Just received Artist impressions on Hyll on Holland
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and their Showflat floor plans.
Hyll on Holland Artist Impressions and Showflat Floor Plans
Archives for August 2020
NoMa Preview
Introduction
This is a preview on what to expect for NoMa when it eventually opens to the public. My calculations are usually done when I have more information on the floor size and the asking price of the various available units for the said development.
See the review of Parc Clematis for an example of how the calculations are done.
As we do not have these information yet, we have to make do with what other information we are currently given and based on that, we will know how much the asking price should be and then decide accordingly.
If you just want to know the answer now. It’s 1733.83 psf.
So with a standard 5 percent margin of error at 95% confidence level, simply because no one can predict the future, an appropriate price range of the psf would be between $1647.13 psf to $1820.52 psf
Depending on your risk tolerance and at this price range, you will be buying a development that should be at a good value investment-wise because we are working on the worst case scenario.
If you are interested to know how I come out with this number and the range, please read on.
What we know
Here’s a list of what we already know about NoMa (August 2020).
Tenure
NoMa will be Freehold. Same with Guillemard Edge. Calculations-wise, we will be comparing a Freehold development with another Freehold development.
Location
NoMa will be built right next to the Guillemard Edge at Lorong 30 Geylang. And similar to the above point, this would be the best comparison to do, the Gross Rent Multiplier number should be roughly the same.
Developer
Developer for NoMa is Macly Group.
Land Price PSF
Macly Group bought the land at 700 psf.
Assumptions Made
Here are the assumptions I’ve made regarding NoMa. This will be corrected once we have the full information from the developer and reflected on the upcoming review of NoMa.
Floor plan
I will be comparing the known floor plan size of 1 bedroom at 463 sqft. If the numbers change when the information are out, I will adjust accordingly in the upcoming review for NoMa.
Type of Buildings and Units Available
It is expected to consist of 3 buildings with only 50 available units.
Comparison with The Guillemard Edge
Due to the close proximity of Guillemard Edge and the multiple similar features between the 2 developments, the Gross Rent Multiplier and Income Capitalisation Method should be as close as it can get.
Transacted Record of the Guillemard Edge
Guillemard Edge received their TOP status in 2015. Based on the latest 1 bedroom transaction, here are the following details
Date | Type | Size | $ |
|---|---|---|---|
13 March 2012 | 1-Bedroom #05-XX | 441 sq ft | 544,000 |
20 July 2020 | 1-Bedroom (Same Unit) | 441 sq ft | 648,000 |
In 8 years, it has achieved a gross capital gain of $104,000 with an annual growth rate of 2.10%.
The annual growth rate of the east region is at 2.98%.
We will use the annual growth rate of 2.10% as we are working on the worst case scenario.
The transacted rental records (lowest and highest) for similar units are as follows
Month | $ |
|---|---|
1st March 2020 | 1,650 |
1st July 2020 | 2,200 |
We shall use the lowest rent receivable at 1,650 SGD per month for the worst case scenario
GRM of the surrounding area
The Gross Rent Multiplier (GRM) for Guillemard Edge is calculated as
GRM = Sales Price / (Annual Rent of Unit)
= 648,000 /(1,650 x 12)
= 32.7273 (Rounded to 4 decimal space)
With the following assumptions taken
Sales Price of 648,000 SGD taken for the unit #05-XX 1 bedroom which was sold on 20 July 2020
Assumption of Annual Rent of 2,200 SGD taken for the lowest rent transacted on 1st July 2020
Income Capitalisation Rate
The Income Capitalisation Rate formula is as follows
Cap rate = Annual Net Operating Income / Market Value
= (Rent Income – Property Tax – Property Insurance – Annual Maintenance Fees – expected Maintenance and Repair – Vacancies Loss) / Market Value
= (19,800 – 1980 – 120 – (320 * 12) – (2 * 1650)) / 648,000
= 0.0167
Assuming the following
- Expected Maintenance and Repair is 0
- Maintenance Fee for the Guillemard Edge is assumed to be 320 SGD
Calculation for NoMa using Gross Rent Multiplier and Income Capitalisation Rate
As we are assuming the same numbers for NoMa, we can calculate the future value of NoMa by using the worst case scenario growth rate of 2.10% with the knowledge that it is expected to TOP in 2023.
