SINGAPORE Q H O U S I N G R E P O R T

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1 H O U S I N G R E P O R T R ESEARCH SINGAPORE Q3 217 Residential market maintains momentum Private residential property sales volume was largely maintained in the primary and secondary residential markets in Q3 217 despite seasonal effects. What is sustaining the demand? Edmund Tie & Company Research

2 PP: Planning Permission GLS: Government Land Sales

3 OVERVIEW Private residential property remains robust Total sales in the private residential property market eased 8.5% q-o-q to 6,324 units in Q3 217 (Figure 1), in part due to the Chinese Seventh month that spanned across September. Given the expectation of slower sales in Q3, there were fewer units launched. This led to a decline in primary sales by 8.5% q-o-q to 2,655 units. Likewise, the secondary market also experienced a dip, dropping 4.9% q-oq. Notwithstanding the slower sales, the private residential market remained robust after isolating these seasonal effects. Primary market sales rose by 36.6% y-o-y as projects launched previously saw brisk demand. The secondary market was equally active, as the 3,669 units sold in Q3 217 was about 41.4% higher than the 2,162 sales in Q The secondary sales volume in Q3 217, which excludes the enbloc transactions, was getting closer to pre-213 levels. Besides the stronger positive sentiments, the improvement was partly due to the higher developer sales of delicensed projects that obtained the Certificate of Statutory Completion. Buyers that have a positive outlook of the market were attracted to these projects because of the Deferred Payment Schemes that were offered. F I G U R E 1 Residential Property Sales Volume Sale Volume 15, 12, 9, 6, 3, Q3 28 Q3 29 Q3 21 Q3 211 Q3 212 Q3 213 Q3 214 Q3 215 Sold in secondary market Sold directly by developers URA Price Index Q3 216 Price Index Q3 217 The build-up in sales since Q2 216 was further translated to stronger support for home prices. The URA s residential property price index posted a.7% q-o-q uptick in Q3 (Figure 1), the first increase after nearly 4 years. Interestingly, the HDB price index diverged from the URA price index, dropping.7% q-o-q in Q3. The decline in HDB price index was a result of the weaker demand for flats that have less than 6 years remaining on the lease. * While demand has risen, the recent collective sales, together with the existing Government Land Sales (GLS) programme, has led to a 19% q-o-q increase in potential supply to 27,375 units in Q3 217 (Figure 2). However, the increase in potential supply is likely to come on board in phases and the impact is likely to be limited. Separately, there was anecdotal evidence that supply has shrunk. A few new developments have ceased marketing their projects, and many owners of older developments, who have the intention or are undergoing the collective sales process, have taken their properties off the market. Coupled with the growth in demand from displaced households from the successful collective sales, we anticipate the residential market to improve further. F I G U R E 2 Potential units to be launched 45, 3, 15, Overall Outlook The outlook for the residential property market continues to improve, and we anticipate an increase in demand in 218, a result of the urgent demand for homes by displaced households affected by the collective sales process. Along with pent up demand from buyers who have been waiting on the side lines, we forecast an upturn in prices in 218. The upcoming projects from end-217 to 218 are expected to benefit from the upturn in sentiments with higher take-up rates when they are launched. T A B L E 1 Selected Upcoming Projects Developer Location District Project Name Sing Development China Construction Fernvale Road West Coast Vale Total Units 28 Parc 735 Botannia 5 Twin Vew 52 CDL Flora Drive 17 I Parc 429 CDL UOL S P Setia Qingjian MCL Land Q3 213 Q4 213 Q1 214 Q2 214 Q3 214 Q4 214 Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q2 217 Q3 217 Tampines Ave 1 Potong Pasir Ave 1 Toh Tuck Road Shunfu Road Margaret Drive 18 NA NA NA NA NA 316

