Singapore Property Weekly Issue 112

7/28/2019 Singapore Property Weekly Issue 112

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CONTENTS

p2 The Singapore Property Wealth

Trap aka Capital Gains

p8 Property Selling Tip # 5: Completion of Sales

p11 Singapore Property News This Week

p14 Resale Property Transactions (June 26 – July 2)

Welcome to the 112th edition of the

Singapore Property Weekly .

Hope you like it!

Mr. Propwise

FROM THE

EDITOR

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SINGAPORE PROPERTY WEEKLY Issue 112

Page | 2Back to Contents

By Gerald Tay (guest contributor)

We can see many property investors on the

streets who dream to become millionaires.

They behave like the hilarious first round

participants of „The Next Singapore Idol‟

contest who are thick-skinned enough to

believe they have „it‟. My late multimillionairegrandfather said, “The Rich makes money

with control, while dreamers always make

money on hope… and hope is their only

saviour.”

Dreamers invest on capital gains and hope.

You don‟t need intelligence to make money in

a booming market, because anyone can

make money when the market is booming.

The Singapore Property Wealth Trap aka Capital Gains





But when the crunch time comes, many of

these dreamers lose control, and panic like

lab rats. They don‟t have the necessary skills

to prevent a financial disaster. All they have is

hope.

They have what I called „herd intelligence‟.

They see the immediate situation just like

everyone else. They copy and paste. They

think narrowly and call it being focused. They

don't see the context. They don't see theconsequences. That‟s how dreamers often

get ripped into pieces by the unforgiving

market.

A taste of success breeds complacency

After the recent MAS cooling measures, Italked to an acquaintance whom I met. He

had made money selling off his first

investment property for a six-figure-profit

which he bought in 2009 and sold in 2011. As

an ordinary employee of a local MNC, he felt

incredible with such profits in his pockets!

Now, believing that he can fly from the

success of his first investment, he proceededto buy two newly launched property units of

large developments in 2012. His objective: to

sell and make capital gains upon T.O.P in the

next few years.

When I asked him if he really believed that he

could sell higher then, he haughtily said, “If Icannot sell, I rent. If I cannot rent, I stay.” He

proudly continued, “I‟ve recently received

many calls from potential buyers for $1.8

million for one of my properties. Initially, that‟s

my asking price but I flatly rejected those

offers.”

“Why?” I asked. “You should have simply

accepted the deal and walked away with the

money now.”





“Because I wanted $2.2 million as I believe

my property will fetch this price due to its

location since other recent new launches in

other less strategic locations are already

asking around this price. I even asked my

wife not to entertain those calls unless the

buyers are willingly to negotiate at my price,

then we talk.”

“What if the market corrects in the next few

years?” I asked.“I can still sell the property at $1.4 million from

the $1.6 million I bought. I can afford to lose

$200,000 in such situation.”

Making assumptions that are out of your

control

This dreamer guy makes far too many

assumptions which he cannot control:

1. Believes prices will always go up

2. Believes his properties have real buyers,

when in reality, the potential „buyers‟ are

no more than property agent‟s marketing

gimmicks to entice buyers to sell.

3. Believes he can keep his job to service

his mortgage payments when a downturn

comes

4. Believes the market, if it corrects, will only

fall 12% and he will lose only $200,000

5. Believes interest rates will stay low in the

future

6. Believes he can rent out his unit easily

when it T.O.Ps (huge development)

7. Believes he can find buyers easily when it

T.O.Ps (huge development)

8. Believes property is a sure one-way-bet

to riches

9. Believes he can constantly make money

on capital gains easily

10. Believes he is a savvy investor and he

can now fly…





He‟s an amateur who invested with no

investment control. His only control was that

he felt he could afford to lose $200,000. If

you‟re investing on assumptions and beliefs,

good luck to your investments.

Capital Gains are like inherited wealth:

attained without discipline

Most kinds of power require a substantial

sacrifice by whoever wants the power. There

is an apprenticeship, a discipline lasting manyyears. Whatever kind of power you want:

CEO of the company; Black belt in karate;

Spiritual guru; Property millionaire. Whatever

it is you seek, you have to put in the time, the

practice, the effort. You must give up a lot to

get it. It has to be very important to you. Andonce you attain it, it is your power. It can't be

given away. It resides in you. It is literally the

result of your discipline.

Now, what is interesting about this process is

that, by the time someone has acquired the

ability to kill with his bare hands, he has most

likely also matured to the point where he

won't abuse it. So that kind of power has a

built in control. The discipline of getting the

power changes you so that you won't abuse

it.

Capital Gains are like inherited wealth:

attained without discipline. You copy whatothers have done, and you take the next step.

You can do it very young. You can make

progress very fast. There is no discipline

lasting many decades. There is no mastery;

risks are ignored. There is no humility before

nature. There is only a get-rich-quick, make aname for yourself fast philosophy. No one has

any standards. They are all trying to do the

same thing: to do something big, and do it

fast.





Without discipline, something will go

wrong eventually

A karate master does not kill people with his

bare hands. He does not lose his temper and

kill his wife. The person who kills is the

person who has no discipline, no restraint.