The future Value of NoMa in 2023 with a 2.10% growth rate is
$802,761.31
Dividing by the 463 sqft size of the unit, we get the price psf of
$1733.83
With a 5 percent margin of error at a 95% confidence level, we get a price range of
$1647.13 psf to $1820.52 psf
My thoughts on the Market Value of NoMa
Let me stress that one transaction record does not determine the GRM and ICR of the development. I try to work on 9 other transactional records from 3 different developments for a more accurate number if available.
And also that we do not have the confirmed floor size, price and floor level of the upcoming NoMa. All of this, which will play a factor in the real estate investing calculations.
The upcoming review of NoMa, when we have more information from the developer, will further determine if it’s a good investment for your next home.
Conclusion
Congratulations! If you’ve read to this point, you are probably really looking at checking out the show flat for NoMa and knowing more about this upcoming development at Sims Drive.
This is just a brief thought process on how I would go through with clients who are interested in buying a unit in NoMa
There are several advantages when I represent you in buying a new launch
- NO COMMISSION REQUIRED. Probably the biggest advantage. If I sell this development, the developer pays me the commission, not you.
- Free Real estate investing report with calculations on your preferred unit will be done for you upon meet-up. Not only will you have all the necessary information, I will also pass you all the floor plans, the images, the pricing and launch price discounts (if any).
- If you are looking to buy a unit for investment, I will research the best unit type this condo has to offer to provide you with the maximum returns from your investment money. If you are looking to buy for home living, I will research and let you know the best floor level and direction facing to get to maximise your sales price. Basically, I will study these units and provide you with the highest chance of increasing the future capital appreciation potential of your unit
- My obligation is only to you. You can look for me for advice for anything real estate related, any time and any day. I don’t work for NoMa. I have no obligation to sell this development for them and therefore, I have no need to pressure you to buy this unit. If you want to buy, buy, otherwise, we move on and will look out for another unit that is more suited for your needs.
- I am part of a team that is very strong in financial calculations. If you are really looking to buy, my team will find different ways and different means to make sure you will be able to afford it. Throw us questions and problems you are currently facing and which your previous agents are unable to answer, let us impress you with what we can do to get you your preferred unit
Buying a condominium (especially a new launch) for anyone is most probably one of the biggest ticket purchase in their lifetime
Think of me as your friendly and knowledgeable real estate investor friend who’s doing you a favour to make sure the purchase of your new condo is really something worthwhile to purchase or at the very least, something that won’t lose you money in the future.
What are you waiting for? Let’s start!
Disclaimer
The information provided on this Datacrunch Real Estate website has been compiled for your convenience. All information (including but not limited to the property area, floor size, price, address and general property description) on the Datacrunch Real Estate website is provided as a convenience to you.
This disclaimer informs readers that the views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual.
Datacrunch Real Estate does not accept liability for any investment decision made on the basis of this information. This website does not constitute financial advice and should not be taken as such.
Limited Time Offer for all New Launches (August 2020)
I’ve recently received the latest discounts for all new launch condos right now in Singapore. Check out the PDF
If you are in the market for a new launch and would like the actual PDF copy, PM me!
If you have friends who are interested in a new launch condo, please share this link with them and PM me!
I would be glad to help. Let me know how.
Looking to serve you soon!
Disclaimer
The information provided on this Datacrunch Real Estate website has been compiled for your convenience. All information (including but not limited to the property area, floor size, price, address and general property description) on the Datacrunch Real Estate website is provided as a convenience to you.
This disclaimer informs readers that the views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual.
Datacrunch Real Estate does not accept liability for any investment decision made on the basis of this information. This website does not constitute financial advice and should not be taken as such.
Artist Impressions of NoMa by Macly
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The Annual Growth Rate for Real Estate Investing
Introduction
Although the annual growth rate is not used in the various real estate investing formulas used for calculating the market value of a real estate, it’s often used as an indicator on whether or not, a real estate is a worthwhile investment to add in your portfolio or if it has the potential to increase in value after you purchase the home.
