RP versus Replacement Cost

Things to remember:

1. The RLV is a future based calculation - it will take into account the Lease Top Up and all the other costs. No purchaser/developer will buy land without doing a RLV first so it is vital that owners see the SAME figures shown to the purchaser and not some watered-down version with bits left out. 
2. The RLV will condense the figures down to a $ psfppr figure (inclusive of Lease Top Up)
3. The RP should be derived directly from the RLV 
4. Present sale price/TC unit is irrelevant
5. Present sale price /other units around Singapore is also irrelevant.
6. Present New Sale prices of nearby units are based on RLVs done in the past.
7. Present New Sale prices of nearby units are therefore also irrelevant up to a point.
8. Your sales proceeds will not be in your bank accounts until 2019 by which time prices would have moved substantially. The property market never stands still.
9. The average unit size in Tampines Court is a whopping 157 sqm

I will look at the following:

Present New Sale prices of nearby units.

Why new units? Because the RLV figures are extrapolated; our RP is ultimately based on the future $ psfppr and so we should be able to purchase a new unit with the sales proceeds. If not, then the RLV shown to owners has been manipulated to lower the RP. 

When I checked for New Unit Sales in Tampines Jan-Aug 2016, only units in The Santorini showed. so I will work with that.

Background info (tables are my own, figures comes from URA) 

http://www.tampinescourt.net/p/gov-land-sales.html

So, the Santorini was bought through GLS in July 2013. 

The RLV would have been done in 2013. 

Sales started in Apr 2014  (It is still under construction so all sales have been off the plans)

Total No. of units: 597

Launched to date: 597

Sold to date: 221 (ref: Realis)

I have chosen the sales from Jan-Aug 2016 :-

What does this table tell us? It tells us  

1. As a rule of thumb, the developer will sell new units for not less that double the $psfppr  he paid for the land. In this case, MCL Land paid $562 psfppr (see table above) in 2013 and lo and behold,  the new units are all being sold at around $1124 psf (give or take) in 2016.
2. That new units are all basically shoeboxes half to one third the size of Tampines Court; the average size of a unit in Tampines Court being 157 sqm. 
3. The sole unit closest to our size is 149 sqm and it was sold for $1,753,000

Tampines Court is in a far superior location than The Santorini and this should be reflected in a higher $ psfppr. At the present RP, we are effectively being offered $765 psf for our units (incl of common property) when the going replacement cost is $1000-$1200. This is unacceptable.

to be cont.