Tag Archives: Singapore Resale Market

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

More homebuyers returning to private residential resale market

More homebuyers are returning to the private residential resale market as it is seen to offer better value compared to new projects launched by developers.

In fact, the gap in median prices of new and resale transactions has also narrowed.

That’s according to real estate agency Dennis Wee Group (DWG).

In a report, DWG said the caveats lodged in the secondary market climbed about 33 per cent in the second quarter in 2012, against the previous quarter.

In particular, the central region saw the largest increase in resale transactions at 37.4 per cent, followed by the North Region at 32.7 per cent and the West Region at 30.9 per cent.

Citing examples, DWG said the record selling prices for new 99-year leasehold projects in Bishan and West Coast are comparable to freehold non-landed residential developments in the resale market, such as Twin Regency and The Regency in Tiong Bahru.

The real estate agency said the revival in interest in the resale market has boosted prices of private homes in the second quarter.

DWG’s report showed that the gap in median prices of new and resale transactions has narrowed from 17 per cent in 1Q 2012 to 13 per cent in 2Q 2012.

The median prices of private residential units in the resale market rose 4.6 per cent to S$1,026 psf in 2Q 2012 from S$981 psf in 1Q 2012.

Meanwhile, the median prices of new projects on an islandwide basis were flat in 2Q 2012 at S$1,160 psf.

DWG also notes that the median size of units sold in the new sale market rose to 947 sq ft in 2Q 2012 from 807 sq ft in 1Q 2012 as a result of lower sales of small units.

It said this is probably due to recent comments by the government that they are monitoring the shoebox apartment segment which could have put off buyers from purchasing small format homes.

DWG said the number of transactions by foreigners rose in 2Q 2012 as the buyers have accepted the Additional Buyer’s Stamp Duty as a tax and are selectively picking up properties in Singapore.

445 private residential units were sold to foreigners in 2Q, up 26.8 per cent on-quarter.

Moving forward, DWG said developers are likely to launch more projects before the lunar seventh month which runs from August 17 to September 15.

Source CNA – 2012 Jul 18