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Contribute Do you have articles and insights and articles that youd like to share with thousands of readers interested in the Singapore property market? Send them to us at info@propwise.sg, and if theyre good enough, well publish them here, on our blog and even on Yahoo! News. Advertise Want to get your brand, product, service or property listing out to thousands of Singapore property investors at a very reasonable cost? Head over to www.propwise.sg/advertise/ to find out more. CONTENTS p2 Should You Invest in Iskandar Malaysia? p7 Singapore Property News This Week p11 Resale Property Transactions (July 2 July 8 ) Welcome to the 165 th edition of the Singapore Property Weekly. Hope you like it! Mr. Propwise FROM THE EDITOR SINGAPORE PROPERTY WEEKLY Issue 165 Page | 2 Back to Contents By David Chong (guest contributor) Should you invest in Iskandar Malaysia? Some say its the next big thing, some say its going to be the next big white elephant. Singapores elder statesman, and former Prime Minister, Lee Kuan Yew famously cautioned Singaporeans: Lets wait and see how Iskandar develops. This is an economic field of cooperation in which, you must remember, we are putting investments on Malaysian soil. And at the stroke of a pen, they can take it over. Should You Invest in Iskandar Malaysia? SINGAPORE PROPERTY WEEKLY Issue 165 Page | 3 Back to Contents White elephant or not, Iskandar Malaysia is dependent on 3 critical success factors I call INC: I International Buy-In N New Metropolis C Connectivity INTERNATIONAL BUY-IN Iskandar Malaysia, also commonly referred to as Iskandar Johor, needs foreign investments and the participation of the international community. Without foreign participation, Iskandar Johor will merely be, well, Johor. For the longest time, properties in Johor have been lagging behind places such as Kuala Lumpur and Penang. For many Malaysians including myself, Johor (Bahru) is more of a stopover city before reaching Singapore. All this started to change in 2012 with the completion of major catalytic projects such as Legoland Malaysia, Mall of Medini, Marlborough College Malaysia, and the coastal highway. The international community began to see the commitment of the government in carrying through various catalytic projects and infrastructure development. Lured by incentives and the lower cost of doing business, investments poured in from Singapore, Spain, USA, Japan, and many other countries. The bulk of these investments are in manufacturing and residential properties. Every now and then, we hear of new investments pouring in, and new projects being launched. This has increased the demand for properties in the Iskandar region. While foreign investors are attracted by the various incentives in Iskandar, this alone is insufficient. SINGAPORE PROPERTY WEEKLY Issue 165 Page | 4 Back to Contents To sustain the investment flow, apart from incentives and the lower cost of doing business, companies need a sufficient pool of talent in Iskandar Malaysia. How do you attract a sufficient pool of talent? NEWMETROPOLIS In order to attract skilled talent, Iskandar Malaysia needs to be a metropolis of international standards. You do not want a scenario where there are impressive buildings all around but with no one living or working in it. Iskandar Malaysia needs to be sustainable and liveable. Johor is traditionally a place with high crime rates the issues of crime and safety needs to be tackled. Residents need to feel safe walking the streets of Iskandar. Iskandar needs to create not only jobs, but a diversity of job opportunities with competitive salaries. Modern amenities need to