Wednesday, November 14, 2007

About this Blog

Making Property Money Second: Supportive Family & Friends First

The common topics among Singaporeans now are the sizzling property prices and the rocketing stock market. It also shows that we are buyers of sentiment and also perhaps followers of the market. Many who purchase properties or stocks last year must be sitting on hefty profits as prices are on the upward trend. Those who buy in middle of this year have a narrower profit margin and perhaps a much riskier portfolio as compared to those who bought last year.

Personally, I sold off my leasehold property late last year and somehow regretted it as I could have held on for a better price if I sell this year. Nevertheless, I bought another property at a reasonable price and felt better knowing that when you sell high you also buy high and this could negate your profits anytime.

Those who sold off their property on an en-bloc basis need to scout around for a property that is affordable and within their budget. I have a feeling that they are the ones chasing up the property prices, as flushed with cash from their en-bloc sales, they are the ones now anxiously looking for a new place. They somehow have a bigger headache of looking for a place now due to the skyrocketing property price and the heavy demand due to the number of property en-bloc sales.

A friend of mine commented that he is envious of the many millionaires that resulted from the dozens of en-bloc sales that is ongoing since late last year. Some may even retire earlier or go for their dream holiday with so much cash on hand. I told him that money earned from such transactions are often difficult to hold on to as, firstly, they will buy another property that may also be around the same price range or even higher unless they are willing to downgrade and, secondly, money that is acquired easily seem to be let off easier too. My advice to en-bloc benefactors is to approach financial advisers for sound financial investment planning and to save up for their retirement, which many Singaporeans fail to do. Another concern of en-bloc sales is that it actually benefits only a small section of the population and out of which a high percentage could also be foreigners.

Singaporeans who put off their property purchase all along may also now begin to hunt for property, contributing to the tight supply

As a large majority of property owners live in public housing, they could never be benefactors of such dream transactions. This also perpetuates the discontentment among the poor and sandwiched middle class who struggle in our ever rising living standard. Many will feel that the booming economy only benefits the rich and upper middle class. Their salaries remain stagnant or rise moderately, never keeping pace with the living cost or their liabilities. The much debated wage rift is also another major concern as the higher wage earners seem to pull away from the rest who continue to struggle, leaving nothing much behind for retirement planning. The top 20 per cent income earners earn at least 10 times more than the bottom 20 per cent wage earners, creating a substantial wage gap which can only fuel discontentment.

My advice to Singaporeans is to live simply and be contented with what you have. Never cast an envious eye on those who have much more financially as I always believe that wealth can never buy happiness. I personally have a few wealthy friends who say that to them their wealth is never a major contributor to their happiness quotient but that strong family bonding, good health and job satisfaction are the main reasons for living a satisfied life. For me, it is better to have some savings and live happily surrounded by supportive family members and friends than having a big fat account and not able to enjoy life due to poor health or a disintegrated family.

Source: Unknown

May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
Smart Buyers, 10 reasons to wait
Property Price Index Graph Plotter & Online Property Valuation

Thursday, September 20, 2007

About this Blog

Smart Buyers, 10 Reasons to wait....

1) Supply is Increasing Rapidly
If you wait, chances are you'll be spoilt for choices.
According to URA's data, there'll be a supply of 65,400 residential units by 2010.

(Source: URA)

In addition, the GLS (Government Land Sales) programme for 2008 Q1 will add another 8250 units. The government has assured Singaporeans that it will continue to review the GLS to meet demand.

Add that to HDB's Ponggol 21 plus, Dawson Estate and the many design and build flats that will give private condo a run for its money; and you'll see the reason to wait. What about those enbloc sales which will come back in manifolds their orginal number. To give you some sense of the quantum, I've seen site which used to be just a bungalow housing one household being turned into a 30 storey high building with some 50 units. Why should 10 people rush for 1 flat when there are so many coming. Buying property is a long term commitment and it's definitely worth waiting for even it means a few years.

(What Singaporeans have to say about the GLS (government land sales) programmes? Are Singaporeans confident that the property supply in the pipeline will take the heat off the property market? Join the Smart Buyers forum.)

2) Global Outlook Uncertain
Despite the recent drop in Fed rates, US subprime problem which has now spreaded to Europe will continue to loom in the years ahead. The uncertain outlook is clearly spelt out in the roller coastal stock market. Most market watchers have conceded now that there is more than a 50% chance that US will go into a recession. A number of them are of the view that the recession is likely to last for years.

