So what is this new 3-million-baht Investment Visa?

It is an extension of stay granted one year at a time and is renewable annually. As this is an extension of stay based on investment, it is designed strictly for the holder to reside in Thailand. It does not grant the holder the right to cork or conduct commercial activities in Thailand.

What law provides for this visa?

Two statutes/ orders provide for this visa. Namely:

a. the Immigration Bureau Order No. 237/2568; and

b. the Immigration Bureau Order No. 238/2568.

The latter order provides for the 12-month extension and lays out the eligibility criteria, the required 3-million-baht investment threshold and the document requirements.

When did this visa start?

The immigration orders came into force on 1 October 2025.

Are there any ambiguities?

To date, the freehold condominium purchase route is well understood and in force. However, as of the time of writing, the authorities are still clarifying the requirements for leasehold and rental pathways for the visa.

Do you need an agent to apply for this visa?

No. You do not need an agent to apply for this visa. There are many companies online who tout their services as “agents” for the visa. However, anyone is permitted to apply for this on their own. The possible benefit of engaging such an “agent” would be that they would be more familiar with the process and perhaps some documents may be better understood in Thai. Hence if you do not understand Thai, you may benefit from such a service.

The market is currently flooded with “agents” charging high “membership” or “service” fees. These fees may come with some additional perks like airport pickups. However, there is no requirement to use an agency to apply for this visa. The process primarily requires you to obtain a Certification Letter verifying your investment, which is administered through Thailand Longstay Service Co., Ltd. under the Ministry of Tourism and Sports. Once you have this Certification Letter, together with the relevant bank and property documents (like the Foreign Exchange Transaction (FET) Form showing funds came from overseas, and the property title deed in your name), you can process the paperwork independently.

Some Thai property agencies or developers may assist their buyers in applying for the 3-million-baht Investment Visa. If you are buying or bought a property through a Thai property agency or Thai developer, you may check with your sales agent if they do provide such a service.

A word of caution when you see “agents” promising guaranteed immediate results or trying to sell you fast track packages using loopholes. These are not advised and to date, I cannot find any “agent” who can fast track the application process. The fastest way to apply would be to have all documents ready and respond promptly when the authorities reach out to you for clarification. There are also “agents” who can claim to be able to obtain an FET Form without the need for funds to come from overseas. This is not legal. Moreover, you would not want to jeopardise your application by submitting something an untruth.

The application procedure

Please note that there may be some changes in the future. This is accurate as of the day of posting. The application is

Step 1: Property purchase and Thai ownership compliance

Finalise the purchase of your freehold condominium worth at least THB 3,000,000. The funds must be transferred from overseas. You will also need to verify that your ownership of the property is compliant (i.e. within the foreign quota limits).

Step 2: Obtain Certification Letter from Ministry of Tourism and Sports

This is done by submitting the property documents, bank forms and a copy of your passport to Thailand Longstay Service Co., Ltd (TLS). There is a one-time membership fee of THB 4,000 and an annual service fee of THB 27,000. They will obtain the Certification Letter from the Ministry of Tourism and Sports on your behalf.

Step 3: Obtain the 90-day visa

With the Certification Letter, you can obtain an initial 90-day Non-Immigrant ‘B’ (Investment) permit from the designated immigration office.

Step 4: Obtain the 12-month extension

Before the expiry of the 90-day permit, you will need to return to immigration to file for the full 12-month extension (this will be facilitated by TLS). This extension is renewable as long as the property is maintained under your name.

Documents required

Personal Documents:

Completed TLS operator application and visa support forms.

Full passport scan (every single page, including blanks). The passport must have at least 6 months of validity remaining.

Passport-format photos.

If applying for dependents later: Marriage and/or birth certificates (must be translated into Thai and legalised or certified by the Ministry of Foreign Affairs or your embassy).

Property and Financial Documents:

Foreign Exchange Transaction Form (FET Form): Issued by a Thai bank, proving the THB 3,000,000 was transferred from a foreign source in a foreign currency specifically for purchasing real estate.

Sale and Purchase Agreement

Chanote Title Deed: Must be registered in your name at the Land Office. (For Bangkok properties, the transfer must have been registered on or after October 1, 2020).

House Registration (Tabien Baan): The yellow or blue residency book for the property.

Land Office Transfer Receipt: The official government receipt showing property transfer fees were paid.

Occupancy Verification Photos: Three specific photos of you at the property:

Standing in front of the building façade (with the building name clearly visible).

Standing at the unit entrance (with the room number legible).

Standing inside the living area of the unit.

Seller’s Documents:

If buying from a Thai individual: A copy of their Thai ID card and their house registration.

If buying from a developer or company: Current company registration documents and the shareholder list (BOJ5 form) proving the company is majority Thai-owned (over 50%).

Timelines to take note of:

TLS Verification Processing (Step 2): Takes approximately 7 to 10 business days.

The “15-21 Day Rule”: When you go to Immigration for your initial 90-day permit (Step 3), you must have at least 15 to 21 days of permitted stay remaining on your current tourist visa or visa exemption. If you have less than that, Immigration will likely reject the application and force you to do a border run to get a fresh entry stamp.

When to Start the Process: Because TLS takes up to two weeks to issue the Ministry Certification, applicants should initiate the TLS submission at least 30 to 45 days before their current Thai visa expires.

Visa Issuance: The 90-day permit is usually issued on the same day as your Immigration appointment. The 12-month extension processing time varies by the specific immigration office but is finalised within the initial 90-day window.

Summary of the 3-million-baht Investment Visa

The target audience is foreigners looking for a long-term, renewable residency option by purchasing a condominium worth at least THB 3,000,000. The condominium must be a freehold condominium and the money must be transferred from overseas in a foreign currency. The Thai bank must issue a FET Form. The condominium must be completed as only when a condominium is completed, will you obtain a title deed with your name on it. Before a condominium is completed in Thailand, the buyer will only have a beneficial interest in the future unit. There is no title deed with the buyer’s name on it. As this is one of the documents required for the application of this visa, the condominium you are using for the application needs to be a completed condominium.

The advanced option would be…

The Long Term Resident Visa under the Wealthy Global Individual option. Please see my previous article for details.

In a nutshell, to qualify as a Wealthy Global Individual, you must:

• Have assets of at least USD 1 million
• Have an annual income of at least USD 80,000 for the past 2 years
• Make an investment of at least USD 500,000 in Thai government bonds or Thai property or a combination of both

The main benefits of this Long Term Resident Visa over the 3-million-baht Investment Visa are:

1. 10 year validity
2. Reduced reporting (annual reporting vs 90-day reporting)
3. Tax benefits in the form of exemption on foreign-sourced income

Please note that these procedures and guidelines may change. It is important to check with the relevant authorities at the point of application for the latest procedures and guidelines.

Yours sincerely,

Daryl

The post Thailand’s new 3-million-baht Investment Visa appeared first on Daryl Lum's Blog.

So what is the COE system?

It is a way of restricting car ownership. It is a mandatory permit that grants the holder of the COE to register, own and use a vehicle in Singapore for a period of 10 years. The COE system was implemented in 1990 to control the number of vehicles on the road. The purpose is to manage traffic congestion.

We do not want Singapore traffic to become something like the traffic in Bangkok…

Yes that is my friends and I walking. It can be faster to walk to some location in Bangkok as compared to taking a taxi.

Not let us move back to the discussion about the COE system in Singapore.

Essentially, the COE is a form of tax on the car owner. Let me explain how taxes work.

Taxes are monies that the government collects and it goes into its coffers. The government would then use this money to improve Singapore in general. For example, public services like street lighting and the police force require monies for them to be running efficiently. As this is a free good, there will not be any private individual or entity that is willing to fund these services. Therefore, the government will have to fund them. The government needs money to do so and taxes provide them with the money to do so. In some cases, taxes are in place to discourage individuals or entities from partaking in certain activities. For example, the Singapore government taxes cigarettes very heavily. This is to discourage people from smoking or probably if they need to smoke, to smoke less. The thing that the Singapore government is trying to prevent people getting illnesses like cancer. Or at least reduce the number of people. In the case of smoking, lung cancer specifically as it has been proven that smokers have a higher chance of developing lung cancer. In the case of road behaviour, the government is trying to reduce congestion. In economics, we call this a negative externality.

Negative externalities can be prevented or reduced with carefully targeted taxes. Taxes on cigarettes are one such example. You want to reduce smoking rates and therefore you tax cigarettes. Through taxes, you change behaviour. People may find it too expensive to smoke and may either smoke less or not smoke at all. In this case, the taxes on cigarettes are targeted. According to the Ministry of Health, smoking prevalence in the Singapore population dropped from 13.9% in 2010 to 10.1% in 2020. In that same time, taxes on cigarettes have been steadily increasing.

Applying this same concept of targeted taxes, we can actually understand why the COE system is flawed.

The negative externality that the Singapore government was trying to reduce is traffic congestion. In this case, the tax should be on the usage of vehicles as the negative externality is due to excess usage. However, the COE is a tax on the ownership of the vehicle. My personal take is that the policy of the COE was something that seemed to be haphazardly put together as the consensus of the day is that if someone owns a vehicle, he will use the vehicle. This is a very flawed way of thinking. I am sure there are many things that all of us own but we do not use. If that is the case, then the government can ensure that every Singaporean owns a pair of running shoes and all of us will be running very often. That neatly brings me to my next point. The way you obtain ownership also determines how you will use that item. If the Singapore government gifts every Singaporean a pair of running shoes, it is unlikely to be a very effective encouragement for many to pick up running because they did not pay for the pair of running shoes. However, if someone pays for a very expensive pair of running shoes, he or she is likely to think that because of the large expense, they should use the pair of running shoes more often to extract as much value as possible. This is the same thinking when someone pays a very high price for a vehicle. If you pay $250,000 or more for a vehicle in Singapore and you can only use the vehicle for 10 years, will you consider leaving your vehicle at home and taking public transport? Highly unlikely. You will want to use the vehicle as often as possible to extract as much value as possible.

