Paper 1 Lesson 1: Real Estate Market

Question 1

What is economic obsolescence?

Answer 1

This occurs when environment around the property changes and cause the value of the property to diminish (e.g change of zoning on neighbouring land)

Question 2

What is functional obsolescence?

Answer 2

Poor/outdated design, layout, size that are no longer popular resulting in a reduction in demand and value. (E.g. one toilet for a 5 bedroom unit. Such layout becomes obsolete if demand for which is substantially reduced)

Question 3

What is physical obsolescence?

Answer 3

A property that costs more to repair than rebuilt due to gross mismanagement and physical neglect

Question 4

Are foreigners allowed to buy landed properties?

Answer 4

No. They are only allowed to buy residential private condo / commercial and industrial properties.

To buy landed, they will need LDAU’s approval.

Question 5

What is the formula to convert m(square) to sqft?

Answer 5

M(square) x 10.7643 = SqFt

Question 6

What is the min plot size for GCB?

Answer 6

1400sqm

Question 7

What is the min plot size for other bungalows (that is not GCB)?

Answer 7

400m(square)

Question 8

What is the min plot size for Semi-detached house (including corner terrace) & back to back semi-detached house?

Answer 8

200m(square)

Question 9

What is the min plot size for terrace house 1 (inter-terrace)?

Answer 9

150m(square)

Question 10

What is the min plot size for terrace house 2 (corner units)?

Answer 10

80m(square)

Question 11

What is the min plot size for terrace house 3 (inter-terrace)?

Answer 11

80m(square)

Question 12

What is the maximum site coverage for within GCB area?

Answer 12

40%

Question 13

What is the maximum site coverage for outside GCB area?

Answer 13

50%

Question 14

What is the min. sqft for GCB?

Answer 14

15,070sqft

Question 15

How many GCB areas are there?

Answer 15

39

Question 16

How many landed housing areas are there in Singapore? And how many are GCB areas?

Answer 16

58, 39

Question 17

What is the min. land size and site coverage (percentage) for Condominium?

Answer 17

4000m(square), Max 50%

Question 18

What is the min. land size and no. of storeys for High-rise Apartment?

Answer 18

1000sqm and more than or equals to 6 storeys

Question 19

What is the min. land size and no. of storeys, and min. party-wall flat size for Low-rise Apartment?

Answer 19

1000sqm, less than 6 storeys and min. 600sqm for party wall

Question 20

What are the MACRO factors affecting demand?

Answer 20

Social, Economic, Governmental, Political, and environmental factors.

Question 21

What are some MICRO factors affecting demand?

Answer 21

Condition of unit, Location, Shape, Size, Accessibility, View, Environment, Facilities, Layout, Design, Tenure, Age, People’s Beliefs (Fengshui) etc.

Question 22

Demand is _______. Supply is ________.

Answer 22

Demand is elastic - responsive and sensitive to news and sentiments.

Supply is inelastic - not quick to respond to demand. E.g. when demand increases, developers are not quick to build more units to meet demand.

Question 23

What is the index URA uses?

Answer 23

Property Price Index (PPI) - revised quarterly

Question 24

What is the index HDB Resale uses?

Answer 24

Resale Price Index (RPI) - revised quarterly

Question 25

Which quarter and year is the PPI and RPI base index set in?

Answer 25

Q1 2009.

Question 26

What is Property Price Index (PPI) based on? | 3 pointers

Answer 26

1. Caveats lodged. 2. Stamp duty records 3. the take-up of new projects

Question 27

What is the Land Betterment Charge (LBC)?

Answer 27

LBC is a tax on the increase in value of land arising from a chargeable consent (e.g. planning permission) given in relation to a development of any land.