You are on page 1of 14

Issue 213

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

CONTENTS
p2

FROM THE

EDITOR

Lessons Learned from a Property

Welcome to the 213th edition of the


Singapore Property Weekly.

Investment Scam

Hope you like it!

p8

Singapore Property News This Week

p12

Resale Property Transactions

Mr. Propwise

(June 2 June 9 )

Contribute

Advertise

Do you have articles and insights and articles that youd like to share
with thousands of readers interested in the Singapore property
market? Send them to us at info@propwise.sg, and if theyre good
enough, well publish them here, on our blog and even on Yahoo!
News.

Want to get your brand, product, service or property listing out to


thousands of Singapore property investors at a very reasonable
cost? Head over to www.propwise.sg/advertise/ to find out more.

SINGAPORE PROPERTY WEEKLY Issue 213

Lessons Learned from a Property Investment Scam


By Property Soul (guest contributor)
I was in Jakarta when I saw an article on the
front page of The Jakarta Post with the
headline Property firm deceives thousands of
buyers (May 27, 2015).
Another story of a property investment
scam
A property consulting firm known as PT Royal
Premier Internasional marketed to the public
investment opportunities of 12 complexes
across Jakarta, Bali, Yogyakarta, Bandung in
West Java and Tangerang in Banten.

Back to Contents

Page | 2

SINGAPORE PROPERTY WEEKLY Issue 213


The company bought condotels from
developers with progressive payments but
claimed it owned those properties. By
leveraging on a partnership with the reputable
property agency Century 21, their investment
opportunity gained a lot of credibility.
Prospective buyers were also lured with
attractive incentives to make a one-off
payment, including high return on investment
and various gifts such as cash back and car
prizes.
As in any high profile investment scheme that
promises ultra-high returns, we all know
whats going to happen next: The company
embezzled all the investment funds and the
person-in-charge fled to Seoul. There were as
many as 1,157 victims who lost a total of Rp
800 billion (S$80 million).

around Rp 155 million (S$15.5 million) to the


developers. The rest of the funds from the
investors were spent on buying insurance,
houses, land and vehicles.
What are the lessons learned?
This is not the first incident, and there will
definitely be more to come. And it is almost
impossible for any government to weed out all
these property investment scams.
Every day potential property buyers and
amateur investors are tempted by different
investment offers. How can they tell which
ones are real projects and who can be
trusted?
Below are four invaluable lessons learned
from this property investment trap in
Indonesia.

The police found that the company only paid

Back to Contents

Page | 3

SINGAPORE PROPERTY WEEKLY Issue 213


Lesson #1: Look out for whats
underneath, not what they want to show
you.
Is PT Royal Premier Internasional a trusted
company? No one knows. But for three years
it has a nice office at the prestigious Bakrie
Tower, a grand 50-storey office tower which is
a landmark in the heart of Jakartas prime
CBD area.
So what? The infamous Brazil public housing
project developer EcoHouse also opened its
Singapore office at Suntec Tower Two in
February 2013. It closed 1 years later
when investors started legal proceedings to
recover their investment funds. Even then the
once high-profile developer still denied all
accusations in front of the media. Barely three
months later, it suspended all its global
operations.

Back to Contents

Look beyond what the developers and their


marketing agents want you to see. Conduct
due diligence before making any purchase
decision.
What is the history, background and business
profile of the company? Do the numbers in
their recent years of financial statements look
suspicious? Have they just started venturing
into real estate? Do they have any track
record of building relevant property projects?
Lesson #2: Look into the developer, not
the marketing agent.
Is Century 21 a reputable and trusted
marketing agency? Definitely. Century 21 is
the franchisor of the worlds largest residential
real estate sales network, with presence in 74
countries comprising more than 100,000
property agents.

Page | 4

SINGAPORE PROPERTY WEEKLY Issue 213


But when things turned sour, with the
company director of PT Royal Premier
Internasional still at large, the police
summoned the management of Century 21
for investigations.
PT Royal Premier Internasional is not even a
developer. And they dont really have full
ownership of the properties they are selling.
So why did Century 21not raise the alarm but
instead signed up as the exclusive marketing
agent?
The property agency might not be in the
know. Or their judgment might be clouded by
the lucrative business opportunity, high profit
margin or any vested interest.
Message to prospective investors: do the due
diligence on the developer or the seller. The
company marketing the project is irrelevant to
the credibility and quality of the deal.
Back to Contents

Lesson #3: Look for completed properties,


not off-plan projects.
Is it safe to buy off-plan properties with
progressive payments? My book No B.S.
Guide to Property Investmenthas touched on
the different types of risks involved in buying
uncompleted projects.
I dont like surprises in my investments. I
prefer to buy resale properties because what
you see is what you get; and what you pay is
what you get.
The legal counselor in Bali advised buyers to
ensure that the properties they intend to buy
should be at least 20 percent constructed. But
even projects with over 70 percent completion
still have the chance of being abandoned by
the developers.
Prudent investors should make a trip to the
actual site to check whether construction has
Page | 5

