D Day Class. N - Night Class

Transcription

1 Batch/Intake No. Kindly take note of you Batch/Intake No: D Day Class N - Night Class

2 For trainees with foreign certificates Please note that CEA requires you to submit a written form and copy of your certs for assessment and validation. Certificates that are not issued by local tertiary institutions are also required to verify with CEA

3 Contact Information Please ensure you have checked the following particulars with the staff at the reception: 1) Name (as in NRIC) Note that this will be printed on your Certificate for Examination booking. Any error would result in delay 2) 1) Additional notes, worksheets and guides will be ed 2) Especially for Yahoo users, check Spam Folder. 3) Printing of such materials will have to be done individually 3) Mobile No 1) In case of any changes, SMSes will be used for notification

4 Attendance Under CEA s Requirement, all NEW Salesperson taking the RES Course Must Fulfill 75% in attendance. Latecomers will also be given 20 mins grace period. Failing which, attendance will not be considered. Please be reminded that ALL must Scan their NRIC IN and OUT for every lesson. For DAY Class Do Remember to Scan IN again at the start of the 2pm session as it is a different lesson.

5 Attendance (Certificate) Your Certificate of Attendance (COA) will only be awarded to you after the Last Lesson. No Early requests will be accepted. If you fail to achieve 75%, (15 Lessons), your COA will only be awarded after the achieving of 75% with Make Up classes.

6 Make-Up Lessons At LMA, we are determined to helping you complete the course so that you may register for your exam. LMA is the ONLY course provider to offer Make-Up Lessons You are required to inform LMA at least 4 working days in advance. Just need to fill up a Make-Up Class request Form which you can obtain at the reception counter.

7 Make-Up Lessons You are required to fill up a Make-Up Class request Form which you can obtain at the reception counter.

8 Make Up Lessons No last minute request will be accepted. However, if you are on MC, we require you to call us to inform us on the same day. Special arrangements (urgent class insertion) will be made

9 RES Exam Exam Provider: NTUC Learning Hub Exam Fee: $ (both papers) Exam Schedule: Once every 2 months 2 Papers, 2 and 1/2hrs each If you fail 1 paper, you can re-sit just the failed paper in the next exam at a fee. $ (Incl. GST) for 1 Paper (only for re-sit)

10 Examination Format Paper 1 and Paper 2 Section A: 50 MCQs (1 mark each) Section B: 15 MCQs with reference to one or two Case Studies (2 marks each) Section C: 10 Fill-in-the-blank Short Answer Questions (2 marks each) Passing mark: 60% (but aim for 65% and above)

11 Important Note for the Exam It is meant to TOUGH! Pertinent to putting in effort to study and doing additional research. Practise reading with speed Keywords Key phrase Key numbers Concepts of Law and Scenarios

12 Format of lessons/notes LMA s RES course is designed to follow CEA s RES examination syllabus closely. There may be slight adjustments to the flow of topics so as to allow learners are better understanding. Prior to the commencement of each Unit/Topic, it is highly recommended to study the syllabus requirements (included in your notes) so as to have a clear idea what will be required for the RES examination.

13 Cognitive Levels Expected From Trainees LEVEL 1 REMEMBERING: Candidates are aware of the basic terminology and concepts of the laws/rules/regulatory requirements/procedures. They should be able to recognise, list, define, describe or name the term or concept. LEVEL 2 UNDERSTANDING: Candidates are able to interpret, infer, classify, paraphrase or explain a term or concept in a scenario or case study. LEVEL 3 APPLYING: Candidates are able to make use of the knowledge and apply in practical situations. This is exhibited through analysis of their client s situations and being able to offer professional and accurate advice to their clients.

14 Kindly note: Strictly no recruitment, recommendation, marketing or sales talk is allowed during the entire duration of the training (by Trainers and Trainees) Any report of such matter will be taken seriously and may be reported to CEA accordingly

15 CEA s Note to Students The Approved Course Provider (ACP) is an independent entity whose core business is in education and training. Recruitment activities by the ACP or its related companies are strictly prohibited. ACP s status may be withdrawn if found to do so. If you see any recruitment activity being carried out by anyone while attending the REA or RES course, please report it to CEA immediately. Thank you.

16 Course/Trainer Feedback Form As part of CEA s requirements, please note that feedback forms must be duly completed and returned to ACP after the lesson. At LMA, there will be two different types of feedback forms: Trainer Feedback Course feedback Your feedback will help us improve and is much appreciated.

