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15 Aug 2014 (Issue no. 3)
Commencement 2014
In this year’s Commencement on 15 July 2014, a total of 173 students graduated with a Bachelor of Science (Real Estate),
Master of Science (Real Estate), Master of Science (Real Estate and Urban Economics) and Doctor of Philosophy degree
from the Department of Real Estate, School of Design and Environment. Read more…
Research Highlight
Singapore Industrial Property Price Index Methodology
The growth of Singapore and global economies broadly fuels the demand for the industrial space in Singapore. Mastering
industrial property price movement is of importance for us to understand the changing demand. This research project funded
by the NUS-JTC i3 Center aims to construct a quality-controlled industrial property transaction price index to better capture
industrial real estate price movements. Read more…
Market Updates
Singapore Residential Price index (SRPI)
The NUS SRPI overall value-weighted index and three sub-indices in June 2014 turned back to the falling track from last
month’s rally with central region leading the price drop of the month. The NUS SRPI in May 2014 decreased by 1.0 percent
for overall, 1.5 percent decrease for central region, 0.4 percent decrease for both non-central region and small units
respectively. Read more…
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NUS-REDAS Real Estate Sentiment Index (RESI)
Real Estate Developers’ sentiment of the market has weakened further in 2Q14. The Composite Sentiment Index, a derived
indicator for the overall real estate market sentiment in Singapore, stood at 3.5 compared to 4.5 a year ago. The Current
Sentiment Index went down from 3.7 in the last quarter to 3.6. The Future Sentiment Index decreased to 3.4 from 3.9 in
1Q14. A score under five indicates deteriorating market conditions, while scores above five indicate improving conditions.
Read more…
Faculty News
Professor Sumit Agarwal has been appointed as Low Tuck Kwong Professor in NUS
Business School
Read more…
Events
Summer Program to Taiwan
This year’s summer program (RE4203 Topics in Real Estate) was in Taiwan from 2-8 June 2014. This year’s trip to Taiwan
involved planned visits to academic institutions, private firms and local governments. Read more…
Getting Connected
NUS Real Estate News is a quarterly e-newsletter which aims to connect industry professionals, alumni and students. It
disseminates information on the latest research and activities in DRE and IRES. Please forward this email to interested
friends and colleagues. Your feedback and comments are most welcome. To unsubscribe, simply reply to this email with the
message “Unsubscribe”.
Editorial team: Sing Tien Foo, Choo Tyng Tyng, Zhou Xuefeng, Cheang Shi Qiang, Andrew
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Commencement 2014
In this year’s Commencement on 15 July 2014, a total of 173 students graduated with a
Bachelor of Science (Real Estate), Master of Science (Real Estate), Master of Science (Real
Estate and Urban Economics) and Doctor of Philosophy degree from the Department of Real
Estate, School of Design and Environment. The graduates, their parents and faculty members
congregated at the University Cultural Centre to celebrate this happy occasion.
The Department wishes all the graduates success in life, may it be embarking on their career
journey or pursuing their interests. We would also like to take the opportunity to congratulate
the following medal and/or prize winners:
Wong Hsien Xiong
winner of the REDAS Gold Medal for M.Sc. (Real Estate)
Lee Si Yuan Andrew
winner of the CBRE Medal and Prize, Fission Medal and Prize, Huttons Marketing
Medal and Prize, Keppel Land Medal and Prize
Ong Zhen Hao
winner of the Ascendas Medal and Prize, Colliers Medal and Prize, Knight Frank
Medal and Prize, Sally Meyer Medal
Chen Bochuan Aaron
winner of the Lee Kuan Yew Gold Medal, SISV Gold Medal
Teo Xian Mei
winner of the BEMA Gold Medal
Hoon Dai Seng
winner of the Amos Koh Medal
Huynh Kim Ngan
winner of the World Valuation Congress Medal
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John Paul Chua Dong Jie
winner of the NUSS Medal for Outstanding Achievement
Lee Xinli
winner of the CapitaLand Medal and Prize
Lim Shu Hui Camille
winner of the SLA Medal and Prize
Nur Faezah bte Kosno
winner of the Seek Ngee Huat Medal and Prize
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Singapore Industrial Property Price Index Methodology
Assoc. Prof Tu Yong, Ms Jeslyn Ng, Assoc. Prof Yu Shi Ming and Dr Li Pei
The growth of Singapore and global economies broadly fuels the demand for the industrial
space in Singapore. Mastering industrial property price movement is of importance for us to
understand the changing demand. This research project funded by the NUS-JTC i3 Center
aims to construct a quality-controlled industrial property transaction price index to better
capture industrial real estate price movements. The current official industrial property
transaction price indices have some limitations. For example, the indices are unadjusted for
quality. Price changes therefore might be dominated by either lower priced or poorer quality
properties in some periods. Besides, twelve quarters’ moving average used in the official
index construction may result in index smoothing problem. Smoothing effect will become
larger if trading activity of the industrial properties is thin in certain periods. Finally, in the
index calculation, only those with “options exercised” as ground of claims are used, and
single-user factories are also excluded. Therefore changes in the reported index between
times may not accurately reflect the overall price changes in the industrial property market.
