Issue 205

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

CONTENTS
p2

FROM THE

EDITOR

Do Property Prices Always Recover and

Welcome to the 205th edition of the

Singapore Property Weekly.

Go Up Higher?

Hope you like it!

p7

Singapore Property News This Week

p12

Resale Property Transactions

Mr. Propwise

(April 8 April 14 )

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SINGAPORE PROPERTY WEEKLY Issue 205

Do Property Prices Always Recover and Go Up Higher?

By Property Soul (Guest Contributor)

Recently, there were reports on units in highend condominium projects being sold at a big
loss. As property buyers, we often hear from
developers and property agents that property
prices will always go up in the long run.
Does the property market always manage to
recover, with prices going higher than the
previous peak? Is it true that any time is a
good time to buy? Below is an abstract from
my book No B.S. Guide to Property
Investment about one of my real-life property
stories and the lessons learned.

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SINGAPORE PROPERTY WEEKLY Issue 205

Bought a unit in a seafront condominium
In 2003, I bought a unit in a seafront
condominium. When it was under renovation,
two neighbors staying at the units above mine
dropped by for a chat. They both bought their
place first-hand from the developer.
Do you mind telling us what price you paid?
I told them the amount.
Oh, that was more or less what we paid for
last time.
Which year did you buy your place?
It was 1984. Do you know about their launch
at that time?
I dont know. I was still in primary school in
1984.
I did a search of the old newspapers. I found
that the condominium was selling in a
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depressed market that year. My

neighbors werent overpaying at all.

two

It was amazing that, almost twenty years

later, despite inflation and after all the ups
and downs in the economy, we were back to
the launch price!
Who said prices cant go back twenty years?
They dont just go back, they can even go
back to where they started from.
Prices cant drop lower?
Between 2002 and 2004, my strategy was to
buy rental properties at fifteen percent lower
than the last transacted price. In that way, I
still had a fifteen percent buffer in case prices
dropped further. And once the market
recovered, I could sell them at any price and
still make a profit.
I did make money. But I was wrong.
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SINGAPORE PROPERTY WEEKLY Issue 205

How could I know that prices couldnt drop
another fifteen or twenty percent?

the next fifty years?

Many people who bought in 1995 held on to

their overpriced purchase. They struggled
through the recession in 2001, SARS in 2003,
the downturn in 2004 Every time when they
thought the bad days were finally over, a
more severe storm came.

In the 1960s, Singapores infrastructure,

economy and social stability were very
different from today. The ease of borrowing
and the pool of eligible buyers were also very
limited.

J. Anthony Boeckh, author of The Great

Inflation, told what happened in some US
states after the sub-prime crisis:In general,
prices nationally have dropped back to the
level of the cost of building a new dwelling,
which includes land acquisition, building
costs, and profit for the builder.
Will exponential growth happen again?
Prices of landed properties in Singapore have
increased 75 to 100 times in the last fifty
years. But can they rise at the same rate in
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I doubt so.

In the last fifty years, Singapore has evolved

from an emerging country to a developed
nation. It is with substantial improvement in
our economy and living standard, coupled
with easy financing, that housing prices can
climb to where they are today.

Markets that achieved high growth in the past

cannot guarantee continued growth. On the
contrary, it could imply that the boom may
soon be over. Once the fundamentals are
changed, the trend will be reversed.

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SINGAPORE PROPERTY WEEKLY Issue 205

There are many countries that used to have a
strong economy. Then they experienced
recession. Some managed to recover and
grow again while others have remained weak
since.
Although history often repeats itself, there are
also things in history that, once they are
gone, are gone forever.
When, or will it ever, recover?
There is a saying that, in each property cycle,
prices always surpass the previous peak to
reach an all-time high. This happened several
times in the history of the Singapore property
market. But the question is: When?
The commodity bull market which started in
the early 1930s was surpassed only by the
bull market in the 1970s. Just look at gold,
there was a very long period of depressed

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prices after its collapse in 1980.