SINGAPORE PROPERTY WEEKLY Issue 213


already started. At least a significant portion
of the project should be completed.
Singapore buyers are used to buying off-plan
projects from local developers even before
the latter has started any foundation work.
However, they need to be careful when
buying overseas properties, as they are no
longer protected by the regulations of the
Monetary Authority of Singapore.
With sky-high property prices and property
buying restrictions at home, Singaporeans
are looking overseas for cheaper alternatives.
However, property investment is different
from buying your own home. You cant settle
for less just because you cant afford the
better choices.
Lesson #4: Look at the deal itself, not the
incentives.

Is a high return or buyer incentives critical to


Back to Contents

attract buyers in a property project? How


many of the 1,157 victims were drawn by the
promise of high returns, cash back and car
prizes?

The US property fix-and-flip scheme by CTL


Global promised a high return between 14.5
and 22.3 percent. Victims from Singapore
claimed that except for one months rental for
a property, they never received the
guaranteed return. Instead they received
legal letters from the US asking them to pay
up the outstanding mortgage or face
foreclosure. Rather than getting cheques with
high rental returns or flipping profits, they
ended up sending cheques to save their
properties.
The risk of ultra-high return investment
schemes is that, once the company cant
deliver the promised return, they can only go
bankrupt or missing.
Page | 6

SINGAPORE PROPERTY WEEKLY Issue 213


And do buyers know that they are actually the
ones paying for all the incentives, cash
subsidies and rebates they get from the
developers?
As I was finishing this blog post, an email
arrived at my mailbox. It read "Empty land for
sale in Jakarta with the surroundings of
offices, mall, apartments and industrial
development. For more information, contact
us at xxxxxxx".
Oh no, not another one!
By guest contributor Property Soul, a
successful property investor, blogger, and
author of the No B.S. Guide to Property
Investment.

Back to Contents

Page | 7

SINGAPORE PROPERTY WEEKLY Issue 213

Singapore Property This Week


Residential

$640 to $700 psfppr.

Toa Payoh Condo site sold for $345.86


million at tender

(Source: Business Times)

A 1.2 hectare condominium site at Toa Payoh


has been sold to the top bidder for $345.86
million or $755.30 psfppr in a tender. The site
is located near Braddell MRT Station and will
yield around 590 units. According to
developers, half of the units to be developed
will consist of one and two-bedders that are
priced below $1 million. The project is
expected to be launched in March or April
next year. In line with experts expectations,
the tender drew 14 bids. It was previously
predicted that the top bids would be around

Located at West Coast Vale, a residential site


has been put up for tender under the
confirmed list for the government land sales
programme. The site is expected to yield
about 595 units. Desmond Sim from CBRE
expects the West Coast site to draw much
interest due to a cut in supply of residential
sites in the second half of this year. Sim
predicts that there will be about 10 to 14 bids;
and the top bid should be more than $600
psfppr.

Back to Contents

West Coast residential site up for tender

Page | 8

SINGAPORE PROPERTY WEEKLY Issue 213


On the other hand, Ong Kah Seng from RST
believes that the top bid would be around
$450 to $500 psfppr. The 18,909 sq m plot of
land is located near commercial amenities
such as Westgate and JEM. It is also situated
near the Jurong Country Club golf course,
which will be developed into a terminal for a
high-speed rail link with Malaysia.
(Source: Business Times)
MND to look into helping buyers of resale
flats near parents
Minister for National Development Khaw
Boon Wan said that priority schemes have
been enhanced to help Singaporeans who
want to stay near their parents. Khaw
acknowledges that more Singaporeans are
looking for flats near those of their extended
families in mature estates. To help this group
of buyers, the ministry will look into improving
Back to Contents

current measures. Data from MND showed


that 24% of build-to-order flat applicants have
applied under one of the ministrys priority
schemes. Those who have applied under
these schemes are more likely to obtain a flat.
Khaw said more flats will be launched in
mature estates to meet the needs of
Singaporeans who wish to stay near their
parents. Not only so, grants will also be
provided to help first-timer families who wish
to buy resale flats to live together or close to
their parents or married children.
(Source: Business Times)
Developer sales fall to 845 units in May,
down from 1,293 in April
Developer sales have been slow in May as
only 845 units were sold in total that month as
compared to the 1,293 that were sold in April
this year.
Page | 9