17 Last but not Least.. We all would like a conducive environment to study in. Thus, we seek your co-operation in ensuring that the classroom is clean. Kindly consume your food and drinks outside the training center.

18 Books Available At LMA The Ultimate Guide to Real Estate Investment in Singapore (2 nd Edition) by Ismail Gafoor $35.00 The Ultimate Guide To Commercial Real Estate Singapore by Roy Chong $25.00 Think Your Way To Fitness 7 Secrets And 14 Scientific Strategies You Must Know by Ken Koh $21.00

19 Bundle Special The Ultimate Guide to Real Estate Investment in Singapore (2 nd Edition) PLUS Think Your Way To Fitness 7 Secrets And 14 Scientific Strategies You Must Just $45.00 (Usual $56.00) $1 will be donated to Singapore Thong Chai Medical Institution

20 Life Mastery Academy Tel: res@lifemasteryacademy.com

21 Real Estate Salesperson Course (RES)

22 Objectives of RES Course Possess the fundamental knowledge of real estate concepts, real estate market, law of contract, law of agency, planning and development control, and principles of marketing so as to be professionally knowledgeable when performing estate agency work. Able to apply knowledge required for estate agency services, in particular knowledge on the handling of sale and lease of residential, commercial and industrial properties and including but not limited to title searches, immigration checks and financial calculations. Understand and apply good ethics, relevant laws and regulations, and best practices in estate agency work so as to uphold the professional standing of salespersons. Be knowledgeable about prevailing market information and government policies and regulations.

23 Overview of Syllabus Paper 1 Competency Unit 1: Real Estate Agency Industry Overview Competency Unit 2: Basic Land Law Concepts and Dealings with Interests in Land Paper 2 Competency Unit 3: Real Estate Marketing Competency Unit 4: Property Transactions Laws and Practices

24 Unit 1: Real Estate Agency Industry Overview 1.1 Real estate market and submarkets 1.2 Real estate market players and government intervention 1.3 Law of agency 1.4 Role and functions of salespersons and their requisite knowledge and skills 1.5 Regulation of real estate agency industry

25 Lesson 1

26 Unit 1.1: Unit 1 Page 6 Real estate market and submarkets 1. Identify the characteristics of real estate vs. real estate investment trusts (REITS) and property stocks. 2. Understand the characteristics of real estate market as a whole. 3. Categorise properties into residential, commercial and industrial according to title (land, lease or strata), form and planning parameters. 1. Identify title/tenure of property, zoning, use and classification of property. 2. Identify types of commercial properties (i.e. strata-titled shop/office units), industrial and residential properties. 4. Understand the micro- and macro-factors affecting supply, demand and prices of properties. 5. Understand the functioning of each submarket (by property types, locations, and socioeconomic characteristics, etc.). 6. Understand the relationship between property cycle and business cycle. 7. Source and interpret property supply, transaction statistics/data and other market information. 8. Convert a 6-digit postal code to its old district number.

27 Unit Unit 2 Page 7 Characteristics Of Real Estate Immobile Fixed geographical location Value dependent on immediate surroundings and accessibility Indestructible Cannot be destroyed Stable investments Improvements and structures deteriorate and depreciate in value over time. Scarce Not considered as a rare commodity but total supply of land is relatively fixed Availability of land in a given location is limited Prices tend to be higher in a small country Heterogeneous No two parcels of land are exactly identical even two adjoining parcels of land might be different Indivisible Sold intact as a whole.

28 Unit Unit 1 Page 6 Characteristics Of REITs A corporation, trust or association that owns and typically operates income-producing real estate or real estate-related assets May include office buildings, shopping malls, multi-family housing, student housing, hotels, resorts, hospitals and health care facilities, self-storage facilities, data centers, warehouses, and mortgages or loans Most REITs specialize in a single type of real estate for example, apartment communities. E.g. Retail REITs, office REITs, residential REITs, healthcare REITs, and industrial REITs, to name a few. REIT must acquire and develop its real estate properties primarily to operate them as part of its own investment portfolio. A way for individual investors to earn a share of the income produced through real estate ownership without actually having to go out and buy the real estate.

