Issue 332

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 CONTENTS FROM THE

p2 The Big Singapore Market Upgrade Hype

EDITOR
Welcome to the 332nd edition of the
Singapore Property Weekly.
or Reality? (Part 2)
Hope you like it!
p10 Resale Property Transactions
Mr. Propwise
(September 25 September 29)

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 SINGAPORE PROPERTY WEEKLY Issue 332

The Big Singapore Market Upgrade Hype or Reality?

(Part 2)
By Ku Swee Yong and Shannon Aw (guest
contributors)

This is part two of a three-part article (you

can read part one here).

A doubling of dollar per sqft prices in the

residential market from 20162030 implies an
average of a 5% per annum increase in
prices. To make up the 5% growth, the
authors of the report Property Prices
Inflecting and On Track to Double by 2030 by
Morgan Stanley believe that Singapore can
achieve 4% growth in nominal GDP per
capita over the long term based on 5%
nominal GDP growth and 1% population
Infographic: Summary of the key points
growth. (Image credit: HugProperty)

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 SINGAPORE PROPERTY WEEKLY Issue 332
The 4% per capita GDP growth or income
growth of the population implies that housing
affordability will improve by 4% per year.
Coupled with a 1% per annum decrease in
the average sizes of homes, it means that a
5% dollar per sqft price growth per year is
sustainable. The 5% nominal GDP growth
assumption came with a 1.52.0% medium-
term headline inflation. (Reference is made
to page 27 of the report.)
Our questions
Does a 10% income growth mean that a
household will be able to afford to buy homes
that cost 10% more? Housing affordability for
renters could increase in tandem with income
growth, that is, if wages increased by 10% a
tenant could increase his rental budget by
10% to rent a bigger home or a home in a
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better location. But for home ownership, the
correlation is debatable.
While each working household may achieve a
consistent 4% per annum income growth,
they still need to deal with inflationary
pressures of 1.52.0% per annum and may
not be able to afford homes which are getting
pricier by 4% every year.
Flipping the question around, we ask if
income growth and improved affordability will
necessarily mean that housing prices will
increase? In a market that is oversupplied
with homes, with 31,000 vacant private
residences and Executive Condominium units
at the end of 1Q2017, and with rentals
continuing to slide, income growth will not
necessarily lead to home price growth.
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 SINGAPORE PROPERTY WEEKLY Issue 332
Fact #1 The correlation between income
and home price growth was negative in
2016
The correlation between income growth and
home price growth was negative, at least for
2016 anyway. Singapores median household
income in 2016 increased by 2.6% over 2015.
However, over the same period, private
residential rentals dropped 4.0% and private
home prices dropped 3.1%. Income growth
does not necessarily translate to home price
growth. Not when we are in a multi-year
oversupply situation.
Fact #2 There was a 15% increase in
households with zero income
A key contributor to the 2.6% household
income growth in 2016 is a 15% increase in
households with zero income. The table
below shows that in 2016, the proportion of
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households with income from work grew by
1.8% over 2015 while the proportion of
households with no working persons
increased by 15%! The shrinking employment
market in the past two years was mainly
attributed to the lower income jobs in sectors
such as offshore and marine, oil and gas,
construction and retail services. When the
lower income households fall into zero
income, the remaining families with stable
income will lift the nationwide average
income. We recognize that there are families
whose household incomes have indeed risen
and that Singapore continues to accept new
Permanent Residents and new citizens who
have a high income. Therefore, we are not
attributing the entire 2.6% income growth to
the large 15% increase in households which
have stopped earning.
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 SINGAPORE PROPERTY WEEKLY Issue 332

We simply want readers to be mindful about
how statistics may be reported.
households are defined as those comprising
solely non-working persons aged 60 years
and over. Retiree households are included
in the category of Households with no
working persons.