The indices derived in this project use both multi-user and single user industrial properties as
well as the properties without “option exercised”. Conventional hedonic model, spatial
model to deal with spatial correlations and the chained hedonic method to deal with revision
problem are adopted to control property quality changes as well as to avoid smooth effect.
The empirical results show that the chained hedonic method is more appropriate for
constructing Singapore’s industrial property transaction price index. It can better capture
industrial property price movement compared with the current official index (see Figures 1
and 2).
Figure 1 Hedonic index vs. the current official industrial property transaction price index
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Figure 2 Hedonic index vs. chained hedonic index
Contact person: Assoc. Prof Tu Yong email: rsttuy@nus.edu.sg
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Singapore Residential Price Index (SRPI)
The NUS SPRI Updating for the Month of July 2014
Date of data feed from URA: 21 July 2014
NUS SRPI – the NUS SRPI overall value weighted index and three sub-indices in June
turned back to the falling track from last month’s rally with central region leading the price
drop of the month. The NUS SRPI from May decreased by 1.0 percent for overall, 1.5
percent decrease for central region, 0.4 percent decrease for both non-central region and
small units respectively.
The revised NUS SRPI of May 2014 adjusted slightly down from flash figures for all indices.
The revised NUS SRPI of May 2014 was 0.4 percent increase from previously reported 0.8
percent increase for overall, while it was 0.5 percent increase for central region, 0.3 percent
increase for non-central region and 0.4 percent increase for small units, respectively from
previously reported 0.7 percent increase for central and 0.8 percent increase for both noncentral and small units.
The SRPI is a transactions-based index that tracks the month-on-month price movements of
private non-landed residential properties in Singapore. For detailed information concerning
the
monthly
NUS
SRPI,
please
see
the
Index
Methodology
at
http://www.ires.nus.edu.sg/srpi/srpi_im.aspx.
The next release will be on August 28, 2014 and will include monthly NUS SRPI flash data
for July and revised data for June.
The SRPI up-to-date Value-weighted Index Chart
1) The SRPI, Central Region SRPI (excluding small units), non-Central Region SRPI
(excluding small units) and SRPI Small (December 2005 to June 2014; 2005.12=100)
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2) The SRPI, Central Region SRPI (excluding small units), non-Central Region SRPI
(excluding small units) and SRPI Small (March 2009 to June 2014; 2009.03=100)
3) Overall SRPI, Sales Volume by 1 st Revision (value-weighted) (December 2005 to June
2014; 2005.12=100)
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June 2014 Flash SRPI Values
NUS SRPI Basket as at December 2013
Index Value
(Mar 2009=
100)
Month-on-month
change
NUS SRPI Overall
150.9
-1.0%
NUS SRPI Central (excluding small
units)
138.6
-1.5%
NUS SRPI Non-Central (excluding small
units)
163.2
-0.4%
NUS SRPI Small
174.6
-0.4%
(Reflective of transactions received as at 21 July 2014)
May 2014 Revised SRPI Values
NUS SRPI Basket as at December 2011
Index Value
Month-on-month
(Mar 2009= 100)
change
NUS SRPI Overall
152.3
0.4%
NUS SRPI Central (excluding small units)
140.7
0.5%
NUS SRPI Non-Central (excluding small
units)
163.9
0.3%
NUS SRPI Small
175.3
0.4%
(Reflective of transactions received as at 21 July 2014)
With effect from 28 July 2011, IRES will publish the overall SRPI, two regional sub-indices
that exclude small units and a small unit sub-index. A small unit has floor area of 506 square
feet or below
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NUS-REDAS Real Estate Sentiment Index (RESI)
21st July 2014
Developer sentiment weakens further
Real Estate Developers’ sentiment of the market has weakened further in 2Q14. The
Composite Sentiment Index, a derived indicator for the overall real estate market sentiment in
Singapore, stood at 3.5 compared to 4.5 a year ago. The Current Sentiment Index went down
from 3.7 in the last quarter to 3.6. The Future Sentiment Index decreased to 3.4 from 3.9 in
1Q14. A score under five indicates deteriorating market conditions, while scores above five
indicate improving conditions.
