Issue 182

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

CONTENTS
p2

FROM THE

EDITOR

6 Ways Developers Hide Project Discounts

and Why its Bad for the Market

Welcome to the 182th edition of the

Singapore Property Weekly.
Hope you like it!

p8

Singapore Property News This Week

p12

Resale Property Transactions

Mr. Propwise

(October 29 November 4 )

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SINGAPORE PROPERTY WEEKLY Issue 182

6 Ways Developers Hide Project Discounts and Why its

Bad for the Market
By Property Soul (Guest Contributor)
To survive the cooling measures, property
developers have no choice but to constantly
come up with creative ways to move their
units from the shelves, because buyers are a
rare species. Where can they find buyers who
possess all of the following?
- Can afford the hefty cash downpayment of
units in new projects;

- Are willing to pay 5, 7, 10 or 15 percent

Additional Buyer Stamp Duty;
- Dont mind holding the property for 4 years
to avoid paying 4 to 16 percent Additional
Seller Stamp Duty;
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SINGAPORE PROPERTY WEEKLY Issue 182

- Dont mind holding the property for 4 years
to avoid paying 4 to 16 percent Additional
Seller Stamp Duty;
- Can pass the TDSR test and obtain the
desired percentage of loan-to-value limit; and
- Have the guts to buy right now when
property prices are on the way down.

1. Markup then Discount

Simply raise the prices of all the remaining
units by 10 to 15 percent before giving back
15 percent discount. Anyway, not everyone
takes the hassle to check past transactions of
the project.

Developers are probably sharing the same

thought: Better sell now than later. Better let
go cheaper than get stuck later.
But wait! They cant rock the boat and further
undermine market confidence. And they need
to be fair to the early buyers, namely the VIP
customers or early birds who bought units at
premium
prices
during
better
days.
Spend a weekend at the sales galleries and
you can spot the tactics deployed by
developers and their marketing agents:

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2. Star Buys
They are units chosen for their bad facing,
inauspicious unit numbers,
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SINGAPORE PROPERTY WEEKLY Issue 182

have been unsold or returned, or are leftover
for any other reasons. Projects offering star
buys include the Citron Residences and
Hillion Residences.
The marketing agent may tell buyers that star
buys just started this month or are valid for
this weekend only. Dont be too tempted to
grab the just for today special offer. Check
the recent transacted prices and find out
whats so special about those units under
promotion.
3. Buying Incentives
Developers can package a unit with a car, or
give away renovation, furnishing or travel
vouchers. These gimmicks work to draw
buyers and manage to keep price levels
constant.

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4. ABSD Fully Absorbed

Some developers are willing to subsidize
buyers for whatever percentage of Additional
Buyer Stamp Duty they have to pay. The
amount will be reimbursed to the buyers after
sales completion.
5. Rental Guarantee
Rental guarantee is nothing new for high-end
condominiums. Mixed development NeWest
is offering an extra 10 percent discount for
their commercial units. Or alternatively,
buyers can choose to have a 7 plus 7 percent
rental guarantee which is payable in two
years after TOP.
6. Cash Rebates
Some projects simply give cash to buyers. On
top of a 4 percent discount,

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SINGAPORE PROPERTY WEEKLY Issue 182

Hillion Residences offers a 6 percent cash
rebate 3 percent after exercising the option
and another 3 percent upon TOP of the
project. In other words, buyers are paying 14
percent instead of 20 percent for the
downpayment of their units.
Implications of Hidden Project Discounts
1. Inflated property prices

URA, REALIS and INLIS cover caveats are

lodged with the Singapore Land Authority
(SLA). SRX is using the URA data plus sales
transactions from major property agencies.
Both the caveats and the transactions do not
reflect the different types of incentives offered
by developers to buyers. Property prices
published, apart from resale units, are being
inflated.
Under

the

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Housing

Developers

Act,

developers are required to disclose all

incentives. But after TOP, developers can
clear unsold units with whatever discounts,
incentives or price levels they please without
informing the public.
In fact, it is not rare to see the price per
square foot of recent caveats lodged at URA
in the same project remain fairly constant, or
sometimes even higher than the previous
transactions.
2. Misrepresented property indices
Developers are also not required to submit
the sales status of their de-licensed projects
after TOP. URA thinks that the low volume of
such transactions does not impact the overall
Property Price Index. This may be true in a
robust market, but is not the case now when
many projects still have tons of unsold units
after TOP, especially in the high-end market.
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SINGAPORE PROPERTY WEEKLY Issue 182

Afterall, the lodgment of caveats with SLA is
based on voluntary submission. Have a check
on any sold-out project in the URA caveat
database and one will find that not all the
units and their sales prices are captured.

Maybe it is applicable to Singapore property

figures too.