And that's the power that capital gains fosters

and permits. And that's why you think that to

build wealth like this is simple. But it is not,

and something will go wrong eventually.I question the conventional wisdom of

constantly buying and selling properties (or

any other assets for the matter) for capital

gains. If the taxman does not get you, the

market will eventually.

You buy low, then sell high. Then what do you

do with your profits at that point of time? Buy

higher, sell lower? It‟s always a zero-sum

game.

The rich never buy and sell profitable assets.

They buy and keep forever – for both income

and capital value. The dreamers always hope

to buy and sell to make that quick buck. Go to

the casino instead. In a casino, an amateur

gambler makes money on the first couple of

visits, only to lose even more eventually when

his luck runs out. Just like a casino, we cannever beat the market.

This is what happens to most amateur

investors who happen by chance to make

money in a boom time, only to lose it all in a

downturn. Real investors make the most

money during the downturn of the market,and treat gains from a booming market as a

bonus.

SINGAPORE PROPERTY WEEKLY I 112





You want to be an investor, not a trader. You

want to invest on income, not capital gains.

Capital gains should be treated only as abonus, and should never be a key priority in

your property investment decision.

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.

SINGAPORE PROPERTY WEEKLY I 112

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

http://8-media.net/cmd.php?Clk=5063734










What if your Buyer requests to delay the

Sales Completion date?

The Sales Completion date is determined by

both the Buyer and Seller when they enter

into the Option to Purchase (OTP) contract.

The date for the Completion of Sales isusually 8 to 12 weeks from the OTP date and

this can vary as long as both parties agree to

it upfront.

So, what if one party requests to delay the

Sales Completion after the OTP has been

exercised? This change will have to be

handled by the solicitors of both parties and

you have the liberty to accept or reject the

change request suggested by the Buyer.

Property Selling Tip # 5: Completion of Sales






In the event that you are in no hurry to

complete the sales, then why not accept the

change as the other party would have their

reasons for such a request? You can requestfor some level of compensation such as

interest or rent settlement via your solicitor.

We have seen a case where the Seller

agreed to delay the completion date and that

benefited her by preventing her from putting

her gain from the property transaction into the

stock market right before a major

correction.So be nice to people and you could

be rewarded in otherways!

Nevertheless, if you have an urgent need to

complete the sale, you can decline the

change request to prevent disruption to your

plans.

When considering the completion date, don‟t

forget to give sufficient notice to the bank or

be prepared to pay a penalty upon your

mortgage redemption, if applicable.

By Eileen Tan and Ui Wei Teck, property investors and authors of Enjoying Mid-Life

Without Crisis. This tip and dozens more are

from their book .


http://aktive.com.sg/store/enjoying-mid-life-without-crisis/


















http://www.propwise.sg/adv-good-news-its-a-buyers-market-now/




Singapore Property This Week


Residential

C ondo rent al y ie lds decrease

Rental yields for condominium apartments

have fallen below the psychological 4 percent

support level. Overall gross median rental

yield for the first half of 2013 stood at 3.9

percent, compared to 4.2 percent in 2012 and

4.4 percent in 2011, according to the

Singapore Real Estate Exchange. Areas

which experienced the sharpest fall include

Southern Islands (28.4 percent), Orchard (28

percent) and Jurong East (17.4 percent). The

Southern Islands have the lowest rental yields

of 1.7 percent, followed by Newton with 2.2

percent and Orchard with 2.6 percent.

Rentals could be under continued pressure

as a record 16,000 completions are expected

this year.

(Source: Business Times)

S i n g a p o r e i s s e c o n d p r i c i e s t i n t h e w o r l d

f o r f o r e ig n e r s t o b u y h o m e s

According to property consultancy Knight

Frank‟s Global Development Insights second-

quarter report, Singapore is second priciest

place for foreign home buyers to buy newly

built prime residential property, only after

Hong Kong. The escalated costs are due toincrease in associated fees and taxes, while

actual property prices have dropped 3.3

percent since a year ago.






Regulatory measures to cool the property

market in January are also another factor to

cause the rise.


Commercial

S-R eit s may pick up

According to UOB Kay Hian, interest in S-

Reits could increase when investors realize

they are growth plays, not traditional yieldplays. This is thanks to potential

improvements in rents, asset enhancements

and acquisitions in a broader global economic

recovery. Recently Reits have suffered a

broad sell-down in the markets with the

sharpest correction among all the yieldstocks. Ten-year yields for Singapore

government securities have risen from 1.4

percent to 2.7 percent from May to June,

while the average yield for Reits has risen by

90 basis points.


J P Mo rg an to b o os t i ts real es tate f o o t p r i n t

Among financial institutions with slow pace of

office leasing in Singapore, JP Morgan was

reported to boost its real estate footprint by

40 percent. Under a front end-back end split,

it is to lease 130,000 sq ft of business park

space at One@Changi City. The bank is

operating out of two locations – Capital Tower

and One@Changi City. JP Morgan‟s chief

administrative officer for Singapore, Mr. Paul

Echart said the bank‟s long term real estate

strategy needs efficient management to

provide desirable work environment.