Source: SingStat, IPA

In view of the large increase in households

without income, the 2.6% household income
growth in 2016 is nothing to celebrate about.
It is akin to a school reporting an
improvement in students average grades
from B to B+ simply by sacking all the
students with C and D grades. Will the school
Notes: make a celebration about that?

a) A resident household refers to a household Fact #3 GDP can grow while employment
headed by a Singapore citizen or permanent declines
resident.
GDP growth amidst employment decline will
b) For statistical purposes, retiree be the new normal.

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 SINGAPORE PROPERTY WEEKLY Issue 332
To top off this discussion, the first quarter
2017 GDP growth came in at 2.7% against: a)
an overall reduction of 6,800 jobs, b) a 0.9%
decline in residential rentals and c) a 0.4%
decline in private home prices. Since mid-
2013, Singapore has experienced steady
GDP growth amidst 15 continuous quarters of
home price declines. The report scarcely
considered the large number of vacant homes
and oversupply of housing stock that are
depressing the market even while economic
growth stayed positive. The total number of
jobs and employment opportunities will
impact the population growth and taken
together, those indicators are more
meaningfully correlated to housing demand
than the actual value of our GDP.
The report further stated that historically, a
7% per annum dollar per sqft price growth
was achieved in the period of 1975 to 2016
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and therefore, we believe home prices will
double by 2030 and offer an average 5% in
annual appreciation per year. We believe a
5% long-term growth rate will keep pace with
income growth, keeping affordability levels
(as measured by home price to income)
stable.
Is it reasonable to use historical growth to
justify the forward growth?
Are the economic factors and policy levers
available in the last 40 years still available in
the next 14 years?
The 7% per annum growth over the period of
1975 to 2016 started from a very low base.
The private residential price index,
normalized at 100 points in 1Q2009, was a
mere 10 points in 1975 and 137 points at the
end of 2016. Growing 7% per annum from a
base of 10 index points is probably a little
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 SINGAPORE PROPERTY WEEKLY Issue 332
easier to achieve than growing 5% per annum
from a base of 137 index points.
Over those 40 years, population growth was
rapid, from about 2.2 million to 5.6 million,
with high annual growth rates achieved in
several years such as 4.8% in 1981, 4.2% in
1996, 4.3% in 2007 and 5.5% in 2008. That
growth boosted the demand for housing and,
over a smaller base of residential stock, that
demand translated into price growth.
Several other factors added to the increase in
home prices in the past decades:
a) the strong government push for home
ownership which, in our best estimates drawn
from HDB reports, rose from below 50% in
1975 to 90% in 2016,
b) the accumulation of CPF monies in the
earlier years and a subsequent relaxation of
rules around the use of CPF for purchasing
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homes,
c) increased plot ratios for housing
developments and higher quality homes built
with better material and specifications, both
contributed to home values, and
d) a young workforce in the 1980s to 2010s
(comprising of the baby boomers) with
increasingly better education, the majority of
whom are employed by multi-national
companies and a growing public service with
attractive salaries.
Fact #4 Population growth will be low
going forward
Population growth will be low, at 1.5% per