be abundant to cater to the diverse lifestyle of its residents. What attracts young urban professionals and retirees can be very different. Iskandar Malaysia also needs to have its own unique flavour in attracting migrants. Malaysians in general are friendly and hospitable. This can be a unique advantage in itself (hint: Some cities are known to be rude and unfriendly). Island resorts and beautiful beaches along the Desaru Coast can be another unique advantage. One clear advantage that Iskandar Malaysia has over other cities is its close proximity to the economic powerhouse Singapore. CONNECTIVITY In 2020, there will be a High Speed Rail (HSR) connecting Kuala Lumpur to Singapore with an estimated travelling time of SINGAPORE PROPERTY WEEKLY Issue 165 Page | 5 Back to Contents 90 minutes. It will stop at Iskandar Malaysia before reaching Singapore. A Rapid Transit System (RTS) will also connect Iskandar Malaysia to Singapores Thomson Line MRT by 2019. Now imagine living in Iskandar and working in Singapore by taking the RTS-MRT (bypassing the busy traffic at Woodlands Causeway or Second Link Expressway) and arriving at work in 30 minutes. Or imagine working in your Singapore office in the morning, visiting your factory in Iskandar in the afternoon, having your evening meeting in Kuala Lumpur and be back in Singapore on the same day. All this is possible with improved connectivity. Once the HSR and RTS-MRT is completed, Iskandar Malaysia will be a convenient place to stay or work. The success of Iskandar Malaysia is very much dependent on these two projects proceeding as planned. Kuala Lumpur-Iskandar Malaysia-Singapore has the potential to be a mega region once the connectivity is in place. CONCLUSION Lee Kuan Yews full quote is And at the stroke of a pen, they can take it over. They are not likely to because they want more investments. Investments in Iskandar Malaysia have reached a total cumulative committed investment of RM131.64 billion in 2013 with 64% contributed by domestic investors. It has reached a point where there is too much at stake for Iskandar Malaysia to fail. There is such a thing as too big to fail. Fuelled by the domestic and foreign private sector, Iskandar Malaysia has created a momentum of its own. Remember Iskandar Malaysia INC the three critical success factors when making SINGAPORE PROPERTY WEEKLY Issue 165 Page | 6 Back to Contents your investment decision. If you feel that Iskandar Malaysia is able to transform itself in these 3 major areas, then this represents a window of opportunity for Iskandar properties. Once Iskandar Malaysia has reached its maturity, you might have already missed the boat. Then you might be lamenting, Why are properties in Iskandar Malaysia suddenly so expensive? David Chong is a Property Infopreneur and founder of InsideIskandar.my, an online magazine which helps property investors understand Iskandar Malaysia. SINGAPORE PROPERTY WEEKLY Issue 165 Singapore Property This Week Page | 7 Back to Contents Residential Resale condo transactions on the rise but prices still dipping Data from Singapore Real Estate Exchange (SRX) revealed that while there was a 7.9 per cent increase in resale volumes for private condominium units in the June from May, resale prices have fallen by 1.4 per cent month-on-month, across all regions. Condo resale prices in June this year are the lowest since December 2012. The total number of resale transactions made this June is also 23.8 per cent lower than in June 2013. Ong Kah Seng from RST Research believes that property owners are adjusting their prices to fit buyers demand. Furthermore, he believes that sales have been affected by the June holidays and the