Oil prices are climbing to a level that warrants concern too, so have commodities. This has brought about one of the biggest inflation rate ever seen. Singaporeans are going to feel it increasingly more painful in their every day life. While most are still optimistic about our jobs, it is possible that a global recession can take a toll on our economy and hence, our employment.

If you buy at a very high price with a huge mortgage, you may not be able to hold through any such disaster.
Join the Smart Buyers Forum

3) Asking Prices Near 1996's Peak

Many sellers are now asking prices near the 1996's peak and even, beyond. At such prices, any rational person will see that there is little upside left. If you plunge in now, you'll be making transaction record for future sellers to ask for even more. For sure, it won't go up forever and you may just be the last one holding the hot potatoe.
(Have something to say about this? Click here.)

4) Capital Appreciation Limted
If you are looking for capital appreciation, calculate your odds against the impending supply and bear in mind that more than 90% of Singaporeans already own their homes and are in no urgency to buy if prices are not right.(If there's a genuine urgent housing need, how come the market was so quieet just about a year ago?) Furthermore, Singapore is a mature economy and property value cannot be expected to rise like before.
(Have something to say about this? Click here.)

5) Rental Yield Limited
Even at today's peak rental, yield is just about 4-5%. In the long run, increasing supply and the government's concern over losing competitiveness will most
certainly put a downward pressure on it. The optimists may argue that with the completion of the IR, our expat population is set to grow and hence, rental yield.
Take a closer look at this argument. Firstly, our expat population is still largely from the third world countries and generally cannot afford the high rental that landlords are looking for to justify their property investment. Secondly, while the IR may create a good number of jobs, they are not going to be high paying for most.
(Have something to say about this? Click here.)

6) Market Correction Imminent
There are some signs that a market correction is imminent. The first sign being the dwindling transaction volume. En bloc sales in particular have dwindled into a streak. The graph below shows that the number of private residential units sold in Q4 2007 drops drastically as price index climbs towards 170, just about 10 points below the historical 1996's peak. This may indicate buying resistance as more and more people are priced out of the market.

Last Updated on 3 Feb 2008
OCBC Investment Research analyst Winston Liew said,'A correction is going to take place.' Asking prices, which went up by the hundred thousands in the last few months, have either stayed put or showed sign of waning. New launches especially the smaller ones are seeing much slower take up. It seems that all those wild speculators and frantic buyers who have been chasing the price up in the past few months have suddenly gone, as quickly as they have come. Developers, real estate agencies and all those who have a vested interest will continue their attempt to talk up the market. The truth is prices will not go up forever. Read the signs yourself.
(Have something to say about this? Click here.)

7) The 10-Yr Property Cycle
The property market is cyclical. It is an established behaviour. The last time the market went down was 1998. There was a supply glut then. Now we see a supply shortage, with developers building frantically to cash in on the demand. It doesn't take a lot of intelligence to see what's next in the cycle.
(Have something to say about this? Click here.)

8) Less Risk Buying Completed Units
As you wait, more residential units will be completed. It's far better to buy what you can see than try to imagine from some floor plan. Believe me, you don't want any rude shock for something that costs you your life savings and more.
(Have something to say about this? Click here.)

9) No Urgency to Buy
More than 90% of Singaporeans already own their homes which means that for most of us, there is no real urgency to buy. So why rush in at this rocket-high price?!
(Have something to say about this? Click here.)

10)Heed to the Minister's Advice
"Stand back and let the others rush. If you want to follow the crowd, you must be prepared to take higher risks." was the advice of Mah Bow Tan.
(Have something to say about this? Click here.)

With all said, I must conclude that the fundamentals for housing demand in Singapore are still strong. Barring any unforseen catastrophe, Singapore's econcomy is set to grow in the forseeable future. The influx of expat workers will continue to grow with job creation, particularly with the completion of the Integrated Resort. Property will still make good investment. You'll just need to wait for the right one at the right price.
(Have something to say about this? Click here.)

Friday, September 14, 2007

About this Blog

Major events that impact the Singapore property market from 1960 to 2007

A study of major events that impact the Singapore property market will better help one to predict the market trends, e.g. like which part of history is likely repeat itself etc.

HDB formed and 12,000 flats built between 1960-70; Property Tax introduced
CPF implements Public Housing Schemes for home ownership (which sees 90% of Singaporeans owning their homes today).
Inflow of foreign funds and the beginning of Singapore's golden years.
Property curbs introduced: foreigners not allowed to buy residential properties; property tax surcharge w.e.f. 1974
Oil Crisis which afflicted the US economy of which Singapore was very dependant on. The year saw a plunge in Singapore property price and Singaporeans learned how their home price has every thing to do with the US economy.
Introduction of Residential Property Act: Foreigners allowed to purchase flats in buildings of 6 levels or higher.