29 Unit Characteristics of the Real Estate Market 1. No central market 1. No physically defined market 2. Most properties available through adverts or GLS 2. Data inefficiency Mainly dissimilar and in different geographical areas, Property information are difficult to come by or delayed 3. Imperfect market structure Not frequently traded (as compared to shares/stocks) Few participants involved in sale/purchase Most properties are not the same

30 Comparison of real estate market with efficient market Efficient Market (e.g. Stock or shares or even super markets) Goods/Services are same/similar items Quality of goods/services fairly uniform => prices are relatively low and stable Real Estate Market No two parcels of real estate/land are physically identical High prices in view of high value of property assets Large number of participants => competitive, free market. No one has large enough share to directly influence price Self regulating Usually only a few buyers and sellers interested in a particular property at one time, in one price range, and in one location Subjected to regulations and controls by many public institution and private entities Goods are readily consumed, quickly supplied and easily transported Durable product, less marketable and illiquid

31 Unit Types of Properties and Submarkets Public Residential Properties Private Residential Properties Commercial Properties/Industrial Properties Special Properties

32 Types of Properties and Submarkets - Public Residential Properties Unit 1 Page 8

33 Types of Properties and Submarkets - Public Residential Properties Under the jurisdiction of the Housing Development (HDB), a statutory board under Ministry of National Development (MND) on 1st February The main aim- Construct residential units and rental to eligible purchases Constructs and manages additional facilities including car parks, markets, hawker centres and social amenities Evolved into providing quality affordable housing and to build communities. Strict regulations. Also provides Provide Concessionary home loan Around 82% of Singapore s population stays in Public Residential housing

34 Public Residential Properties - Studio Apartment 1. Started in Nov 1997, flats designed to meet the needs of elderly residents 2. Enable elderly (aged 55 and above) lessess of HDB flats to realize capital by selling their larger flats and move into SA 3. 35sqm and 45sqm member households 5. Ready to occupy and Elder-friendly features 6. Sold on 30-year leases

35 Public Residential Properties Build To Order (BTO) Flat allocation system Gives flat applicants flexibility in timing and more selection power in their choice of location for their new flats Applicants will get to choose their specific location (note, such flats are not even built yet), size, layout, etc Book the flat by paying a deposit Construction of BTO flat will take around 3 and half years

36 Public Residential Properties - Design Build and Sell Scheme (DBSS) Introduced in 2005 Involves private sector in the development of public housing Greater innovation in the building and design of flats With new regulation by HDB, family which are now earning between SGD $8,001 to SGD$10,000 can now also apply for DBSS and still qualify for HDB grants - giving more flexibility in options and selections for this group. Since 2012, the DBSS is under HDB s review to ensure its relevance to current market.

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38 Public Residential Properties Executive Condominium (EC) 1. Executive Condominium (EC) 1. Introduced to cater to Singaporeans, especially young graduates and professionals who can afford more than an HDB flat but find private property out of their reach. 2. Comparable in design and facilities to private condominiums as they are developed and sold by private developers LA CASA TOP 22 Feb 2008

39 Public Residential Properties Resale Flats 1. Any open market HDB flats by occupant (seller) and can be marketed by owners or Agents 2. Occupants must fulfill the Minimum Occupation Period (MOP) and eligibility to sell 3. Buyers must fulfill the eligibility to buy 4. Many Resale flats available can be found in Classified Adverts or Global listing Services (GLS) like E.g. or 5. Cash Over Valuation (COV)

40 Key Points to note when dealing with Public Residential 1. HDB regulates all such flats and all criteria/regulations must be adhered to, without fail. 2. All HDB flats are subsidized and meant to provide affordable housing, especially to Singapore Citizens 3. Eligibility considerations (Schemes) HDB Flats are subsidized and meant for Singapore Citizens Strict criteria include : Age, Family Nucleus, Income Ceiling, Ownership/Interest in Property in Singapore, Owners/Ex-owners of HDB/DBSS/ECs 4. HDB Housing Grants and Loans Housing subsidy provided by the government The CPF Housing Grant (in the form of CPF Monies and not cash) can be used for the initial payment or to reduce the mortgage loan for the flat purchase 5. Minimum Occupation Period Minimum period of time the HDB flat owners must physically occupy their flats before they are eligible to sell their flats in open market

41 Types of Properties and Submarkets - Private Residential Properties Unit 1 Page 13

42 Types of Properties and Submarkets - Private Residential Properties Private properties offer exclusivity and unique features/facilities Much higher in price Typically landed and non-landed. Under landed, there are Good-Class Bungalows, Detached (also known as bungalows), Semi-Detached, Terrace, Cluster Houses and Townhouses. Only 58 designated landed housing areas in Singapore the properties in such areas are considered restricted properties Restrictions of foreign ownership of landed properties Under non-landed, there are Condominiums and Apartments.

