With fewer new launches during the June school holidays, property developers turned their focus to clearing off unsold units from earlier launches.
7,234 new private homes remained unsold last month, down by some two percent from May.
Market watchers say these units, which were launched at prices before the recent rise in property prices, seem more like a steal compared to the newer launches.
Analysts say developers may also offer bulk discounts on these units to lure both local and foreign buyers.
D’leedon, Interlace, Reflections at Keppel Bay and A Treasure Trove are among the developments that offer large number of units.
Based on data on caveats lodged, these developments also have a large portion of unsold units.
Except for A Treasure Trove at Punggol, these developments are located in the city and fringes.
Analysts say most of the buyers of these developments are foreigners.
And many of them have shied away recently due to the Additional Buyers’ Stamp Duty (ABSD).
Alan Cheong, research head at Savills Singapore, noted that in the first quarter of this year, the number of foreign buyers was zero for districts 1 and 2.
“But in the second quarter of this year, the foreign content as a percentage of total purchases is almost back to second-quarter last year, meaning the foreigners have probably shied away from the market in the first quarter. They are still mainly the Indonesians and the Malaysians,” he said.
Some analysts are upbeat that foreign buyers could be making a comeback in the coming months.
They cite softening property prices in prime areas as among the likely attraction for such buyers to make a comeback.
According to latest price data from the Urban Redevelopment Authority, prices of residential units in prime areas have eased by about 0.6 percent.
They add that recent high profile transactions have also suggested that institutional buyers are becoming active again.
Analysts say the high profile transactions include the purchase of 17 units at Napier 8 for S$100 million, or $2,800 to $3,000 per square foot.
This suggests that institutional buyers are slowly returning to the property market.
Property developers may also offer bulk discounts for purchases of more than 10 units.
Experts say this could help offset the Additional Buyers Stamp Duty and ease the inventory of unsold units in some of the larger developments.
Donald Han, special adviser at HSR, said: “Potentially it (discount) could be anywhere between 5-10 percent, because that is the amount to be compensated for foreign buyers coming back into the market because they need to pay 10 percent component as ABSD.”
Analysts point out that while developers are reluctant to offer discounts to buyers of single units, remnant units with unattractive views or inauspicious unit numbers may be offered at a cheaper rate so as to complete the sale of the entire development.
But a healthy cash reserve over the last couple of boom years will generally give developers a stronger holding power to wait for better prices.
Source CNA – 2012 Jul 18
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