The incomplete data entries make it difficult

for the public to get a real picture of the
current private property market in Singapore.
All those property indices are, at best, for
one's information only.
Jim Rogers has this to say about GDP
figures: "First of all its backward looking.
Second of all they make them up. They are
always revised later. I know you have to
report these things on TV, but as an investor I
dont pay any attention.

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3. Inaccurate valuation and loan-to-value

limit
If the valuation of residential properties is
based on recent transactions in the same or a

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SINGAPORE PROPERTY WEEKLY Issue 182

similar development, without factoring in
developers rebates, the figures are likely to
be unrealistically high.
Similarly, if the loan-to-value limit is based on
the valuation of the property, buyers are now
able to borrow a bigger housing loan from the
bank based on the undiscounted purchase
price.
Such practices are going against the
governments determination to ensure greater
financial prudence among property buyers.
What goes around comes around
The misdeed of not reporting the actual
selling prices and the failure of the authority
to take actions can only hide the truth
temporarily. As the Chinese saying goes, no
one can swathe flames in paper. What the
buyers and sellers of new projects are doing
now may later come back to get them.
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Once the government requests submission of

the real transaction prices after rebates,
buyers who enjoyed such incentives earlier
may risk holding a negative equity property,
with their outstanding mortgage higher than
the fair market value of their properties.
On the other hand, the inflated property price
index can be used as a good excuse for the
government to insist that its too early to
relax property cooling measures, until the
rare species of buyers gradually becomes an
extinct species.
Or the government may impose harsher rules
to further correct the market, especially when
its time to please the voters again.
By guest contributor Property Soul, a
successful property investor, blogger, and
author of the No B.S. Guide to Property
Investment.
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SINGAPORE PROPERTY WEEKLY Issue 182

Singapore Property This Week

Residential
Resale prices of non-landed
homes up 0.4% in October

private

From September to October, resale prices of

non-landed private homes have increased by
0.4 percent. While prices in the city fringe and
suburbs have increased by 0.6 percent each,
prices of apartments in the city have fallen by
0.3 percent according to SRX. Despite the
slight increase in prices, Wong Xian Yang
from OrangTee believes that overall prices
will decrease due to the effect of the Total
Debt Servicing Ratio framework. According to
the Business Times, resale prices of private
homes have fallen by 4.5 percent year on
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year from October 2013. In October this year,

about 451 private homes changed hands,
which was slightly lower than the 461 units
that were resold in September this year.
(Source: Business Times)

98% of all units at Lake Life have been

sold since its launch
521 out of the 534 units at Lake Life have
been sold since its launch. Lake Life is the
first executive condominium project that has
been launched in Jurong in the last 17 years.
Vincent Ong from Evia Real Estate said that
the condominiums prime location drew
buyers. The 99-year leasehold project is
priced from $799 to $930 per square foot.
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SINGAPORE PROPERTY WEEKLY Issue 182

On average, a two bedroom unit is sold at
$685,000; a three bedroom unit is priced at
$898,000; a three bedroom premium unit is
priced at $984,000 and a four bedroom unit is
sold for an average price of $1.07 million.
Additionally, a four bedroom premium unit is
sold for $1.088 million, while a five bedroom
unit is priced at $1.388 million.
(Source: Business Times)
Non-landed private home rentals slipped
1.1% from Q2 to Q3
According to the Business Times, non-landed
private home rentals have slipped by 1.1
percent from 14Q2 to 14Q3. Rental in the
core central region took the hardest hit. Other
districts such as those at Novena and Middle
Road did not experience any significant
changes in rental prices. On the other hand,
rental prices in 7 districts have increased from
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Q2 last year to Q2 this year. For example,

District 20 which includes Bishan and Ang Mo
Kio saw rental prices increase by 15.9
percent from Q2 last year to Q2 this year. The
number of rental transactions in those areas
increased to 209 units in Q2 this year from
the previous year, said Nicholas Mak from
SLP International. Lee Lay Keng from DTZ
believes that the accessibility to public
amenities in mature estates like Ang Mo Kio
and Bishan could have resulted in higher
rental prices. Lee expects that there will be an
increase in supply of rental units in the
suburban area in the next year. However, as
policies on foreign hiring tighten, demand for
rental units is expected to fall. This increase
in supply in the next year and the decrease in
demand for rental homes is expected to drive
rental prices down.

