Tag Archives: private residential resale market

Larger resale condos selling for less than $1m

With the various property cooling measures in effect, buyers are spotting homes in the private resale market for $1 million or less, reported The Straits Times.

And these homes are not all shoebox-size. Some of the bigger units in good locations like Bayshore Road have been going for this amount.

“In 2010 to 2012, $1 million was a sort of standard or expected price to pay, and it was unlikely buyers could get something good for less than that,” said R’ST Research Director Ong Kah Seng.

“Now, opportunistic buyers are referencing it as a ceiling price. They are scouring for properties significantly lower than $1 million. It is still not easy to get these deals, but definitely much easier than before.”

In fact, the proportion of freehold or 999-year leasehold homes resold at this price range climbed to 17 percent from 2014 to this month, from just six percent from 2010 to end-2013.

Aside from the resale market, bargains are also being seen in the auction market, where mortgagee sales are taking place.

Since the start of Q4 2015, units on auction with opening prices of below $1 million included the mortgagee sale of a 790 sq ft apartment in Tiong Bahru and an owner’s sale of a 527 sq ft unit at Dunearn Suites, revealed data from Colliers International.

In 2016, mortgagee sales are expected to be on a stable uptrend, potentially exceeding 270 in number, which is more than what was recorded during the 2008 Global Financial Crisis, noted Grace Ng, Deputy Managing Director at Colliers.

“The rising interest rate will add further strain on borrowers, particularly for those holding multiple properties. However, the numbers are not expected to spike as the employment rate in Singapore remains high, enabling most owners to service their mortgage loans,” she said.

HDB, private resale markets continue decline

The resale property market remained lacklustre last month with fewer transactions in both the Housing and Development Board (HDB) and private segments, indicating the latest round of cooling measures are taking effect.

Sales of previously owned HDB flats fell 6.2 per cent to 1,271 units last month from 1,355 units in March, data from the latest Residential Property Flash Report by the Singapore Real Estate Exchange (SRX) showed. The decline, however, was much steeper at 36 per cent when compared with the 2,000 flats sold in April last year.

The sentiment in the non-landed private residential resale market was equally weak, with only 572 homes sold last month. This is down 6.8 per cent from the 614 units sold in March and a decline of more than 50 per cent from the 1,240 units transacted in April last year.

The downtrend shows that the government’s cooling measures, such as a 30-per-cent cap on mortgage servicing ratio (MSR) for public housing loans, are taking their intended effect, said ERA Realty Network’s Key Executive Officer Eugene Lim. “As a result, cash-over-valuation has come down because the MSR cap limits people’s ability to pay more cash,” he said.

According to SRX, the median overall cash-over-valuation (COV) fell for the third consecutive month in April, weakening by S$1,000 to S$30,000. This is the lowest monthly COV since September last year. And while the median resale price for HDB flats edged up 1.1 per cent on-month to S$465,000 in April, Mr Lim predicts it may cool going forward.

“The HDB targets to launch at least 25,000 BTO flats in 2013. With a higher success rate of attaining their perfect home in the new flat launches, buyers could turn away from the resale market. Together with the new cooling measures, demand is expected to fall and this will help keep HDB prices stable,” Mr Lim said.

Over at the non-landed private residential resale market, prices remained subdued. Prices for units in both the Core Central and Rest of Central Region fell 1.9 per cent on-month to an average of S$1,772 and S$1,267 per square foot, respectively. In contrast, resale prices in the Outside Central Region saw a 1-per-cent increase to S$1,022 psf last month.

Sentiment in the resale market is in stark contrast to that for new private homes, where transactions soared to a record 2,793 units in March on a combination of new launches and attractive pricing.

“Some potential buyers might have been lured away from the resale market by these new launches, while others might also be withholding their purchase in anticipation of further price drops due to the cooling measures,” said Mr Alan Cheong, Senior Director of Research and Consultancy at Savills.

But he added that it may be too early to make a conclusive statement that the cooling measures have worked.

“I would like to see a couple more quarters of decline in both the new sales and resale markets while the global economy recovers, before I say for certain that the market has softened because of the cooling measures,” Mr Cheong said.

Source : Today – 11 May 2013