43 Private Residential Properties Landed Residential

44 Private Residential Properties - Landed Residential Total of 58 designated Landed Housing Areas 1.Good Class Bungalows Gazetted GCB areas 2. Districts 10, 11, 20, 21 and Min size = 1400 sqm or 15,069.6 sq ft. Min Frontage : 18.5m. Height = Capped at 2 storeys 2.Detached (also called bungalows) 1. Min size = 400 sqm or 4,305.6 sq ft 2. Min frontage = 10 m 3.Semi-Detached 1. Min size = 200 sqm or 2,152.8 sq ft 2. Min frontage = 8 m

45 S/ Property Name N Aroozoo Park, Charlton Park, Tai Keng Villas, tai Keng Garden, Tivoli 1 Gardens, Paya Lebar Gardens 2 Beauty Garden, St.Anne's Wood, Sengkang East Way 3 Boon Teck Road, Jalan Kemaman, Jalan Bahagia, Jalan Ma'mor Brizay Park, Ewart Park, Maryland Estate, Sixth Avenue, Jalan Haji 4 Alias, Queen Astrid Park 5 Bukit Villas, Woodlands Park 6 Burgundy Hill 7 Caldecott Hill Estate, Spanish Villa, Lornie Walk, Wallace Way Camden Park, Chee Hoon Avenue, Capitol Park, Dunearn Estate, 8 Kheam Hock Road, Merryn Road 9 Chatsworth Park, Ridley Park Clementi Road, Moonbeam Walk, Mount Sinai Road, Holland Grove 10 Avenue, Jalan Jelita, Holland Rise 11 Cluny Hill, Cluny Park, Nassim Road, Dalvey Estate, White House Park Comfort Gardens, Nicon Gardens, Hua Mei Gardens, Phoenix Height 12 Estate, Pavilion Park Eng Neo Avenue, First/Third Avenue, Hillcrest Road, Watten Estate 13 Road, Shelford Road, Dunearn Road 14 Evergreen Garden, Palm Beach Estate, East Coast Hill 15 Frankel Estate, Upper East Coast Road, Siglap Road 16 Gay Villas, Macpherson Garden Estate, Happy Gardens Goldhill Garden, Bukit Tunggal, Chancery Park, Asimont Garden, Jalan 17 Novena Hazel Park Terrace, Cashew Terrace, Chestnut Drive, Green Hill 18 Estate, Mera Gardens, Fuyong Estate 19 Hillview Estate, Popular Estate, Hillview Villas Hindhede Road, Jalan Kampong Chantek, Rifle Range Road, Kilburn 20 Estate, Binjai Park, Swiss Club Road 21 Holland Road, Ridout Park 22 Jalan Angin Laut, Jalan Pelatok, Seagull Walk Jalan Jurong Kechil, Toh Tuck Road, Cheng Soon Garden, King Albert 23 Park Kechubong Terrace, Green Spring, Gerald Park, Summer Villas, 24 Mugliston Hill 25 Kimnan Park, Jalan Kembangan 26 Lakeside Grove Lentor Villas, Melody Life Mastery Villas, Academy The Countryside, Pte Ltd. All Rights Banyan Reserved Villas, Florissa 27 Park, President Gardens S/ Property Name N Mei Hwan View, Chuan Villas, Serangoon Park, Daisy Park, Vaughan 30 Garden, Summer Grove 31 Mountbatten Road, Crescent Road, Margate Road Namly Cresent, Duchess Avenue, Coronation Road, Queens Road, 32 Cornwall Gardens, Oei Tiong Ham Park 33 One Tree Hill, Mount Elizabeth, Oxley Road 34 Pasir Panjang Road, Jalan Mat Jambol, Jalan Pelepah 35 Pasir Ris Road, Elias Road, Elias Terrace 36 Picardy Gardens, Wei Ming Garden, Lucky Hill, Bedok Park Ponggol Twenty-Fourth Avenue, Northshore Bungalows, Ponggol 37 Seventeenth Avenue Seletar Garden, Cactus Bloom, Florida Park, Sunrise Villa 38 Estate,Springhill Terrace Sembawang Gardens Arcade, Springhill, Country View, Sembawang 39 Springs Estate, Sembawang Road 40 Sembawang Park, Goodlink Park, Jalan Mata Ayer 41 Sembawang Straits Estate, Straits Gardens Serangoon Garden Estate, Chuan Terrace, Chuan Vista, Tai Hwan 42 Garden, Golden Hill Estate, Grace Park Serene Park, Saraca Gardens, Mimosa Terrace, Stratton Green, Seletar 43 Hill Estate, Belgravia ark 44 Shepherd's Drive, Merino Cresent 45 Sungrove, Pasir Panjang Gardens, The Clementvale, Jubilee Road 46 Sunset Way, Faber Terrace, Faber Hills, Hong Leong Gardens Teacher's Housing Estate, Yio Chu Kang Gardens, Sembawang Hill 47 Estate, Shangri-La Park, Mayflower Gardens, Ang Mo Kio Ave 2 The Inglewood, Fulton Hill, Bright Hill Cresent, Windsor Park Estate, 48 Adelphi Hill Garden, Soo Chow Garden The Morning Dew, Jalan Kayu, Jalan Tari Payong, Jalan Kayu, Lorong 49 Samak 50 Toh Drive, Mariam Way, Jalan Chelagi 51 Villa Verde 52 Wan Tho Lodge, Sennet Estate 53 West Coast, Pasir Panjang Road 54 Westville, Westwood Park 55 Wishart Road, Bukit Teresa Road, Bukit Teresa Close Woodgrove Estate, Century Woods, Cedar Grove, Pinewood Terrance, 56 Beechwood Terrace

