Friday, July 22, 2011

Private home subsales rise 10.6% in Q2

THE number of private homes sold in the subsale market, which is often used as a proxy of speculative activity, rose 10.6 per cent quarter on quarter to 712 units in the second quarter of this year, but this pace of increase was slower than a nearly 27 per cent jump reflected in the 4,562 new private homes sold by developers, according to Savills' analysis.
'With speculators weeded out from the market after the higher seller's stamp duty (SSD) rates introduced in January, more genuine home buyers now have direct access to choice units from developers in the primary market. So the supply chain has become more efficient with the 'middlemen' or speculators cut out', said Savills Singapore research head Alan Cheong.

'The full impact of the January 2011 anti-speculation measures will need time to work their way through the system since the SSD would affect only those who bought a private home from Jan 14 and sell it within four years of purchase,' he added.

The SSD rates are 16, 12, 8 and 4 per cent respectively for those who sell their properties in the first, second, third and fourth year of purchase respectively.

Those who had, a few years earlier, picked up private homes which are now still under construction, would generally still find it worthwhile to divest them, given the recovery in property values since the global financial crisis, say property consultants. This is expected to continue to contribute to a steady stream of subsale activity.

'This will especially be the case for projects which are close to or have just been completed since buying interest in such developments is typically higher among those who would like to purchase a property that they can move into or rent out immediately,' says Ong Choon Fah, DTZ's COO and head of consulting and research, SE Asia.

Subsales refer to secondary-market deals in pro-jects that have yet to receive a Certificate of Statutory Completion (CSC).

Resales, which are also secondary-market transactions but involve projects with CSC, rose 17.5 per cent quarter on quarter to 4,144 units in Q2 2011, shows Savills' analysis of caveats captured by URA Realis.

The subsale and resale figures were based on caveats lodged (excluding en bloc sales) while new home sales by developers were based on developers' submissions to Urban Redevelopment Authority's surveys. The latest Q2 developer sales figure was compiled as the sum of monthly sales from April to June 2011; however, the final tally to be released by URA today may be lower as it will take into account units returned by buyers.

Savills' analysis covered landed and non-landed properties, excluding executive condos, which are a hybrid of public and private housing.

The study showed that the most popular non-landed project in the subsale market in Q2 2011 was Livia in Pasir Ris (29 subsales), followed by 10 Shelford (24 subsales), The Clift along McCallum Street (22 units), Clover by The Park in Bishan (21 units) and Double Bay Residences in Simei (21 units).

The Clift received Temporary Occupation Permit (TOP) in Q1 this year while Livia and Clover by The Park clinched the same approval this month. Typically, CSC for a project can be obtained one to six months after it has received TOP.

District 12 (which includes Balestier and Toa Payoh) was the most popular subsale district among non-landed homes in Q2, followed by prime districts 9 and 11.

Among non-landed resale transactions, the most sought-after districts were 15 (which includes Katong, Telok Kurau, East Coast Road and Siglap), 10 and 16.

In the landed resale segment, District 19 (which includes Upper Serangoon and Hougang) topped the chart, followed by District 15 and 16. The last includes Upper East Coast, Bedok and part of Upper Changi Road East.

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