annum. Looking forward, in the period of
2017 to 2030, assuming that we can achieve
the population target of 6.9 million in 2030,
the annual population growth rate will
average 1.5%.
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 SINGAPORE PROPERTY WEEKLY Issue 332
This growth is strongly premised on the ability
to create jobs while sustaining GDP growth at
between 2% to 4% per annum till 2030.
However, as discussed in the paragraphs
above, Singapore achieved positive GDP
growth amidst a decline in employment in
1Q17. The future of jobs creation is a
question mark given the rapid advancement
of robotics, more powerful software and new
technology. In the next ten years, it is
conceivable that redundancies will outpace
new jobs even while GDP grows. So where
will demand for residential properties come
from? Not robots for sure!
Fact #5 Home ownership has peaked
Home ownership has hit a peak. Home
ownership has hovered around 90% for the
last 20 years and despite policy makers push
for 100% home ownership, there will be
families who are not able to, or choose not to,
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own their homes. If we are not able to create
sufficient jobs to bring about an increase of
foreign workers, there are only two ways to
increase home purchases: splitting household
units and getting more investors to buy (but
will they buy knowing that rentals are not
looking up?).
Fact #6 The population is ageing
There are few policy levers that can mitigate
old age and death. Our population is ageing
and the workforce is no longer young. The
number of retiree households increased
from 54,000 in 2008 to 95,000 in 2016, a 76%
increase over 8 years. The size of this group
will only increase further: in the 10-year
period from 2017 to 2026, about 558,000
Singaporean baby boomers will cross into the
retirement age of 60 (based on Department of
Statistics definition in tabulating household
incomes).
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 SINGAPORE PROPERTY WEEKLY Issue 332
In contrast, only 461,000 young
Singaporeans will graduate past the
average first-time home-buying age of 25.
Whilst we agree that there will be new home
sales and new family formation, we have to
be mindful that many retirees also need to
cash out of their homes for retirement.
Further, we need to note that the total number
of deaths due to old age will increase over the
next 15 years as the 1 million baby boomers
(who are between 5169 years of age today)
approach the median life expectancy of about
85 years.
In this part, we learnt that numbers can be
deceiving, and some positive numbers here
and there might not provide a comprehensive
view of the full picture. The reduced demand
for private homes going forward is due to an
already high home ownership rate, together
with an ageing population and workforce.
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This article is co-written by Ku Swee Yong,
Co-founder of HugProperty with Shannon Aw
Qian Tong, undergraduate from the
Department of Real Estate, National
University of Singapore. HugProperty is a
web-based property platform, which provides
potential buyers and sellers with expert
knowledge and insights, that are necessary to
make informed decisions. Originally started
by three co-founders, Mr. Winston Lam, Dr.
Andy Teoh and Mr. Jeffery Sung in July 2016,
the HugProperty team now consists of
industry experts such as veteran property
agent and property analyst, Mr. Ku Swee
Yong and renowned mortgage expert, Ms.
Ally Yang. Through data analysis conducted
by the experts, HugProperty can help make
property buying and selling, an intelligent and
hassle-free experience.
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 SINGAPORE PROPERTY WEEKLY Issue 332