Consider car rental companies that purchase vehicles to lease these vehicles for individuals who want to work as private hire drivers. The rental rates will go up if the acquisition cost of the vehicle goes up. This would mean that the driver will have to drive longer hours to make money from his rental vehicle.

Take a look at the traffic congestion that happens so very frequently on our roads. It is a result of many road users wanting to extract as much value as possible from their expensive vehicles.

So then, what is the solution?

We have a solution sitting right in front of us. It is to tax road users based on how much they use their vehicles. We have the ERP 2.0 system that can track vehicle usage on public roads. We have gantries in our central business districts that are lying idle. We are able to tax road users high rates in areas like the central business district and perhaps a lot less on roads that are far away from the city centre. We do not have to do away with the COE system. Yes we can have a hybrid system that taxes both ownership and usage. However, with carefully calibrated taxes, we can increase vehicle growth without increasing traffic congestion. Imagine a scenario where COE is say SGD$30,000 and you purchase an entry level vehicle for maybe SGD$120,000. Yes you are paying maybe $10,000 per annum for your vehicle. However, if the road usage tax that you have to pay to drive to your office in Raffles Place is $30 a day, it is likely that you will consider taking the MRT if that is going to cost you less than 5% of the cost to use the road. Add in parking fees and the savings are even greater. Remember, we never had an issue where we had an insufficient number of carpark lots. The issue was that the roads in certain parts of Singapore, namely the central business districts, were getting increasingly congested.

There are always those who need a vehicle. Some families may have handicapped or elderly family members. Getting them to always take public transport during family outings is not ideal. Yes they can call for a taxi or a private hire vehicle but then some of them have a large amount of things to carry along with them. They may also require vehicles with ramps or vehicle boots that can accommodate items like wheelchairs. If we have progressed truly as a nation, should a vehicle not be something that a family should be able to afford? We can implement highly prohibitive usage taxes on weekdays especially to discourage usage. We can then lower or reduce the usage taxes on weekends and do away with them altogether in certain areas to encourage those with vehicles to visit certain parts of the island.

There are also those who need a vehicle for work. For example, a company that does aircon servicing will need a vehicle. They cannot be carrying all their tools and taking public transport. High COE prices will invariably lead to them having to pass on at least some of this cost to the everyday consumer. Hence while we say that COE is a tax on the wealthy, there are certain costs that are also passed on to the middle and even lower class in Singapore.

One interesting point to note is that while car prices are included in the Consumer Price Index (CPI) calculation under the private transport category, when the MAS monitors core inflation, they exclude car prices from their calculation.

Anyway, my proposed solution may not be the most elegant but at least I am trying to target the behaviour that is causing the externality.

So should we scrap the COE system? 

No we should not. We should control the number of new registered vehicles that come onto the road every month. This allows the government to calibrate the vehicle growth and respond to trends. Imagine if Tesla decides to slash prices of its latest Model Y to take a foothold in the Singapore market. This is likely to cause a large number of buyers of the vehicle. If this is unchecked, it could unexpectedly spike the vehicle growth. Ownership, while not directly linked to the root of the problem, is still helpful to a limited extent, in managing traffic congestion.

So why is this archaic policy that was implemented in 1990 still prevalent today? 

Well, this is one of the policies which I think need changing. There is no way any transport policy maker can say that taxing ownership is the best way to reduce a negative externality that is caused by usage. It just does not match. So while I generally agree with the government on many of its policies, this is one example of an inefficient policy that remains. Why? Maybe because there is no one who dares to stand up and question the COE system in depth.

Something for the next batch of parliamentarians to think about…

Yours sincerely,

Daryl

The post The Certificate of Entitlement. A flawed system that persists with no end in sight… appeared first on Daryl Lum's Blog.

For the past few trading sessions, the overall stock market in the US and over the world have been plunging. In essence, losing trillions of dollars in value over a matter of days.

Liberation Day was the day that Donald Trump announced his sweeping tariffs. As referenced earlier, this was on the 2nd of April 2025. What was he liberating the Americans from you might ask? Perhaps the Americans were liberated from being able to purchase goods from all over the world.

Why a stock market plunging is worrying for many Americans is multi-fold. The immediate concern are for those looking to retire. In the US, many Americans plan their retirements by using their monies in their 401(k) account to invest in stocks. Generally, the monies in this account can only be withdrawn, penalty-free, when the account holder reaches 59 1/2 years old. For those who are reaching this age, to see their stock portfolio plunge overnight is extremely worrying. This means that they will have less monies for their retirement.

The next immediate concern are rising prices. One can appreciate that Trump is trying to force manufacturing and production back to the US. However, if you tax imports like coffee, there is no way that Americans can immediately produce coffee once these tariffs kick in. What will happen is that coffee imports into the US will be hit with a tax. Hence, if you are a coffee importer in the US and you buy USD$100 worth of coffee from Vietnam, once that USD$100 worth of coffee reaching the US port, the US tax department will hand you a bill of USD$46 as the tariffs on Vietnamese products is 46%. This is an oversimplification of the process. There is usually a declaration procedure where the importer has to fill in a form before the bill comes but you get the point. To those Americans who think that prices are not going to rise, you are going to realise that what you think is not going to happen.

The tariffs are not really reciprocal

Trump mentioned that it cannot get any simpler than the US merely taxing others what others are taxing them. In fact, Trump mentioned that he is merely taxing the other party approximately half of what they impose on the US. However, this could not be further from the truth. This is what they came up with:

I will let CNBC explain this formula to you. I will not belabour the point.

The essential part of this formula is that it takes into account the trade deficit with a particular country and includes it in the tariff calculation. This is how Vietnam got hit with a tariff rate of 46%. For the record, Vietnam does not impose 92% tariffs on the US. It never has. However, Vietnam racks up large trade surpluses against the US. Hence, there is clearly a trade imbalance in favour of the Vietnamese. The US buys more goods from Vietnam as does Vietnam from the US.

Is it possible to have a perfect trade balance?

This is what Donald Trump wants. He wants there to be no trade imbalances. He equates trade imbalances with tariffs. If you sell more goods to us than we to you, you are imposing tariffs on our goods. However, it is not that simple. Trade imbalances are part and parcel of global trade. It is a principle and the bedrock of how goods and services flow around the world. Imagine a scenario where there are perfect trade balances. This is before the advent of money. Barter trade dictates that I give you what I have in exchange for what you have. Hence, in the past, before there was the concept of money, if I grew rice and my neighbour grew vegetables and I wanted vegetables and he wanted my rice, I could exchange some of my rice for his vegetables. This is only workable if both parties have what each other desire. In the case where I want his vegetables but he does not want my rice, I cannot barter trade with my neighbour. The only way to get vegetables would be to look for some other person who has vegetables and is willing to trade for my rice or I had to grow my own vegetables. This is where money comes in. Money is useful because it acts as a store of value. Therefore, I can sell my rice for money to someone who wants to buy it. The money, as a store of value, can be used to buy the vegetables that I want. What this means is that I can just focus on growing rice. If I keep growing it and trying to improve my growing practices, I will get better at growing it. I do not have to divert my resources to growing something that I am less good at. This is the basis of global trade. Every country focuses on what it is good at and we use money as a store of value to trade with each other.

What Trump wants is akin to a reversion to barter trade. You have something that I want and I am going to buy it from you. In exchange, you must buy something back from me with at least the same value of what I buy from you. Alternatively, since you have something that I want and you do not want to buy things from me or at least of the same value of what I am paying you, then I am not going to buy it from you. I am going to produce it in the US.

I have this analogy to him and his advisors. I go to my. hairdresser for a haircut every 6 weeks. I pay her money for the haircuts but she does not buy anything from me. I have a trade deficit with my hairdresser. That does not mean that I stop going to get my haircut and cut my hair by myself.

The concept of no trade imbalances against the US is impossible. This will never happen because globalisation and specialisation dictates that certain countries will buy more of certain goods and services from others and vice versa.

Can there be a way for countries like Vietnam to rectify the trade imbalances to go to a zero tariff rate with the US?

Of course Vietnam would want there to be no tariffs on the products they sell to the US. However, the reason why the US is buying products from Vietnam is because Vietnam is producing these products very cheaply or that certain produce grown in Vietnam is desirable to US consumers because of certain characteristics. For example, Nike makes its clothing in Vietnam because they are cheap. The reason why Americans buy products from Vietnam and China is because of price. They are cheap and generally of good quality. Even if the quality may not be as good as if the product was made in the US, the American consumer is ok with that because of the low price.

Can the US shift manufacturing back to the US and make the US a manufacturing superpower and yet keep prices low?

The strict answer to that is no. There is no way Trump can get factories to shift from places like Vietnam and China to the US and have these factories produce their products at the same cost as before. This is because the working conditions in Vietnam and China are so much worse compared to the conditions in the US. Running sweatshops are cheap. Workers are not unionised and hence you can work them to the ground. Long hours, low pay and little regulation may sound wrong to these workers but the truth of the matter is that consumerist countries like the US love products made in this manner because they are cheap. Look at US culture. It is a consumerist one. You look at TV shows and the rooms are filled with stuff. The US consumer loves shopping and the world loves producing goods for the US. If the US were to domicile all manufacturing, it is likely we will see products that are much higher than they are now. This is because there are proper labour laws in the US. Workers are unionised and hence if conditions are not ideal, workers go on strike or start negotiating for higher pay or better conditions. In the worst case scenario where we take the ends of the spectrum, imagine a dilapidated factory in Vietnam that employs extremely poor workers and even child labour (I am against such exploitation. I am just using this as an illustration). Now imagine a factory in the US. Do you see the same dilapidated factory with such impoverished workers or do you see the possibility that the workers in the US know their rights and are part of unions? There is no way you can produce an iPhone in the US at the same price as you once did in China. Trump is not going to be able to make American manufacturing great again because in most cases, the jobs are gone forever and will never come back.