The prime residential sector showed a current net balance of -72% and a future net balance of
-69%; while the suburban residential sector showed a current net balance of -63% and a
future net balance of -65% in 2Q14. The office sector had a current net balance of +41% and
a future net balance of +32%.
A “current and future net balance percentage” is used to indicate current and future
sentiments about real estate development and market conditions in Singapore. It is the
difference between the proportion of respondents who have selected the positive options
(“better” and “increase”) and the proportion of respondents who have selected the negative
options (“worse” and “decease”).
In 2Q14, more than 60% of the respondents foresee that rising cost of construction, inflation
and interest rates will adversely impact the market sentiment in the next 6 months. 53.8% of
them indicated that the property market will have an excessive supply of new launches and a
slow-down in the global economy. Due to the government intervention in the property
market, 89.2% of respondents felt that it is unlikely that a real estate price bubble will be
formed in the market. They also do not expect excessive speculative activities in the near
future.
29.3% of the developers surveyed in 2Q14 expected residential property launches to hold at
the same level in the next six months. 31.7% of them expected moderately more launches in
2Q14 and 9.8% of them indicated that they will launch substantially more units. 24.4% of
them indicated that they would launch moderately less units of new launches; up by 15.8%
from the last quarter. On price changes, 26.8% of them anticipated that residential prices will
hold in the next six months, up from 26.3% in 1Q14. 63.4% of them expect moderately lower
price in the near term, down from 68.4% in the last quarter.
45.3% of the respondents mentioned that the industrial sector was moderately impacted by
the spill-over effect of the cooling measures since January 2013. In terms of demand by
sector, luxury condominiums / apartments are the sector most adversely impacted by the
cooling measures in the residential market. More than 40% of the respondents indicated that
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new sale and re-sale property prices were significantly impacted; while about 68% felt that
take-up rate (demand) were significantly impacted by the cooling measures. 81.5% of the
respondents indicated that the investment demand was also significantly affected by the
cooling measures implemented since January 2013.
In the next 12 months, 77.8% of the respondents felt that, there will be strong outflows of
investments to the oversea real estate markets. 32.8% and 18.9% of the respondents indicated
that high transaction cost and high property prices in Singapore are the main drivers for for
the outflows of investments to overseas real estate markets. About 19% of them mentioned
that affordable prices and high yield returns are two reasons that make foreign real estate
investments attracting. United Kingdom (UK), Australia and Malaysia are the top 3 countries
that attract strong interests from Singapore investors.
“The further weakening of the future sentiment index reflects the pessimistic outlooks of
developers on the property market in the next 6 months. The pressure of declining residential
property prices and low take up in new launches is greatly felt.” says Associate Professor
Sing Tien Foo of NUS’ Department of Real Estate.
For the full report, please click here.
For enquiries, please contact:
1) REDAS: Lim Jiang Fu, Benjamin, Tel: 6336 6655, E-mail: benjamin@redas.com
2) NUS DRE: Assoc. Prof Sing Tien Foo, Tel: 6516 4553, E-mail: rststf@nus.edu.sg
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Honors and Achievements
Professor Sumit Agarwal
He has been appointed as Low Tuck Kwong Professor in the NUS Business School. The
appointment is in recognition of his outstanding and impactful scholarly accomplishments,
which are internationally acknowledged. It is tenable for a period of five years, from July
2014 to June 2019.
Professor Deng Yongheng
His paper co-authored with Xin Liu and Shang-jin Wei entitled “One Fundamental and Two
Taxes: When does a Tobin Tax reduce financial price volatility?” won the best paper award
in the 2014 China International Conference in Finance (CICF), in Chengdu, China in July
2014.
He has been appointed as a member of the management board of Asia Research Institute at
NUS from 1 July 2014 to 30 June 2016.
Assoc. Prof Alice Christudason
She was elected to be the Vice-Chair of the NUS Teaching Academy’s Executive Council
(Exco) with effect from 1 July 2014, for a two-year term. The Exco is actively involved in
defining the direction of the Academy for both the short and long term. The Exco also
undertakes the day-to-day operations of the Academy, and is responsible for making
decisions on behalf of all Fellows.
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Dr Qin Yu
Dr Qin Yu, the newly joined faculty member, had her paper “Networked Leaders in the
Shadow of the Market: A Chinese Experiment in Allocating Land Conversion Rights”
included in the conference program of the NBER Meeting in October 2014. Only a small
subset of the large submissions can be included in the program.