Non-Landed Residential Resale Property Transactions for the Week of Sep 25 Sep 29
Postal Area Transacted Price Postal Area Transacted Price
Project Name Tenure Project Name Tenure
District (sqft) Price ($) ($ psf) District (sqft) Price ($) ($ psf)
1 THE SAIL @ MARINA BAY 1,313 1,980,000 1,508 99 9 CAIRNHILL PLAZA 2,293 3,220,000 1,404 FH
2 SPOTTISWOODE RESIDENCES 624 1,218,000 1,951 FH 9 OLEANAS RESIDENCE 1,227 1,713,888 1,397 FH
2 ICON 581 1,030,000 1,772 99 10 8 NAPIER 2,013 6,483,873 3,221 FH
3 ECHELON 1,292 2,540,000 1,966 99 10 GRAMERCY PARK 1,270 3,961,600 3,119 FH
3 ECHELON 1,292 2,050,000 1,587 99 10 GRAMERCY PARK 2,174 5,865,600 2,698 FH
4 CORALS AT KEPPEL BAY 1,389 2,850,000 2,052 99 10 THE GRANGE 2,282 5,450,000 2,388 FH
4 REFLECTIONS AT KEPPEL BAY 1,615 2,664,200 1,650 99 10 ONE BALMORAL 1,410 3,070,000 2,177 FH
4 CARIBBEAN AT KEPPEL BAY 893 1,399,000 1,566 99 10 RV RESIDENCES 1,216 2,228,000 1,832 999
4 REFLECTIONS AT KEPPEL BAY 1,076 1,620,000 1,505 99 10 CUSCADEN ROYALE 1,604 2,900,000 1,808 FH
4 THE OCEANFRONT @ SENTOSA COVE 1,711 2,300,000 1,344 99 10 RV RESIDENCES 1,292 2,300,000 1,781 999
4 HARBOURLIGHTS 1,249 1,660,000 1,329 FH 10 GALLOP GREEN 3,574 6,300,000 1,763 FH
4 THE OCEANFRONT @ SENTOSA COVE 1,851 2,300,000 1,242 99 10 THE SIXTH AVENUE RESIDENCES 2,056 3,300,000 1,605 FH
4 THE INTERLACE 3,972 4,230,000 1,065 99 10 D'LEEDON 990 1,520,000 1,535 99
4 THE INTERLACE 3,983 3,000,000 753 99 10 LEEDON 2 764 1,150,000 1,505 FH
4 THE INTERLACE 3,993 2,870,000 719 99 10 THE EQUATORIAL 1,378 2,050,464 1,488 FH
5 HERITAGE VIEW 1,163 1,370,000 1,178 99 10 DUCHESS CREST 2,088 2,500,000 1,197 99
8 CLYDES RESIDENCE 1,119 1,200,000 1,072 FH 10 JERVOIS JADE APARTMENTS 2,174 2,300,000 1,058 99
8 MERGUI MANSIONS 1,389 1,330,000 958 FH 11 LINCOLN SUITES 1,044 1,950,000 1,868 FH
9 HILLTOPS 1,593 5,120,000 3,214 FH 11 STRATA 506 925,000 1,828 FH
9 UP@ROBERTSON QUAY 743 1,560,460 2,101 99 11 CUBE 8 560 870,000 1,554 FH
9 VIDA 840 1,608,888 1,916 FH 11 TREVOSE PARK 1,647 2,500,000 1,518 FH
9 THE IMPERIAL 3,412 5,500,000 1,612 FH 11 CUBE 8 1,335 1,880,000 1,409 FH
9 PARC EMILY 1,733 2,780,000 1,604 FH 11 M21 1,755 2,300,000 1,311 FH
9 YONG AN PARK 1,023 1,550,000 1,516 FH 11 MOUNT ROSIE GARDEN 2,250 2,880,000 1,280 FH
9 ORCHARD SCOTTS 2,282 3,250,000 1,424 99 12 RIVERSIDE MELODIES 1,421 1,730,000 1,218 FH