Amid spiraling property prices in the 1980s,
many Japanese believed they would never be
able to afford it if they didnt buy now. Many
borrowed huge housing loans that could only
be paid off by their grandchildren. The bubble
that burst in the late 1980s started two lost
decades in Japan.
This is how Marc Faber described a major
market collapse, as compared to a minor
correction:
Major manias occur very infrequently. Once
they burst, they shake an entire generations
faith in the object of speculation ... while mini
manias may take place every few years ... a
major mania will represent the final stage, or
culmination, of a long-term secular up-trend
which may have lasted 10 to 25 years.

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SINGAPORE PROPERTY WEEKLY Issue 205

What are the lessons learned?
Only invest if you have the answers for the
following questions:

The next time you want to ask when a good

time to buy is, take the hint from investor Jim
Rogers:

How long do you think you can wait to see

profit from your property investment?

Bottoms in the investment world dont end

with four-year lows. They end with 10- or 15year lows. You do not buy unless it is cheap
and unless you see positive change coming
within the next 2 to 3 years.

Do you have the holding power to wait till

the next Bull Run?

Can you see positive or negative changes

coming?

Will you see a recovery before your

retirement (and at least live to see that
happen)?

By guest contributor Property Soul, a

successful property investor, blogger, and
author of the No B.S. Guide to Property
Investment

Can you see any upside in the fundamentals

in the foreseeable future?

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SINGAPORE PROPERTY WEEKLY Issue 205

Singapore Property This Week

Residential
GCB put up for auction for $20m
A Good Class Bungalow (GCB) that is located
at Binjai Rise has been put up for auction. Its
indicative price is $20 million, or $1,174 psf.
The site has a gross floor area of 13,378 sq
ft. It is currently partially completed, and is
expected to have a swimming pool. To
complete the construction, it is expected that
it will cost another $1 million to $2 million; to
tear down the current structures, it may cost
up to $6 million, said the Business Times.
According to industry experts, mortgagee
sales of GCBs like this are rare. In instances

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where they are placed for auction, GCBs are

typically put up for sale by owners, not
mortgagees. Industry experts added that
since 2014, there have been fewer GCB
auction sales due to the implementation of
the total debt servicing ratio framework. The
framework, which acts as a cooling measure,
had affected demand in the GCB market, said
experts. According to William Wong from
RealStar Premier Group, the site at Binjai
Rise is competitively priced, however its
proximity to the expressway may reduce its
appeal.
(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 205

Private home prices fall by 1% in Q1
In the first quarter, private home prices have
fallen by 1 percent, according to the Business
Times. Rents have also fallen by 1.7 percent.
Data from the Urban Redevelopment
Authority (URA) showed that the fall in prices
and rents in the private residential property
market has persisted for six consecutive
quarters.
In Q1, prices of non-landed
properties fell by 0.4 percent in the core
central region, 1.7 percent in the rest of
central region and 1.1 percent in the outside
central region, according to URAs data. On
the other hand, a 0.9 percent fall was
observed in prices of landed properties.
Compared to the previous quarter, Q1 rents
of non-landed homes have fallen by 1.9
percent in the core central region, 1.8 percent
in the outside central region and 1.6 percent

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in the rest of central region. Chia Siew Chuin

from
Colliers
International
said
that
developers have offered discounts in an
attempt to attract more buyers. For example,
GuocoLand offered discounts of up to 19
percent for Sims Urban Oasis, while a 10
percent discount was offered to Marine Blue
buyers by CapitaLand. Chia added that she
believes private home prices will continue to
fall by about 5 to 8 percent this year. Nicholas
Mak from SLP International said that a 4 to 7
percent fall in overall rent is expected this
year. He believes that rents in the rest of
central region and outside central region are
falling faster than in previous quarters due to
an increase in supply of private and HDB
housing units for lease.
(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 205