SINGAPORE PROPERTY WEEKLY Issue 213


Of the 845 units, 638 units are private
residential units and 207 are executive
condominium units. Also, developers have
released only 979 units in May, down from the
1,382 units released in the previous month.
Mohammed Ismail from PropNex added that
given the downwards trend, developer sales
in June is expected to be slow too. Chia Siew
Chuin from Colliers International added that
he believes that about 500 units will be sold
by developers in June. According to data from
URA, three-quarters of the total number of
private home sold in May took place in the
outside central region. Also, market experts
believe that the lending curbs will continue to
limit the affordability of private homes, thus
further impacting developer sales.
(Source: Business Times)

Commercial
Singapores office market less attractive
than Australia and Japan

According to Union Investment, Singapores


office market is less attractive than Australia
and Japan due to slow rental growth and an
excess supply of office space.Not only so,
several landlords are considering selling their
Singaporean offices. It is believed that
interest has been expressed for Singapores
Asia Square Tower 1, which could be sold for
more than $4 billion. Other landlords such as
Keppel Lands investing company is also
planning to sell its 50% stake in Capital
Square. According to Cushman & Wakefield,
Grade A office rents in the CBD is expected to
fall by 14% in the next two years to $9.12 psf
per month from $10.60 psf per month.
(Source: Business Times)

Back to Contents

Page | 10

SINGAPORE PROPERTY WEEKLY Issue 213


Transaction for strata officeunits lowest
since H1 2009
According to data from Knight Frank, the
number of caveats lodged for strata office
units between January and May fell by 72.7%
from the same period last year. This is the
lowest since H1 2009, where 63 caveats were
lodged. Not only so, the number of caveats
lodged for retail strata units have also fallen
by 58.4% year-on-year in the January-to-May
period this year. This is the lowest since H2
2008. Alice Tan from Knight Frank believes
that the overall transaction volumes will
remain low at around 400 to 600 units for the
entire year. This is likely to be due to cooling
measures such as the total debt servicing
ratio framework. According to the Business
Times, the average prices of new freehold
office units are about $3,467 psf from January

Back to Contents

to May this year. This is 17.8% higher than


the average price of $2,944 psf in H2 2014.
Due to limited stock, office spaces in CBD
remain highly sought after, said Tan.
(Source: Business Times)

Page | 11

SINGAPORE PROPERTY WEEKLY Issue 213

Non-Landed Residential Resale Property Transactions for the Week of Jun 2 Jun 9
Postal
District
1
1
1
3
3
3
4
4
4
5
5
5
7
8
8
8
9
9
9
9
9
9
9
10
10

Project Name
MARINA BAY SUITES
THE SAIL @ MARINA BAY
PEOPLE'S PARK COMPLEX
MERAPRIME
TANGLIN VIEW
EMERALD PARK
REFLECTIONS AT KEPPEL BAY
THE COAST AT SENTOSA COVE
CARIBBEAN AT KEPPEL BAY
VARSITY PARK CONDOMINIUM
HERITAGE VIEW
REGENT PARK
SOUTHBANK
CITY SQUARE RESIDENCES
CITY SQUARE RESIDENCES
KERRISDALE
SCOTTS SQUARE
ESPADA
URBAN SUITES
THE COSMOPOLITAN
8 @ MOUNT SOPHIA
LEONIE GARDENS
WILKIE STUDIO
GOODWOOD RESIDENCE
GRANGE RESIDENCES

Back to Contents

Area Transacted Price


Tenure
(sqft) Price ($) ($ psf)
2,045 4,620,000 2,259
99
592 1,220,000 2,061
99
409
500,000 1,222
99
1,173 1,670,000 1,423
99
1,141 1,500,000 1,315
99
1,238 1,400,000 1,131
99
3,993 9,600,000 2,404
99
2,024 3,400,000 1,680
99
1,572 2,280,000 1,451
99
1,475 1,760,000 1,193
99
1,206 1,380,000 1,145
99
807
850,000 1,053
99
904 1,560,000 1,725
99
1,206 1,700,000 1,410
FH
1,518 2,080,000 1,370
FH
1,259 1,290,000 1,024
99
624 2,202,371 3,528
FH
355 1,030,000 2,900
FH
2,002 4,900,000 2,447
FH
1,679 3,180,000 1,894
FH
1,464 2,220,000 1,516 103
2,540 3,200,000 1,260
99
1,916 2,200,000 1,148
FH
2,142 5,180,000 2,418
FH
2,583 6,088,000 2,357
FH

Postal
District
10
10
10
10
10
10
10
10
10
10
10
11
11
11
11
11
11
12
12
12
14
14
14
15
15