Here’s a brief description on what these percentage numbers means for the home you are looking at.
0 – 0.99%
Most probably this property was bought at an overvalued price. Try to avoid these units as much as possible unless you really really really love it or you absolutely have to live in it.
I don’t see any benefit in staying in such a unit because the same unit can be bought in 6 – 10 years time with perhaps just a slight increase in the purchase price (<20K – 80K).
Meanwhile, you could be staying in another property which will give you much higher returns and return to buying this overpriced unit when the initial buyers start to sell their units at a lower price than they paid for.
A win-win situation for you.
1 – 1.99%
The minimum you should be looking out for if you are buying a unit not aimed for real estate investing but because of several other factors like
- you really liking the location or unit
- the amenities and/or facilities
- The location within 1 km of the school you are looking to get your kids into (For parents, of course)
Nothing against these properties, it’s just that there are probably some other properties with the same features in the vicinity which will give you better returns at a better price.
2 – 3.99%
The average returns for a well-selected property. A good new launch condo priced right for its location, facilities and amenities will tend to give out these numbers. From this point onwards, the popular advice on how investing in real estate will always make you money and be a constant hedge against inflation from real estate agents and well-meaning friends will hold true.
At a 3% annual growth rate for an 800K priced property held over 5 years, your paper capital gain from your property will be SGD 2166 every month (on average) and will increase the longer you hold it due to the compounding effects of an increasing market value for your property.
Best bought during the recession period of a real estate cycle (not to be confused with the economic cycle) or the beginning recovery period to allow time to work in your favour.
4 – 7.99%
The holy grail of real estate investing properties. At these annual growth rates, you can look into doubling your investment in ten to fifteen years. Very possible if you do your maths and invest in a redeveloping district with growing job opportunities which would allow a general rise of asking rent every year.
These properties will usually be used as shining examples on why you should be investing in real estate. Especially in a land-scarce country like Singapore.
Beyond 8%
If you are in purely for real estate investing and nothing else, I would advise you to start looking to sell as these numbers usually signify the beginnings of a housing bubble. Sell the property and wait for the prices to go down to a more reasonable price before jumping back into the real estate market to start the whole process again.
If this is your home, at this point, it would probably be the highest you can ever sell your home for at least in the next 10 years. Nothing wrong to continue staying if you have fully paid for this property and like your home. But if you are looking to downgrade for whatever reasons, this is probably a very good time to do it.
Due to the cooling measures implemented by the Singapore government since 2010, the property market looks to be in good shape and unless something drastic happens that causes the Singapore government to remove these cooling measures, a housing bubble crash like the one that happened between 2008 and 2012 will hopefully be replaced by one with just a slower growth rate with a longer recovery period before things start picking up again.
This will be the best news for home owners and real estate investors alike.
Conclusion
Hopefully these numbers will be a good gauge for the new launch or resale property you are looking at buying.
If you are looking at a new launch, these numbers will not be available for you to check out, mainly because they haven’t been built yet. But you can look at the properties surrounding this location and compare it objectively. Use the real estate investing formulas to determine how much is the market value of these new launch condos and then you can decide or not whether they are a good choice for your needs.
If you are looking at a resale condo or apartment, use the existing property transaction records to your advantage. The more transactions this development has been through, the more accurate you will get with your calculated numbers.
If you are looking at landed properties, the transactions are usually much fewer in numbers due to the fact that these owners are buying and holding the property for longer periods of time and not for real estate investing reasons. This is when using the sales comparison approach from Urbanzoom or SRX will help. Ultimately, the price is largely determined by the negotiation between the buyer and seller.
If you have any questions or are looking for someone who can assist in your real estate journey whether or not you are buying or selling, let me know how I can help!
Disclaimer
The information provided on this Datacrunch Real Estate website has been compiled for your convenience. All information (including but not limited to the property area, floor size, price, address and general property description) on the Datacrunch Real Estate website is provided as a convenience to you.
This disclaimer informs readers that the views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual.
Datacrunch Real Estate does not accept liability for any investment decision made on the basis of this information. This website does not constitute financial advice and should not be taken as such.
