Issue 219

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

CONTENTS

FROM THE

EDITOR

p2

Expert Advice for Housing Loan Borrowers

p7

Singapore Property News This Week

p10

Resale Property Transactions

Welcome to the 219th edition of the

Singapore Property Weekly.
Hope you like it!
Mr. Propwise

(July 15 July 21 )

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 219

Expert Advice for Housing Loan Borrowers

By Property Soul (guest contributor)
Recently I had an interview with Wayne Quek,
Director of mortgage consultancy firm Home
Loan Whiz, to understand more about how
property financing and SIBOR rates work.
Below is a summary of our conversation.
PS = Property Soul
Wayne = Wayne Quek, Director, Home Loan
Whiz
Main factors affecting and future direction
of mortgage rates
PS: Could you share with us the main factors
affecting housing loan interest rates?

Back to Contents

Page | 2

SINGAPORE PROPERTY WEEKLY Issue 219

Wayne: There are many factors that will
affect mortgage rates. I think the most
significant factor at this time is the US Federal
Reserves announcements and actions with
regards to their interest rate policies.

SIBOR (Singapore Interbank Offer Rates) is

heavily influenced by the Singapore-US
Dollar exchange rate and also the US Federal
Funds rate. Historically, there is a very strong
correlation between the interest rates in
Singapore and the US. We have already seen
an example earlier this year when the Federal
Reserve announced the end of their QE
program, which led to a spike in our SIBOR
from 0.4 percent all the way to 1 percent.
PS: Where do you see the SIBOR rates going
in the near future? How would that impact
banks and mortgage borrowers?
Wayne: If we examine the current 3-month
Back to Contents

SIBOR of 0.82 percent, it is still hovering

below its long-term average. It is unlikely that
the rates will increase dramatically overnight,
but it most likely will increase in the next year
or two. This depends very much on the
actions of the Federal Reserve and MAS.
A higher SIBOR will be good news for the
local banks, as they will be able to earn a
much larger margin with their low cost of
funds. Just think about it from the banks
perspective: paying customers 0.05 percent
interest for savings account and charging
three percent for mortgage lending.
With a healthy economy and high
employment rate, there should not be a huge
impact on mortgage borrowers. The
government has also implemented measures
to curb investors speculation and overleveraging, with the introduction of the Total
Debt Servicing Ratio and Buyer/Seller Stamp
Page | 3

SINGAPORE PROPERTY WEEKLY Issue 219

Duties.
We might however, start seeing more defaults
from over-leveraged investors, and a rise in
bank mortgagee sales (or bank loan defaulted
properties). This is due to a double whammy
effect of a huge supply of residential units
coming into the market and the tight foreign
immigration policy, which will result in a
lackluster rental market.

Options for borrowers in a rising rate

environment
PS: What are the options of a borrower in the
environment of rising interest rates?
Wayne: Mortgage borrowers should avoid
timing the market. Be financially prepared in
terms of your cash flow to handle a one to
two percent increase in interest rates.

If you find that you will not be able to handle a

Back to Contents

spike in interest rates, you can consider

switching to fixed rates to eliminate that shortterm concern. Also, if you are on a floating
interest rate, always make sure that you are
getting the best spreads at any point of time.
We have no control over the SIBOR, but we
can better manage the spreads we pay to the
banks.
PS: Under what circumstances should a
borrower consider refinancing his existing
housing loan?

Wayne: There are many factors one should

consider when refinancing an existing
housing loan. The primary reason would be to
lower your interest rate spreads to save
money. Most interest rate packages in
Singapore tend to have teaser rates for the
first few years, and spike up thereafter. I
cannot emphasize the importance of doing a
periodic loan review every three years.
Page | 4

SINGAPORE PROPERTY WEEKLY Issue 219

PS: What are the key factors to consider
when comparing housing loan offers from
different banks?
Wayne: Key factors will differ between
individuals. A person who intends to prepay
needs to go for a package without lock-in.
Someone who wants to do a maximum cash
out might go for the bank that can support the
highest valuation. A person who has not-sogood credit might want to approach a bank
that is more lenient. Of course, after fulfilling
all these requirements, it always comes down
to interest rates which are still the main factor
when comparing packages.
PS: What do you recommend borrowers do if
they have difficulties passing the TDSR test in
the process of refinancing?
Wayne: For borrowers who have difficulties
passing the TDSR, they have to figure out the
Back to Contents

root cause of the problem and figure out how

to reduce their liabilities. Is it because of their
car loan? Is it because of too much personal
loan
and
credit
card
expenditure?
Alternatively, they can approach mortgage
consultants like us to review their situation
and find possible solutions and to develop an
action plan.
PS: Do you see rising interest rates having a
strong impact on the performance of REITs?
Wayne: Rising interest rates mean higher
interest expense as most REITS have a high
gearing ratio. This will affect the profitability of
the REITs. However, on the other hand, when
interest rates rise, it is most likely the result of
an improving economy. An improving
economy will lead to more jobs, higher
consumer spending, which in turn leads to
higher rentals.
Page | 5

SINGAPORE PROPERTY WEEKLY Issue 219

I think that rising interest rates will probably
cause a short-term correction in the REITs
market, especially those that are more heavily
geared. This may present some buying
opportunities.