Graph shows the Property Price Index (Click on the image to view details.)
Major events that impact the Singapore property market from 1960 to 2007

CPF implements Residential Properties Scheme for private home ownership which allowed Singaporeans to use up to 80% of their CPF ordinary account savings for property purchase. Property price rose 3 to 4 times e.g. HDB flats bought in the 1970s were in the range of $10K but in the 1980s, HDB flats typically cost $40K-$100K. (Note from the graph that the property price index rose from ~10 in the 1970s to ~50 in the 1980s)
Economic recession. (Note from the graph that the property price index fell from ~50 in the 1983's peak to ~30 in the 1986)
CPF implements Minimum Sum Scheme to ensure that Singaporeans have enough CPF for their retirement.
Total CPF withdrawal for the purchase of private housing increased to 100% of the value of the property (Nov 1988). Property price escalated.
1989 (Aug)
PRs allowed to buy HDB flats and HDB owners allowed to invest in private property.
1990 (Aug)
Gulf War - which saw a small dip in property price that lasted as quickly as US declared victory. Property price continued to escalate after that.
1991 (Oct)
HDB allowed single citizens above 35 to buy three-room flats
1993 (Oct)
CPF rules relaxed and home buyers allowed to withdraw larger CPF amounts and HDB flat buyers allowed to take higher mortgages. Property price soared.
1995 (Aug)
Government introduced Executive Condominium which were sold for about 10% less than 99-year lease condoniniums. The launches were heavily oversubscribed, typically with 10 applicants to 1 unit.
1996 (Feb)
Exemption limit for owner-occupied property increased to the first $150,000 (previously $75,000) of its NAV; Exemption limits on estate duty for residential properties and movable assets, including CPF balances, raised to $9 million and $600,000 respectively. CPF balances in excess of $600,000 will continue to be exempt; property tax rate from 13% to 12%; Stamp duty adjustment on property transfers; reduction on stamp duty rates on property leases.
1996 (May)
Anti-speculation measures implemented - 80% financing restriction for property purchase; 7,000-8,000 residential units to be released in 1997; 30-month project completion period (PCP) for private developments under QC scheme; 5% p.a. penalty imposition for PCP extension; stamp duty extended to buyers of all sales and sub-sales of uncompleted properties; new stamp duty on those who sell properties within years; tax on gains from properties sold within 3 years of purchase. Property price fell for the first time after 10 long years of relentless up trend.
1997 (Feb) Budget 1997
Concessionary property tax rate of 4% on the annual value of the residential house for home owners who rebuild their houses for their own subsequent occupation during the period when their houses are undergoing reconstruction
Measures to curb abuse of HDB subsidised mortgage e.g. HDB mortgage pegged to bank rate.
The Asian financial crisis. Property price plunged.
Reversal of Anti-speculation policy implemented in 1996:
Removal of $30,000 cap
HDB owners allowed to book a new private property only after occupying the flat for 5years.
Government sale sites deferred and project completion period (PCP) extended for up to 8 yearsl.
Stamp duty for sellers was suspended.
More Property policy reversal:
Land sales were suspended; 15% property tax rebate for commercial and industrial properties commencing July 1998; Property tax exemption for land under development reinstated; exemption will be for a period of up to 5 years,
and will apply from the time construction begins to the time the TOP is granted
1998 (Jun) Off-Budget measures implemented including more property policy revisions. Land sales were suspended and more tax
exemptions granted; stamp duty deferred for buyer of uncompleted properties until TOP or subsequent sale.
1998 (Nov) 10% CPF housing grant cut; more tax rebates
1999 (Feb) Budget 1999 -The 55% property tax rebate on industrial and commercial properties, first announced in the June 1998 off budget
measures, will be extended by another year to 30 June 2000 ( 99)
1999 (May) Second CPF housing grant cut.
1999 (Sep) Government to resume land sales in 2000
2000 (Feb) Budget 2000 - Tax exemption on land under development withdrawn; change will only affect new projects; Projects which
have been granted tax exemption will continue to enjoy the concession for a maximum period of 5 years or upon
completion, whichever is earlier; DC rates revised - increased by 27% on average for residential land (Feb 00); Property
tax rebate extended up to June 2001, at reduced rate of 25% (from 55%); estate duty exemption for Singapore residential
property used for business activity;
2000 (June) HDB owners required to seek approval before booking private property even if they have fulfilled the 5-year time bar.
Global oil price hike
2001 Collapse of dotCom bubble
