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Issue 101

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The Difference Between How Successful and Average Property Investors Think Property Renting Tip #5: Rental Rate



Welcome to the 101th edition of the Singapore Property Weekly.

Hope you like it!

Mr. Propwise


Singapore Property News This Week

Resale Property Transactions (April 10 April 16)

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The Difference Between How Successful and Average Property Investors Think
By guest contributor Gerald Tay I recently ran across this book titled How Rich People Think by Steve Siebold. I was immediately struck by the differences between the thoughts and actions of the World Class investor and the Middle Class investor. In the book, Steve listed 21 ways that the wealthy think differently from average people, categorizing them as World Class and Middle Class thinkers. In this article, I will call the two investor groups the 99% and the 1%.

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SINGAPORE PROPERTY WEEKLY Issue 101 Ill list nine of his 21 Rules here (you can read his book and educate yourself on the rest) and briefly explain the similarities on some of the rules in the arena of property investment. 2. The 99% think the road to riches is paved with formal education. The 1% believes in acquiring specific knowledge. Universities are leftist indoctrination facilities. And they are full of deluded morons. You must educate yourself financially. You can learn anything you want to learn about on money and investments. Almost everything is on the internet, for free. If you want to learn about it the only thing stopping you is you. I will say it again: Everything you learn in school might be less useful if you want to be an entrepreneur/investor. Its up to YOU to learn your craft.

1. The 99% have a lottery mentality. The 1% have an action mentality.

I hear the 99% say all the time: Prices will sure go up. If I can simply invest on some expert opinions Ill be rich. If my big break would come in. If I could just win the lottery. Until they realize that lottery is a tax on people who don't know how to do math, they'll never get it. The 1% dont expect anything to be given to them. If they want it, they go and get it themselves. The 99% stupidly play the lottery, buy stupid investments on hopes of capital gains, make stupid investment decisions sitting in front of the TV, and make stupid excuses.
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3. The 99% would rather be entertained than educated. The 1% would rather be educated than entertained.
Television, magazines, celebrity websites, sports pages the mark of the average. If you cant learn or earn from it, burn it.
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SINGAPORE PROPERTY WEEKLY Issue 101 I spend my free time learning about global economics, world history, the history of money and government, doing intense property diligence, doing cash flow analysis, etc. Rather than looking forward to weekends, playing Xbox and getting drunk, spend some hours investing in yourself. Join a course, read marketing or finance books, learn to invest, think of how you can provide others with value. 4. The 99% plays not to lose. The 1% swings for the fences. price will go up further, and not doing so will make one look like a fool. Whos really the fool? Investing in property because the price wont go down or everyone is buying are such crappy reasons. Unless of course, thats your only reason? Then all the best in your investment. 5. The 99% believe the markets are driven by logic and strategy. The 1% knows they're driven by emotion and greed. Personally, Ive no time for people who constantly talk about logic and strategy. I often hear these people say, Price will go up because of limited land and MRT. Tell me about your strategic buy/hold/sell recommendations. Tell me specifically or a range, where prices will be in the next four years.

You hear about property cooling measures and hot media reports. You often hear people rushing to queue up at property showrooms and seminars to buy that property because everyone is doing so and worrying that the

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SINGAPORE PROPERTY WEEKLY Issue 101 I like logic. I deal with things logically. But, logic is only one part of the picture. If you look at everything logically, you arent looking at the big picture and Ill tell you why. Most people in the world do not think logically, they think emotionally. When you speak to them logically, you are not getting through to them. But these Im so logical types always assume that everyone else also thinks logically. Logical thinking is only half the puzzle. 6. The 99% live beyond their means. The 1% live below theirs. then buy a medium sized car when they can afford a big car. They buy a big car when they can afford a small helicopter, and they buy the helicopter when they can afford the private jet. They dont own expensive toys to boast to the world Ive arrived. When the 1% makes money, they plough the profits back to buy more investments that will put more passive money into their pockets. The 99%, after making their profits will first think what bigger car to drive and which bigger house to live in. When youre rich, you can have a lot of stuff and still be rich enough to afford more stuff. When youre middle class or working class, you cannot. If you live within your means, youd be surprised by how much you ultimately have to invest when the opportunity comes to be financially free.
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Why do the 99% always complain theyve no money to invest?

