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Competency Unit 1A - Real Estate Agency Industry

Real Estate Characteristics

  • immobile
  • illiquid
  • indivisible
  • indestructible
  • heterogeneity = every property is unique

Real Estate Market

  • NO Central Market (unlike stock exchange)
  • Imperfect Knowledge
  • Highly Regulated
  • Imperfect Competition
  • Real Estate Industry Transformation Map (REITM) to improve using technology

vs Reits

  • Investors (beneficiaries) buy shares
  • Revenues distributed to shareholders

Types of Residential Property

  • Landed
    • Land Titles = Certificate of Title (CT)
    • Strata Titles = Subsidiary Strata Certificate of Title (SSCT)
      • Own the “air space”
  • Non-landed
    • Strata Titles
  • HDB flat gets Subsidiary Certificate of Title

Housing Forms

  • GCB
    • Min 1,400sqm
    • Height max 12m
    • Min width x depth: 18.5m x 30m
    • Setback: 7.5m front, 3m sides & rear
  • Bungalow/Detached
    • Min 400sqm
    • Min width: 10m
    • Setback: 7.5m front, 2m sides & rear
  • Semi-Detached = a pair sharing common wall
  • Terrace = 3 or more in a row
    • Corner = end of row
  • Cluster = mixture
  • Apartment
    • Minimum site 1,000 sqm
    • Maximum site coverage 50%
  • Maisonette = 2-level with staircase
  • Penthouse = highest floor, normally with roof garden
  • EC = strata built by private, with some restrictions as there are subsidies
  • Condominium
    • Minimum site 4,000 sqm
    • Maximum site coverage 50%
  • HDB
  • Shophouse
    • 1st level commercial
    • 2nd level residential
  • Business 1 (B1) = clean & light
  • Business 2 (B2) = general industry, warehouse (more pollution)

Foreign Person

  • Foreigners & PR
  • Require approval from Land Dealings Approval Unit (LDAU)
  • PR should by 5y, with exceptional economic contributions
  • These requires approval
    • Vacant land
    • Landed
    • Strata Landed not condo status
    • Shophouse (for non-commercial purpose)
    • Place of worship
    • Worker’s Dormitory/Serviced Apartments/Boarding House (not registered under the provisions of the Hotels Act)

Demand & Supply

  • Supply Curve /
    • Quantity supplied (x) vs Price (y)
    • As price increases -> motivates supplier to supply more
    • elastic = can increase supply without a rise in cost or a time delay
    • inelastic = firms find it hard to change production in a given time period
  • Demand Curve \
    • Quantity demanded (x) vs Price (y)
    • When demand increases, the curve shift upwards
  • Equilibrium
    • The intersection of supply and demand
    • Will find its way in open market
  • Property is relatively inelastic in response to changes in price
    • change in demand cannot be matched by a change in supply -> large change in price
  • Factors affecting prices
    • Location
    • Tenure
    • Accessibility

Property Cycle

  • Lags behind business cycle
  • 4 Stages
    1. Recovery (upswing)
    2. Expansion (peak or boom)
    3. Decline (downswing)
    4. Recession (bottom or trough);

Statistics

  • Submarket for private
    • CCR (Core) -> RCR (Rest) -> OCR (Outside)
  • Primary Market = New Sale
  • Secondary Market = Resale
  • Temporary Occupation Permit (TOP)
  • Certificate Of Statutory Completion (CSC)
    • Usually TOP then CSC
    • But can be CSC first
  • URA uses Property Price Index (PPI) to track market prices
  • HDB uses Resale Price Index (RPI) to track market prices
    • Based on only HDB (no private)

Postal Code

  • 6 digits
    • First 2 = Sector code (01-81)
    • Next 4 = Delivery Point
  • 4 digits (OLD)
    • First 2 = Postal Code (01-28)
    • Next 2 = Sector code
  • 2 digits (OLDEST)
    • Postal Code (01-28)

Postal code is property district D01-D28.

Government

Statutory Board Under Focus
Singapore Land Authority (SLA) Ministry of Law Land optimization and registration authority
Urban Redevelopment Authority (URA) MND Strategic land use
Jurong Town Corporation (JTC) MTI Develop industrial estates
Housing & Development Board (HDB) MND Public housing
Building and Construction Authority (BCA) MND Excellent built environment

Others: IRAS, MAS, LTA