Let us analyse the reason why the US runs so many trade deficits with so many countries around the world

One of the main factors driving the trade deficits is the strength of the US dollar. The US dollars strength causes its goods to feel relatively expensive by foreign countries. On the flip side, the people in the US holding US dollars will feel that products from outside of the US are comparatively cheap. The means that more people in the US are buying foreign products than foreign countries buying US products. The main reason why there is a constant strong demand for the US dollar is because of its role as the reserve currency in the world. The US must decide whether it can accept a scenario where the US dollar is no longer the reserve currency in the world and no longer enjoy such demand. In my personal opinion, the US will not want this to happen and it also cannot afford to do. Ceding the US dollar’s role as the reserve currency would mean that demand for its bonds and securities will not be as high as before.

It is because of this that the US runs trade deficits. So make no mistake that the trade deficits are not of the foreign country’s own making. The US dollar does contribute to this situation as well.

The question is whether there is any logic to this madness.

Now there could be. Trump’s advisors are likely to be steeped in economic knowledge as well. They would have made their calculations as well. They are likely to know that the tariffs would elicit a negative response in the stock market. It is unconceivable that they would not know this. So let us try to find some sense in what seems like a whole load of nonsense.

Imagine the scenario where the Vietnamese coffee exporter exports 100% of his coffee to the US. In that case, when the US government slaps a 46% tariff on the coffee, it is likely that his US importer will not want to pay an additional USD$46 on top of every USD$100 worth of coffee. In this case, if the Vietnamese coffee exporter only has one client and that is to that US importer, then the US importer not buying any coffee from him would be extremely detrimental to him. What he could do would be to lower the price he sells his coffee to the US importer. For example, instead of selling the same amount of coffee for USD$100, he could sell it for USD$70.

In this case, after the tariff, the coffee would cost:

$70 + (46% x $70) = USD$102.20

This would not make much of a difference and the US importer can leave the price relatively the same. In this case, the cost of the tax will be born solely by the Vietnamese coffee exporter. Instead of collecting USD$100 for that amount of coffee, he collects USD$70.

However, the truth is perhaps somewhere in between. The Vietnamese exporter is likely to have other parties he can sell his coffee to. In this case, he is likely to maybe reduce his price less than the USD$30 that would keep the eventual price somewhat similar to before the tariff. Say he lowers the price to $85.

In such a case, after the tariff, the coffee would cost:

$85 + (46% x $85) = USD$124.10

In such a scenario, it would be unlikely that the US coffee importer would agree to keep prices stable as he is paying approximately 24% more for the same amount of coffee post-tariff. He can then pass on the cost to the US consumer. Hence, coffee prices in the US are likely to increase.

I think there is some benefit to tariffs. Yes, free trade protagonists will argue that all tariffs are protectionist in nature and are bad for free trade. However, protectionist measures do help to shield certain local industries which otherwise would be decimated by the availability of cheap goods from countries like Vietnam and China. However, not everything needs to be produced in the US. Moreover, what industry are you trying to protect if that industry was never there in the first place?

Let us take a ridiculous example. Let’s say the US imports Mao Shan Wang durians from Malaysia. Imagine if the US sets a tariff of 24% on these durians. What is it trying to achieve? Can the US actually produce its own Mao Shan Wang durians from Malaysia? It does not have the climate and expertise to do so. Even if it did, it takes approximately 8 years for a tree to bear fruit. For these 8 years while the US is waiting for the newly planted trees to bear fruit, its consumers will have no choice but to continue buying Mao Shan Wang durians from Malaysia. This is exactly why Singapore welcomes so many products into our country. This is because we do not have the capacity to produce those products!

Trump is taking a broad brush approach. He levies a flat tariff for all goods coming into the US from a certain country. If he were concerned with the trade deficit, would it not be ideal to actually understand why there is a trade deficit? There are reasons for running one especially when there are goods from a certain country that cannot be produced in the US for legitimate reasons. Just like me not wanting to cut my own hair, Trump has to ask himself whether his US workers want certain jobs. Remember this fact: when China was producing low value products like shoes and clothes, there was a lot less clamour from the US than when China started producing its own chips that goes into smartphones. Remember the ban on Huawei? Was there ever a ban on shoes?

So what should the US have done?

When it comes to a policy that affects the global economy, the precision of a sniper is favoured over firing a bazooka. It should have identified industries it would have liked to protect and domicile. For example, it is possible and arguably ideal to domicile car production plants in the US. The same can be said for the production of computer chips. However, to levy a 46% levy on Vietnam is just pure wrong. Which of Vietnam’s industries do you desire to domicile in the US?

So why did Trump do it?

Perhaps it was to show off that big beautiful chart…

Well done Trump! It is a really well made chart.

Yours sincerely,

Daryl

The post Making sense of Trump’s tariffs appeared first on Daryl Lum's Blog.

1. Inherent risk

   I have always spoken about investment risk. This earthquake brings to mind the risk of a property facing natural disasters. I am Singaporean and in Singapore, we are not faced with the prospect of frequent earthquakes. In fact, the cause of the tremors was an earthquake in Myanmar. The particular fault line was the Sagaing Fault which stretches from Mandalay to Yangon. This is relatively far from Thailand and definitely far from Bangkok. Yet due to the low frequency tremors, it affected taller buildings. Bangkok being an extremely built up area in Thailand with so many tall buildings, the people in these tall buildings experienced the full force of the tremors.

   However, no building other than that skyscraper under construction fell. There were similarly many other buildings under construction. There were also similarly many other buildings taller than that skyscraper. The Mahanakhon, has 79 floors and is 320 meters tall to tip. The Baiyoke Sky Tower has 88 floors and is 328 meters tall to tip. Both these buildings are the tallest in Bangkok and both are unscathed from the tremors. It is arguable that if that skyscraper under construction did not topple, the tremors would be closer to a non-event then the current state of emergency.

   There are many risks. There is also the risk of war. In Singapore, we are worried about rising sea levels. In the event that sea levels rise past a certain point, it is arguable that large parts of Singapore will be underwater despite its best efforts to mitigate this risk. All investments come with risk. Properties are relatively illiquid as compared to equities. If you cannot stomach such risk, you should not be investing because once you are in and want to sell the property when something happens, the illiquid nature of properties will become extremely apparent to you.

2. Comfort level

   It should not be up to me to tell you whether you can still buy Bangkok properties. This is a very subjective decision. You should be comfortable with your investment and understand the various risk. You should not listen to someone without forming a constructive and structured reasoning as to why you decide to do things in a certain manner. If you listen to me when I tell you to invest just because I tell you to then you did not form a constructive and structured reason. Similarly, if you think that all buildings in Bangkok are damaged and you are worried that this will be an issue in the future, then you should not buy a property in Bangkok. This especially when most reputable developers have conducted checks on their buildings are found them to be safe. If you are still not reassured and believe that the developer may he hiding something or that the developer will be faced with future issues that are not manifesting currently, then you should not be buying Bangkok properties.

   In everything we do, we have to undertake some degree of risk. If there is no risk, then there is no to little reward. This risk premium is something that you should determine on your own.

3. Reputation of developer

   I have been reiterating the point that we should always buy from the large, reputable developers that are listed on the Stock Exchange of Thailand. Such developers are always keen in maintaining their business in Thailand. While investigations are still ongoing, the truth of the matter is that if the skyscraper did not collapse, there will be no state of emergency in Bangkok. Bangkok will not be a disaster zone. I am sure that the earthquake would have affected other parts of Thailand. However, there was no collapse of any building elsewhere and hence there is no state of emergency outside of Bangkok.

   If you want to know what most, if not all large Thai developers are doing, here it is.

   MQDC is one of Thailand’s largest developer. It is the developer in charge of Icon Siam. Here is what they put out on their social media platforms and in their communications with clients who purchased their properties. Buildings come with warranty on their structure. It is a norm to have such warranty. However, the warranty is only valid if the party warrantying the building is around in the event something happens. This is why I have always reiterated that the profile of the developer is extremely important. I had spoken extensively about a certain Chinese developer that was in debt building in Bangkok. I highlighted this fact to the general public on many occasions. You can see this short post I did from back in 2023.

   I am confident that there is a high probability that MQDC will be around to deal with any matters should there be a need to make a claim on the warranty.

   

   

   Noble Development, like MQDC, is listed on the Stock Exchange of Thailand. It is one of the largest developers in Thailand. Its major shareholders include the BTS group which runs a large proportion of the metro lines in Bangkok.

   

   Developers like Noble will undergo the process of checking the structural integrity of all its developments. This includes buildings that were built long ago. This is the list of buildings that were checked.

   

   Similarly, here are other large Thai developers that have done similar work.

   
   

So can you still buy Bangkok properties? I cannot answer that question for you. Nor can I guarantee that everything will be safe. No one can do so for any property in any part of the world. Even in Singapore, from where I come from. Bangkok has not experienced anything like this for as long as recordings have started. For Burma, the earthquake toppled structures that had been around for more than a century. Which meant that the earthquake to just about everyone in the country was unprecedented.

If you are a client of a large Thai developer. You most likely should have received a message from your developer or your juristic (management) office. You should follow the steps provided as to what to do in the event you find damage to your property. People who do not live in Bangkok but have properties in Bangkok should engage a property management company to assist them with the checks and rectification process with the developer.

Yours sincerely,

Daryl

The post Can we still buy Bangkok properties? appeared first on Daryl Lum's Blog.

When we invest in property, we have to determine the metrics that we are looking at. Once we determine this, we need to stick to it. For property, whether a property is a good investment, I will consider factors like location attributes which include proximity to city centre and the central business district, proximity to the nearest train station, proximity to amenities and the availability of a catchment area of tenants. I will also look at the price of the property in comparison with other properties in the area. This is why when the property agent tells me that the property he is selling will definitely make money because the next plot of land was sold for a higher price, I do not take that into account. Imagine how difficult things can become if every time you visit a showflat, you consider different factors. Every new launch that a buyer walks into, many buyers will feel like that new launch is a good investment. This is because the agents in the sales gallery are telling you the good things about that property. The rational investor should disregard this as noise and stick to his investment metric. Easier said than done. In sales, selling on emotion is much easier than selling on logic. This is because humans are inherently emotional creatures.

