singapore property weekly issue 130

8/13/2019 Singapore Property Weekly Issue 130

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Issue 130Copyright 2011-2013 www.Propwise.sg. All Rights Reserved.
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CONTENTS

p2 The 4 Fundamental Rules of

Property Investment

p9 Singapore Property News This Week

p15 Resale Property Transactions

(October 30 November 5)

Welcome to the 130th edition of the

Singapore Property Weekly.

Hope you like it!

Mr. Propwise

FROM THE

EDITOR
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SINGAPORE PROPERTY WEEKLY Issue 130

Page | 2Back to Contents

By Gerald Tay (guest contributor)

In any investments, and especially in property

due to its highly illiquid nature, there are four

fundamental rules of property investment

ordinary investors must to adhere to if they

want to be successful:

1. You Must Preserve Your Capital (the

ability to at least preserve the initial

investment capital without losing it),

2. Money Must Be in Constant Velocity

(generating immediate returns)

3. You Must Be In Control (YOU Control the

investment, not the other way around)

4. Never Invest in Something You Dont

Understand Well

The 4 Fundamental Rules of Property Investment


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These are the four rules I followed religiously

ever since embarking on my property

investment journey 10 years ago, and these

crucial rules have helped cushion my property

investments in the ups and downs of the

market over the years. These rules are not

entirely created by me, but they have always

been used by successful investors and

entrepreneurs whom I have had the privilege

to learn from. One of them is my late wealthy

grandfather who had built a multi-million

dollar business and property empire by simply

adhering to these four fundamental

investment rules.

Rule 1: You Must Preserve Your Capital

Sounds logical and simple enough, yet many

gullible investors forget this rule when greed,

arrogance, ignorance and a gambling streak

arise.

When an investor tries to find those

investments that will give them the best

possible returns on their investment capital,

they will often absent-mindedly ignore the

potential downsides of the investment and

economy. Greed and arrogance will cause

them to pursue investments that promise so

called high returns that look good on the

surface with unsubstantiated claims of

potential high rental yields or capital gains

that the properties or investment can fetch.

Take for example, buying overseas property

in exhibitions and property seminars. Smart

overseas property marketers know greed and

ignorance always sells, and they know how to

use it to prey on unsuspecting investors whomay be completely ignorant of the market,

especially in an overseas market which one

may be unfamiliar with.


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Greed has foreshadowed fundamentals. Most

of the time, the investor does not realise it

unknowingly, and we all know that greed will

always lead to dire financial consequences.

If you want to do well in any investment,

you must possess some basic business

knowledge. Knowing how to differentiate

between a winning investment and a losing

investment takes many years of experience,

humble learning and a basic understanding ofreading a simple business financial

statement. The problem with most amateur

investors is that they cannot even manage

their own personal finances properly, or to

distinguish what an asset and liability is.

Rule 2: Money Must Be in Constant

Velocity

If the investment does NOT give

immediate returns t oday, its

not aninvestment.Any investment bought on future

price gains and yield is gambling! For

example, buying a property off-the-plan only

to see completion four years later is more of a

consumer choice than an investment choice.

If you have an obese bank account with many

other income producing assets, I say sure, go

ahead and speculate on some off-the-plan

property projects or other investments that

will ripen years down the road. You can

afford to wait and play the game patiently.


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However, for the ordinary investor, where time

is of crucial importance in growing wealth,

who has yet to secure his retirement funds,

and has no passive income from zero assets

nor a million dollars in the bank account

today, trappingyour limited capital resources

for four years or more with zero returns in the

period (not to mention the potential downside

and economic changes that might happen in

fouryearstime) can prevent you from seizing

other potential opportunities to grow that

wealth earlier.

Rule 3: You Must Be in Control

Its called the c o n t r o l o f m o n e y . The rich

get richer, while the poor get poorer because

the rich understands the importance of havingcontrol in any investment. They control the

money, sufficiently protecting their downside.

They control the investment and the returns

they want through managing income cash

flow and expenses.

Holding Power is NOT a protection of

downside: Never mind, my downside

protection is if the property cannot be rented

out or fetch the price I want, I can always stay

in it or use it myself.

Itsthe same as saying if I fail to woo the girl I

like, I can still hope to win her heart back with

more flowers and expensive gifts. There areplenty of other good choices around. Dump

the losing property and move on. Holding

power is for people who have already made

their wealth, and not for ordinary investors

who have very limited capital resources for

more productive uses in other opportunities.

Property developers take their initial

investment back within five years by selling

units to property buyers as soon as they can.


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Banks (and even loan sharks) take back their

money lent to borrowers in the form of

immediate monthly loan re-payments as

interest income.