A u s G ro u p s o l d f ab r ic at io n f ac i li ti es f o r

$39.4m

AusGroup has sold its Singapore fabrication

facilities at 36 Tuas Road for $39.4 million toBoustead Trustees Pte Ltd in a sale-and-

leaseback deal. The deal allowed AusGroup

to leaseback the property with no impact on

its operations of providing clients with high

quality fabrication and machining services in

timely delivery. The property has an area of 30,000 sq meters, with large enclosed

fabrication facility, machine shop and staging

areas. It has a JTC lease for 30 years starting

in May 6, 1995.



http://www.moneymatters.sg/





Non-Landed Residential Resale Property Transactions for the Week of Jun 26 – Jul 2

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

3 TWIN REGENCY 1,227 2,150,000 1,752 FH

4 CARIBBEAN AT KEPPEL BAY 893 1,550,000 1,735 99

5 ONE-NORTH RESIDENCES 1,615 2,550,000 1,579 99

5 HERITAGE VIEW 969 1,250,000 1,290 99

5 REGENT PARK 807 931,000 1,153 99

5 REGENT PARK 904 990,000 1,095 99

5 VISTA PARK 904 880,000 973 99

8 MERA SPRINGS 1,292 1,860,000 1,440 FH

8 MERA SPRINGS 1,066 1,360,000 1,276 FH

9 SCOTTS SQUARE 624 2,300,000 3,684 FH

9 HILLTOPS 1,593 5,285,000 3,317 FH

9 HILLTOPS 1,593 4,798,000 3,012 FH

9 THE PATERSON EDGE 872 2,280,000 2,615 FH

9 ILLUMINAIRE ON DEVONSHIRE 441 1,150,000 2,606 FH

9 GRANGE INFINITE 2,702 6,484,800 2,400 FH

9 THE COSMOPOLITAN 1,324 2,730,000 2,062 FH

9 ASPEN HEIGHTS 3,100 4,950,000 1,597 999

9 SOPHIA 98 969 1,530,000 1,579 FH

9 ASPEN HEIGHTS 1,604 2,380,000 1,484 999

9 PARC CENTENNIAL 1,163 1,700,000 1,462 FH

10 PARVIS 2,013 3,980,000 1,977 FH

10 STUDIO 3 560 1,070,000 1,912 FH

10 STEVENS LOFT 700 1,300,000 1,858 FH

10 ONE ROBIN 1,948 3,300,000 1,694 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

10 MONTVIEW 1,744 2,725,000 1,563 FH

11 SOLEIL @ SINARAN 936 1,830,000 1,954 99

11 SKY@ELEVEN 2,820 4,940,000 1,752 FH

14 LE CRESCENDO 1,453 1,635,000 1,125 FH

14 STARVILLE 1,216 1,220,000 1,003 FH

14 THE ALCOVE 1,270 1,070,000 842 99

14 COSY LODGE 1,292 1,020,000 790 FH

15 ONE AMBER 1,259 1,880,000 1,493 FH

15 COSTA RHU 990 1,300,000 1,313 99

15 BUTTERWORTH 33 1,389 1,575,000 1,134 FH

15 AQUENE 1,119 1,250,000 1,117 FH

15 MANDARIN GARDEN CONDOMINIUM 1,528 1,650,000 1,079 99

15 TORIE MANSIONS 1,356 1,100,000 811 FH

15 NEPTUNE COURT 1,636 1,200,000 733 99

16 CHANGI COURT 1,389 1,438,000 1,036 FH

16 AQUARIUS BY THE PARK 1,206 1,140,000 946 99

16 EAST MEADOWS 1,615 1,500,000 929 99

17 CARISSA PARK CONDOMINIUM 1,001 970,000 969 FH

18 MELVILLE PARK 990 770,000 778 99

18 RIS GRANDEUR 3,078 2,050,000 666 FH

19 RIVERVALE CREST 1,421 1,100,000 774 99

19 REGENTVILLE 1,163 900,000 774 99

20 BRADDELL VIEW 1,453 1 ,375,000 946 99

20 BRADDELL VIEW 1,615 1 ,450,000 898 99




S G O O ssue


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

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

21 BUKIT REGENCY 1,399 1,450,000 1,036 FH

21 MAYFAIR GARDENS 1,798 1,680,000 935 99

21 BEAUTY WORLD CENTRE 1,873 1,720,000 918 99

22 THE CENTRIS 1,087 1,150,000 1,058 9922 PARC OASIS 1,076 1,120,000 1,041 99

22 PARC VISTA 1,259 1,180,000 937 99

22 PARC VISTA 1,044 960,000 919 99

23 THE DAIRY FARM 1,281 1,450,000 1,132 FH

23 MI CASA 1,259 1,390,000 1,104 99

23 HILLVIEW REGENCY 1,195 1,150,000 963 99

23 MERALODGE 1,916 1,780,000 929 FH

23 NORTHVALE 1,356 1,130,000 833 99

23 PARKVIEW APARTMENTS 1,119 920,000 822 99

26 SEASONS PARK 1,066 950,000 891 99

http://propertymarketinsights.com/

Singapore Property Weekly Issue 112

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