4 DEMAND ANALYSIS: Primary Market Buying activity in the primary market continues its run Despite the slight q-o-q dip in sales due to seasonal effects, the primary market in Q3 217 continued to be active, with sales figures hovering above 2,5 units for the third quarter in a row. Two-bedroom units (7 sq ft to 1,1 sq ft) formed the bulk of purchases in Q3, making up about 49% of nonlanded primary market transactions (Figure 3). Notwithstanding this point, one-bedroom units (less than 5 sq ft) are still popular, growing by 12% q-o-q to 337 units in Q3. On a y-o-y basis, the larger private non-landed homes registered higher growth. For instance, the non-landed residential properties that have a strata area of 1,1 to 1,55 sq ft grew by 75.1% y-o-y to 457 units. F I G U R E 3 Breakdown of Non-Landed Homes by floor area (primary market) 1% 8% 6% 4% 2% % Q3 28 Q3 29 Q3 21 Q3 211 Q3 212 The proportion of non-landed residential properties transacted in the quarter that were below $1.5m still formed the bulk at 74%, while residential properties that are priced between $1m to $1.5m formed 46% of new non-landed residential transactions in Q3 (Figure 4). The number of non-landed properties that were transacted between $2m and $2.5m in Q3 217 rose the most y-o-y, by slightly more than 4 times of the 32 units transacted in Q F I G U R E 4 Breakdown of Non-Landed Homes by Quantum (primary market) 1% Q3 213 Q3 214 Q3 215 Q3 216 Q3 217 Less than 5 sq ft 5 sq ft to 7 sq ft 7 sq ft to 1,1 sq ft 1,1 sq ft to 1,55 sq ft 1,55 sq ft to 2,1 sq ft Greater than 2,1 sq ft 8% 6% 4% 2% % Q3 28 Q3 29 Q3 21 Q3 211 Q3 212 Q3 213 Q3 214 Q3 215 Q3 216 Less than $1.5m $1.5m to $2m $2m to $2.5m $2.5m to $3m $3m to $4m $4m to $5m Greater than $5m Q3 217 Top Selling non-landed Projects Le Quest was the top selling project in Q3 217 (Table 2). The project did well as there was pent up demand in the area. It was the only new non-landed private project launched in the area since 22. The residential project is part of a mixed used development and has a child care centre. It is located within a new enclave of Built-To-Order HDB flats at Bukit Batok and will be close to the recently unveiled Tengah HDB Town. Based on the caveats lodged, Le Quest sold 285 out of the available 3 units (95%) within three days of its initial launch. T A B L E 2 Top Selling Non-Landed Projects in the Primary Market (Q3 217) Project District Units sold (7 sq ft or smaller) Total Units Sold in Q3 217 (Stock) Average ($ per sq ft) Le Quest (516) $1,39 Kingsford (1,165) $1,258 Waterbay Martin Modern (45) $2,21 Commonwealth Towers Sophia Hills (845) $1, (493) $2, Martin Modern was the other notable launch in Q Developed by GuocoLand, the project sold 83 units out of the 16 units launched within the first three days in late July 217. It eventually sold a cumulative 139 units as of Q3. The project is located within the Robertson Quay neighbourhood, and is a 5-minute walk from the Great World MRT station on the Thomson East Coast Line, which will be ready by 221. Kingsford Waterbay, Commonwealth Towers and Sophia Hills also did relatively well, selling 151 units, 121 units and 19 units respectively in the quarter. While Kingsford Waterbay and Sophia Hills still have unsold units numbering in the triple digits, Commonwealth Towers has sold all its units. Outlook The outlook for the primary market looks promising, and we forecast that primary market sales in 217 will range between 9, units to 1, units. Primary sales are likely to moderate with some developers holding back sales. For instance, Guocoland indicated that they were moderating the release of units within Martin Modern, while Qingjian Realty was also holding back the second phase of its sales launches. Notwithstanding the launches that have been held back, Sing Holdings will be launching Parc Botannia in Q4.

