Secondary home sales shrink under big chill

(SINGAPORE) Secondary market transactions of private homes slowed down considerably in September over the preceding month following the property cooling measures announced on August 30.

The number of subsales fell about 52 per cent month on month in September, while resales of private homes eased 42 per cent over the same period, an analysis of URA Realis caveats data as of Oct 19 shows.

The sales volumes are expected to increase over the next few weeks as more caveats are lodged for September's transactions. Nevertheless, market watchers reckon the preliminary numbers shown in the analysis by Credo Real Estate is an indication of the slowdown of activity in the secondary market for private homes following the government measures.

Subsales and resales are secondary market transactions; subsales involve projects that have yet to receive Certificate of Statutory Completion (CSC), while resales refer to developments with CSC.

Last Friday, Urban Redevelopment Authority (URA) unveiled data showing that the number of private homes sold by developers fell about 28 per cent month on month to 911 units in September. However, analysts cautioned against comparing this rate of slowdown with declines for secondary market deals.

This is because URA primary market sales numbers are sourced from monthly surveys of developers, whereas data on the number of subsales and resales are collated from caveats lodged, and there's typically a lag of about 2-3 weeks or even more, between an option being granted and a caveat being lodged (the latter usually takes place upon exercise of option).

However, at least one seasoned property consultant was willing to say that the data is a 'good reflection' of what's happening in the market. DTZ executive director Ong Choon Fah said: 'Chances of successful sales in the secondary market these days are lower as people do not have that much control. It's not as organised, whereas in the primary market, a developer will first test the market to ensure there's a reasonable chance of good response before launching the project. It's a more managed process.'

Mrs Ong said another reason secondary market sellers were less successful than developers last month is that 'by and large, owners are trying to hold on to their prices, which is why we're seeing a standoff in the secondary market'.

'Whereas developers, if they want to launch, have to ensure there'll be sales activity. In recent weeks, we've seen them releasing new projects at the lower end of their original price expectations.'

Credo's caveats analysis showed that the number of caveats lodged for subsales of private homes slipped from 311 in August to 150 in September. The volume of resale caveats eased from 1,927 in August to 1,113 in September.

The last time the subsale figure was this low was in February 2009 (127 units) while the latest resale figure is close to the 1,009 transactions seen in April 2009, in the aftermath of the global financial crash.

Credo's executive director Ong Teck Hui also highlights that the 150-unit subsale volume for September is about half the 304-unit average for January to August this year, while the September resale figure of 1,113 units is down 37 per cent from the 1,767-unit average for Jan-Aug 2010.

The most expensive subsale of a landed home in September (in both absolute quantum and per square foot pricing) was a bungalow at Kasara - The Lake collection at Sentosa Cove, which sold at $16.75 million or $1,853 psf of land area of 9,042 sq ft. It was previously transacted for $14.428 million in December 2009, reflecting a profit of about 16 per cent.

In the non-landed housing segment, the priciest subsale in September based on psf of strata area was a 46th level unit at Marina Bay Residences which sold for about $7.4 million or $3,790 psf, after being previously purchased for about $5 million in January 2007. That works out to a 48 per cent gain over a period of three years and eight months.

In absolute price quantum, the most expensive non-landed subsale last month was a 3,251 sq ft unit at Parkview Eclat at Grange Road which fetched $9.95 million ($3,061 psf of strata area). This was 15 per cent below the $11.7 million at which the unit was previously transacted in August 2007.

Among resale deals, the priciest condo last month in absolute price was $14.24 million, for a 6,060 sq ft unit at St Regis Residences. In psf terms, the most expensive condo was a 2,885-sq ft apartment on the 23rd floor of Ardmore Park, which fetched $3,467 psf.

For landed homes, the most expensive resale deal in September was a good class bungalow at Jervois Road, which sold for nearly $27.2 million ($1,293 psf of land area). On a psf basis, the priciest resale was a bungalow at Lakeshore View at Sentosa Cove which fetched $1,899 psf (or $14 million in total).