One of the habits that are common between all wealthy people is that they live below their means. This means that they buy a small car when then can afford a medium sized car,
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SINGAPORE PROPERTY WEEKLY Issue 101 7. The 99% believe you need money to make money. The 1% use other people's money. I made my first bunch of money using only a LITTLE of my own money. The 1% makes money with NO money. If you want it bad enough, as in you are obsessed with it, you will get it. Even if you only have $12 to your name, it makes no difference. Its the idea that makes money, NOT money to make money! I cant make money because I dont have any money. Sounds pretty stupid doesnt it? beautifully decorated property show rooms, sit in a nice air-con room and be served like a king by the property salesman. The 1% love to rough it out in the hot sun, walk-the-ground, buy old resale properties the 99% will shun, convert them and offer massive value to tenants with extraordinary returns. 9. The 99% play it safe with money. The 1% know when to take risks. What I have found is that when I take certain risks, the kind of risks that give others nausea, diarrhoea and anxiety for days, they tend to be a payoff for me. Risks come from ignorance and zero control over the investment. The 99% only know how to invest in REITS, gamble in stocks, buy offplan properties and let others manage their investments.
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I have to make money because I dont have any money sounds much better.
8. The 99% love to be comfortable. The 1% find comfort in uncertainty. The 99% often loves to buy properties from
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SINGAPORE PROPERTY WEEKLY Issue 101 They have a Follow-the-Leader mentality, and will invest in something if only someone is also doing it. Risks cannot be totally ignored but they can be managed well. The 1% follow a strict personal investment system and criteria. They will only invest when the investments meet those requirements. And they always have absolute control over their investments to manage risks. Conclusions If you want to be financially free, youve to get it yourself. No one gets anything for you or offers you a chance of becoming rich the free and easy way. You see, theres a difference between a Hand-out and Help. A Hand-out requires giving over and over without the receiver doing anything with what was given besides using it for their own leisure. Help requires giving to someone else but this time the receiver uses what was given to gain ground and stand upright on their own two feet instead of relying on constant future hand-outs.

So don't seek hand-outs, seek help for good

financial education and you will find it. Once you do, try your best to make it work. By guest contributor Gerald Tay, CEO of CREI Academy Group, who exposes widelyheld property investment myths that have proven highly ineffective in creating wealth, and prevent a comfortable retirement for the ordinary investor.

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Property Renting Tip #5: Rental Rate

Would you rather accept a lower than expected rental or leave the rental unit vacant when you are not able to find a Tenant who can pay your expected rental? Besides looking at the rental yield, which is dependent on the purchase price, another element to help in making such a decision is to understand the future plan of this rental property. Do you plan to sell it in the near future for capital gains OR do you regard this as a long term passive income vehicle? If you are looking for capital gains, you have to rent the property at an attractive yield to appeal to the next Buyer.This means that you may leave the unit vacant until a suitable
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Tenant appears.You can do a simple renovation and/or include nice furniture, fixtures and fittings to attract a higher rent for your investment property. If you do not plan to sell it in the near future, then having positive cash flow is important and you would want to rent it out as soon as possible to have uninterrupted rental income.You can start arranging with your Tenant to allow for viewings about two months prior to the expiry of the Tenancy Agreement. By Eileen Tan and Ui Wei Teck, property investors and authors of Enjoying Mid-Life Without Crisis. This tip and dozens more are from their book.
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Singapore Property This Week