Dr Grace Wong
She has been appointed as Fellow of the NUS Teaching Academy for 3 years with effect
from 1 July 2014. Fellows of the Teaching Academy would play a central role in developing
the educational agenda of the University.
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Summer Program to Taiwan
This year’s summer program (RE4203 Topics in Real Estate) was in Taiwan from 2-8 June
2014. This year’s trip to Taiwan involved planned visits to academic institutions, private
firms and local governments. It exposed the students to a wide range of topics from
residential developments and urban planning to community development and disaster
management. This report summarizes some places visited by 19 Real Estate students led by
Professors Liao Wen-Chi and Yu Shi Ming.
Day 2: Taipei
政治大學
At National Chengchi University, we
received warm welcome from faculty and
students. Professor Calvin Lin gave a lecture
on “Taiwanese housing market and future
challenges.” We had a great time interacting
with the year 4 students from the land
economics department of the host university
during the lecture and lunch. The Taiwanese
students are very friendly and knowledgeable
on the local housing issues.
台北 101
At the iconic landmark of Taiwan, Taipei 101, Cathy Yang, the General
Manager of Taipei Financial Centre Corp, which owns the tower, walked us
through various developmental stages of the project. The topic of crisis
management is of particular interest given the frequent seismic activities in
Taiwan.
台北市政府
The day ended with a visit to the Taipei’s municipality government,
where the honourable Deputy Mayor Professor Chang Chin-oh gave a
two-hour lecture on the current issues facing Taiwan’s real estate, urban
renewal and housing justice, and shared his vision of a cultural city. It
was an invaluable lesson and we were very impressed with his passion
and commitment to improving the urban environment of Taipei city.
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Day 3: Taipei to Sun Moon Lake
冠德建設
Kindom Construction Corporation was our last
site visit in Taipei. The Group Chairman and
CEO, Mr. Timothy Y.S. Ma personally
welcomed us at one of their up-market
condominium developments. The visit provided
us insights into Taiwan’s property market
through the perspective of the developer and
also how they created an excellent customer relationship management framework and how
they implemented the novel concept “library at home” into each of their residential projects.
涵碧樓 (The LaLu)
Next, we traveled to The Lalu (涵碧樓) at
the scenic Sun Moon Lake. The
presentation and tour of the hotel not only
impressed us with the resort by the lake but
also how they had overcome the last major
earthquake to create a top class luxury
resort. The key lessons of crisis
management and hotel/tourism management
were interestingly presented in the museum
at the resort. We also took the opportunity to have some leisure activities around Sun Moon
Lake while enjoying the beautiful and serene environment.
Day 4: Sun Moon Lake to Douliu
斗六市公所
It was a great honour to be hosted by Dou Liu
Mayor, 謝淑亞. Despite her busy schedule, she
conducted a presentation on how the city was
revived after the earthquake and how they
adopted a bottom-up approach in creating a
sense of identity for the residents. In addition,
she brought us around the city for a better
understanding of the people and their history.
Her passion to improve the lives of her people and city had earned her great respect from all
of us. Our interaction with the residents was also an unforgettable one with their sincere and
warm welcome.
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Day 5: Alishan to Tainan
崑山科技大學
At Kun Shan University, Prof Chen Shu-mei, the business school’s dean, talked about
government attempts to curb real estate prices with cooling measures. We learnt the problems
and challenges of two tier governance especially where there are conflicting views between
the central and city governments. Prof Chen also spoke on the real estate market situation in
Taiwan focusing on the issue of housing affordability.
成功大學
At Cheng Gong University, Prof Chen Yen-jong presented the urban planning history of
Tainan and how they managed to keep Tainan’s own uniqueness by developing
characteristics to their buildings. Prof Chen also shared the problems of the diversity of views
of the Taiwanese people. These lectures helped us better understand the challenges faced by
governments around the world in comparison to Singapore.
Day 6: Tainan- Kenting
墾丁國家公園管理處
We were given a presentation at the Kenting
National Park on the conservation of the
environment. This visit helped us understand
more about eco-tourism and the importance of
public education and awareness in helping to
preserve nature and the environment.
Day 7: Kenting- Kaoshiung
After 6 days of travelling around Taiwan,
we ended our trip with a refreshing morning
nature walk at Kenting National Park. The
magnificent greenery and cool breeze
somehow reinvigorated our mind as we
marked the end of a truly wonderful and
educational trip. Besides the lessons learnt
and the beautiful sights, more importantly,
we will always remember this trip because
of the strong group spirit and the shared
experiences.
Lastly, we greatly appreciate the arrangements and efforts by Professor Yu and Professor
Liao in making this an awesome and rewarding trip.
Li Meixin, Goh Yiting, Ng Koh Xin
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