46 39 Good Class Bungalow Areas (GCBA) Name District Name District Name District 1 Belmont Park Cornwall Gardens Leedon Park 10 2 Bin Tong Park Dalvey Estate Maryland Estate 10 3 Binjai Park Eng Neo Avenue Nassim Road 10 4 Brizay Park 5 Bukit Sedap 6 Bukit Tunggal 7 Caldecott Hill Estate 8 Camden Park 9 Chatsworth Park 10 Chee Hoon Avenue 11 Chestnut Avenue 12 Cluny Hill 13 Cluny Park Ewart Park 18 First / Third Avenue 19 Fort Avenue 20 Fourth / Sixth Avenue 21 Gallop Road / Woollerton Park 22 Garlick Avenue 23 Holland Park 24 Holland Rise 25 Kilburn Estate 26 King Albert Park Oei Tiong Ham Park 31 Queen Astrid Park 32 Raffles Park 33 Rebecca Park 34 Ridley Park 35 Ridout Park 36 Swiss Club Road 37 Victoria Park 38 Windsor Park 39 White House Park

47 Private Residential Properties - Landed Residential 4. Terrace Houses 1. Corner Min size = 200sqm (80sqm for Type II), Min Frontage = 8m 2. Inter Min size = 150sqm (80sqm for Type II), Min frontage = 6m 5. Town Houses and Cluster Houses 1. Considered as landed form even though they are strata titled. Foreigners must apply for special approval from Land Dealings (Approval) Unit (LDU) under Singapore Lands Authority (SLA) 2. Cluster houses a hybrid between conventional landed housing and condominium housing. All units have ground contact but with shared facilities similar to those found in condominiums. 3. Town House - One in a row of not less than 3 residential units having ground contact and common ownership of the land

48 Key considerations for Landed Residential Transactions 1.Foreign ownership control 1.FOREIGNERs cannot acquire or purchase Landed Properties, unless he obtains the special approval of the Land Dealing Unit (LDU) under Singapore Land Authority (SLA) (Covered in details Book 1 Pg 96 Onwards) 2.Master Plan land use / Height control 1.Determined by URA 2.Influences the developmental potential 3.Taxation involved 1.Seller s Stamp duty 2.Buyer s Stamp duty 3.Additional Buyer s Stamp duty

49 Guess The Type of Landed Form Cluster House

50 Guess The Type of Landed Form Detached

51 Guess The Type of Landed Form GCB

52 Guess The Type of Landed Form Terraced

53 Guess The Type of Landed Form Semi-Detached

54 Guess The Type of Landed Form Terraced

55 Private Residential Properties Non-Landed Residential Unit 1 Page 13

56 Condominiums and Apartments 1.Land parcel subdivided into AIRSPACE or vertical lots for residential dwelling 2.Under Land Titles (Strata) Act, Strata-titles to be conferred on each separate residential lot (Subsidiary Strata Certificate Of Title or SSCT) 3.Each purchaser will have a certain percentage SHARE in the COMMON property and each owner must pay amount to management and sinking funds 4.Foreigners are allowed to purchase. (Note: even through cluster houses and town houses are strata-titled, they are still considered as restricted property to foreigners)