The middle class becomes poorer because

their one and only Get Wealthystrategy is to

buy off-the-plan-properties and have mutual

funds for retirement plans. There is no control

here. The only people in control are the

property developers, the economy and the

fund managers themselves.

Rule 4: Never invest in Something You

DontUnderstand Well

You dontknow what you dontknow.

We need to understand Risk Vs Risky. Allinvestments come with risk, but not all are

risky if you know what you are doing. A

professional mountain climber knows he/she

faces risk when doing this sport, and they

love to do it as it gives them an adrenalin high

and a strong sense of satisfaction (high

returns),but he/she doesnot view it as risky

because they follow a set of strict rules,

proper system, proper safety techniques andconstant training to minimise those risk

associated with mountain climbing. The

untrained ones like us, however, will view

mountain climbing as a very risky

investment.

The point is this: If you do not know what you

are doing, it is considered risky. And

surprisingly, most untrained investors

(arrogant and ignorant) thinkthey know what

they are doing.

Focus on ONE key investment area youknow very well, before even considering

venturing into the next. Focus, NOT diversify!

Diversification is for those with no control and

do not know what they are doing.

SINGAPORE PROPERTY WEEKLY I 130


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David Beckam, the famous professional

football star, does not say he will diversify

playing professionally into other sports like

golf (and hope to become another Tiger

Woods) simply because his managers tell himthere is a danger of tearing his leg ligament

ust by playing soccer alone. Yes he plays golf

but thats a hobby he can afford and not a

career.

Luciano Pavarotti, the famous opera singerdoes not diversify into singing rock songs,

because there are fewer opera listeners and

rock is more popular.

Take commercial and industrial property

investment for example. With massive cooling

measures on residential property sector,many unwitting home-buyers have gone into

the commercial and industrial sector. Being

only residential buyers for their own homes,

most small-time ordinary retail investors have

very little or no knowledge of how the

commercial and industrial sector works, yet

they invest on hopes of returns (if any). The

investment dynamics and structure of thecommercial and industrial property sector is

completely different from that of residential

homes.

Implement Strict Personal Investment

Criteria and SystemDo you have a personal investment system

with a strict set of investment criteria?

I follow all four of the fundamental rules

strictly and if an investment does not meet

just one of those rules, I do not invest at all.

All my property investments arelowrisk, high

returns (returns which meet my criteria

according to my personal goals) because I

understand them very well,

SINGAPORE PROPERTY WEEKLY I 130


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they fit my strict personal criteria and system,

and they adhere strictly to the 4 Rules of

Investment.

You need to have constant training, ground

experience and implement a set of rules and

system catered specifically to your own needs

and life priorities and most importantly, follow

them without fail! I have my own set of strict

investment system and criteria, and I follow

them. If a particular investment does not meetany of my set criteria, I do not invest, no

matter how promising the returns are.

Having a personal investment philosophy

would also help tremendously. Having first

evaluated these goals will help determine

ones preferred investment returns, to

preserve or grow oneswealth, and what sort

of investments should you invest in.

As Sun Tses Art of War says, Knowing

yourself and knowing your enemy is the key

to winning all battles.

Follow strictlyyour rules of engagement for

any investments. The investment can either

be your dearest friend or it can be your

deadly enemy. You decide.

By guest contributor Gerald Tay, CEO of

CREI Academy Group, who exposes widely-

held property investment myths that have

proven highly ineffective in creating wealth,

and prevent a comfortable retirement for the

ordinary investor.

http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/


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Singapore Property This Week


Residential

D uo R esidences receives good int erest

During the first phase of sales at Duo

Residences, the 99-year leasehold

development at Ophir-Rochor Road, more

than 1,000 cheques were submitted. Theproject is a joint collaboration of Temasek

Holdings and KhazanahNasional. Apartments

at the development start from $2,214 psf for a

studio apartment of about 420 sqft in size,

while prices of one-bedders of 538 sqft start

at $2,045 psf. Two-bedroom units of at least807sqft in size are priced at $1,983 psf. The

property is a few-minute drive from

TiongBahru, VivoCity, Orchard Road, MBS,the CBD and Sentosa.