For stocks, this is actually even simpler. This is because a stock is just a ticker on a screen. Your monitor or mobile phone shows the stock as a ticker code. Imagine stock markets as traditional markets. Companies can choose to sell their goods, i.e., in this case, their stock, on a market. For example, if I were Tesla, I want to sell my stock to raise money. Buyers of my stock will give me money and I can use that money to expand the business. I can choose the market I want to list my stock for sale and for my stock to be traded on. If I want to do it in Singapore, I can do it on the SGX. In the US, there is a market called the NASDAQ. In the case of Tesla, it chose to list and have its stock traded on the NASDAQ. Therefore, it is listed on the NASDAQ as TSLA.

Imagine you looking at the ticker TSLA on your mobile phone. It is just four letters. In fact, you can just Google “Tesla stock price”. This is what you will see.

Tesla Stock Price

You do not see pictures of cars. You do not have an agent telling you all the good things about the company. In fact, the news online are people who are not connected to the company. In many cases, they see the CEO of Tesla, Elon Musk working with Donald Trump. They then see the stock price falling. They then equate the fact that the stock price is falling because of Elon Musk’s association with Donald Trump.

Let me explain the concept of causation. Just because something happens after an occurrence does not mean that that occurrence caused that something. For example, there is an increase in the rates of colon cancer among people under the age of 30. Then someone says that this is caused by the COVID-19 vaccine.

This does not actually make sense because you cannot say that but for the COVID-19 vaccine, the young people under the age of 30 would not have gotten colon cancer. There needs to be a clear link to the something that happened.

Let me move back to the metric when investing in stocks. The truth of the matter is that most investments in stocks by institutions are done by computers. Heard of the term robotrading? There are institutions that are trading on algorithms. Technical analysis allows such trading to be highly efficient. A computer is not affected by what is on YouTube or news platforms like CNBC, CNN or Bloomberg. The most logical and common metric when looking at stocks is the P/E ratio.

So what is the P/E ratio?

For this we need to go back to how stocks are priced. Just because Tesla is now trading at USD$259.16 and Google is trading at USD$156.23 does not mean that Tesla is more expensive than Google. Apple is trading at USD$222.13. It also does not mean that Apple is more expensive than Google.

Google Stock Price

Apple stock price

The prices are just prices of 1 stock. The company can split the stock. i.e., divide one stock into multiple stock. Apple can say that it would like to divide 1 stock into 222 stocks. So whoever is holding 1 stock would, after the stock, hold 222 stock. We therefore need a metric to see everything on a level playing field. This is where the P/E ratio comes in. What this does is take the current price of the stock against the earnings of that one stock. The P stands for Price and E stands for Earnings per Share. To get earnings per share, you take the earnings and divide it by the number of shares (stock) issued. In the case of Apple, the P/E ratio is 35.31. This means that for that one Apple stock that you are holding, the price is 35.31 times of the earnings of that one stock. E, being the denominator, would mean that if the E were a larger number, the P/E ratio would be lower. And of course if the E were a smaller number, then the P/E ratio would be a larger number. A lower P/E ratio would mean that the current trading price is a lower multiple of its earning and hence a cheaper stock. It is not always the case where we only look at the P/E ratio. I may decide to buy a stock with a higher P/E ratio if that stock is in an industry with more innovation and growth. For example, I may decide that Apple, being a tech company, has more growth than companies in the banking industry.

Citigroup stock price

Therefore, Citigroup is trading with a P/E ratio of 11.94 but I might be more interested in Apple at current prices because of the industry or sector that Apple is currently in. Please note that this is hypothetical. I am not saying that I am currently choosing tech over banking as a sector.

With the knowledge of P/E ratio at hand, let us look back at Tesla’s current stock price in comparison with Apple’s. Apple’s P/E ratio is 35.31. In comparison, Tesla’s P/E ratio is 127.14. On all metrics, this is a very over priced stock. Google is trading with a P/E ratio of 20.23 and Amazon is at 34.43. The reason for the sell off of Tesla stock is because their reported earnings are falling. If earnings are falling, the denominator in the P/E ratio is getting smaller. This results in a larger P/E ratio. Traders who trade through numbers will immediately see this and determine that this is a good time to stop holding the stock. In fact, they may even consider shorting the stock (i.e. “betting” that the stock will fall by selling the stock and buying it back later). Now is there any reason to still hold Tesla with a P/E ratio of 127.14? Apparently the market does not think there are many reasons to do so. The reasons are most likely that Tesla is no longer the market leader in electric vehicles (EVs). Players like BYD have broken into Tesla’s lead. In fact, Teslas are no longer the world’s leading manufacturer of EVs. Other traditional car manufacturers like Toyota, Honda, Kia, Hyundai, Mercedes, BMW are also catching up in the EV space. Also, when someone buys an EV, he most likely does not change his EV every other year. This is called the replacement cycle. I believe this replacement cycle for EVs is not as frequent as compared to the replacement cycle when it comes to replacing mobile phones. If everyone who wants a Tesla already has a Tesla, then buying activity is likely to drop.

Is there some glimmer of hope when it comes to Tesla? I do think that as crazy as it sounds, Tesla may be able to pull off the robotaxi plan. If so, that would mean that Tesla would have a monopoly over autonomous ride hailing services. Tesla is the only EV maker to execute autonomous driving. It can constantly improve its autonomous driving capabilities because every Tesla EV and subsequently robotaxi is collecting data.

Think about it. Elon Musk, the CEO of Tesla is close to the US president Donald Trump. This sentence in itself is a positive thing. In fact, Tesla’s stock did rise the moment Donald Trump won the elections. Now that there is unhappiness at what Elon Musk is doing and that Tesla stock is dropping hence it must be caused by his association with Donald Trump?

If only markets were that irrational. We would have much wider swings with more opportunities to take advantage of this irrationality.

The post Why is Tesla stock falling? Other compelling reasons to explain the price correction. appeared first on Daryl Lum's Blog.

The highly restrictive Additional Buyers’ Stamp Duties (ABSD) levied on foreign buyers has put the brakes on almost all foreign purchases. I have always maintained that if a foreigner chooses to pay the 60% ABSD, there is something that should be scrutinised. Imagine this, a foreigner purchases an SGD$5 million property. He pays SGD$3 million as ABSD. His total acquisition cost, including the usual Buyers’ Stamp Duty and other fees amount more than SGD$8 million. As a foreigner with more than SGD$8 million, he would have choices galore. He has access to properties all around the globe. If that individual can purchase properties from all over the world, what is his motivation to pay more than SGD$8 million for something that is perhaps valued at around SGD$5 million? This means that the moment he purchases the property, the asset that he is holding is worth much less than what he paid for. This, in investing sense, is purely illogical. However, if that individual acquired his monies relatively easily, then he would not mind losing that value. Foreign buyers are almost non-existent. In fact, if I were the authorities, I would question and scrutinise the very few purchases by foreigners. I would want to understand the motivation and purpose for such a purchase. Well, if there were no clear motivation for the buyer to purchase Singapore properties then it would be prudent to scrutinise his source of funds for the property purchase.

So then, foreign property purchases have slowed to a trickle. This perverts the normal demand for Singapore properties. Foreigners would be less motivated by things like familiarity and proximity to other family members. For example, if my family members and I have been living in a certain part of Singapore, say Toa Payoh, then if there is a new property launch in Toa Payoh, I would be more likely to be enticed to make a purchase because I want to live near my family members and also to live in a part of Singapore that I am familiar with. This is why, to me, properties like Chuan Park are selling well as compared to a property like Aurea. There are fewer existing families living around Aurea as compared to Chuan Park. Hence there will be less “familiar” buyers for Aurea. Go to Chuan Park and the typical buyer will be someone who lives or lived around the area. Or has family members living in the area.

Location, despite what we have always focused on, may not weigh as much on current buyers’ consideration in today’s market. Familiarity with a particular location is high on buyers’ consideration. This is why many developers look at marketing their projects to HDB upgraders. This can be seen in the weak bids for land in areas with less HDB upgraders. Let me turn you back to end 2024 where the Marina Gardens Crescent site drew just one bid of SGD$770.5 million, or SGD$984 per square foot per plot ratio (psf per) This bid was too low and URA did not award this site to the bidder. This bid is nearly 30% lower than the neighbouring Marina Gardens Lane site. This is the site on which One Marina Gardens is located on. This one Marina Gardens Lane site was awarded to the Kingsford Group in July 2023 for SGD$1.03 billion or SGD$1,402 psf ppr. Look around this area. There are no residential properties around the area. It is inconceivable that someone will walk into the One Marina Gardens sales gallery and say, “I lived in this area for the past few decades and would like to purchase a unit in this development due to my familiarity with the location”.

Details about the development

One Marina Gardens is a 99-year leasehold development. The total site area is 12,245.10 square meters. The development consists of 937 units spread across two blocks. The two blocks are 30 and 44 storeys. It will also have commercial units like 2 restaurants, 2 shop units and a childcare centre. There will be 445 carpark lots. The expected completion is in 2029.

Where is the development located?

One Marina Gardens is located along Marina Boulevard.

One Marina Gardens Location Map

It is located right next to exit 4 of Marina South MRT Station. Marina South MRT Station is one of the stations on the Thomson East Coast Line. Marina South MRT Station is not yet opened. It is scheduled to open in tandem with developments in this area. I believe that this means that when One Marina Gardens is completed, Marina South MRT Station will be operational. For the purposes of this review, we will refer to TE22 Gardens by the Bay MRT Station rather than TE21 Marina South MRT Station.

Travelling from Gardens by the Bay MRT station to Orchard MRT station would take a total of 13 minutes over 6 stations. The cost is $1.59.