57 Difference between Condos and Apartments 1.Condos have common facilities, e.g. pool, tennis courts, gym, etc 2.Total land area of the condo development should be at least 4,000sqm 3.Approved and accorded the title of "condominium" by the relevant authorities

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59 Types of Properties and Submarkets - Commercial Properties Unit 1 Page 18

60 Commercial Zones

61 Industrial Zones Senok o Yishun Kranji Loyang Sungei Kadut Changi North Tuas Juron g Pasir Panjang Bukit Merah Paya Lebar, Kaki Bukit Eunos, Macpherso Changi South

62 Types of Commercial/Industrial Properties Office Retail Shophou se Industrial Others Office Space Retail Space HDB Shophous e B1 Light Industry Medical Suites Office Building F&B Space Private Shophous e B2 General Industry Hotels & Resorts SOHO Marina & Country Clubs

63 Types of Commercial Properties 1. HDB Shop - Shop space within a HDB block 2. Office - Office space in commercial office buildings or shop house 3. Restaurant / Lounge - Commercial space suitable for cafe, restaurant, lounge businesses 4. Shop/Shop space - For retail business in malls or shophouse 5. Shophouse - Row of low-rise shops joint side by side with a living quarter / office above them 6. Warehouse space for storage - May include some office space

64 HDB Commercial Property Provided by HDB for short-term leases or tenancies in heartland estates Office usage Tuition centres Pre schools

65 Private Commercial Property Mixed-Use development projects Retail outlets, office blocks and apartments Shopping Malls Real Estate Investment Trusts (REITs) Office complexes

66 Guess The Property Type HDB Shop Office Space

67 Guess The Property Type Restaurant/Lounge Retail Shop

68 Guess The Property Type Conservation Houses Warehouse

69 Factors affecting selection of Commercial Properties 1. Floor plate efficiency and column free space 2. Lift system number of lifts, capacity and speed 3. Car park facilities allocation and charges 4. Air-conditioning system 5. Specific sitting floor level 6. Frontage from lift reception lift lobby

70 Factors affecting selection of Retail Properties 1. Specific sitting 2. Trade mix and anchor tenant (variety of shops) 3. Size of development 4. Car parking facilities 5. Promotional activities 6. Vertical transportation 7. Loading and unloading facilities

71 Industrial Properties HDB Industrial Premises Warehouses, flatted factories and terrace workshops JTC Industrial Facilities Covered later Industrial Facilities owned by REITs Business parks Factories Warehouses Chemical plants

72 Industrial Properties 1. Most important developer of industrial land properties > JTC Corporation (JTC) 2. Property Types provided by JTC: 1. Prepared industrial land For custom built facilities on 30 or 60 years lease 2. Ready-build factories Light and clean industries 3. Start-up spaces Range of start-up spaces for technopreneurs 4. Specialized parks For industries with specific facilities or location requirements, such as wafer fabrication parks, business parks and biomedical parks

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74 JTC For more information about JTC industrial properties, visit

75 Types of Properties and Submarkets - Special Properties

76 Types of Properties and Submarkets - Special Properties Such properties does not easily fall into categories of residential, commercial or industrial properties May have residential or commercial characteristics but their value cannot be simply derived by methods used in the residential market or commercial market Include preservation and conservation sites. A preservation site differs from a conservation site in that it is usually a national monument and there is hardly a change in use of the building. A conservation site usually spans an area of historical and cultural importance such that the general facades of buildings are retained. Also includes golf courses, hotels, and petrol stations. Lack of close comparisons to value the property Valued based on the profits method or cost method of valuation

77 Types of Properties and Submarkets - Special Properties Examples of Preservation Sites: St. Andrews Cathedral Victoria Theatre and Concert hall National Museum CHIJMES Istana Examples of Conservation Sites: Chinatown Little India Fullerton Hotel (former General Post Office) Rochester Park

78 Types of Properties and Submarkets - Classifications / Tenure

79 Classification Codes Residential Commercial Industrial Educational Institution Civic and Community Institution Infrastructure and Utilities Transportation and Communication Parks and Gardens, Open Space Special Uses, Water Catchment Mixed urban land uses may exist within a particular site, area, or zone to promote complementary uses.