(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 182

HDB rentals fall by 1.7% from Dec 2013
According to SRXs flash estimates, HDB
rents have fallen by 1.7 percent in October
this year, from December 2013. According to
SRX estimates, about 1,559 HDB flats were
rented out in October. This was 0.8 percent
higher than in September. Yet, the year-onyear rental volume in October this year has
fallen by 2 per cent from the previous year.
Ong Kah Seng from RST Research predicts
that HDB rents will continue to fall by up to 4
percent by the end of the year. Not only so,
he believes that HDB rents will fall by as
much as 8 percent in the following year.
Eugene Lim from ERA Realty said that the
HDB rental market has weakened as prices
for private homes in suburban areas have
fallen to as low as $2,500 a month.
Nonetheless, Lim believes that the HDB
rental market will continue to attract tenants
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who have a rental budget that is below

$2,500.
(Source: Business Times)

Cooling measures will continue to affect

property market
Market experts believe that cooling measures
will continue to shrink demand in the property
market. The weak property market has
affected sales at Sing Holdings, Hotel
Properties Limited and Design Studio Group.
In Q3 this year, Sing Holdings net profit fell
by 90.9 percent to $307,000. Similarly, Hotel
Properties Limited experienced a reduction in
net profit in Q3 this year as revenue shrank
from $180.1 million to $146 million. Market
experts believe that as the market shrinks
and as foreign labour supply is tightened,
property sales volume will continue to fall.

(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 182

Commercial
CDL: Demand for Grade A office space is
increasing

Kwek Leng Beng from City Development

Limited (CDL) said that the demand in the
residential market has remained low due to
the implementation of cooling measures.
Kwek said that mortgage borrowers who are
affected by lower rentals may find it difficult to
finance their loans. This may lead to forced
fire sales. Nonetheless, Kwek believes that
property agents can rely on the office and
hotel markets as both markets have been
doing well this year. Particularly, demand for
Grade A office space has increased and the
capital value for hotels is also on the rise. In
fact, in Q3 this year, CDL made a profit of
$87.59 million from the hotel market.
(Source: Business Times)
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SINGAPORE PROPERTY WEEKLY Issue 182

Non-Landed Residential Resale Property Transactions for the Week of Oct 29 Nov 4

Postal
District
3
5
5
5
5
9
9
9
9
9
10
10
12
12
14
14
15
15
15
15
15
15
15

Project Name
QUEENS
THE FOLIAGE
CARABELLE
BLUE HORIZON
CARABELLE
TRIBECA
RESIDENCES @ KILLINEY
ST THOMAS SUITES
YONG AN PARK
OLEANAS RESIDENCE
ORION
RV EDGE
TRELLIS TOWERS
TRELLIS TOWERS
WATERBANK AT DAKOTA
STARVILLE
SUITES @ EASTCOAST
RIVEREDGE
MARINE VIEW MANSIONS
BUTTERWORTH 8
BUTTERWORTH 8
LEGENDA AT JOO CHIAT
PENG'S COURT

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Area
(sqft)
1,195
969
1,292
969
1,292
1,378
1,055
2,013
3,143
1,636
1,507
377
710
1,163
1,259
1,216
377
1,335
2,088
1,464
1,507
1,399
980

Transacted
Price ($)
1,500,000
1,200,000
1,450,000
1,050,000
1,350,000
2,690,000
1,925,000
3,600,000
5,500,000
2,538,800
3,300,000
776,888
1,020,000
1,558,000
1,510,000
1,140,000
612,000
1,650,000
2,450,000
1,712,880
1,600,000
1,260,000
860,000

Price
Tenure
($ psf)
1,255
99
1,239
FH
1,123 956
1,084
99
1,045 956
1,952
FH
1,825
FH
1,788
FH
1,750
FH
1,552
FH
2,190
FH
2,062
FH
1,436
FH
1,340
FH
1,199
99
937
FH
1,624
FH
1,236
99
1,173
FH
1,170
FH
1,062
FH
900
99
878
FH

Postal
District
16
16
16
16
17
18
18
18
18
19
19
22
23
26
27
28

Project Name
WATERFRONT WAVES
EAST MEADOWS
THE CLEARWATER
AQUARIUS BY THE PARK
EDELWEISS PARK CONDOMINIUM
TROPICAL SPRING
EASTPOINT GREEN
SAVANNAH CONDOPARK
THE TROPICA
THE SUNSHINE
HOUGANG GREEN
PARC OASIS
PARKVIEW APARTMENTS
BULLION PARK
EUPHONY GARDENS
SELETAR SPRINGS CONDOMINIUM

Area
(sqft)
1,292
1,195
1,496
1,098
947
1,335
1,130
1,238
1,313
1,227
764
1,076
980
1,259
1,518
1,335

Transacted Price
Tenure
Price ($) ($ psf)
1,420,000 1,099
99
1,140,000 954
99
1,338,000 894
99
868,000
791
99
830,000
876
FH
1,200,000 899
99
1,005,000 889
99
1,100,000 889
99
1,068,000 813
99
1,225,000 998
FH
742,000
971
99
990,000
920
99
823,000
840
99
1,210,000 961
FH
910,000
600
99
1,120,000 839
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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