Gardens by the Bay MRT to Orchard MRT

Travelling from Gardens by the Bay MRT station to Raffles Place MRT station would take a total of 5 minutes over 2 stations. The cost is $1.19.

Gardens by the Bay MRT to Raffles Place MRT

The drive from One Marina Gardens to Raffles Place would take approximately 7 minutes and the distance travelled is about 2.7 kilometres.

The drive from One Marina Gardens to Raffles Place

The drive from One Marina Gardens to Orchard Road would take approximately 18 minutes and the distance travelled is about 6.5 kilometres.

The drive from One Marina Gardens to Orchard Road

One Marina Gardens is located at the fringe of the Marina Bay Financial District. I do not think that residents would drive to Raffles Place. I believe the short train ride would be the most ideal option. As a point of reference, the Google Map query was done in the afternoon at about 4pm. Hence traffic is light. If you are driving during peak hours, do factor in additional travelling time.

Who is this development for?

I genuinely think that if you believe in the concept of catchment areas, then why are you not considering properties in and around the Marina Bay Financial District? Are your tenants not coming from people who work in offices in the area? If so, I do think that if you are looking to purchase for rent, then this is the ideal property for you. I am a person who always focuses on what is around the area. If the area is littered with offices with highly paid employees, then this is a huge plus.

One of the reasons I can offer as to why many Singaporeans do not think this way is because of the ABSD. On multiple properties, ABSD applies. Hence Singaporeans only have one property purchase which is not subject to ABSD. If so, that first property is likely to be a property in a location which they are familiar with. In certain cases where a married couple plans to have two private properties, one under the husband’s name and another one under the wife’s name, then this is an ideal second property.

Marina One Residences One Bedroom for rent

A simple search on PropertyGuru would show that a 1 bedroom condominium at Marina One Residences is going for about $4,800 a month.

According to a recent Business Times article, the 1 bedroom units at One Marina Gardens starts at SGD$1.16 million.

Working out the yield based on an assumed rent of $4,800 a month or $57,600 per annum,

$57,600 / $1,160,000 = 4.97% per annum

Of course there are a few assumptions when it comes to my calculation. I am making the assumption that the 1 bedroom unit at One Marina Gardens can be rented out for $4,800 in about four years time. I believe my assumption is reasonable because it is likely that rents are likely to increase in the next four years, albeit at a much slower pace. The $4,800 is based off the current rent in an older development. Secondly, the purchase price is based on the lowest priced unit. However, if you factor in a higher purchase price, you would still receive a yield of more than 4%.

Ever heard the notion that yields tend to be lower in the city centre? Well not necessarily so. Especially when current property prices in the Outside Central Region (OCR) are so close to the prices in the Core Central Region (CCR) and Rest of Central Region (RCR). Try going to Chuan Park and getting a 1 bedder for less than SGD$1 million. I do not think it is possible. Then look at the prices at developments in areas that are so much closer to Singapore’s Central Business District (CBD).

Hence I firmly believe that if I were looking for a property with good rentability, One Marina Gardens is something I would look at.

The selling points of the development

Rentability and closeness to the MRT station and Singapore’s CBD. If location is the prime determinant of how much one should pay for a certain property, is the market making a mistake in looking away from developments in the Marina Bay Area?

Oh yes, heard of the Marina Bay Development Plan? The Greater Southern Waterfront?

If you require more information about developments in this area, you can refer to the URA website on The Marina Bay Story.

If you need more confirmation that there will be developments in the area, this is the URA Master Plan. The reddish pink areas where One Marina Gardens sits on are zoned Residential with Commercial at 1st storey. Those in white are White sites. It is clear that this is an area slated for future development. There will be HDB flats built in this area as well. It was announced in 2023 that more homes are planned in central locations to let more people enjoy city living. Marina South is one of those areas stated. With HDB flats in the vicinity, the usual amenities that are associated with HDB neighbourhoods are likely to also follow suit. Hence, if you do not have a food centre or supermarkets in the vicinity currently, if HDB flats are built here, then all these conveniences should make their way to this neighbourhood.

URA Master Plan

Possible bad points of the development

There is another plot of land slated for development right next to One Marina Gardens. This would block, perhaps partially, the sea view of units facing the sea. However, it is likely that there will be many new developments in the area so having an unblocked view would not be a permanent thing.

One Marina Gardens

Pricing 4/5

Prices start from $1.15 million or about SGD$2,762 psf. Yes you can get a Marina One Residences unit for $1,993 psf but then for some reason there is also an outlier that transacted at $2,522 psf. The average psf for transactions within the last 1 year is $2,112. Assuming an average price of about $2,900 psf, One Marina Gardens is going for a 37% premium over Marina One Residences. Of course you are getting a new lease and this is in an area with a lot of new developments. Hence you will need to factor this into the premium that you are paying.

Marina One Residences Past Transactions

Location 4.5/5

I believe this area is going to be filled with amenities as private developments as well as HDB developments start to fill the area. One Marina Gardens is the closest you can get to the Marina South MRT Station. The thing about the URA is that once it has announced developments in the area, it is most certainly going to happen. I believe in time to come this area is going to develop into an extremely desirable area.

If there were no ABSD on purchases beyond a Singaporean’s first property, I would seriously consider a property like One Marina Gardens.

Yours sincerely,

Daryl Lum

My other recent Singapore property reviews:

My review of Aurea by Far East Organization and Perennial Holdings

My review of Parktown Residence by CapitaLand, UOL and Singapore Land

The post My review of One Marina Gardens by the Kingsford Group appeared first on Daryl Lum's Blog.

For starters, let me explain how a bank works when you put your monies the bank. For example, DBS is a bank. When you place SGD$100 with DBS, that $100 does not belong to you. In fact, when you open up the DBS app to check your balance and it shows SGD$100, that is not monies that belong to you. That is a debt that DBS owes to you. Therefore, when you put say SGD$150,000 in your bank account with DBS, DBS owes you SGD$150,000. In the event that the bank goes bankrupt, you are a creditor of the bank. You will rank equally with all the other creditors. In this case, if your friend has a bank account with that bank, he will also be a creditor, just like you. Hence, if upon bankrupcy. the balance is only sufficient to return half of what all the bank owes to all creditors, then all creditors will only get back half of what the bank owes them. All depositors rank equal. In my example, you will get back SGD$75,000 of the SGD$150,000 that you placed in the bank.

Singapore has a Deposit Insurance (DI) Scheme. This protects insured deposits held with a full bank or finance company. The maximum that will be compensated is SGD$100,000. In my example, you will get back SGD$100,000 of the SGD$150,000 you placed with the bank.

If you want to learn more about the DI Scheme and who and what is covered, you can refer to the frequently asked questions on the SDIC website.

The Chocolate Finance platform works similar to how a digital bank operates. You put the monies with them and they provide you with an account. To most, it looks and feels like you are banking with a bank. However, you are not. Therefore your deposits with Chocolate Finance are not covered by the DI Scheme.

So how did it all start?

Chocolate Finance gave attractive terms to depositors who placed their monies with them. As of today, they are offering 3.3% returns per annum (p.a.) for the first SGD$20,000 placed with them. This is very high. As a point of comparison, a digital bank like GXS, which is by Grab and Singtel is offering up to 2.88% interest p.a.

(Update: At one point in time, they were offering 4.5% returns p.a.. I believe also on the first SGD$20,000.)

The difference, to me, is that GXS is a digital bank and Chocolate Finance is not. This is on GXS’ webpage. This cannot be placed on Chocolate Finance’s webpage because monies placed with Chocolate Finance cannot be covered by the DI Scheme as Chocolate Finance is not a bank.

However, the key benefit was Chocolate Finance’s miles rewards when you used their debit card. Their debit card is called The Chocolate Card. It boasted zero FX fees and 2 Max Miles for every SGD$1 spent. The key was that it allowed users to earn miles when they paid their bills on the payment platform, AXS. This was a major differentiating factor when comparing The Chocolate Card to other debit card rewards.

I do not think that you can earn miles off many cards while making AXS payments. When a debit card is used to make payments, there is a fee that is paid to Visa or Mastercard. Visa or Mastercard will then share that fee with the card issuer. The card issuer can then use that amount of money for their incentive programs.

In this case, AXS transactions do not attract any fees that are payable to Visa or Mastercard. Therefore, the card issuer, in this case Chocolate Finance, will bear the cost of the miles that will be issued to the card holder. I believe that Chocolate Finance’s strategy was that Chocolate card holders would not only use The Chocolate Card on AXS payments but also on other payments. However, the main reason why people signed up to The Chocolate Card was to make payments on their bills on AXS. Let’s call this the AXS-miles advantage. That was the main draw and that was how the card was promulgated to the public. Even if Chocolate Finance did not aggressively promulgate the AXS-miles advantage on The Chocolate Card, they did not set any limit to people who, according to them “gamed” the system. My question to them is, “how is that gaming the system when it was one of the functions of The Chocolate Card?”

In fact, six months ago, Chocolate Finance was featured on CNBC and the CEO was asked whether what he was offering was too good to be true. He was also asked about whether deposits are protected. To me, he did not answer the question directly. I saw this interview as rather confusing as the CEO did not seem to have direct answers to the questions which were posed to him.

Now back to my question, “how is that gaming the system when it was one of the functions of The Chocolate Card?” It is like you going to a buffet like Swensen’s Unlimited and then constantly choosing the most expensive item at the buffet to put on your buffet plate. For example, if you serve up snow crabs at a buffet and it is clear that that is the most expensive item at the buffet, you cannot tell customers that they should not take too much snow crabs as that is gaming the system. Also, when you remove the snow crabs from the buffet, it is expected that the number of people who will come to your buffet will drop. Therefore, when Chocolate Finance removed the AXS-miles advantage on The Chocolate Card, they must have expected that customers will no longer want to place their monies with Chocolate Finance. Anyway the main motivation for perhaps a large number of users of The Chocolate Card is the AXS-miles advantage. Then how can they say that they cannot handle the large number of withdrawals? You saw how fast you grew when you offered the AXS-miles advantage. Therefore, it would be reasonable for you to see an equally fast withdrawal of deposits from customers when this was removed.

