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Transcript of Singapore Property Weekly Issue 219
8/20/2019 Singapore Property Weekly Issue 219
http://slidepdf.com/reader/full/singapore-property-weekly-issue-219 1/12
Issue 219Copyright © 2011-2014 www.Propwise.sg. All Rights Reserved.
8/20/2019 Singapore Property Weekly Issue 219
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CONTENTS
p2 Expert Advice for Housing Loan Borrowers
p7 Singapore Property News This Week
p10 Resale Property Transactions
(July 15 – July 21 )
Welcome to the 219th edition of the
Singapore Property Weekly .
Hope you like it!
Mr. Propwise
FROM THE
EDITOR
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SINGAPORE PROPERTY WEEKLY Issue 219
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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
M ai n f a c to r s a ff e c ti n g a n d f u t u r e d i r e c t io n
o f m o r t g a g e r a te s
PS: Could you share with us the main factors
affecting housing loan interest rates?
Expert Advice for Housing Loan Borrowers
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Wayne: There are many factors that will
affect mortgage rates. I think the most
significant factor at this time is the US Federal
Reserve’s 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 inSingapore 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
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 bank’sperspective: 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 over-
leveraging, with the introduction of the Total
Debt Servicing Ratio and Buyer/Seller Stamp
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Duties.
We might however, start seeing more defaults
from over-leveraged investors, and a rise in
bank mortgagee sales (or bank loan defaultedproperties). 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 interms 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
spike in interest rates, you can consider
switching to fixed rates to eliminate that short-
term 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 existinghousing 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 inSingapore 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.
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PS: What are the key factors to consider
hen comparing housing loan offers from
different banks?
Wayne: Key factors will differ betweenindividuals. 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-so-
good credit might want to approach a bankthat is more lenient. Of course, after fulfilling
all these requirements, it always comes down
to interest rates which are still the main factor
hen comparing packages.
PS: What do you recommend borrowers do if
they have difficulties passing the TDSR test inthe process of refinancing?
Wayne: For borrowers who have difficulties
passing the TDSR, they have to figure out the
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 mortgageconsultants 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 improvingeconomy will lead to more jobs, higher
consumer spending, which in turn leads to
higher rentals.
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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.
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Singapore Property This Week
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Residential
Shun fu Vi l l e up fo r en bl oc s al e
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 Authority’s 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.
(Source: Business Times)
C o n d o p r i c e s i n c e n t r a l r e g i o n h a s f a l l e n
by 12.7% sinc e 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. Pricesof 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 R’ST Research
explained that this is because flat owners
may be releasing their shoebox units for saleafter the flat has been left vacant for a period
of time. On the whole, the SRPI has fallen
10% since July 2013.
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Ong Kah Seng from R’ST Research predicted
that prices of completed private homes in the
non-central region may be volatile in the
upcoming months.
(Source: Business Times)
Q 2 C u r r e n t S e n t i m e n t I n d e x i n c h e s u p t o
3.9 poi nts f rom 3.8 i n 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
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 thenext half of the year while 38% believe that
prices will remain stable.
(Source: Business Times)
Choa Chu Kang EC si te attracts 11 bi ds
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.
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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 livingfeatures into the residential development and
ill be launched in late-2016 or early-2017.
(Source: Business Times)
Commercial
Thong Si a Bui l di ng sol d for $380 m i l l i on
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 in1981. It has a land area of about 21,602 sq ft.
The building may be redeveloped into a
mixed residential and commercial
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)
1 3 7 C e c i l S t r e e t s o l d f o r m o r e t h a n $ 2 0 0
m i l l i o n
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
$2,100 psf based on the property’s net
lettable area of 115,000 sq ft.
(Source: Business Times)
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Non-Landed Residential Resale Property Transactions for the Week of Jul 15 – Jul 21
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
1 THE SAIL @ MARINA BAY 678 1,254,300 1,850 99
2 INTERNATIONAL PLAZA 1,604 1,690,000 1,054 99
3 CENTRAL GREEN CONDOMINIUM 2,110 2,450,000 1,161 99
3 TANGLIN VIEW 1,163 1,280,000 1,101 99
4 THE INTERLACE 1,001 1,280,000 1,279 99
5 HERITAGE VIEW 969 1,080,000 1,115 99
8 CITY SQUARE RESIDENCES 1,238 1,650,000 1 ,333 FH
9 THE PIER AT ROBERTSON 678 1,250,000 1,843 FH
9 RIVERGATE 1,507 2,570,000 1,705 FH
9 RESIDENCES AT 338A 1,163 1,970,000 1,695 FH
9 THE QUAYSIDE 1,711 2,000,000 1,169 99
10 PARKVIEW ECLAT 3,251 8,200,000 2,523 FH
10 THE GRANGE 1,765 3,710,000 2,102 FH
10 CYAN 1,001 2,010,000 2,008 FH
10 ONE TREE HILL RESIDENCE 1,227 2,430,000 1,980 FH
10 TANGLIN PARK 1,023 1,850,000 1,809 FH
10 MONTVIEW 1,679 2,240,000 1,334 FH
11 SHELFORD REGENCY 1,152 1,800,000 1,563 FH11 SKY@ELEVEN 2,271 3,450,000 1,519 FH
11 MONARCHY APARTMENTS 1,216 1,235,000 1,015 FH
12 TWIN HEIGHTS 1,421 1,620,000 1,140 FH
12 SUNVILLE 1,152 1,000,000 868 FH
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
14 WATERBANK AT DAKOTA 1,259 1,550,000 1,231 99
14 CASSIA VIEW 1,152 1,150,000 998 FH
14 EVER LODGE 990 880,000 889 FH
14 WING FONG MANSIONS 1,227 858,000 699 FH
15 THE SEAFRONT ON MEYER 2,088 3,600,000 1,724 FH
15 THE BELVEDERE 1,302 1,850,000 1,420 FH
15 ONE AMBER 1,593 2,130,000 1,337 FH
15 THE MAKENA 1,647 2,200,000 1,336 FH
15 THE WATERSIDE 2,411 3,150,000 1,306 FH
15 HAIG COURT 1,399 1,750,000 1,251 FH
15 THE AMERY 1,389 1,668,888 1,202 FH
15 B UTTERWORTH VIEW 1,195 1,406,000 1,177 FH
15 PARK EAST 1,970 2,149,500 1,091 FH
15 SUNNY PALMS 1,313 1,268,000 966 FH
15 WOO MON CHEW COURT 1,130 1,050,000 929 FH
16 COSTA DEL SOL 1,313 1,500,000 1,142 99
19 THE SCALA 474 750,000 1,584 99
19 THE MINTON 1,216 1,420,000 1,167 9919 TREASURE MANSIONS 753 838,000 1,112 FH
19 CHILTERN PARK 915 880,000 962 99
19 HOUGANG GREEN 764 735,000 962 99
19 CHUAN PARK 1,851 1,650,000 891 99
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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 a purchasersigns an OTP, hence the lagged nature of the data.
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
19 KOVAN 81 1,959 1,660,000 847 999
20 THOMSON V TWO 581 750,000 1,290 FH
20 CLOVER BY THE PARK 2,573 2,900,000 1,127 99
20 THE GARDENS AT BISHAN 1,399 1,320,000 943 99
23 GUILIN VIEW 1,281 1,088,000 849 99
23 THE WARREN 1,518 1,245,000 820 99
23 HILLTOP GROVE 1,238 958,000 774 99
26 SEASONS PARK 1,539 1,340,000 871 99
26 CASTLE GREEN 1,345 1,100,000 818 99
27 EUPHONY GARDENS 1,184 830,000 701 99