2001 (June) GLS - Introduction of Reserve List System for 2H 2001
2001 (Aug) MND announced that less than 8,000 new public flats will be built in 2001
2001 (Sept) 11th Sep 01 attack on the World Trade Centre in New York
2001 (Oct) Off-Budget 2001- Capital gains tax was lifted, foreigners were allowed to use SingDollar for housing loan, GLS
(Confirmed List ) was suspended. Sites would only be made available through the Reserve List. Property tax was exempted for a period of 2 years for land under development.
2002 (Apr) Recommendations by ERC sub-committee on taxation, CPF, wages and land.
2002 (May) Budget 2002 - Loss-transfer system of group relief; GST increased from 3% to 5% from 1 Jan 2003
2002 (July ) Refocusing the CPF System - Minimum Sum will be raised to $80,000 on 1 July 2003, of which $40,000 can be in
property; limit CPF withdrawals for housing to 150% of the value of property and bring the limit down to 120% in equal
steps over 5 years
2002 (Sep) For purchase of ECs, a minimum 10% of the downpayment will have to be paid in cash, while the remaining 10% can be
paid out using CPF funds
2002 (Dec) Extension of 2001 Off-Budget Measures - Fixed rebate of up to $8,000 per year for all commercial and industrial
properties; also, 30% rebate for the remaining property tax payable; 2 years property tax exemption for all land under
development with immediate effect; stamp duty rates reduced by 30% on all instruments.
2002 (Dec) GLS Confirmed List suspension extended to 1H2003. Defer the release of BFC site for sale in 1H2003
2003 (Early) Iraq War & SARS Outbreak
2003 (Feb) Budget 2003 - e.g. Defer restoration of CPF employer contribution rate for 2 years; lower CPF salary ceiling over 2 years;
new property tax rebate for commercial and industrial properties for 2H03.
2003 (Apr) $230 million on SARS Relief Package e.g. Additional property tax rebates for commercial properties; higher property tax
& 100% rebate of TV licence fees rebates for gazetted tourist hotels; cess rebate
2003 (Apr) Single Purpose Company Requirement for GLS sites lifted
2003 (July) Formation of HDB Corp and announcement on the public housing building programme. Programme would be opened up
to the private sector – starting with 10% in July 2006 and reaching 50% in July 2008.
2004 (Jun) Continued Suspension of Confirmed List. BFC Site for Sale on Reserve List
2004 (Aug) Government of Singapore - New Cabinet
2004 (Aug) Government’s invitation to foreigners to buy land in Sentosa Cove
2004 (Dec) GLS : No Confirmed List in 1H 2005
2004 (Dec) Tsunami Tragedy
2005 (Feb) Budget 2005 - REITs Incentives ; $40 mil Orchard Road Investment Enhancement Plan by STB
2005 (Apr) Government Announced Plans to Build 2 Integrated Resorts
2005 (July) Changes to the Residential Property Act - all existing and new QC applicants will be granted project completion period of 6
years from date of QC issuance (current 3-4 years); Bankers' Guarantee for QC application reduced from current 50% to 10% w.e.f. Mar 2006
2005 (July) MND Announcement on Policy Changes Affecting the Property Market - Loan-to-Value Limit raised from 80% to 90%;
Cash payment for residential properties reduced from 10% to 5%; non-related singles allowed to use their CPF to jointly but private residential properties; phase out of the Non-Residential Properties Scheme in July 2006; Restriction on the use of CPF savings for multiple properties
2005 (Nov) GLS Programme – 1 commercial site at Collyer Quay in the Confirmed List
2005 (Nov) Waiver of security requirement for developers offering Deferred Payment Scheme after the Issue of TOP
Budget 2006 (Feb) - tax incentives to broaden capital markets like tax exemption on foreign-sourced interest and trust
distribution received by REITs expansion; lift property tax surcharge; review of the administrative conditions for Industrial
Building Allowances; Progress Package give-out.
2006 (June) GLS Programme - 1 commercial site at Beach Road/Middle Road in the Confirmed List; further extended for reassignment
of GLS Sites by successful tenderers and private land by foreign housing developers by one year to 30 June 2007
2006 (Oct) The First Public Housing Project under the Design, Build & Sell Scheme (DBSS) was launched for sale
2006 ( 15 Dec) Stamp duty concession withdrawn – all property buyers to pay stamp duty (at up to 3% for properties worth over $360k)
within 14 days of the date of acceptance of an Option. As transitional measure, buyers who accept an Option or sign S&P
between 15-30 Dec 2006 will have until 14 March 2007 to pay the stamp duty.
2007(Aug)Increase in Development Charge. Based on the announced rates, the jump is estimated to be about 55 percent.
2007(Oct)Withdraw the deferred payment scheme for the sale of uncompleted private residential and commercial properties with effect from 26 Oct 2007.
These policies (together with the increasingly uncertain global economic outlook) put a brake on enbloc sales and practically purged the market of speculators.