5 DEMAND ANALYSIS: Secondary Market Landed home sales still high in Q3 Sales in the secondary landed residential property market remained high in Q3 217 (Figure 5). Landed homes in the secondary market increased marginally by.8% q-o-q in Q3 217 to 57, with terrace houses making up 58% of landed property transactions. Correspondingly, the URA landed price index increased 1.2% q-o-q, a reversal from the past two quarters. District 19 (Serangoon Gardens, Hougang and Punggol) had the most landed residential property transactions (87 units) in Q3 217, followed by District 15 (76 units) and District 2 (47 units). F I G U R E 5 Landed Home Sales by Type against Price Index (secondary market) Sales Although sales have increased in the secondary landed residential property market, it seems that most activities were centered in the entry-level landed homes market segment. Terrace houses saw a 3.5% q-o-q increase in transactions and made up 58% of all landed residential property sales in Q3 217, compared to semi-detached (3% q-o-q) and detached houses (-15% q-o-q). Terraces sold between $2m and $3m accounted for the largest proportion at 55% (Figure 6). F I G U R E 6 Sales of Terrace Houses by Quantum (secondary market) Q3 213 Q4 213 Q1 214 Q2 214 Q3 214 Q4 214 Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q2 217 Q3 217 Terrace House Detached House Price Index Q1 29 = Semi-Detached House Price Index URA Q3 213 Q4 213 Q1 214 Q2 214 Q3 214 Q4 214 Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q2 217 Q3 217 Less than $2m $2m to $3m $3m to $4m $4m to $5m Greater than $5m Sales of non-landed residential properties remained stable After the substantial increase of non-landed homes transacted in the secondary market from Q1 217 to Q2, total transaction volume for non-landed residential properties, excluding collective sales, fell marginally by 2.7% q-o-q in Q3 217 to 3,12 units (Figure 7). However, the number of non-landed sales in the secondary market is still above 3, units, which suggests that demand is coming back. The last time non-landed private residential sales crossed the 3, mark was back in Q Sales momentum was likely supported by the growing optimism of the property market, which was reinforced by the recent land bids in the GLS programme and collective sales. Notwithstanding this increasing optimism, most of the sales for non-landed homes were for those sold below $1.5m, which has been a norm since 212. F I G U R E 7 Non-Landed Home Sales by Quantum (secondary market) 3,5 3, 2,5 2, 1,5 1, 5 Q3 213 Q4 213 Q1 214 Q2 214 Q3 214 Q4 214 Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q2 217 Q3 217 Less than $1m $1m to $1.5m $1.5m to $2m $2m to $3m $3m to $4m $4m to $5m Greater than $5m Most of the top 5 selling projects in the secondary market have been delicensed within the last two years and were being sold directly by developers (Table 3). For example, Skysuites@Anson was delicensed in 215 and relaunched in July 217, selling 82 units in Q3. Some of the projects also introduced the Deferred Payment Scheme to boost sales. T A B L E 3 Top Selling Projects in the Secondary Market (Q3 217) Project (tenure) District Total Units Sold Price Range ($ per sq ft) Skysuites@Anson (LH) ,926-2,611 RV Residences (FH) 1 4 1,781-2,181 Gramercy Park (FH) ,5-3,228 Riversails (LH) ,219 Euhabitat (LH) ,97-1,245 We anticipate the secondary market will remain active as buyers sentiments continue to improve. The increase in the number of successful collective sales will also result in new demand as previous homeowners will need to look for a new place in the coming months, which will help support the current pipeline of projects in the months to come.

6 DEMAND ANALYSIS: Foreign Buyers Non-Singaporean purchases Foreign demand for all residential properties fell 13.5% q-o-q in Q3 217 due to the Ghost Month. Non-landed private residential purchases by Non- Permanent Residents (NPRs) fell 14.5% q-o-q to 42 units, while that by Singapore Permanent Residents (SPRs) also fell 13.3% q-o-q to 839 units. On a y-oy basis, the number of non-singaporean purchases rose by 26.4% to 1,38 units. The last time the non- Singaporean purchases crossed the 1,3 mark was back in Q In Q3 217, SPRs bought homes from projects that were in areas with good growth potential (Table 4). This includes Le Quest (near Jurong East Precinct), Commonwealth Towers (near the established Queenstown estate), and Martin Modern (the first new launch in the prime district). Price was also another factor, as properties like The Santorini ($978 per sq ft to $1,15 per sq ft) and Symphony Suites ($77 per sq ft to $1,15 per sq ft) were among the top 5 projects, albeit not as popular as the projects previously mentioned. NPRs, on the other hand, were attracted to projects in the prime districts. Given that NPRs mainly purchase residential properties for investment, they prefer projects that are centrally located and more likely to find tenants. T A B L E 4 Preferences of NPR and SPR buyers (Q3 217) Popular new projects for SPR (number of units sold to SPR) Popular new projects for NPR (number of units sold to NPR) Le Quest (34) Principal Garden (29) Commonwealth Towers Martin Modern (18) (29) Martin Modern (24) Sophia Hills (16) Symphony Suites (19) Queens Peak (11) The Santorini (17) Le Quest (8) Foreign buyers by nationality Although Mainland Chinese buyers made the most purchases among foreign buyers in Q3 217, the number of units and proportion amongst foreign buyers dropped (Figure 8). Mainland Chinese buyers only purchased 324 units, or 25% of all sales in the quarter. Malaysian and Indian buyers were also more restrained, dropping 19% and 8% q- o-q to 255 units and 15 units respectively. On the other hand, the number of Indonesian home purchases rose 14.8% to 93 units in Q3. Indonesians, unlike the other three nationalities, purchased residential properties of higher quantum. Only 46% of Indonesian purchases in Q3 were $1.5m and below, compared with Mainland Chinese buyers (65%), Indian buyers (68%) and Malaysian buyers (79%). F I G U R E 8 Sales by Nationality (Q3 217) The Indian and Indonesian nationals continued to be location-centric in terms of their preferences. Indian nationals were still active in the eastern part of Singapore (Table 5), as most of their purchases came from District 18 (Tampines, Pasir Ris), District 16 (Bedok, Upper East Coast, Eastwood, Kew Drive) and District 15 (Katong, Joo Chiat, Amber Road) On the other hand, Indonesians tended to buy within the prime districts 9 and 1. T A B L E 5 Popular Districts from Top 4 Purchasing Nationalities (Q3 217) Mainland China District 9 (35 units) District 3 (31 units) District 1 (31 units) District 15 (23 units) District 18 (23 units) Q3 213 Q4 213 Q1 214 Q2 214 Q3 214 Q4 214 Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q2 217 Q3 217 Mainland China Malaysia India Indonesia Others Malaysia India Indonesia District 23 (38 units) District 19 (27 units) District 14 (24 units) District 1 (17 units) District 15 (17 units) District 18 (2 units) District 16 (12 units) District 15 (1 units) District 5 (8 units) District 9 (8 units) District 1 (21 units) District 9 (17 units) District 3 (9 units) District 19 (8 units) District 12 (7 units)

7 DEMAND ANALYSIS: Singaporean Buyers Demand from Singaporeans continue to grow Private residential properties purchased by Singaporeans eased slightly by 3% q-o-q to 4,93 units in Q However, due to the greater decline in purchases by other nationalities, the proportion of Singapore purchases to total purchases (less en bloc sales) increased slightly by two percentage-points q-o-q to 79% in Q The proportion of properties purchased by Singaporeans priced lower than $1.5m was about 6%, which is 1. percentage-point lower than the proportion of sales in Q2. There was an 8.6% q-o-q increase in private property purchases between $2m to $3m, as prime developments such as Martin Modern and were launched for sale in Q3. F I G U R E 1 Home Sales by Quantum in Q3 217 (Singaporeans) 2, 1,5 1, 5 Less than $1m Le Quest was the most popular new project in Q3 217 (Table 6). The only other new project that was launched in the quarter was Martin Modern. The other new projects on the list are re-launches. In the secondary market, most of the units transacted were developer sales of projects that were delicensed. Recent collective sales in the vicinity, along with the expiry of the Seller s Stamp Duty holding period for the project, contributed to the increased interest. $1m to $1.5m $1.5m to $2m T A B L E 6 Preferences of Singaporean buyers (Q3 217) Popular new projects for Singaporeans (number of units sold) $2m to $3m $3m to $4m Q2 217 Q3 217 $4m to Greater $5m than $5m Popular developments for