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 | 6

SINGAPORE PROPERTY WEEKLY Issue 219

Singapore Property This Week

Residential
Shunfu Ville up for en bloc sale
Located at Marymount Road, a privatised
estate, Shunfu Ville has achieved the
minimum consent level required for it to be
launched for en bloc sale. The estate is about
409,000 sq ft large and has a balance lease
term of 70 years. The plot is expected to sell
for $800 psf ppr. Under the Urban
Redevelopment Authoritys Master Plan 2014,
Shunfu Ville is zoned for residential use. Also,
it has a 2.8 plot ratio, which may be
constructed into 1,280 units with an average
unit size of 850 sq ft.

Condo prices in central region has fallen

by 12.7% since 2013
According to the Singapore Residential Price
Index (SRPI), prices of completed private
apartments and condos in the central region
have fallen by 12.7% since May 2013. Prices
of small apartments that are no larger than
506 sq ft have also taken a 9.9% hit, since
August 2013, when property prices peaked.
Ong Kah Seng from RST Research
explained that this is because flat owners
may be releasing their shoebox units for sale
after the flat has been left vacant for a period
of time. On the whole, the SRPI has fallen
10% since July 2013.

(Source: Business Times)

Back to Contents

Page | 7

SINGAPORE PROPERTY WEEKLY Issue 219

Ong Kah Seng from RST Research predicted
that prices of completed private homes in the
non-central region may be volatile in the
upcoming months.
(Source: Business Times)
Q2 Current Sentiment Index inches up to
3.9 points from 3.8 in Q1
According to the Real Estate Sentiment Index
survey, the Current Sentiment Index has
increased to 3.9 in Q2 from a score of 3.8 in
Q1. In the same survey, the Future Sentiment
Index had also increased from 3.7 points to 4
from Q1 to Q2. The results indicate that
developers are optimistic about the market.
Survey respondents believe that the
upcoming General Elections may have
influenced market sentiments as developers
are hoping that the election may bring about
policy changes. About 74% of developers
Back to Contents

surveyed believed that the number of

residential projects that will be launched in
the next 6 months will either increase or
remain the same. 52% believe that there will
be a drop in residential property prices in the
next half of the year while 38% believe that
prices will remain stable.

(Source: Business Times)

Choa Chu Kang EC site attracts 11 bids
Situated at Choa Chu Kang Avenue 5, an
executive condominium site has attracted 11
bids in a tender. The site was eventually sold
to the top bidder for $295 psf ppr. 8 of the 11
bids were priced below $250 psf ppr. Ong
Teck Hui from JLL said that this is expected
as there is still a large volume of unsold EC
units in the market, and more EC units are
expected to be launched in the future.

Page | 8

SINGAPORE PROPERTY WEEKLY Issue 219

Nicholas Mak from SLP said that the site may
have attracted a large number of bidders as
developers anticipate that the income ceiling
for buyers will be increased. The Choa Chu
Kang site is said to incorporate smart living
features into the residential development and
will be launched in late-2016 or early-2017.

(Source: Business Times)

Commercial
Thong Sia Building sold for $380 million
Thong Sia Building, which is 26 storeys high,
has been sold for $380 million or $2,430 psf
in a collective sale. It is the first and the
largest ever mixed use collective sale this
year. The building is freehold and was built in
1981. It has a land area of about 21,602 sq ft.
The building may be redeveloped into a
mixed
residential
and
commercial

Back to Contents

development with at least 60% of the space

set out for residential use. Market experts
believe that the building had fetched a very
high price, given current market conditions.
(Source: Business Times)
137 Cecil Street sold for more than $200
million
The office block at 137 Cecil Street has been
sold for between $210- $215 million to a
Shanghai buyer. The Aviva Building, which is
located at Cecil Street, has a net lettable area
of 67,550 sq ft. According to URA, two units
on the first level of the office block will be
used as restaurants. A neighbouring site, 158
Cecil Street, was also sold in late June for
$2,100 psf based on the propertys net
lettable area of 115,000 sq ft.