Q1 resale flat price index fell by 1 percent
quarter-on-quarter
In Q1 this year, the HDB resale flat price
index has fallen by 1 percent, quarter-onquarter. According to the Business Times, the
fall in prices is slower than the previous
quarter, and is the smallest recorded quarteron-quarter decline for the index since Q3
2013. As the supply of Build-to-order (BTO)
flats tapers, market experts believe that
buyers may flock back to the resale market.
This year, HDB is expected to launch 16,900
BTO flats, which is fewer than the 22,455
BTO flats launched last year and the 25,139
BTO units launched in 2013. Not only so,
there are 10.8 percent fewer applications for
resale HDB flats in the first quarter of this
year, compared to the previous quarter, said
the Business Times. Eugene Lim from ERA
Realty believes that this year there will be
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more resale flat deals. He predicts that

18,000 to 20,000 resale flats would change
hands by the end of the year. Market experts
believe that there would be a 3.5 percent to 5
percent drop in HDB resale prices this year.
This is less than the 6 percent fall in the price
index last year.
(Source: Business Times)
Commercial
Q1 Grade A office vacancy rates fall by 0.3
percent quarter-on-quarter
According to Cushman and Wakefield,
vacancy rates for Grade A office spaces have
fallen by 0.3 percent quarter and quarter to
3.9 percent in Q1 this year. Data from URA
showed that overall the vacancy rates of
office spaces have remained unchanged at
10.2 percent this year.

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SINGAPORE PROPERTY WEEKLY Issue 205

Christine Li from Cushman and Wakefield
added that Grade A office rents are expected
to increase by 5 to 6 percent this year as
vacancy rates will be around 3 percent by the
end of the year. Chia Siew Chuin from
Colliers International added that the average
monthly gross rent for Premium Grade
spaces in Raffles Place/New Downtown may
increase by about 5 to 10 percent this year.
However, rents in the CBD area for Grade A
and B offices may increase by about 5
percent for the entire year. Chia said that
despite the low transaction volumes in the
office market, there is still growing interest in
office properties. However Li believes that
retail rental market may remain weak due to
higher business costs and a smaller influx of
tourists.

Q1 industrial prices increased by 0.7%

while rents increased by 0.4%
According to the Business Times, prices and
rentals of industrial space have increased.
However this increase is slowing down due to
an increase in supply. In Q1 this year, the
overall prices of industrial spaces have
increased by 0.7 percent quarter-on-quarter
and rents have increased by 0.4 percent.
However, occupancy rates have fallen by 0.2
percent. According to Chia Siew Chuin from
Colliers International, in Q1, prices in the
multiple-user factory market have increased
by 0.1 percent from the previous quarter. The
Business Times added that the stabilising in
prices could be due to the festivities in
February and may also be due to the Total
Debt Servicing Ratio framework.

(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 205

By the end of February this year, about 1,700
units
of
uncompleted
multiple-user
developments were still available for sale,
according to statistics by JTC. Chia believes
that the overall industrial prices may reduce
by 3 percent this year. However, rents for
business parks and independent high-spec
buildings are expected to increase by 3
percent and 6.5 percent in 2015 respectively,
said market experts.
(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 205

Non-Landed Residential Resale Property Transactions for the Week of Apr 8 Apr 14

Postal
District
3
3
4
4
8
9
9
9
9
10
10
10
10
10
10
10
11
11
11
11
12
12
13

Project Name
ALEXIS
ALESSANDREA
THE OCEANFRONT @ SENTOSA COVE
THE INTERLACE
CITY SQUARE RESIDENCES
RIVERGATE
THE COSMOPOLITAN
ASPEN HEIGHTS
CAVENAGH HOUSE
GOODWOOD RESIDENCE
SOMMERVILLE GRANDEUR
THE HORIZON
VALLEY PARK
JERVOIS MEADOWS
MUTIARA CREST
CASABELLA
AMARYLLIS VILLE
AMANINDA
MONTEBLEU
NOVENA HILL
DE ROYALE
KEMAMAN POINT
8@WOODLEIGH