80 Land Tenure in Singapore With the Land Acquisition Act, the government is able to acquire land so as to provide public housing and infrastructural facilities. Over the years, state ownership of land in Singapore have gradually increased: % % % % % The earliest lease issued in Singapore was 999 years. No such tenure was issued after years leases were granted since Freehold titles were issued from 1845, but were not issued again since Temporary Occupation Licenses (TOL) short-term leases of 1 or 3 years, or in the form of years

81 Unit Factors Affecting Real Estate Market and Prices Unit 1 Page 24

82 Real Estate Market Cycle 1. Boom or Peak 2. Decline 3. Recession Bottom or Trough 4. Recovery Boom Decline Recovery Trough

83 Boom or Peak Real Estate Activity increases Prosperity with increase in employment Economy in full swing Prices rise and lead to demand which exceeds supply of goods and services. Labour and material shortages are acute and leads to further increases in price and costs Inflationary Effects falls in and cost of borrowing increases with higher demands for loan.

84 Decline Due to expansion of growth experienced, speculative developers enter the market Supply exceeds demands With higher levels of property prices, banks start to restrict loans for property purchases Funds will now be in short supply and thus become more expensive and difficult to obtain Further tightening in credit supply and rising costs will lead to a decline in activity and demand

85 Recession Bottom or Trough Excess supply present > high level of vacancies Prices go down and low confidence of the future economy Businesses and consumers are now reluctant to commit to long term borrowing and investment Little property development activity and inactivity may drag on for a while

86 Recovery Initial expansion in activity is associated with an upswing of business cycle Improving economic conditions encourage building Return in business confidence Lower costs and interest rates boost volume of activity resulting in an increase in bank landing Unemployment rate decrease with rising wages increasing the demand for goods and services.

87 Relationship Between Property and Business Cycle Usually (but not always) Downswing of real estate cycle precedes that of the business cycle and lags beyond the period of general business recovery Upswing of real estate cycle lags that of the business cycle Business Cycle Decline First Recover Later Real Estate Cycle

88 Understanding Demand, Supply and Price Statistics Demand refers to the relationship between the prices of a real estate property demanded at a certain quantity. Supply refers to the relationship between price and the quantity of a real estate property supplied.

89 Supply Demand Curve From Supplier s point of view When product price is high, supplier want to produce more to sell Price Supply Quantity

90 Demand Low quantity results in higher demand and price Shortage of any goods would result in higher demand thus leading to higher price Price Demand Quantity

91 Relationship between Supply and Demand

92 Inelasticity of Supply of Property Measure of the impact as a result of a change in prices and other elements. Elastic Demand - if a slight change in price gives a rise to a large change in demand. Inelastic Demand - if a large change in price does not give rise to any significant change in supply.

93 Factors affecting Supply Supply of vacant land Determined by Government through URA, HDB or JTC Private source of supply from En-bloc sales of old building Supply of existing stock Refers to the buildings and properties that are already available Supply of new buildings If currently, there is a high number of constructions and are targeted for completion around the same time, there will be a surplus in time to come

94 Macro Factors affecting Demand Political/institutional Political and economic stability encourages growth in property development Government incentives Relaxation or implementation of rules. E.g. ABSD, SSD, LTV, MSR, TDSR, HDB cooling measures, CPF grants/loans Social Lifestyle changes, preferences and social tastes Household size, family values and formation Economic GDP, GNP, employment rate, level of investment Interest rates Global Trends DOT Com bubble, SARS, Lehman brother crisis etc. Property prices badly affected since many owners affected by economy Property would have to be sold quickly, often at a loss When economy does well, transaction volumes increase and properties may even be transacted at never before prices (not to mention, never before commissions)

95 Micro Factors affecting Demand Location Environment Accessibility and Convenience Size, Shape and Frontage Height and View Condition of Property Facilities

96 Micro Factors affecting Demand Psychology Corner Influence Design and Architecture Geological Factors Orientation Tenure Build-up Area and No. of Bedrooms

97 Unit Unit 1 Page 31 Sources of Market Data and Interpretation Property Price Index (PPI) HDB Resale Price Index REALIS by URA SISV Database OneMap (RES need only to know where to gather such information (and what is provided) for the purpose examination. Practical steps are given in your notes for your actual real estate work in future.)