Twin Fountains at Woodlands 2.3 times subscribed Twin Fountains, the first EC launched in Woodlands since 2005, saw a total of 963 eapplications for its 418 units, making it 2.3 times subscribed. One third of the subscribers are first-time buyers, the rest are second-time buyers. Its appeal lies in its location, being near the upcoming Woodlands South MRT station and expressways such as the Seletar, Tampines and upcoming North-South expressways. Units range from two-bedroom suites to three- and four-bedroom units. 104 dual- key units are also offered in the development. There will also be a "Fountain
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Villa" for residents to host private functions or to accomodate visiting guests. (Source: Business Times) Freehold Versailles at Paya Lebar up for collective sale Versailles, a 55-unit four-storey condominium freehold condominium located near Guillemard Road and Paya Lebar Road has been put up for collective sale. The 53,073 sq ft site with a 2.1 GPR is asking for $105-110 million or $1,088-$1,133 psf ppr including development charge. It has a potential GFA of 122,598 sq ft which could yield potentially 148 units and has a maximum height of 24 storeys.
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SINGAPORE PROPERTY WEEKLY Issue 101 Any new development on the site is expected to be popular since there is a general lack of new residential projects in the area and it is located near the upcoming Paya Lebar Central, Paya Lebar MRT station and schools such as Kong Hwa School, Haig Girls' School, Tanjong Katong Primary School, and Chung Cheng High School. The tender will close at 2.30 pm on Thursday, May 30, 2013. (Source: Business Times) Increase in private home price slows in Q1 In Q1 2013, private home prices saw a mere 0.6% increase from Q4 2012, compared to the 1.8% increase then. This is attributed to the cooling measures in the residential sector in January. 5,412 private homes were sold in the primary market Q1, compared to 4,353 units in Q4. The secondary market, however, saw a fall in transactions from 3,447 units to
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1,871 units in Q1. The overall rental index saw a 0.8% increase, slightly higher than the 0.7% increase I Q4 2012, while the vacancy rate fell to 5.2% from 5.4% in Q4. The number of rental transactions, however, fell by 33% to 7,676 deals in Q1. Meanwhile, the URA's All Industrial price index increased by 4.5% in the same period, compared to a 0.7% fall earlier. This is despite the 51.4% fall in transaction volume of strata industrial units since the proportion of transactions involving freehold/999-year leasehold industrial properties which have higher values more than doubled from 11% in Q4 2012 to 24% in Q1. The price indexes for multiple-user warehouse space and multipleuser factory space also increased by 10.6% and 2.9% respectively. The price index for office space also increased by 2.1% in Q1,

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SINGAPORE PROPERTY WEEKLY Issue 101 compared to a 0.3% increase in Q4 while the price index for shop space also increased by 2.1% in Q1 after 0.2% fall in Q4. (Source: Business Times) Commercial Office leasing market expected to bottom out in 2013 The office leasing market is expected to bottom out towards the end of 2013 despite the fall in rents in Q1 and the expectation of rents to remain flat. Even if there is any increase, it would be marginal increases of around 0.5% at the end of the year. There had been a 2.5% fall in rents for grade A+ office space in the Marina Bay and Raffles Place area from Q4 2012 to Q1 2013. Rents in the Shenton Way/Tanjong Pagar and Robinson Road area are also expected to fall given the ongoing construction of buildings in
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the area. Meanwhile, rents in the suburbs are expected to remain stable given the development of new good quality office buildings and their high pre-committed rates. (Source: Business Times) Bright Chambers sold for $46 million Bright Chambers, a nine-storey eight-unit commercial development located at 108 Middle Road next to Bugis+ near Bugis MRT station is said to have been sold via a tender exercise for $46 million. The development with a total strata area of 34,972 sq ft sits on a 5,263 sq ft site zoned for commercial use which has a balance lease term of about 60 years. It can be refurbished and further strata-subdivided for sale or retained by the new owner for rental income. (Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 101 65 retail units at 99-year The Midtown at Hougang sold at preview 60% of 65 of the 107 retail units at The Midtown, a 12-storey mixed-development in Hougang, have been sold. Of the retail units, there are 55 F&B units, 51 shop units and a supermarket space. The F&B units (721-969 sq ft) are sold at an average of $4,039 psf, or between $3,588 psf and $5,013 psf while the shop units (258-893 sq ft) at an average of $5,800 psf or between $4,687 psf and $6,737 psf. In addition, 40 of the 160 residential units at Midtown Residences have also been sold at an average price of $1,400 psf. Unit sizes range from 441 sq ft for a one-bedroom apartment with a study to 1,572 sq ft for a penthouse. Prices start from $660,000 for a one-bedroom unit on a low level to $2.1 million for a four-bedroom penthouse. (Source: Business Times)