This is a fintech company that has all the available information at its fingertips. It could see how many users were taking advantage of this AXS-miles advantage. It would have enough information to be able to anticipate the backlash when the AXS-miles advantage was taken away.

So why did Chocolate Finance come up with the AXS-miles advantage?

The way Chocolate Finance makes money is by using the monies that customers placed with it to make investments. Just like what I explained earlier. That money that you place with Chocolate Finance does not belong to you once you transfer it to Chocolate Finance. That is a debt that Chocolate Finance owes to you. Therefore, the moment that you pass the money to Chocolate Finance, it can use the money to make investments. If the market is buoyant, then the profits from these investments will make enough to cover the miles needed to be distributed to the users as well as the 3.3% p.a. returns that it needs to pay to depositors. Do not forget that Chocolate Finance still needs to generate money for its operations. Operations like the cost of maintaining its servers, salaries, rent, etc… The thing about every market is that there are always times where almost everything you purchase goes up. However, every market will inevitably go through corrections. If you are a participant in the market then you can only follow the market. You may be able to beat the market but your earnings will be closely pegged to how the market performs. For example, if the general market is giving returns of say 5% and your portfolio produces a return of 8%, you would have beaten the market. There will be times when the market is in negative territory of say -2% and you make a return of say 1%. You would still have beaten the market.

Look at the stock markets for the last two months. It has been easing off. Mainly due to uncertainty from all the tariff threats from the new US president. If you are Chocolate Finance and you need to make enough money to cover the promised 3.3% returns, provide the miles rewards and maintain operational costs, that is a tall order. In fact, in retrospect, I think they could have lowered their returns to just above 2% and depositors may not have left the platform in such haste. The question now is whether Chocolate Finance has sufficient monies to return everyone’s money if every one with deposits demands their money back.

The statement that Chocolate Finance put up on its website says little as to whether they have sufficient monies to return all deposits. It only states that the investment funds are secure and ring fenced. This just means that if Chocolate Finance received SGD$100 million, they could have invested this SGD$100 million. This SGD$100 million is secure in a sense that it cannot be used for any random purpose except within a certain mandate. In this case, that mandate is likely to be investing in various assets. The company cannot, for example, use this money to say hold a year end party for its employees. In the event that the market tanks say 20%, that SGD$100 million would become SGD$80 million. It would still be secure and ring fenced. However if everyone came to Chocolate Finance to withdraw their monies, then they may not have enough to return that SGD$100 million.

Let us consider the fact that not everyone withdraws their money. Perhaps only half do so. That would mean that SGD$50 million would be withdrawn, leaving SGD$30 million. That would leave a deficit of SGD$20 million. The market has to perform very well for that SGD$30 million to increase in value to SGD$50 million to ensure that all deposits are matched dollar for dollar. Judging from the recent market turmoil, this seems like a tall order.

The Chocolate Finance saga has highlighted one thing to the general public. There is a difference between companies like Chocolate Finance and traditional and digital banks. Banks are covered by the DI Scheme whereas companies like Chocolate Finance are not. This is something that the general public should know.

One more thing… if it is too good to be true, it probably is.

Yours sincerely,

Daryl

The post Chocolate Finance: When things are too good to be true, they probably are… appeared first on Daryl Lum's Blog.

When I speak of Thonglor, I mean the main Thonglor road which is Sukhumvit Soi 55. You get off the BTS at Thonglor BTS Station and you can see this very wide road. A lot wider than the typical narrow sois that are perpendicular to the main Sukhumvit Road. If you travel along Sukhumvit Soi 55, you will realise that this is a major artery that leads from the main Sukhumvit Road to Phetchaburi Road.

Sukhumvit Soi 55 links the main Sukhumvit Road to Phetchaburi Road

This is a straight road linking both major roads. This is very rare as most sois are short and narrow. Because of this, there is a lot of activity along Sukhumvit Soi 55. Much more than your typical soi in the area.

Five years ago, I made a video where I walked along Sukhumvit Soi 55 on a Friday night.

Therefore, when a property claims to be a property located in Thong Lor, you need to be careful as to whether it is merely near Sukhumvit Soi 55 or is it actually along Sukhumvit Soi 55. There are many projects that label their developments with the word Thonglor, or any other popular location for that matter, without the development actually being in that area. If they are near Sukhumvit Soi 55, I still think it is alright. If you want the strong rental demand, then it should be along or very near Sukhumvit Soi 55.

As you can see from my video above, Thonglor is a very modern and hip neighbourhood. There are many bars and restaurants in the area. It gives you an idea that people living in this area probably are from the upper echelons of Thai society. There are many landed houses in the area. These houses can only be bought by Thai nationals. The prices of these properties are very high. In some cases, there are houses going for over THB100,000,000. That is in excess of USD$3 million for a house in Thonglor.

Details about the development

Noble Form Thonglor is a freehold condominium by Noble Development Public Company Limited (Noble). Noble is listed on the Stock Exchange of Thailand. The development sits on a land size of 2-2-56.7 rai which is approximately one acre (1 acre is about 4,046.86 square meters). The development consists of 1 residential building that is 46 storeys tall. There will be 546 units. The parking will be automatic tower parking.

The unit mix is as such.

1 bedroom: 31 to 36 square meters
1 bedroom plus: 52 square meters
2 bedrooms: 63 to 73 square meters

Within the 46 floors, the facilities are located on the ground level, levels 37 to 38 and 45 to 46.

On the ground level, or what they call level G, there is a mail room and smart lockers. On the factsheet they also state that there is an urban oasis and art deco lobby. These are just fancy terms for the lobby. On the 37th and 38th level there is, according to the factsheet, a Noble Social Club, The Lounge & The Library, a Multipurpose Space, a Recreation Room, a Sky Auditorium and a Moon Bar. It is common for there to be these communal spaces in new developments in Bangkok. Co-working spaces are very common as the digital nomad lifestyle is very prevalent in Bangkok. On the 45th floor lies the Sky Lagoon Swimming Pool (essentially it is a pool on a very high floor), the kids pool, semi outdoor shower, semi outdoor jacuzzi, water curtain (whatever that is. likely a water feature), a pool bar, a steam room, digital lockers and the gym. The 46th level houses the Sky Garden which includes a yoga yard, party space, BBQ space and a sky observation seating.

The interesting part about the newer developments in Bangkok is that they are increasingly integrating technology into their developments. Noble Form Thonglor is no exception. There is a “ME PASS” that all residents will set up to access the development. You can go past the entrance gate and into your unit as a resident via bluetooth. Entrance into the lift lobby is via facial recognition.

Where is the development located?

Noble Form Thonglor is located along Sukhumvit Soi 55. It is located across the road from the very popular Noble Form Thonglor. Around this area are high end restaurants, community malls and bars. If you notice, there is very limited area for residential properties to be built. I have consistently highlighted the case of Park Origin Thonglor where the developer had to buy out all the commercial spaces to convert it into that condominium.

Location of Noble Form Thonglor

You will need to walk 1.5 kilometres to reach Thong Lor BTS Station. The walk will take 21 minutes. It is definitely not near the BTS Station. While I have always advocated buying close to the BTS stations, Thong Lor is unique. It is perhaps one of the very few locations where I would be ok with recommending that is not close to the BTS Station. Based on past experience, the rental demand for properties in the middle of Sukhumvit Soi 55 is very high. Tenants demand for properties in this location because of the large concentration of amenities in the area. Also, this is a very good neighbourhood to live in. It consists of well to do locals and foreigners. The houses that are within this area are one of the priciest in central Bangkok. Therefore, the neighbourhood is little with very wealthy Thais.

Walk from Noble Form Thonglor to Thong Lor BTS

There is a very small silver or perhaps grey lining. There is slated to be a BTS station, titled “Thonglor 10” on the yet to be confirmed Grey BTS Line. The BTS network has expanded very extensively and is continuing to expand. The grey line links northern Bangkok to the south and is slated to past through Thonglor with a station along Thong Lor Soi 10 (judging from the proposed name of the station). Thong Lor Soi 10 is a very short street that is perpendicular to Sukhumvit Soi 55. The end of which, if you are walking from Noble Form Thonglor, will be DONKI Mall Thong Lor.

The distance to walk to DONKI Mall Thong Lor is 850 meters and will take about 11 minutes. This is the end of the soi. If the proposed train station is anywhere else along Thong Lor Soi 10, then the walk will be shorter.

Walk from Noble Form Thonglor to Donki Mall Thong Lor

My thoughts about the development (selling points and investment potential)

You can get a 1 bedroom at about THB 7 million. There might still be units that are less than THB 7 million. This works out to a per square meter price of about THB220,000. Of course units with better facing and on higher levels would command a higher price and price per square meter.

Considering that there is another development along the same street going for way higher… perhaps Noble Form Thonglor is attractively priced.

Of course The Monument Thonglor is a very high end development with very premium finishes. The cost of building that property itself would be significantly higher than Noble Form Thonglor. If you want to purchase to rent, then Noble Form Thonglor would provide you with decent yield.

As a benchmark, let us use Park Origin Thonglor. For one, the distance to Thong Lor BTS Station is similar. It is also located around the middle of Sukhumvit Soi 55, albeit an arterial road that is Thonglor Soi 10. The size of their one bedroom units are also similar to those at Noble Form Thonglor.

In this area, with this level of furnishing, a one bedroom condominium would be able to command a rent of about THB45,000 to THB55,000. Let us take THB45,000 to be the expected rent for a one bedroom unit at Noble Form Thonglor.