World Cup season. Data from SRX showed that condo units in the Rest of Central Region (RCR) suffered a 3.2 per cent fall in pricesthe largest decline among all regions. Also, condo units in the Core Central Region (CCR) saw a 1.7 per cent dip in prices, while those in the Outside Central Region (OCR) only suffered from a 0.3 per cent price fall. Eugene Lim from ERA Realty said that loan restrictions, increase in developer stock, and a weak rental market could have affected the resale market in the CCR region. (Source: Business Times) SINGAPORE PROPERTY WEEKLY Issue 165 Page | 8 Back to Contents Experts expect weak demand for condos in H2 Although developers have lowered condo prices, market experts still expect condo demand to remain low. Data from URA showed that developers sale of private condos have fallen by 68 per cent to 482 units in June from May. Mohd Ismail from PropNex predicts that 600 to 800 condo units will be sold per month in the second half of 2014. Similarly, Chia Siew Chuin from Colliers International also expects the market for condos to shrink as buyers are less willing to commit. Nonetheless, developers price cuts in the previous months have captivated the interest of some price conscious buyers. At the re-launch of The Panorama at Ang Mo Kio in May 2014, Wheelock Properties have cut prices by 10 per cent to push sales. 100 units were sold at the discounted median price of $1,241 psf, proving that discounts may attract price-sensitive buyers. However, sales have cooled for other projects such as Kallang Riverside and Waterfront @ Faber. Ong Teck Hui from JLL said that the overall weak demand for condos was due to the Total Debt Servicing Ratio. Furthermore, Nicholas Mak from SLP International expects the total number of private homes sold by developers in 2014 to be less than 11,000 units if demand remains weak. (Source: Business Times) Spring Grove selling for $1.39b In an en bloc sale, Spring Grove condominium which is located at Grange Road is asking for $1.39 billion or $2,512 per square foot per plot ratio. The condominium which is marketed by Knight Frank has a maximum gross floor area of 553,377 square SINGAPORE PROPERTY WEEKLY Issue 165 Page | 9 Back to Contents feet. Located within the Core Central Region (CCR), Spring Grove currently has three blocks of 20-storey apartments with 325 units. Its tender will close on September 10, 2014. Besides the large land space and its prime location, analysts believe that Spring Groves own unit owners, who may have demanded for higher compensation, may have pushed its selling price up. Due to the hefty price tag, market analysts are not optimistic about the sale. Not only so, previous billion-dollar sales that are similar in nature have failed to attract committed buyers. Nonetheless, if it is successfully sold, Spring Grove will triumph Farrer Courts $1.34 billion en bloc sale in 2007. Nicholas Mak from SLP International said due to the hefty land cost, developers may have to partner up in a joint venture to purchase Spring Grove so as to spread risks. (Source: Business Times) Commercial Real estate investments fell 11 per cent in Q2 According to a report by DTZ, the overall real estate investments in Q2 have fallen by 11 per cent from the previous quarter to $4.4 billion. Non-residential investments such as investments in office units have also fallen by 6 per cent to $2.9 billion. However, market experts believe that non-residential deals will continue to push investment activities for the rest of the year. While the total non-residential transactions made in Q2 have driven real estate investment volumes in H2 of 2014 to $9.4 billion, it is still 17 per cent lower