Project Name
N.A.
GALLOP GABLES
GALLOP GABLES
BELMOND GREEN
REGENCY PARK
MELROSE PARK
THE MARBELLA
WING ON LIFE GARDEN
THE TESSARINA
SPRING GROVE
RIDGEWOOD
368 THOMSON
VILLA CHANCERY
MONTEBLEU
THE ANSLEY
THOMSON 800
ADAM PARK CONDOMINIUM
TRELLIS TOWERS
TRELLIS TOWERS
TREVISTA
SUITES @ EUNOS
DAKOTA RESIDENCES
WINDY HEIGHTS
QUESTA @ DUNMAN
AALTO

Area Transacted Price


Tenure
(sqft) Price ($) ($ psf)
2,120 4,029,900 1,900
FH
2,863 5,050,000 1,764
FH
2,648 4,600,000 1,737
FH
1,335 2,300,000 1,723
FH
3,649 5,850,000 1,603
FH
1,507 2,350,000 1,559 999
1,658 2,550,000 1,538
FH
3,498 5,200,000 1,486
FH
1,033 1,530,000 1,481
FH
1,389 2,000,000 1,440
99
2,002 2,530,000 1,264 999
872 1,470,000 1,686
FH
2,659 3,700,000 1,392
FH
807 1,090,000 1,350
FH
1,281 1,620,000 1,265
FH
1,625 2,000,000 1,230
FH
1,916 1,818,000 949
FH
840 1,233,800 1,470
FH
710 1,035,000 1,457
FH
1,141 1,530,000 1,341
99
344
598,000 1,736
FH
1,894 2,528,000 1,334
99
2,476 1,988,000 803
FH
527
855,000 1,621
FH
1,528 2,460,000 1,609
FH

Page | 12

SINGAPORE PROPERTY WEEKLY Issue 213


Postal
District
15
15
15
15
15
15
15
15
16
16
16
16
16
16
16
17
17
18
18
18
18
19
19
19
19
19
19

Project Name
THE SEAFRONT ON MEYER
THE SEAFRONT ON MEYER
JUPITER 18
RIVEREDGE
COSTA RHU
PEBBLE BAY
THE MAKENA
MARINE VILLE
BREEZE BY THE EAST
VENEZIO
EAST MEADOWS
EAST MEADOWS
BAYSHORE PARK
BAYSHORE PARK
APOLLO GARDENS
EDELWEISS PARK CONDOMINIUM
CARISSA PARK CONDOMINIUM
MODENA
MODENA
MELVILLE PARK
TAMPINES COURT
SUITES @ KOVAN
A TREASURE TROVE
3@SANDILANDS
CHUAN PARK
CHUAN PARK
RIO VISTA

Back to Contents

Area Transacted Price


Tenure
(sqft) Price ($) ($ psf)
1,066 1,600,000 1,501
FH
1,604 2,350,000 1,465
FH
452
620,000 1,371
FH
1,518 2,010,000 1,324
99
1,841 2,330,000 1,266
99
1,367 1,660,000 1,214
99
1,507 1,800,000 1,194
FH
936 1,060,000 1,132
FH
2,185 2,250,000 1,030
FH
1,173 1,180,000 1,006
FH
1,238 1,180,000 953
99
1,496 1,385,000 926
99
1,292 1,165,000 902
99
1,292 1,100,000 852
99
1,841 1,400,000 761
FH
1,023 920,000
900
FH
1,324 1,030,000 778
FH
1,453 1,360,000 936
99
1,410 1,228,000 871
99
1,087 725,000
667
99
1,701 950,000
559
101
366
500,000 1,366
FH
1,130 1,250,000 1,106
99
1,087 1,081,008 994
999
1,528 1,360,000 890
99
1,173 1,033,000 880
99
1,378 1,100,000 798
99

Postal
District
20
20
20
21
21
21
21
22
22
22
23
23
23
23
23
23
26
28

Project Name
BISHAN POINT
LAKEVIEW ESTATE
GRANDEUR 8
THE BEVERLY
THE CASCADIA
REGIS MANSIONS
PINE GROVE
THE LAKESHORE
PARC OASIS
THE MAYFAIR
HILLVISTA
FORESQUE RESIDENCES
THE JADE
MAYSPRINGS
MI CASA
PALM GARDENS
MEADOWS @ PEIRCE
SUNRISE GARDENS

Area Transacted Price


Tenure
(sqft) Price ($) ($ psf)
1,270 1,320,000 1,039
99
1,615 1,300,000 805
99
1,647 1,168,000 709
99
1,496 1,920,000 1,283
FH
1,916 1,800,000 939
FH
1,206 1,010,000 838
FH
1,690 1,220,000 722
99
1,173 1,160,000 989
99
1,389 1,200,000 864
99
1,184 960,000
811
99
990 1,232,888 1,245
FH
1,270 1,445,260 1,138
99
1,012 1,120,000 1,107
99
807
750,000
929
99
1,259 1,128,000 896
99
1,206 825,000
684
99
1,776 1,687,200 950
FH
1,302 960,000
737
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 | 13