Some thoughts:
1. A quick glance at the graph above shows that property price escalated relentlessly from 1993 to 1996. The events that fuelled the property price were in great part due to the relaxation of using CPF monies for property investment.

Question: Is this likely to repeat itself in the years to come? given that the Singapore government is increasingly concerned about the aging population and the lack of CPF for retirement.

2. Another reason for the soaring property price in the 1990s was the years of double digit economic growth.

Question: Is Singapore still likely to enjoy years of double digit economic growth in the years ahead?

3.Property price plummeted in 1997 due to the Asian Financial Crisis, and again in 2003 due to Gulf War and SARS. It took up to 2005 for the market to show sign of recovery, and in fact, up to 2007 for the recovery to reach the mass market.

Question: What are the risks of similar events taking place in the years ahead? Looking at the past cycle, what is your assessment on the impact on the Singapore property market if such events should recur?

About this Blog

Free Sample Tenancy Agreement - HDB or Private Property Rental


AN AGREEMENT made on the ___ day of ________ BETWEEN

(Landlord's Name) of (Address) (hereinafter called "the Landlord" which expression shall where the context so admits include the person entitled for the time being to the reversion immediately expectant on the term hereby created) of the one part


(Tenant's Name) (hereinafter called "the Tenant" which expression shall where the context so admits include the Tenant's successors and assigns) of the other part.


The Landlord agrees to let and the Tenant agrees to take all that property known as (Address) (hereinafter called "the said premises") together with the furniture, fixtures and fittings therein belonging to the Landlord as specified in the Schedule annexed hereto (hereinafter called “the furniture”) TO HOLD unto the Tenant from the (day) day of (month, year) to (day) day of (month, year) for a term of _____ year, at the rent of DOLLARS (Rent Amount in Words)(Rent Amount in Numerals) per month comprising:-

Dollars (Rent Amount in Words)(Rent Amount in Numerals) being rental in respect of the said premises and

Dollars (Rent Amount in Words)(Rent Amount in Numerals) being charges for the hire of the furniture, maintenance charges and GST payable.

The first payment of Dollars (Rent Amount in Words)(Rent Amount in Numerals) for the rent for the period from (Start Date) to (End Date) is payable on the signing of this Agreement. Subsequent payment of Dollars (Rent Amount in Words)(Rent Amount in Numerals) is payable monthly in advance without deduction whatsoever on the (day) day of each month.

2. The Tenant hereby agrees with the Landlord as follows:

To pay the said rent at the times and in the manner aforesaid.

To pay a deposit of DOLLARS (Rent Amount in Words)(Rent Amount in Numerals) being equal to two (2) months’ rent upon the signing of this Agreement (the receipt whereof the Landlord hereby acknowledges) as security against the breach of any term or condition of this Agreement, such deposit to be refunded (free of interest) at the expiry or lawful termination of this tenancy. This deposit shall not be utilised as set-off for any rent due and payable during the currency of this Agreement.

To pay all charges due in respect of any telephones, internet services or other equipment installed at the said premises, including any tax payable thereon.

To pay all charges for the supply of water, electricity, gas and any water borne sewerage system, any such installations installed or used at the said premises, refuse disposal, including any tax payable thereon. Further, to pay all charges for Cable TV which are incurred by the Tenant.

To keep the interior of the said premises including the sanitary and water apparatus and the furniture and the doors and windows thereof in good and tenantable repair and condition throughout this tenancy (fair wear and tear and damage by any act beyond the control of the Tenant excepted).

To permit the Landlord and its agents, surveyors and workmen with all necessary appliances to enter upon the said premises at all reasonable times by prior appointment (except in the case of emergency where no appointment is required) for the purpose whether of viewing the condition thereof or of doing such works and things as may be required for any repairs, alterations or improvements whether of the said premises or of any parts of any building to which the said premises may form a part of or adjoin.

To replace electric bulbs, tubes and other expendable items at its own expense up to Dollars One Hundred (S$100.00) per item. Such expenditure in excess of Dollars One Hundred (S$100.00) shall be borne by the Landlord.

To comply with all such rules and regulations and terms and conditions as may be imposed from time to time on occupiers of the building by the Housing & Development Board (HDB).