year- on-year, compared to 2013. According to a report by Colliers, the fall in residential investment sales could be due to weak investor interest in en bloc sales SINGAPORE PROPERTY WEEKLY Issue 165 Page | 10 Back to Contents and strata-titled properties. However, interest in commercial properties is expected to increase as the office rental market recovers from its slump. (Source: Business Times) SINGAPORE PROPERTY WEEKLY Issue 165 Page | 11 Back to Contents Non-Landed Residential Resale Property Transactions for the Week of Jul 2 Jul 8 Postal District Project Name Area (sqft) Transacted Price ($) Price ($ psf) Tenure 1 THE SAIL @ MARINA BAY 861 1,500,000 1,742 99 5 HERITAGE VIEW 1,313 1,500,000 1,142 99 8 CITYLIGHTS 678 1,175,000 1,733 99 9 VISIONCREST 926 1,730,000 1,869 FH 10 THE MONTANA 893 1,600,000 1,791 FH 10 ONE JERVOIS 1,701 2,820,000 1,658 FH 10 GALLOP GABLES 1,528 2,430,000 1,590 FH 10 ALLSWORTH PARK 1,959 2,900,000 1,480 999 11 NOVENA LODGE 732 1,120,000 1,530 FH 11 HILLCREST ARCADIA 1,970 2,230,000 1,132 99 12 BALESTIER TOWERS 1,410 2,608,000 1,850 FH 12 BALESTIER TOWERS 1,410 2,450,000 1,737 FH 12 BALESTIER TOWERS 990 1,680,000 1,696 FH 12 BALESTIER TOWERS 1,109 1,838,000 1,658 FH 12 BALESTIER TOWERS 1,410 2,256,000 1,600 FH 12 BALESTIER TOWERS 1,109 1,552,200 1,400 FH 12 BALESTIER TOWERS 1,496 1,945,060 1,300 FH 12 BALESTIER TOWERS 1,410 1,833,091 1,300 FH 12 BALESTIER TOWERS 1,496 1,945,060 1,300 FH 12 BALESTIER TOWERS 1,410 1,833,104 1,300 FH 12 BALESTIER TOWERS 1,496 1,945,034 1,300 FH 12 BALESTIER TOWERS 1,410 1,833,091 1,300 FH 12 BALESTIER TOWERS 1,119 1,455,298 1,300 FH 12 BALESTIER TOWERS 1,410 1,833,104 1,300 FH Postal District Project Name Area (sqft) Transacted Price ($) Price ($ psf) Tenure 12 BALESTIER TOWERS 1,496 1,945,034 1,300 FH 12 BALESTIER TOWERS 1,410 1,833,091 1,300 FH 12 BALESTIER TOWERS 1,119 1,455,298 1,300 FH 12 BALESTIER TOWERS 1,119 1,455,298 1,300 FH 12 BALESTIER TOWERS 1,109 1,441,284 1,300 FH 12 BALESTIER TOWERS 990 1,287,364 1,300 FH 12 BALESTIER TOWERS 1,119 1,455,298 1,300 FH 12 BALESTIER TOWERS 990 1,287,377 1,300 FH 12 BALESTIER TOWERS 1,109 1,441,284 1,300 FH 12 BALESTIER TOWERS 990 1,287,364 1,300 FH 12 BALESTIER TOWERS 1,119 1,455,280 1,300 FH 12 BALESTIER TOWERS 1,109 1,441,284 1,300 FH 12 BALESTIER TOWERS 1,496 1,945,060 1,300 FH 12 BALESTIER TOWERS 1,496 1,945,034 1,300 FH 12 BALESTIER TOWERS 1,496 1,945,060 1,300 FH 12 BALESTIER TOWERS 1,410 1,833,104 1,300 FH 12 BALESTIER TOWERS 1,496 1,945,034 1,300 FH 12 BALESTIER TOWERS 1,496 1,945,060 1,300 FH 12 BALESTIER TOWERS 1,410 1,833,104 1,300 FH 12 BALESTIER TOWERS 1,496 1,945,060 1,300 FH 12 BALESTIER TOWERS 1,410 1,833,092 1,300 FH 12 BALESTIER TOWERS 1,496 1,945,060 1,300 FH 15 THE ESTA 1,399 1,980,000 1,415 FH 15 HAWAII TOWER 2,239 2,600,000 1,161 FH SINGAPORE PROPERTY WEEKLY Issue 165 Page | 12 Back to Contents 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. Postal District Project Name Area (sqft) Transacted Price ($) Price ($ psf) Tenure 15 ROYALE MANSIONS 1,216 1,250,000 1,028 FH 15 SUITES @ EASTCOAST 1,787 1,700,000 951 FH 16 CASA MERAH 1,238 1,400,000 1,131 99 17 THE GALE 1,356 1,450,000 1,069 FH 18 MELVILLE PARK 1,044 826,000 791 99 19 KENSINGTON PARK CONDOMINIUM 1,658 1,828,000 1,103 999 20 THE WINDSOR 1,873 2,080,000 1,111 FH 21 THE CASCADIA 1,184 2,036,480 1,720 FH 21 THE STERLING 1,507 2,380,000 1,579 FH 21 SPRINGDALE CONDOMINIUM 1,119 1,090,000 974 999 22 THE LAKESHORE 1,270 1,260,000 992 99 22 PARC OASIS 1,227 1,060,000 864 99 23 HILLVIEW REGENCY 1,109 1,000,000 902 99 23 HILLVIEW REGENCY 1,130 948,000 839 99 26 FOREST HILLS CONDOMINIUM 1,163 950,000 817 99 27 ORCHID PARK CONDOMINIUM 958 753,000 786 99