98 Property Price Index (PPI) by URA

99 HDB Resale Price Index

100 REALIS by URA

101 SISVREAL by SISV

102 OneMap

103 Knowing where to gather data is one thing, it is also important to learn how to collate and interpret the data.

104 1975Q1 1975Q4 1976Q3 1977Q2 1978Q1 1978Q4 1979Q3 1980Q2 1981Q1 1981Q4 1982Q3 1983Q2 1984Q1 1984Q4 1985Q3 1986Q2 1987Q1 1987Q4 1988Q3 1989Q2 1990Q1 1990Q4 1991Q3 1992Q2 1993Q1 1993Q4 1994Q3 1995Q2 1996Q1 1996Q4 1997Q3 1998Q2 1999Q1 1999Q4 2000Q3 2001Q2 2002Q1 2002Q4 2003Q3 2004Q2 2005Q1 2005Q4 2006Q3 2007Q2 2008Q1 2008Q4 2009Q3 2010Q2 Thousands 0.25 Example 0.2 (Global Trend) (Global Trend) (Legislation/Policies) (Global Trend) (Global Trend) (Global Trend) (Legislation/Policies) (Legislation/Policies) (Legislation/Policies) Click for next animation

105 Unit Postal Codes and Postal Districts Originally 28 postal districts in , 4-digit system was put in place: the first 2=postal district, while the last 2 digits=sector. Total of 81 sectors. 1995, new 6-digit postal system was incorporated. The first 2 digits represented the sector, while the remaining 4 digits define the point within the sector. E.g. Orchard Rd: District 9 4-digit system: digit system: 23XXXX

106 Postal District Postal Sector (1 st 2 digits of postal codes) General Location 01 01, 02, 03, 04, 05, 06 Raffles, Cecil, Marina, People s Park 02 07, 08 Anson, Tanjong Pagar 03 14, 15, 16 Queenstown, Tiong Bahru 04 09, 10 Telok Blangah, Harborfront 05 11, 12, 13 Pasir Panjang, Hong Leong, Clementi High Street, Beach Road 07 18, 19 Middle Rd, Golden Mile 08 20, 21 Little India 09 22, 23 Orchard, Cairnhill, River Valley 10 24, 25, 26, 27 Ardmore, Bukit Timah, Holland Rd, Tanglin 11 28, 29, 30 Watten Estate, Novena, Thomson 12 31, 32, 33 Balestier, Toa Payoh, Serangoon 13 34, 35, 36, 37 Macpherson, Braddell 14 38, 39, 40, 41 Geylang, Eunos 15 42, 43, 44, 45 Katong, Joo Chiat, Amber Rd 16 46, 47, 48 Bedok, Upper East Coast, Kew Dr 17 49, 50, 81 Loyang, Changi 18 51, 52 Tampines, Pasir Ris, Simei 19 53, 54, 55, 82 Serangoon Garden, Hougang, Punggol 20 56, 57 Bishan, Ang Mo Kio 21 58, 59 Upper Bukit Timah, Clementi Park 22 60, 61, 62, 63, 64 Jurong 23 65, 66, 67, 68 Hillview, Bukit Panjang, Choa Chu Kang 24 69, 70, 71 Lim Chu Kang, Tengah 25 72, 73 Kranji, Woodgrove 26 77, 78 Upper Thompson, Springleaf 27 75, 76 Yishun, Sembawang 28 79, 80 Seletar

107 Any Questions?

108 Recap Unit 1.1: Real estate market and submarkets 1. Identify the characteristics of real estate vs. real estate investment trusts (REITS) and property stocks. 2. Understand the characteristics of real estate market as a whole. 3. Categorise properties into residential, commercial and industrial according to title (land, lease or strata), form and planning parameters. 1. Identify title/tenure of property, zoning, use and classification of property. 2. Identify types of commercial properties (i.e. strata-titled shop/office units), industrial and residential properties. 4. Understand the micro- and macro-factors affecting supply, demand and prices of properties. 5. Understand the functioning of each submarket (by property types, locations, and socioeconomic characteristics, etc.). 6. Understand the relationship between property cycle and business cycle. 7. Source and interpret property supply, transaction statistics/data and other market information. 8. Convert a 6-digit postal code to its old district number.

109 End of Lesson 1