Vacancy rate of office space falls in Q1

The net absorption of office space increased to 269,098 sq ft in Q1, up from 183,000 sq ft in Q4 last year. This resulted in an office vacancy rate stood at 9.2%, compared to 9.4% in Q4 2012. There has also been an increase in non-CBD office rents while the gross average monthly rent for Grade A office space fell by three cents to $9.55 psf in Q1 this year while the gross effective monthly rent for prime Grade A offices in Raffles Place remained at $8.90 psf. (Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 101 30-year Tuas Bay Crescent industrial highest bidders Walk and Buroh sites awarded to

The first is the 0.58-hectare site zoned for Business 2 (Food only) use located at Tuas Bay Walk plot. The top bid out of the four the site attracted was $8.988 million or $84.57 psf ppr from Yee Lee Development Pte Ltd. The second is the 1.77-hectare site at Buroh Crescent in Jurong which attracted a total of five bids. The top bidder OKH Holdings Pte Ltd bid $39.017 million or S$82 psf ppr for the site zoned for Business 2 use. (Source: Business Times)

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Non-Landed Residential Resale Property Transactions for the Week of Apr 10 Apr 16
Postal District 1 1 3 4 4 4 5 5 5 8 8 9 9 10 10 10 11 12 12 14 14 14 14 14 15 15 Project Name MARINA BAY RESIDENCES EMERALD GARDEN THE ANCHORAGE REFLECTIONS AT KEPPEL BAY CARIBBEAN AT KEPPEL BAY REFLECTIONS AT KEPPEL BAY BLUE HORIZON WESTCOVE CONDOMINIUM THE PARC CONDOMINIUM CITIGATE RESIDENCE KERRISDALE THE PIER AT ROBERTSON ASPEN HEIGHTS ALLSWORTH PARK ASTRID MEADOWS VILLA AZURA RESIDENCES @ EVELYN TREVISTA THE ABERDEEN LE CRESCENDO NICOLE GREEN MERA EAST SIMSVILLE ASTON MANSIONS AALTO THE BELVEDERE Area Transacted Price ($ Tenure (sqft) Price ($) psf) 710 1,750,000 2,463 99 980 1,810,000 1,848 999 1,173 1,500,000 1,278 FH 1,442 3,200,000 2,219 99 883 1,550,000 1,756 99 1,076 1,850,000 1,719 99 1,163 1,328,000 1,142 99 1,206 1,155,000 958 99 1,927 1,710,000 888 FH 614 975,000 1,589 FH 1,927 1,935,000 1,004 99 743 1,475,000 1,986 FH 1,130 1,820,000 1,610 999 1,959 3,080,000 1,572 999 1,023 1,570,000 1,535 FH 1,356 1,810,000 1,335 FH 2,250 4,130,000 1,836 FH 1,130 1,708,000 1,511 99 1,399 1,620,000 1,158 FH 947 1,180,000 1,246 FH 1,238 1,480,000 1,196 FH 1,033 1,180,000 1,142 FH 980 980,000 1,000 99 1,012 888,000 878 99 1,550 3,472,000 2,240 FH 2,583 4,370,000 1,692 FH

Postal District 15 15 15 15 16 17 18 18 19 20 20 21 21 21 23 23 23 23 23 23 23 26 27


Area Transacted Price ($ Tenure (sqft) Price ($) psf) 990 1,450,350 1,465 FH 850 1,200,000 1,411 FH 1,281 1,720,000 1,343 99 1,163 1,500,000 1,290 FH 1,119 1,180,000 1,054 99 1,442 812,000 563 999 1,292 1,322,000 1,023 FH 3,111 1,980,000 636 FH 1,109 1,130,000 1,019 99 1,270 1,610,000 1,268 FH 1,615 1,460,000 904 FH 926 1,088,000 1,175 99 1,593 1,675,000 1,051 999 1,755 1,580,000 901 99 958 1,100,000 1,148 FH 1,345 1,400,000 1,041 999 861 890,000 1,034 999 1,238 1,260,000 1,018 FH 1,819 1,650,000 907 FH 1,184 980,000 828 99 1,335 792,888 594 99 1,109 945,000 852 99 1,733 1,350,000 779 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. Page | 14

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