Let us also assume a purchase price of THB8 million. I believe you can still find a small one bedroom at Noble Form Thonglor at about THB7 million but that would be for the smaller units, i.e., the ones that are 31 square meters in size. Instead, we will assume the larger of the one bedrooms. Those that are 36.61 square meters in size. Such a unit costs slightly above THB8 million. With a purchase price of THB8.2 million, the gross rental yield works out to be as such:

THB45,000 x 12 / THB8.2 mill = 6.6%

This is relatively healthy as the typical gross rental yield in Bangkok is about 5%. Moreover, the profile of tenants who will be renting properties in Thonglor is very good. They are usually families or well paid professionals. They can be both local or foreigners.

Investment potential wise, owning a property in the Thonglor neighbourhood is akin to holding a blue chip stock. If I were to choose one neighbourhood that will not go weak on demand over time, I would choose Thonglor. Location and environment wise you cannot do much better. Is there still room to rise in terms of capital appreciation? I believe so. However, if you are looking for property prices in Thonglor to increase in multiples, then this will definitely not be the case. Especially if you are looking to own the property for a period of about a decade. Instead, what you should be considering is whether the property in Thonglor can yield healthy returns through rent. In this aspect, I believe rental prices should increase over time. After a holding period of five years, individual investors should consider selling the property as they would have already side stepped the specific business tax that is levied on individual owners who sell within 5 years of ownership.

Of course, the ideal situation would be for the Grey BTS Line to be confirmed. That would definitely cause an increase in demand for properties in this area. Not that there is a need to encourage further demand. However, property investors should consider this as a potential upside as well.

Noble Form Thonglor

Noble Form Thonglor

Pricing 5/5

To me, most attractively priced development in the last two years. You can take a look at my explanation above.

Location 4.5/5

This is not near Thonglor BTS Station. However, it does not need to be. This area is highly sought after. Perhaps this fact actually adds to the exclusivity of the development. If it were close to Thonglor BTS then this would be the ideal condominium. However, the prices of properties very close to Thonglor BTS will not be this affordable. I guess it is a trade off. This is a trade off which I personally would gladly make.

Yours sincerely,

Daryl

The post My review of Noble Form Thonglor by Noble Development appeared first on Daryl Lum's Blog.

However, this was a place where people came to get their Thailand fix. Be it at the numerous mookata outlets or just shopping at the Thai Supermarket. If you want to reminise about Golden Mile Complex, a friend of mine did a vide just before it shuttered. I had the honor of joining him when we went to shoot most of these scenes.

The smidge of positive news is that Golden Mile Complex, well the building at least, is to be conserved. This means that the developer cannot demolish the building. It can retrofit and structure, make it somewhat new. The commercial portion of the development will be called The Golden Mile.

So now this place is called Aurea. That is the residential building that is to be built next to Golden Mile Complex or the new The Golden Mile. For whatever reason or purpose, I am unsure. It really sounds weird. Well to me at least. If you want to build a residential building next to the commercial building, which is the conserved Golden Mile Complex, why not name it something close to the old name? One Golden Mile perhaps? Remember One Pearl Bank?

Well who am I to give advice to the developers? Namely Far East Organization (Far East) and Perennial Holdings (Perennial). Far East is the largest private developer in Singapore. It has developed over 780 developments including 55,000 private homes since 1960. This is what it says on their website. Perennial, well they hold many iconic era estate across Singapore. A few of notable mention are Chinatown Point, Capitol and CHIJMES. They too develop real estate and have presence in China, Singapore, Malaysia and Indonesia.

Yes the developer profile is strong. It has to be. Golden Mile Complex was sold en bloc for SGD$700 million in 2022. You would need to be someone, or some group, with considerable financial muscle to be able to make such a purchase. After making the purchase, you would then need to top up the lease to a fresh 99-year period. This is exactly what the developer of Aurea did. Hence the fresh 99-year lease starts from 18 November 2024.

Details about the development

Aurea is a 99-year leasehold development. It will be built next to the refurbished and conserved Golden Mile Complex. That building, as mentioned, will be named The Golden Mile. The total site area is 144,908 square feet comprising of 188 residential units, 156 offices, 2 levels of retail and 19 medical suites. The expected completion of the project, namely the expected date for the project to obtain its temporary occupation permit is in the 2nd quarter of 2029.

The residential development, Aurea, will consist of a good mix of 2, 3 and 4-bedroom types. The 4-bedroom types come with private lift access.

Where is the development located?

Aurea is located at 802 Beach Road. It is located right next to The Golden Mile which has an address of 800 Beach Road.

The Aurea Location Map

The nearest MRT Station is Nicoll Highway MRT Station. The walk is 700 meters. It will take approximately 9 minutes. I am assuming that there will exist a link between The Aurea, The Golden Mile and Golden Mile Tower. This would mean that the portion that is relatively unsheltered would be from the St. John’s Headquarters onwards.

The walk from The Aurea to Nicoll Highway MRT Station

Nicoll Highway MRT Station is located along the Circle Line. The train journey to Raffles Place MRT Station will take approximately 8 minutes over 4 stations and will cost $1.29. You will need to make a change from the Circle Line to the North South Line at Marina Bay MRT Station.

Nicoll Highway MRT Station to Raffles Place MRT Station

The train journey to Orchard MRT Station will take approximately 12 minutes over 6 stations and will cost $1.40. You will need to make a change from the Circle Line to the North South Line at Dhoby Ghaut MRT Station.

Nicoll Highway MRT Station to Orchard MRT Station

The drive from Aurea to Raffles Place will take about 13 minutes and the distance travelled is about 5 kilometers. This Google Map query was done in the middle of the day on a weekday. Therefore, traffic conditions are generally light. You will need to factor in peak hour traffic if you are driving this route during peak hours in the morning and just after office hours.

The drive from Aurea to Raffles Place

The drive from Aurea to Orchard Road will take about 15 minutes and the distance travelled is about 3.8 kilometers. Once again, this Google Map query was done in the middle of the day on a weekday.

The drive from Aurea to Orchard Road

The selling points of the development

The location of Aurea is extremely prime. This is located at Beach Road, just at the edge of the Central Business District (CBD). In fact, if you consider Bugis as within the CBD (and there is no reason not to as it is located after the ERP gentry, then Aurea is one of the closest residential developments at the edge of the CBD. The other two notable ones, which are nearer, are Concourse Skyline and City Gate Residences. Anything nearer and you would be beyond the ERP gentry. In that case, the development that is just within the CBD would be DUO Residences.

The next selling point, allegedly, would be the price per square foot for a unit in Aurea. Based on what is reported, prices at Aurea are expected to start from SGD$2,750 per square foot. In the current market, this psf is reminiscent of new developments in places like Lorong Chuan and Tampines. Well it should still be marginally higher but would it not make sense to pay about 10-20% more for a development located along Beach Road than say Lorong Chuan?

If you were to compare the past transacted prices of City Gate and Concourse Skyline, Aurea is approximately a 20-25% premium from the resale prices at City Gate and Concourse Skyline. City Gate’s 99 year leasehold is from 2014 (88 years left) and Concourse Skyline’s 99 years stated from 2008 (82 years left). Aurea’s 99-year lease started in November 2024 (almost full 99 years). Aurea has 12.5% more lease than City Gate and 21% more lease than Concourse Skyline. Being a new development, closer to the food centre and amenities and linked to The Golden Mile, I would think that the premium is reasonable. New developments tend to have a premium of about 20+% over comparable developments in the vicinity.

A huge plus, and this is a real advantage, is that just across Aurea is Golden Mile Food Centre and wet market. Just across Aurea is a cluster of HDB developments. There is a community centre right next to the market as well, Kampong Glam Community Centre. Walk further north and you can avail yourself to another huge market and wide variety of shops at North Bridge Road. This is perhaps the ideal city living with a heartland feel. That was one of the reasons why the old Golden Mile Complex was so popular. It was right smack in the middle of a HDB enclave, surrounded by a slew of amenities as well as being centrally located in Singapore. The perfect blend of connectivity and convenience.

Possible bad points of the development

Possible road noise from Nicoll Highway perhaps? The developer clearly thinks that this could be an issue. On some of the unit type plans there exits “acoustic mitigation”. Clearly to mitigate the sound coming from somewhere. Therefore it is important to pick a good unit if you are looking to purchase a unit at Aurea.

Aurea

Pricing 4/5

It perplexes me why buyers persist with buying outside core central region properties when properties in Beach Road are going for rather similar psf. Is location of a development not one of the key factor of a sound property investment? If you intend to pay in excess of $2,500 psf for a leasehold property, I would think that it should be somewhere close to the city centre.

Location 4/5

I have been going on and on about Aurea’s location. Perhaps the downside of this would be the walk to the MRT station. Be it that it is unsheltered for about half the journey, the walk is actually not that far and this is so close to the city centre. Picture this, you like in a property like Aurea. You cross the road to a food centre and all the usual HDB amenities you can find at HDB shophouses. You are linked to a mall. You walk to Nicoll Highway MRT Station and get to your workplace at Raffles Place, all in under 20 minutes. (Walk 9 mins and train ride 8 minutes).

Now compare that to you living in The Chuan Park. Is this location in Chuan Park better? I am not so sure…

The Chuan Park’s surrounding

Property investment should be very simple. Purchase a property where people will want to live. Amenities, location and connectivity are all factors that should come into play. Then look at the price. Does it make sense to what is around the area and current market.

Yours sincerely,

Daryl Lum

The post My review of Aurea by Far East Organization and Perennial Holdings appeared first on Daryl Lum's Blog.

Location is not as poignant a selling point as before. With the proliferation of MRT stations across the island, many developments are “minutes walk to MRT”. The question is usually “how many minutes, really?” but many buyers do not ask that question. They take it as gospel truth that the number postulated on the brochure is accurate. There has to be a standard of measure. In most cases, flip out your phone and use Google Maps. If you use Google Maps consistently to determine how far a development is to the train station, then this consistency will provide you with a proper yardstick. Simple as it sounds but I do not believe that many buyers actually do this.

So what is a true USP?

Let’s focus on the word unique.

