in anticipation of a
weaker market. In H2 this year, only 7,852
private residential units will be released
across 17 confirmed and reserve list sites.
This is 11% lower than in H1 this year. Only 4
residential sites have been offered in the
confirmed list, according to the Business
Times. These 4 sites can yield 2,130 units.
According to market experts, the government
has been cutting land supply for private
homes since H2 2010 due to a slowdown in
demand. Christine Li from Cushman &
Wakefield believes that the government is
shifting its focus from keeping price growth
low to maintaining a steady supply of land to

(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 212

meet long-term housing demand.

studio apartments and two-room flats, in

order to cater to the needs of different
groups.

(Source: Business Times)

Khaw: Lease
received

Buyback

Scheme

well

According to the Minister for National

Development Khaw Boon Wan, the latest
Lease Buyback Scheme (LBS) has been well
received since it took effect in April this year.
Khaw said that 450 households had applied
for the scheme. Of the 450 applications, 214
are four-room flat owners and the rest own
three-room or smaller flats. In April, the
scheme was extended to include four-room
flats owners. The income ceiling was also
raised from $3,000 to $10,000. Under LBS,
elderly living in HDB flats may use their
remaining flat leases to fund their retirement
plans without leaving their flats. Khaw added
that the ministry will review schemes for
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(Source: Business Times)

GCB at Belmont Road fetched a price of
$44m
A good class bungalow that is situated at
Belmont Road has been sold for more than
$44 million or $1,413 psf. The 31,125 sq ft
freehold site has five bedrooms and a pool.
According to market experts, the site may be
subdivided into two plots that are about 1,400
sqm each. Among the other good class
bungalows that have recently changed hands,
is a freehold site at Ridout Road. It was sold
for $1,251 psf based on its 73,277 sq ft of
land area. This translates to a transaction of
about $91.69 million.

(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 212

Commercial
White site at Central Boulevard expected
to draw strong interest

A white site at Central Boulevard that is

situated between the old Shenton Way
financial district and the new Marina Bay
downtown is expected to draw strong interest
due to its prime location. Due to its size and
location, the Business Times said that the site
will have a bid price that is between $1.7
billion and $2 billion. According to Desmond
Sim, the hefty bid price will sieve out smaller
developers. The white site which is 1.12-ha
large can yield about 1.2 million sqft of
commercial space and 375 residential units. It
has a gross plot ratio of 13 and is situated
near the Downtown MRT Station.
(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 212

Non-Landed Residential Resale Property Transactions for the Week of May 27 May 29
Postal
District
3
4
4
4
4
4
9
9
9
9
9
10
10
10
10
11
11
11
11
12
12
13
14
15
15
15
15

Project Name
DOMAIN 21
THE COAST AT SENTOSA COVE
THE OCEANFRONT @ SENTOSA COVE
CARIBBEAN AT KEPPEL BAY
THE BERTH BY THE COVE
HARBOUR VIEW TOWERS
SCOTTS SQUARE
THE ORCHARD RESIDENCES
THE COSMOPOLITAN
THE LAURELS
ONE OXLEY RISE
GOODWOOD RESIDENCE
GRANGE RESIDENCES
THE SOLITAIRE
WATERFALL GARDENS
PARK INFINIA AT WEE NAM
PARK INFINIA AT WEE NAM
PAVILION 11
THE ARCADIA
THE MARQUE @ IRRAWADDY
THE CALLISTA
PARC ASTON
STARVILLE
CRYSTAL RHU
CRESCENDO PARK
JC RESIDENCE
MANDARIN GARDEN CONDOMINIUM

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Area
(sqft)
926
2,024
1,216
1,206
2,002
1,206
635
1,808
1,679
1,927
1,055
1,970
2,583
1,238
2,196
1,668
1,001
958
3,778
883
1,302
1,195
1,238
1,259
1,389
721
1,528

Transacted
Price ($)
1,338,000
3,700,000
1,850,000
1,830,000
2,520,000
1,380,000
2,156,155
5,500,000
3,550,000
3,800,000
1,840,000
4,780,944
5,400,000
2,200,000
3,400,000
3,128,000
1,875,000
1,569,000
4,380,000
1,200,000
1,245,500
1,350,350
1,090,000
1,620,000
1,542,000
795,000
1,265,000

Price
Tenure
($ psf)
1,445
99
1,828
99
1,521
99
1,518
99
1,259
99
1,145
99
3,395
FH
3,041
99
2,114
FH
1,972
FH
1,744
FH
2,427
FH
2,090
FH
1,777
FH
1,548
FH
1,875
FH
1,873
FH
1,638
FH
1,159
99
1,360
FH
956
999
1,130
FH
881
FH
1,286
FH
1,111
FH
1,102
FH
828
99

Postal
District
15
15
16
16
16
16
17
18
18
18
19
19
19
19
20
21
21
22
23
23
23
25
27

Project Name
NEPTUNE COURT
LAGOON VIEW
COSTA DEL SOL
PARBURY HILL CONDOMINIUM
EAST MEADOWS
AQUARIUS BY THE PARK
AVILA GARDENS
SAVANNAH CONDOPARK
MELVILLE PARK
TAMPINES COURT
KOVAN MELODY
THE MINTON
THE SPRINGBLOOM
THE MINTON
FAR HORIZON GARDENS
GOODLUCK GARDEN
PARC PALAIS
THE LAKESHORE
ESPA
HILLINGTON GREEN
MI CASA
PARC ROSEWOOD
SUN PLAZA

Area
(sqft)
1,270
1,647
1,345
1,206
1,227
1,324
1,604
1,238
1,453
1,722
904
1,216
1,539
2,788
1,389
1,701
1,389
861
1,206
1,356
1,302
431
1,356

Transacted
Price ($)
990,000
1,282,000
1,600,000
1,320,000
1,150,000
1,210,000
1,250,000
1,000,000
930,000
840,000
1,083,000
1,445,000
1,600,000
2,750,000
1,140,000
1,710,000
1,315,000
960,000
1,327,000
1,250,000
1,200,000
545,000
1,020,000

Price
Tenure
($ psf)
779
99
778
99
1,189
99
1,095
FH
937
99
914
99
779
FH
808
99
640
99
488
101
1,198
99
1,188
99
1,039
99
986
99
821
99
1,005
FH
947
FH
1,115
99
1,101 999
922
999
921
99
1,266
99
752
99

NOTE: This data only covers non-landed residential resale property

transactions with caveats lodged with the Singapore Land Authority.
Typically, caveats are lodged at least 2-3 weeks after a purchaser
signs an OTP, hence the lagged nature of the data.
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