(Source: Business Times)

Page | 9

SINGAPORE PROPERTY WEEKLY Issue 219

Non-Landed Residential Resale Property Transactions for the Week of Jul 15 Jul 21

Postal
District
1
2
3
3
4
5
8
9
9
9
9
10
10
10
10
10
10
11
11
11
12
12

Project Name
THE SAIL @ MARINA BAY
INTERNATIONAL PLAZA
CENTRAL GREEN CONDOMINIUM
TANGLIN VIEW
THE INTERLACE
HERITAGE VIEW
CITY SQUARE RESIDENCES
THE PIER AT ROBERTSON
RIVERGATE
RESIDENCES AT 338A
THE QUAYSIDE
PARKVIEW ECLAT
THE GRANGE
CYAN
ONE TREE HILL RESIDENCE
TANGLIN PARK
MONTVIEW
SHELFORD REGENCY
SKY@ELEVEN
MONARCHY APARTMENTS
TWIN HEIGHTS
SUNVILLE

Back to Contents

Area
(sqft)
678
1,604
2,110
1,163
1,001
969
1,238
678
1,507
1,163
1,711
3,251
1,765
1,001
1,227
1,023
1,679
1,152
2,271
1,216
1,421
1,152

Transacted
Price ($)
1,254,300
1,690,000
2,450,000
1,280,000
1,280,000
1,080,000
1,650,000
1,250,000
2,570,000
1,970,000
2,000,000
8,200,000
3,710,000
2,010,000
2,430,000
1,850,000
2,240,000
1,800,000
3,450,000
1,235,000
1,620,000
1,000,000

Price
Tenure
($ psf)
1,850
99
1,054
99
1,161
99
1,101
99
1,279
99
1,115
99
1,333
FH
1,843
FH
1,705
FH
1,695
FH
1,169
99
2,523
FH
2,102
FH
2,008
FH
1,980
FH
1,809
FH
1,334
FH
1,563
FH
1,519
FH
1,015
FH
1,140
FH
868
FH

Postal
District
14
14
14
14
15
15
15
15
15
15
15
15
15
15
15
16
19
19
19
19
19
19

Project Name
WATERBANK AT DAKOTA
CASSIA VIEW
EVER LODGE
WING FONG MANSIONS
THE SEAFRONT ON MEYER
THE BELVEDERE
ONE AMBER
THE MAKENA
THE WATERSIDE
HAIG COURT
THE AMERY
BUTTERWORTH VIEW
PARK EAST
SUNNY PALMS
WOO MON CHEW COURT
COSTA DEL SOL
THE SCALA
THE MINTON
TREASURE MANSIONS
CHILTERN PARK
HOUGANG GREEN
CHUAN PARK

Area
(sqft)
1,259
1,152
990
1,227
2,088
1,302
1,593
1,647
2,411
1,399
1,389
1,195
1,970
1,313
1,130
1,313
474
1,216
753
915
764
1,851

Transacted
Price ($)
1,550,000
1,150,000
880,000
858,000
3,600,000
1,850,000
2,130,000
2,200,000
3,150,000
1,750,000
1,668,888
1,406,000
2,149,500
1,268,000
1,050,000
1,500,000
750,000
1,420,000
838,000
880,000
735,000
1,650,000

Price
Tenure
($ psf)
1,231
99
998
FH
889
FH
699
FH
1,724
FH
1,420
FH
1,337
FH
1,336
FH
1,306
FH
1,251
FH
1,202
FH
1,177
FH
1,091
FH
966
FH
929
FH
1,142
99
1,584
99
1,167
99
1,112
FH
962
99
962
99
891
99

Page | 10

SINGAPORE PROPERTY WEEKLY Issue 219

Postal
District
19
20
20
20
23
23
23
26
26
27

Project Name
KOVAN 81
THOMSON V TWO
CLOVER BY THE PARK
THE GARDENS AT BISHAN
GUILIN VIEW
THE WARREN
HILLTOP GROVE
SEASONS PARK
CASTLE GREEN
EUPHONY GARDENS

Area
(sqft)
1,959
581
2,573
1,399
1,281
1,518
1,238
1,539
1,345
1,184

Transacted
Price ($)
1,660,000
750,000
2,900,000
1,320,000
1,088,000
1,245,000
958,000
1,340,000
1,100,000
830,000

Price
Tenure
($ psf)
847
999
1,290
FH
1,127
99
943
99
849
99
820
99
774
99
871
99
818
99
701
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.

Back to Contents

Page | 11