To yield up the said premises at the expiration or sooner termination of this tenancy in such good and tenantable repair and condition (fair wear and tear excepted) as shall be in accordance with the conditions, covenants and stipulations herein contained and with all locks keys and the furniture.

To keep the air-conditioning units installed at and for the said premises in good and tenantable repair and condition which air-conditioning units are to be serviced and maintained at least once every six (6) months at the expense of the Tenant by a reliable air-conditioning contractor.

During the two (2) months immediately preceding the expiration of the tenancy herein to permit the Landlord or its representatives at all reasonable times and by prior appointment to bring interested parties to view the said premises for the purpose of letting the same.

During the currency of this tenancy, to allow the Landlord or its representatives at all reasonable times and by prior appointment to bring any interested parties to view the said premises in the event of a prospective sale thereof.

Not to make or permit to be made any structural alterations to the said premises.

(n) To use the said premises strictly as a private residence only and not to do or permit to be done upon the said premises any act or thing which may be or may become a nuisance or annoyance to or in any way interfere with the quiet or comfort of any other adjoining occupiers or to give reasonable cause for complaint from the occupants of neighbouring premises and not to use the said premises for any unlawful or immoral purposes.

(o) Not to use the said premises or any part thereof other than as a *warehouse/factory/shop/office in connection with and for the purpose of the Tenant’s business and to obtain licences and permits at the Tenant’s expense from the relevant authorities where necessary.

(p) Not to exceed the maximum electricity load and not to load or permit to be loaded on any part of the floors of the said premises weights exceeding those specified by the Landlord, HDB or other bodies (where applicable).

Not to assign, sublet or part with the possession of the said premises or any part thereof.

Not to keep or permit to be kept on the said premises or any part thereof any materials of a dangerous or explosive nature or the keeping of which may contravene any statute or subsidiary legislation.

Not to do or permit to be done anything whereby the policy or policies of insurance on the said premises against damage by fire may become void or voidable or whereby the premium thereon may be increased.

To inform the Landlord of any visitors staying in the premises from time to time.

(t) Only the following persons are permitted to occupy the said premises, and provided that such occupancy is for the purpose stated in this Tenancy Agreement:-

(Name of Occupier 1) holding (Identification Type and Number).
(Name of Occupier 2) holding (Identification Type and Number).
and/or such other persons as may be approved in writing by the Landlord from time to time.

The Tenant shall at all times ensure that all occupants of the said premises comply with all applicable laws for entering and staying in Singapore, and without prejudice to the generality of this sub-clause:-

(aa) The Tenant shall produce to the Landlord for inspection the originals of all occupants’ identity cards/passports and other relevant documents evidencing their legal entry into and stay in Singapore before the commencement of this Agreement, and thereafter, before any new permitted occupant moves in; and

(bb) If the relevant Singapore immigration or Employment pass of an occupant expires during the term of this Agreement, the Tenant shall produce to the Landlord for inspection the originals of all occupants’ identity cards/passports and other relevant documents evidencing their legal entry into and stay in Singapore on or before the expiry thereof.

3. The Landlord hereby agrees with the Tenant as follows:

To pay all rates, taxes, maintenance charges and any surcharges thereon, assessments and outgoings (except as otherwise provided in this Agreement) which are or may hereafter be charged or imposed on the said premises including any surcharges payable thereon.

To insure the said premises against loss or damage by fire and to pay all premium thereon.

To be responsible for the repair and replacement of parts in respect of the air-conditioning units installed at the said premises save where the same are caused by any act, default, neglect or omission on the part of the Tenant or any of its servants agents occupiers contractors guests or visitors.

To maintain the structural condition of the said premises including sanitary pipes and electrical wiring and to keep the roof of the said premises in good and tenantable repair and condition.

That the Tenant paying the rent hereby reserved and observing and performing the several conditions, covenants and stipulations on the Tenant's part herein contained shall peaceably hold and enjoy the said premises during this tenancy without any interruption by the Landlord or any person rightfully claiming under or in trust for the Landlord.

4. Provided always and it is expressly agreed as follows:

If the rent hereby reserved shall not be paid for seven (7) days after its due date or if there shall be a breach of any of the conditions, covenants or stipulations on the part of the Tenant herein contained, the Landlord shall be entitled to re-enter and re-possess the said premises and thereupon this tenancy shall immediately absolutely determine but without prejudice to any right of action of the Landlord for damage or otherwise in respect of any such breach or any antecedent breach.