(Source: Business Times)

N a t i o n a l D e v e l o p m e n t M i n i s t e r s e e s l i g h t

f o r S i n g a p o r e p r o p e r t y m a r k et

At Parliament on November 12, NationalDevelopment MinisterKhaw Boon Wan was

asked by Member of Parliament Christopher

de Souza about what can be done to ensure

a predictable regulatory regime to regulate

foreign ownership in Singapore's property

market in order to create sustainable property

prices. Minister Khaw said he was seeing

light at the end of the tunnel to achieve a



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sustainable Singapore property market, with

the cooling measures creating the intended

effect of dampening foreign demand and

reducing speculation. The proportion of

purchases by foreign in Singapore privatehousing market has decreased since 2011

from 17 percent in 2011 to only 7 percent in

Q3, 2013. The number of purchases by

foreigners has also decreased from about

1,400 per quarter to 330 in Q3, 2013. In

addition, subsales, a proportion of privatehousing transactions and a gauge of level of

speculative activity in the property market, fell

from 7.6 percent in 2011 to 4.6 percent in Q3,

2013. Minister Khaw said that only citizens

are now allowed to buy new HDB flats and

provided grants to purchase resale HDB flats,and almost all landed housing can only be

purchased by Singaporeans.


S in g ap o r e p r o p er t y m a rk et t o c o r r ec t i n

2015 or 2016

According to presentations at the 20th

Singapore Economic Roundtable Forum, one

of several medium-term challenges and risks

confronting the Singapore economy in the

future is that the property market could

correct substantially in 2015 or 2016 as

higher interest rates are expected to coincide

with large increase in housing supply. Other

challenges mentioned at the forum include

over-leveraging in certain household

segments, lower cost-competitiveness and

obstacles to productivity growth. The forum

was organised by the Institute of Policy

Studies and The Business Times, and is held

twice a year under the Chatham House Rule

which participants agree to keep each other's

views anonymous to promote frank debate.




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C I TY D evelopment s Lt d raises red f lags on

p r i v a t e h o u s i n g

Following its 10.4 percent year-on-year drop

in Q3 net earnings to $120.6 million, City

Developments Ltd (CDL) has raised red flags

on the Singapore private housing market.

CDL said that although developers are cutting

their prices in existing and new projects and

willing to take lower profit margins, land

prices are continuing to increase. In addition,

non-traditional developers, especially foreign

construction companies, are entering state

tenders by bidding aggressively to secure

land, and at the same time sacrifice their

profit margins on construction. This has led to

many developers to form joint venture to bidfor land and then cause successful bid prices

to differ widely among different sites, which

would need careful study from the

government.


S in g ap o re b an k s c o u ld w i th s tan d ev en

5 0% p r o p e r t y p r i c e p l u n g e

According to the stress tests carried out by

the International Monetary Fund (IMF) and

the Monetary Authority of Singapore (MAS),

Singapore banks will be able to withstand

even a 50 percent plunge in property prices

over the next two years. It was also found

that Singapores financial system is highly

developed, well regulated and supervised,

with financial-soundness indicators for the big

three domestic banks remained strong during

the global and European crises. However, the

risk which Singapore property sector could

pose to financial stability is that property

prices were already above their 2008 peak,



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and that the rapid growth of credit and real

estate prices could exacerbate aggregate

sensitivity to macroeconomic shocks and

interest-rate cycles.


S in g ap o r e L an d s el ls 15 0 u n i t s a t A l ex

R esidences

150 out of 200 units released in Alex

Residences were already sold on November

13 by Singapore Land with the average price

of $1,650 psf. The popular units are one, two

and three-bedroom units to owner-occupiers

and potential investors. The Residences

condominium is located near MRT station and

has 429 units, and is a short distance from

Chatsworth Park Good Class Bungalow Area,

a wet market, a food centre, restaurants and

cafes.


Pr iv at e h o m es s aid t o r eb o u n d in

N o v e m b e r

Developers' sales of private homes are

expected to rebound this month, with 468

units sold out of 540 units released at the

660-unit Duo Residencesat an average price

of $2,000 psf. Earlier, Singapore Land had

sold 150 units at Alex Residences, while later

this month, GuocoLand is expected to release

Clermont Residence in TanjongPagar at a

price above $3,000 psf. Sales of private

homes had fallen 19 percent in October to

only 1,009 units from 1,246 units in

September. The October's figure itself was

about half of the 1,949 units year-on-

year.Savills Singapore predicts of about 1,400

to 1,500 unit sales this month.




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New g lo bal p ro per ty m eas u r em en t

st andard t o be ready in 2014

A new global property measurement standard

tostandardise the way valuation is conducted

around the world could be ready in June 2014the earliest, following the formation of the first

International Property Measurement

Standards Coalition (IPMSC).The draft of this

first standard targeting office space is being

finalized, and will likely be sent out for

consultation in January 2014 before beingsent back for approval in June or July 2014.