Property consultants expect private home sales to remain slow for the rest of the year in both primary and secondary markets, due to the seasonal year-end slowdown. 'The market will take time to consolidate and adjust to the new policies,' says CB Richard Ellis executive director Li Hiaw Ho.

DTZ's Mrs Ong says: 'There has to be a marked and prolonged slowdown in activity before sellers reprice their units. Prices are always more sticky going down.'

Source: Business Times © Singapore Press Holdings Ltd.
Business Times: Thu, Oct 21

Cut ties with Singapore and lose your right to own land

Cut ties with Singapore and lose your right to own land
But PRs seem unperturbed by new ownership rules

SINGAPORE - Those who cut their ties with Singapore should not expect to own the city's scarce land resources.

That, according to analysts, is the message that the Government is sending through its Bill to amend the Residential Property Act, which was tabled in Parliament on Monday.

However, permanent residents whom MediaCorp spoke to said they were unperturbed by the new rules.

"I'm not concerned," said Indian hedge fund manager Samir Arora, who owns a house in upscale Sentosa Cove. "I have no plans to leave Singapore anyway."

Individuals who give up their citizenship or PR status in Singapore will now have to dispose of their landed properties within two years.

The Bill, which is expected to be debated in Parliament next month, could be passed by the end of the year. It seeks to impose a penalty of $20,000 or a three-year jail term for failure to adhere to the rules.

Foreigners inheriting landed property will have to sell it in five years instead of the current 10.

The new rules will be able to better respond to challenges presented by a population that is more mobile than in 1973, when the existing law came into force, analysts noted.

"Perhaps it will be a bit harsh for those PRs or citizens who inherited properties or who have since moved because of work or because of social reasons," said Dr Chua Yang Liang, head of research and consultancy at Jones Lang LaSalle. "But the issue is, if they have given up their citizenship or permanent residency, then they should be treated like a foreigner."

According to analysts, the impact on the market is expected to be minimal, as PRs currently own only 3 per cent of landed homes and landed housing makes up just some 5 per cent of Singapore's total real-estate market.

But rules are also being tightened for foreign property developers - developers with foreign directors or any amount of foreign ownership - who may feel the squeeze.

Developers who fail to complete and sell developments within the current stipulated period will now have to pay for any extension of their time frames.

Said Cushman and Wakefield managing director Donald Han: "I think the measures are being updated to create more of a 'hurt aspect' so that developers will be incentivised to use the two-year period to fully sell off their units."

HDB imposes 7-day cooling-off period for flat sale

SINGAPORE: From November, sellers of Housing & Development Board (HDB) flats will have to observe a seven-day cooling-off period before they can grant an Option-to-Purchase (OTP) to the buyers.

The cooling-off period starts after they complete a resale checklist which will have to be submitted online to the HDB website.

The checklist was introduced in 2008 to ensure flat sellers and buyers are aware of the key resale and financial policies before they commit to sell or buy a resale flat.

The HDB said the enhanced resale checklist would also require sellers to state their next housing arrangement.

HDB added if sellers intend to buy another flat, they have to work out their estimated sales proceed of their current flat, and submit a financial plan for their next flat purchase

Buyers of resale flats, acting with or without agents, will also be required to complete and submit the resale checklist.

The HDB said the enhancement was part of regular reviews to better protect the interests of sellers and buyers and help them make informed and prudent decisions.

Currently, agents engaged by sellers or buyers are required to go through a resale checklist with the sellers or buyers to highlight key policies and procedures before the sellers or buyers would grant or exercise the OTP.

After the OTP is granted or exercised, sellers or buyers are required to submit the completed checklist to HDB together with the resale application form.

Sellers and buyers without agents are encouraged, but not required, to go through a separate Do-It-Yourself (DIY) resale checklist.

They also do not need to submit the checklist to HDB.

-CNA-