In the event the rent remaining unpaid seven (7) days after becoming payable (whether formally demanded or not), it shall be lawful for the Landlord to claim interest at two percent (2 %) per month on the amount unpaid calculated from the date due to the date of actual payment.

The Landlord shall not be liable to the Tenant or the Tenant’s servants or agents or other persons in the said premises or persons calling upon the Tenant for any accidents happening, injury suffered, damage to or loss of any chattel property sustained on the said premises.

In case the said premises or any part thereof shall at any time during this tenancy be destroyed or damaged by fire lightning riot explosion or any other cause beyond the control of the parties hereto so as to be unfit for occupation and use, then and in every such case (unless the insurance money shall be wholly or partially irrecoverable by reason solely or in part of any act, default, neglect or omission of the Tenant or any of their servants agents occupiers guests or visitors), the rent hereby reserved or a just and fair proportion thereof according to the nature and extent of the destruction or damage sustained shall be suspended and cease to be payable in respect of any period while the said premises shall continue to be unfit for occupation and use by reason of such destruction or damage.

In case the said premises shall be destroyed or damaged as aforesaid, either party shall be at liberty by notice in writing to the other determine this tenancy, and upon such notice being given, this tenancy or the balance thereof shall absolutely cease and determine and the deposit paid hereunder together with a reasonable proportion of such advance rent as has been paid hereunder, where applicable, shall be refunded to the Tenant forthwith but without prejudice to any right of action of either party in respect of any antecedent breach of this Agreement by the other.

Notwithstanding anything herein contained, if at any time after the expiration of twelve (12) months from the date of the commencement of this tenancy, the tenant of the said premises, (Tenant's Name), shall be transferred out of the Republic of Singapore permanently by his/her employer or cease to be employed in Singapore by the her employer, then and in such a case, it shall be lawful for the Tenant to terminate this tenancy by giving three (3) months' advance notice (this is in addition to the twelve (12) months aforesaid) in writing to the Landlord or by paying three (3) months' rent in lieu of such notice. Documentary evidence of such transfer or cessation shall be required and such notice shall be deemed to have commenced on such date as the Landlord shall have actually received such evidence. If at any time during the period of tenancy, the landlord decides to sell the property, it shall be lawful for the Landlord to terminate this tenancy by giving three (3) months' advance notice in writing to the tenant or by paying three (3) months' rent in lieu of such notice.

Notwithstanding anything herein contained, if at any time during the period of tenancy, the Housing & Development Board (HDB) revokes or withdraw its consent to the subletting, this agreement shall immediately be terminated. The land lord shall not be liable to the tenant for any cost of re-location or any other cost as a result of the termination under this clause.

The waiver by either party of a breach or default of any of the provisions in this Agreement shall not be construed as a waiver of any succeeding breach of the same or other provisions nor any delay or omission on the part of either party to exercise or avail itself of any right that it has or may have herein, operates as a waiver of any breach or default of the other party. Acceptance by the Landlord of the rent hereby reserved shall not be deemed to operate as a waiver by the Landlord of any right to proceed against the Tenant in respect of a breach by the Tenant of any of the Tenant’s obligations hereunder.

Any notice served under or in any way in connection with this Agreement shall be sufficiently served on the Tenant if left at the said premises or delivered to the Tenant personally or sent to the Tenant at the said premises by registered post and shall be sufficiently served on the Landlord if delivered to the Landlord personally or sent to the abovementioned address by registered post. Any notice sent by registered post shall be deemed to be given at the time when in due course of post it would be delivered at the address to which it is sent.

The stamp duty for stamping this Agreement in duplicate shall be borne by the Tenant and shall be paid on the date of signing of this Agreement.

This Agreement shall be subject to the laws of the Republic of Singapore.

In this Agreement unless the context otherwise requires:-
The expression "the Landlord":- (1) where the Landlord is a person shall include its personal representatives and assigns; and (2) where the Landlord is a company shall include its successors-in-title and assigns;

The expression "the Tenant":- (1) where the Tenant is a person shall include its personal representatives and permitted assigns; and (2) where the Tenant is a company shall include its successors-in-title and permitted assigns;

Where the Landlord consists of two (2) or more persons, all covenants and stipulations made by or applicable to such persons are made or applicable jointly and severally;

Where the Tenant consists of two (2) or more persons, all covenants and stipulations made by or applicable to such persons are made or applicable jointly and severally;

The expression "person" shall mean any individual, firm, company or other legal entity;
Words importing the neuter gender shall include the masculine and feminine genders and vice versa; and
Words in the singular shall include the plural and vice versa.