According to Mr. Michael Newey, president of

the Royal Institution of Chartered Surveyors

(Rics), Intheory, if you are valuing a building

here in Singapore, and you're valuing a

building in Hong Kong, and one in London orSydney, it's the same methodology. The

problem is that properties are measured in

hugely different ways around the world. For

example, floor space in Spain would include

outdoor swimming pools, while in the Middle

East it would include the hypothetical

maximum number of floors that can be built

on existing foundations.


Commercial

H av e l o c k h o t e l s i t e g e ts h i g h e s t b i d o f $ 3 0

m i l l i o n

Despite a shorter tenure and the need for

parts of the original building to be conserved,

a plum hotel site at Havelock Road has drawn

the highest bid of 30.09 million or $1,303.24

psfppr out of nine valid bids. This highest bid

is 6.6 percent higher than the second highest

bid of $28.09 million or $1,216.62 psfppr from

OoiTeckHin. Analysts had previously

expected the winning bid at only between

$920 and $980 psfppr.




15/16



A l l v a c at ed C i ty s p a c e a t M i ll en i a T o w e r

t aken up

All of the 143,000 sqft under Citi's lease at

Millenia Tower expiring next month have beentaken up, showing a strong demand for

secondary office space.Citi started to vacate

the space earlier this year and completed its

exit from the building in July, marking the final

leg of the group's four-phase departure from

Millenia Tower and the next-door CentennialTower that began in 2011.Citi had occupied a

total of 440,000 sqft in the two buildings, but it

moved to Asia Square Tower 1 in 2011.


http://propertymarketinsights.com/


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S G O O ssue 30


Non-Landed Residential Resale Property Transactions for the Week of Oct 30 Nov 5

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

3 QUEENS 915 1,330,000 1,454 99

3 PEARL BANK APARTMENT 1,324 1,118,780 845 99

5 THE INFINITI 926 1,150,000 1,242 FH

9 ORCHARD TOWERS 1,970 3,000,000 1,523 FH

9 GRANGE HEIGHTS 3,025 4,100,000 1,356 FH

9 GAMBIER COURT 1,163 1,560,000 1,342 99

10 GARDENVILLE 1,582 3,200,000 2,022 FH

10 THE MONTANA 592 1,156,090 1,953 FH

10 THE MONTANA 1,141 2,108,100 1,848 FH

10 THE TESSARINA 1,324 2,130,000 1,609 FH

10 KELLOCK LODGE 893 1,250,000 1,399 FH

10 DUCHESS CREST 1,593 2,050,000 1,287 99

10 THE SIERRA 1,141 1,460,000 1,280 947

11 PAVILION 11 958 1,580,000 1,649 FH

11 CHANCERY COURT 926 1,220,000 1,318 99

14 STARVILLE 1,270 1,265,000 996 FH

14 SIMS MEADOWS 1,066 986,000 925 FH

15 ARTHUR 118 926 1,440,000 1,556 FH

15 POSHGROVE EAST 1,238 1,750,000 1,414 FH

15 SPRING @ KATONG 1,593 2,150,000 1,350 FH

15 OCEAN PARK 1,410 1,875,000 1,330 FH

15 COTE D'AZUR 1,302 1,680,000 1,290 99

15 LAGUNA PARK 1,453 1,300,000 895 99

16 CASA MERAH 1,227 1,480,000 1,206 99

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

16 THE CALYPSO 2,120 2,130,000 1,004 FH

16 THE CLEARWATER 1,195 1,171,100 980 99

17 RIZ HAVEN 570 680,000 1,192 946

18 SAVANNAH CONDOPARK 1,023 1,000,000 978 99

19 THE QUARTZ 1,044 1,100,000 1,054 99

19 RIO VISTA 1,249 1,190,000 953 99

19 CHILTERN PARK 1,249 1,150,000 921 99

21 ASTOR GREEN 1,066 1,340,000 1,257 99

21 SPRINGDALE CONDOMINIUM 1,076 1,230,000 1,143 999

21 BUKIT REGENCY 1,539 1,600,000 1,039 FH

23 PARK NATURA 1,012 1,400,000 1,384 FH

23 HILLVIEW HEIGHTS 1,668 1,830,000 1,097 FH

23 GUILIN VIEW 1,528 1,380,000 903 99

25 ROSEWOOD 1,173 980,000 835 99

26 BULLION PARK 1,238 1,323,800 1,069 FH

27 YISHUN SAPPHIRE 1,206 880,000 7 30 99

28 SUNRISE GARDENS 1,862 1,460,000 784 99

NOTE: This data only covers non-landed residential resale propertytransactions with caveats lodged with the Singapore LandAuthority. Typically, caveats are lodged at least 2-3 weeks after apurchaser signs an OTP, hence the lagged nature of the data.

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