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 SINGAPORE PROPERTY WEEKLY Issue 332

Postal Area Transacted Price Postal Area Transacted Price

Project Name Tenure Project Name Tenure
District (sqft) Price ($) ($ psf) District (sqft) Price ($) ($ psf)
12 TRELLIS TOWERS 1,485 1,808,000 1,217 FH 17 PARC OLYMPIA 797 775,000 973 99
12 ROCCA BALESTIER 1,087 953,100 877 FH 17 HEDGES PARK CONDOMINIUM 1,345 1,190,000 884 99
13 NIN RESIDENCE 893 1,175,000 1,315 99 17 CARISSA PARK CONDOMINIUM 1,647 1,225,000 744 FH
14 VACANZA @ EAST 484 647,500 1,337 FH 18 THE PALETTE 495 605,000 1,222 99
14 ASTORIA PARK 1,195 1,150,000 963 99 18 RIPPLE BAY 786 802,000 1,021 99
14 THE ARIZON 947 883,000 932 FH 18 DOUBLE BAY RESIDENCES 1,259 1,238,000 983 99
14 CASA EMERALD 2,056 1,250,000 608 FH 18 RIPPLE BAY 797 765,000 960 99
15 THE WATERSIDE 2,433 3,780,000 1,554 FH 18 WATERVIEW 926 888,000 959 99
15 THE SHORE RESIDENCES 592 908,000 1,534 103 18 CHANGI RISE CONDOMINIUM 1,259 920,000 731 99
15 THE WATERSIDE 2,411 3,600,000 1,493 FH 18 LIVIA 2,680 1,950,000 728 99
15 ONE AMBER 1,389 2,060,000 1,484 FH 19 THE SCALA 1,033 1,450,000 1,403 99
15 EMERALD EAST 926 1,330,000 1,437 FH 19 KOVAN MELODY 1,367 1,501,000 1,098 99
15 VERTIS 667 950,000 1,424 FH 19 KOVAN RESIDENCES 1,765 1,920,000 1,088 99
15 PEBBLE BAY 2,336 2,920,000 1,250 99 19 CHILTERN PARK 915 980,000 1,071 99
15 PARKSHORE 1,324 1,650,000 1,246 FH 19 RIVERSAILS 1,109 1,170,000 1,055 99
15 COSTA RHU 1,776 2,200,000 1,239 99 19 KOVAN MELODY 1,227 1,290,000 1,051 99
15 BUTTERWORTH 8 1,464 1,739,988 1,189 FH 19 THE QUARTZ 1,141 1,070,000 938 99
15 TANJONG RIA CONDOMINIUM 635 748,000 1,178 99 19 RIVERSAILS 1,378 1,290,000 936 99
15 CASUARINA COVE 1,593 1,850,000 1,161 99 19 KENSINGTON PARK CONDOMINIUM 1,668 1,500,000 899 999
15 THE ESPIRA 1,087 1,188,000 1,093 FH 19 REGENTVILLE 1,076 780,000 725 99
15 SUNNY PALMS 1,033 1,108,000 1,072 FH 19 REGENTVILLE 1,076 750,000 697 99
15 MANDARIN GARDENS 829 880,000 1,062 99 20 SKY HABITAT 1,755 2,597,900 1,481 99
15 SANCTUARY GREEN 1,216 1,260,000 1,036 99 20 SKY HABITAT 1,163 1,707,500 1,469 99
15 MANDARIN GARDENS 732 675,000 922 99 20 CENTRO RESIDENCES 926 1,230,000 1,329 99
15 VILLA MARINA 1,615 1,400,000 867 99 20 CLOVER BY THE PARK 1,249 1,608,888 1,289 99
16 THE BAYSHORE 947 950,000 1,003 99 21 JARDIN 1,722 2,770,000 1,608 FH
16 BAYSHORE PARK 936 850,000 908 99 21 THE CASCADIA 1,496 2,380,000 1,591 FH

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 SINGAPORE PROPERTY WEEKLY Issue 332

Postal Area Transacted Price

Project Name Tenure
District (sqft) Price ($) ($ psf)
21 CASA ESPERANZA 1,894 2,830,000 1,494 FH
21 MAPLE WOODS 1,335 1,990,000 1,491 FH
21 TERRENE AT BUKIT TIMAH 1,324 1,750,000 1,322 999
21 BUKIT REGENCY 1,539 1,520,000 987 FH
21 THE RAINTREE 1,582 1,500,000 948 99
21 KILAT 19 1,841 1,520,000 826 FH
21 N.A. 3,154 2,100,000 666 FH
22 THE MAYFAIR 893 840,000 940 99
22 THE MAYFAIR 1,163 1,050,000 903 99
22 THE MAYFAIR 1,163 992,000 853 99
23 THE LANAI 1,367 1,600,000 1,170 999
23 GLENDALE PARK 1,033 1,200,000 1,161 FH
23 HAZEL PARK CONDOMINIUM 980 1,068,000 1,090 999
23 THE LINEAR 1,249 1,220,000 977 999
23 MONTROSA 1,152 980,000 851 999
23 THE WARREN 1,227 970,000 790 99
23 THE WARREN 1,475 1,100,000 746 99
25 THE WOODGROVE 1,033 700,000 677 99
27 YISHUN EMERALD 1,023 750,000 733 99
28 MIMOSA PARK 1,894 1,583,000 836 FH

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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