Singaporeans in the secondary market (number of units sold) Le Quest (243) Skysuites@Anson (66) Kingsford Waterbay (13) RV Residences (27) Martin Modern (96) Riversails (18) Commonwealth Towers 26 Newton (14) (84) The Santorini (83) Fulcrum (14) Buyers with HDB addresses Private residential property acquisitions by buyers with HDB addresses declined by 11% q-o-q to 2,12 units in Q The fall was attributed to the 19.1% q-o-q decrease in the demand for private residential property sold between $1m to $1.5m (Figure 11). F I G U R E 11 Home Sales by Quantum in Q3 217 (buyers with HDB addresses) 1, Less than $1m $1m to $1.5m Buyers with HDB addresses tend to purchase from new nonlanded projects that were priced more affordably. At least 75% of units in the new projects purchased (Table 7) were below $1.5m in Q In spite of this, these buyers were willing to purchase units of higher quantum in projects that were in better locations next to transport nodes such as Commonwealth Towers. A similar trend was also seen in the secondary market. These buyers with HDB addresses were discerning and were only willing to pay a higher premium for properties in the Central Region. District 9 (Orchard, Cairnhill, River Valley), district 1 (Ardmore, Bukit Timah, Holland Road, Tanglin) and district 2 (Bishan, Ang Mo Kio) remained popular, recording at least 5 transactions in Q3, with at least 3% of purchases above the $2m mark. T A B L E 7 Preferences of buyers with HDB addresses (Q3 217) Popular new projects for buyers with HDB addresses* (number of units sold) $1.5m $2m to $3m to to $2m $3m $4m Q2 217 Q3 217 Popular districts for buyers with HDB addresses in secondary market* (number of units sold) Le Quest (132) District 19 (188) The Santorini (52) District 15 (114) North Park Residences (33) District 23 (89) Parc Riviera (3) District 18 (81) The Alps Residences (29) District 14 (7) * This excludes the buyers with HDB addresses who are yet to be updated into the system and are currently labeled as NA. We use it as a proxy for Singaporeans living in HDB flats We anticipate buyers with HDB addresses to continue remaining restrained, but will enter the market if there are value-for-money homes available. $4m to Greater $5m than $5m

8 CONTACTS Edmund Tie Executive Chairman Ong Choon Fah Chief Executive Officer Key Executive Officer P R O F E S S I O N A L S E R V I C E S Valuation Advisory Valuation Advisory Property Tax Advisory & Statutory Valuation Poh Kwee Eng kweeeng.poh@etcsea.com Hazel Ng hazel.ng@etcsea.com Ng Poh Chue pohchue.ng@etcsea.com Nicholas Cheng nicholas.cheng@etcsea.com Carolyn Teo carolyn.teo@etcsea.com Alden Cheong alden.cheong@etcsea.com Tay Pei Li Associate peili.tay@etcsea.com Research Consulting Property Management Hospitality Ong Choon Fah Chief Executive Officer choonfah.ong@etcsea.com Ong Choon Fah Chief Executive Officer choonfah.ong@etcsea.com Philip Leow philip.leow@etcsea.com Heng Hua Thong huathong.heng@etcsea.com Lee Nai Jia naijia.lee@etcsea.com Constance Leung constance.leung@etcsea.com Kwok Sai Kuai saikuai.kwok@etcsea.com Tay Hock Soon tayhs@treetops.com.sg Paul Wong paul.wong@etcsea.com A G E N C Y S E R V I C E S Investment Advisory Auction Commercial & Retail China Desk Edmund Tie Executive Chairman edmund.tie@etcsea.com Nicholas Cheng nicholas.cheng@etcsea.com Chua Wei Lin weilin.chua@etcsea.com Heng Hua Thong huathong.heng@etcsea.com Swee Shou Fern shoufern.swee@etcsea.com Joy Tan joy.tan@etcsea.com Yam Kah Heng kahheng.yam@etcsea.com Tan Chun Ming chunming.tan@etcsea.com Authors: Lee Nai Jia, Research Joshua Loh Senior Research Analyst Residential Margaret Thean margaret.thean@etcsea.com Gary Tan gary.tan@etcsea.com Karen Ong karen.ong@etcsea.com Edmund Tie & Company (SEA) Pte Ltd 5 Shenton Way, #13-5 UIC Building, Singapore 6888 phone: fax: mail.sg@etcsea.com Disclaimer: This report should not be relied upon as a basis for entering transactions without seeking specific, qualified, professional advice. Whilst facts have been rigorously checked, Edmund Tie and Company can take no responsibility for any damage or loss suffered because of any inadvertent inaccuracy within this report. Information contained herein should not, in whole or part, be published, reproduced or referred to without prior approval. Any such reproduction should be credited to Edmund Tie and Company. Edmund Tie & Company 217