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Area
(sqft)
657
1,001
1,894
2,099
1,206
1,776
1,141
1,130
1,701
2,508
1,884
1,561
1,216
1,216
3,983
3,003
958
1,249
1,141
710
1,281
861
1,098

Transacted
Price ($)
1,140,000
1,440,000
2,698,000
2,700,000
1,655,000
3,450,000
2,150,000
1,690,000
2,150,000
6,150,000
2,850,000
2,318,000
1,680,000
1,600,000
4,888,000
3,180,000
1,470,000
1,810,000
1,580,000
970,000
1,565,000
980,000
1,330,000

Price
Tenure
($ psf)
1,736
FH
1,438
FH
1,424
99
1,286
99
1,373
FH
1,943
FH
1,884
FH
1,495 999
1,264
FH
2,452
FH
1,513
FH
1,485
FH
1,381 999
1,315
FH
1,227
FH
1,059
FH
1,534
99
1,450
FH
1,385
FH
1,365
FH
1,222
FH
1,138
FH
1,211
99

Postal
District
14
14
15
15
15
15
15
15
15
15
15
15
16
16
16
17
18
19
19
19
20
20
21

Project Name
LE CRESCENDO
WINDY HEIGHTS
BELLA CASITA
SUITES @ AMBER
TIERRA VUE
PEBBLE BAY
HAIG COURT
AMBER PARK
ST PATRICK'S RESIDENCES
MABELLE
PALM VISTA
VILLA MARINA
OPTIMA @ TANAH MERAH
WATERFRONT WAVES
VILLAS LAGUNA
LOYANG VALLEY
RIS GRANDEUR
SUNGLADE
HOUGANG GREEN
REGENTVILLE
BISHAN 8
BISHAN 8
TERRENE AT BUKIT TIMAH

Area
(sqft)
861
2,476
506
635
1,227
3,057
1,076
1,744
2,562
883
990
1,281
1,173
1,292
1,496
3,251
1,539
1,109
764
980
1,163
1,163
1,033

Transacted
Price ($)
965,000
2,120,000
800,000
965,000
1,700,000
4,150,000
1,360,000
2,140,000
2,900,000
970,000
1,000,000
1,200,000
1,300,000
1,360,000
1,320,000
1,780,000
1,400,000
1,130,000
700,000
805,000
1,300,000
1,280,000
1,385,000

Price
Tenure
($ psf)
1,121
FH
856
FH
1,581
FH
1,520
FH
1,385
FH
1,358
99
1,263
FH
1,227
FH
1,132
FH
1,099
FH
1,010
FH
937
99
1,108
99
1,053
99
882
FH
548
99
910
FH
1,019
99
916
99
822
99
1,118
99
1,101
99
1,340 999

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SINGAPORE PROPERTY WEEKLY Issue 205

Postal
District
21
21
21
22
22
23
23
23
23
23
23
23
27
27

Project Name
SPRINGDALE CONDOMINIUM
SIGNATURE PARK
THE RAINTREE
LAKEHOLMZ
PARC VISTA
HILLINGTON GREEN
MERA WOODS
HAZEL PARK CONDOMINIUM
REGENT HEIGHTS
NORTHVALE
PALM GARDENS
HILLTOP GROVE
CANBERRA RESIDENCES
THE ESTUARY

Area
(sqft)
1,163
1,722
1,302
1,507
1,302
990
1,345
1,335
1,023
1,087
1,216
1,862
1,141
1,302

Transacted
Price ($)
1,238,000
1,830,000
1,260,000
1,370,000
1,055,000
1,030,000
1,360,000
1,210,000
860,000
850,000
890,000
1,160,000
1,210,000
1,018,000

Price
Tenure
($ psf)
1,065 999
1,063
FH
967
99
909
99
810
99
1,040 999
1,011 999
907
999
841
99
782
99
732
99
623
99
1,060
99
782
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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