Should any provision of this Agreement be declared void, unenforceable or illegal by any competent authority or court, this shall not affect the other provisions of this Agreement which are capable of severance, which shall continue unaffected.

IN WITNESS WHEREOF the parties have hereunto set their hands as shown below.

SIGNED by the Landlord
(Landlord's Name)
NRIC NO : ________

In the presence of
(Witness Name)
Address :

SIGNED by the Tenant
(Tenant's Name)
PASSPORT NO : ________ )

In the presence of:
(Witness Name)
Address :

Note : Red texts are to be replaced accordiningly.

Note: If you cannot download this tenancy agreement properly at this site and wish to have a copy of this tenancy agreement in editable MS Word doc, ps leave a comment with your email. The blog owner will be pleased to email a copy of the tenancy agreement to you in an editable format.

May also want to read:
How to Calculate Rental Yield for Singapore Property
Inland Revenue Authority of Singapore(IRAS): Stamp Duty Calculator
Singapore Property History
How to calculate Stamp Duty for Singapore Property
How to calculate Singapore Property Tax

Thursday, September 13, 2007

About this Blog

Singapore Property Supply Crunch?

The key argument by vested parties for a continued increase in Singapore property price rests largely on "Supply Crunch".

Here is a typical example: According to Citigroup, the property supply crunch is likely to get worse despite government assurances that supply over the next few years is sufficient. They reckon that the foreign worker inflow will continue to overwhelm available residential units. Jobs growth in 2007 is keeping pace with the 176,000 jobs generated in 2006, of which about half were taken up by foreigners...

Conclusion: Demand outstrips supply so property price must continue to go up.

Argument like this, which has propelled many property investors to plunge into the property market, while persuasive at first sight, has serious flaws.

Firstly, it fails to see the price mismatch between demand and supply. While there may be a genuine supply crunch, if the price is beyond the affordability of those who need the housing, alternatives such as sharing of apartments, may reduce the actual demand well below that of the projected demand. One should not therefore underestimate the resourcefulness of the human spirit.
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Secondly, the projected demand is hinged on a continual robust economic growth in Singapore. With the threat of global recession intensifying each day, it is not inconceivable that Singapore's economy will be adversely affected, especially if the US economy goes into a prolonged recession. Jobs creation in Singapore may be substantially reduced, if not halted. In such a situation, it is likely that the Singapore government will want the limited number of jobs to go to its people. This will reduce number of foreigners to Singapore, which is what fuelled the housing demand in the first place.
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Thirdly, the argument of "Supply Crunch" does not take into account that the demand comes in the form of rental housing, rather than permanent homes for Singaporeans. The fact that 90% of Singaporeans already own their homes makes demand more elastic than it has been publicised through the media. Hence, we have a situation where the people who need the housing are not the people who form the majority of the buyers in the Singapore property market, which remains to be Singaporeans. Unless property price comes down to a level that makes good investment sense, Singaporeans are likely to stay at the sidelines as they are doing now (as reflected in the *dwindling number of property sold. Refer to graph below: The green bar shows the property price index and the blue bar shows the number of units sold).

As long as speculators are kept out of the market, which the Singapore government seems determined to do so, Singapore property buyers are likely to remain rational. They will not keep on paying higher and higer prices for property.
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Wednesday, September 12, 2007

About this Blog

Why are Singaporeans paying sky-high prices for property?

According to the Household Expenditure Survey 2003 (
93% of HDB households own their flats and 88% of private residential households own their properties.

So why are Singaporeans still paying sky-high price for property?

The simple answer is that: They don't have to.

Then why are they doing it? Namely, kiasu.
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In a nutshell, the property market in Singapore is strong fuelled by sentiment, rather than fundamental. Hence, any down turn in sentiment is enough to send prices plunging.
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Take for instance the resale market between 2004 and 2006, despite continuous economic growth ( a positive fundamental), the negative sentiment continues to drag prices down in the suburbs even though prices at the high end market has already soared (another positive fundamental). The sales volume remained the miserable few hundreds during this period. Sellers got really pessimistic and were selling their properties practically at half price.
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Yet, there were so few buyers. When this market segment finally caught up with the property boom in early 2007, buyers suddenly swam in to chase the price to an insane level. By middle of 2007, prices have gone up as much as 50%. Surely the need for home couldn't have changed so drastically in a year.
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Perhaps, it all started with the media reports about the millions that enbloc sellers are pocketing. Then friends and relatives are boasting about the good money they've made from their properties. Can one help being envious? Envy soon turns into impatience, and impatience into bad judgment, and bad judgement can cost one's life earnings and more...
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