Unique stands for one of its kind. Unlike anything else.

As such, I find it hard to fathom how being 5 to 10 mins from the MRT station is unique. The term USP is a misnomer to begin with because there is almost nothing that one development has that is one of its kind. I mention this because I am trying to highlight how the various developments are so similar in their offerings. Basically new developments in Singapore are generally the same in terms of their facilities, layout and overall unit types.

So when is a development unique? Well, if we apply a strict definition of the word unique, then never. For those that come very close to being unique, one thing stands out. Integrated developments.

So what are integrated developments?

They are property developments where there is a residential component built in conjunction with a retail mall, a transport hub, possibly other amenities like a hawker centre and/or community centre. You like above and come down to a shopping mall, an MRT station, bus interchange and more.

The upcoming Parktown Residence is one such example. It is an integrated development located in Tampines. The condominium is named Parktown Residence, the retail mall below it is named Parktown. There is a transport hub below as well. There is an MRT station and an air-conditioned bus interchange. There is also a community club, a community plaza and a hawker centre. Oh and it is kind of linked to Tampines Boulevard Park.

How many of such integrated developments exist in Singapore? We speak of integrated developments being a residential and commercial development integrated with a transport hub. There are nine. They are:

1. The Centris
2. Hillion Residences
3. North Park Residences
4. Sengkang Grand Residences
5. Compass Heights
6. Pasir Ris 8
7. Bedok Residences
8. Park Town Residence

Details about the development

Parktown Residence is a 99-year leasehold development. The 99-year lease started from 9 October 2023. The total land area of Parktown Residence is 50,680 square meters. This makes it the largest integrated development out of the nine listed above. There will be a total of 1,193 units. Parktown Residence is jointly developed by CapitaLand Development, UOL Group Limited and Singapore Land Group Limited. Back in 2024, this consortium obtained this plot of land with a top bid that crossed the $1 billion mark. In fact, their bid was an eye-watering SGD$1.206 billion.

Here is the unit mix of Parktown Residence

1-Bedroom + Study, 43 and 47 square meters, 73 units
2-Bedroom,  55 square meters, 160 units
2-Bedroom Premium, 63 and 67 square meters, 292 units
2-Bedroom + Study, 71 square meters, 134 units
3-Bedroom, 86, 87 and 88 square meters, 135 units
3-Bedroom Premium, 98, 99 and 100 square meters, 158 units
3-Bedroom Premium + Study, 108, 109 and 110 square meters, 115 units
4-Bedroom, 124, 125 and 126 square meters, 57 units
4-Bedroom Premium, 138 and 139 square meters, 47 units
5-Bedroom, 156 square meters, 22 units

Where is the development located?

Parktown Residence is located along Tampines Street 62.

Parktown Residence Location Map

It is located close to Tampines Ikea.

Close to Tampines Ikea

Tampines is quite large so I believe this would serve as a point of reference. The Tampines North Interchange is a temporary one. Once Parktown Residence is completed, there will be an interchange located within the integrated development.

I would usually put up the walking time to the nearest MRT station and shopping mall. However, since Parktown Residence is going to be an integrated development, the MRT station and the shopping mall is located right below the development.

The MRT that is located within the integrated development is Tampines North MRT Station. It is the sixth station on the Cross Island Line. The Cross Island Line will run from the east to the west of Singapore. It will go through locations like Loyang, Pasir Ris, Hougang, Serangoon North, Ang Mo Kio, Sin Ming, Bukit Timah, Clementi and West Coast. It is slated to be the longest MRT line in Singapore with about 27 stations. It should opening in phases with Phase 1 going from Aviation Park to Bright Hill opening at around 2030. Eventually the Cross Island Line should be fully completed around 2040.

A point of interest might be how long it would take to walk to Tampines Ikea. In the vicinity is Courts and Giant as well. It would take approximately 27 minutes to walk to Ikea from Parktown Residence. The total distance would be 2 kilometres.

Who is this development for?

I’ve decided to ask this question in my reviews moving forward. This question is actually very important because who this development is for will also determine who you can possibly sell this property to in the future. How many times have I encountered a property owner and he comments, “I want to sell my property to a rich Indonesian!”. When I ask him where his property is located, he answers, “Woodlands!”. Really? You really think wealthy individuals will look at your overpriced property in Woodlands? Especially when they can buy property not only in Singapore but literally the whole world. Well, this development, Parktown Residence, is mainly for HDB upgraders. People who live in Tampines generally, from my conversations with the people I know who live in Tampines, want to continue living in Tampines. Tampines is an area that is littered with amenities. However, if this property is for HDB upgraders, then it bears considering that people who live in the HDB properties nearby are able to afford to upgrade.

When I mean afford, it does not mean that a property seller sells his HDB for a certain price and he can purchase a resale Parktown Residence for the exact same price. What I mean is whether the HDB upgrader has the cash on hand to make that leap. Let’s face it, our property market is living off leverage. Without housing loans, most, if not almost all buyers will not be able to afford to buy private properties.

A 2-bedroom unit, at launch would average at about $1.628 million. This is an estimation after taking the per square foot pricing to hover around $2,400 and multiplying it by 63 square meters (678.126 square feet).

A buyer will need to fork out 25% downpayment on that property assuming it is his first property. The cash component is 5%. The figures are as such:
5% cash = $81,400
20% CPF = $325,600

If you break it down this way, you will realise that the cash component is not prohibitively high. The thought of maintaining that loan over the span of up to 30 years seldom crossed any buyers’ mind. This is because we live in a property market where our primary property is seen not only as a place to live but as a form of investment that will be disposed of once the property has risen in value. In fact, many see their primary property as an investment first and a home second. This is what global inflation has done to the property market. Can the property market continue its upward trajectory? No one really knows.

So what are the transacted prices of HDB properties around Parktown? Currently, the highest price for a 4 room flat is $820,000. These buyers would have bought their flats for probably less than $500,000. This means that if they were to sell their flats, they would obtain in excess of $250,000 after accounting for CPF plus accrued interest.

Now you understand why the HDB upgraders are so essential to developments in the heartlands? It is not only important. It is essential. HDB upgraders free up cash when they upgrade from the flats that they obtained through the Build to Order (BTO) scheme.

So let’s consider a situation 5 years from now. Let’s say you as a buyer purchase a 2-bedroom in Parktown Residence. Now you want to sell it. What are the numbers you will need to crunch and can a HDB upgrader still afford it?

A 2-bedroom unit, at launch would average at about $1.628 million. This is an estimation after taking the per square foot pricing to hover around $2,400 and multiplying it by 63 square meters (678.126 square feet). This is the same calculation from above. Going at a conservative rate of a 2% increase in price over 5 years, This works out to be $1,797,444.

A buyer will need to fork out 25% downpayment on that property assuming it is his first property. The cash component is 5%. The figures are as such:
5% cash = $89,872
20% CPF = $359,488

Not much of a difference is it?

For the sake of this discussion, I know some are going to comment that this is not a fair comparison because going from a 4-room HDB to a 2-bedroom unit at Parktown Residence means losing one bedroom. I am just making this assumption that this is the typical “upgrade” route. Even though moving to something smaller is not something I would personally embark on. However, this is the feasible “upgrade” that I would think individuals could make because a 3-bedroom might be prohibitively high in terms of the loan quantum.

The selling points of the development

I’ve mentioned this at the beginning of this article. It is the fact that it is an integrated development. Oh and the largest integrated development out of the 9 integrated developments in Singapore.

Possible bad points of the development

The sheer size of the development. Imagine having to compete with so many landlords and sellers. The competition in the resale and rental market will be intensely fierce. This is why selecting a good unit if you have the opportunity to do so is so important.

The Cross Island Line is also not up yet. You would have to wait till possibly 2040 for the whole line to be operational. It is also not exactly near Tampines MRT Station and Tampines Mall. It is approximately 2.1 kilometres away. Walking would take 29 minutes according to Google Maps.

I would think that the true benefits of the Cross Island Line would only be felt when it is fully operational. This is something that buyers need to consider when deciding to invest in Parktown Residence. I still find it peculiar when someone tells me that he won’t hold the property for long and hence the 30-year loan is inconsequential but then when the developer sells him a point that will only happen in the distant future, he does not reconcile that with his prior statement.

Also, another point to note is that there will be two executive condominiums (ECs) nearby. Aurelle of Tampines and Tenet. In the future, buyers have more choices when it comes to units in the vicinity. If they find the resale prices at Parktown too prohibitively high, they can always consider the resale units at these ECs. The prices should be lower as the buyers of these properties would have bought them at a lower per square foot pricing.

Parktown Residence

Pricing 3.5/5

Indicative prices are around $2,400 per square foot. I do not have any nearby completed condominium development to compare this to. The closest ones are located in the cluster along Pasir Ris Grove. The premium on the launch price at ParkTown Residence is 50%. This means that if you were to enter the resale market and purchase a unit at D’Nest, the price per square foot is about $1,600. The premium on a new unit at ParkTown Residence is 50% as the indicative per square foot pricing is $2,400. Of course you would have to weigh the fact that you are getting a new property on a fresh lease and a condominium in an integrated development.

Location 4/5

For now, this is not higher than it could be because the train line is not up. Yes, granted that this will be the longest MRT line and it will be crossing Singapore from east to west but that is what the current east-west MRT line is already doing. What is to say that there will not be a long and more well connected train line in the future?

The main consideration for Parktown is the fact that it is sitting in an integrated development.

I have decided to not comment about quality moving forward. This is because quality is dependent on the actual completed product and my only way of rating an uncompleted development based on past developments. However, in this case, this is a joint development of three developers. It would be difficult to assess the product based off their portfolios. Moving forward, I believe that developers will typically jointly develop due to the high cost of land acquisition as well as gradual reduction of risk appetite in the market.

Yours sincerely,

Daryl Lum

The post My review of Parktown Residence by CapitaLand, UOL and Singapore Land appeared first on Daryl Lum's Blog.