Non-landed resale market shows signs of reviving. Number of transactions in first four months up, says R'ST Research
One reason for the uptick in interest in the resale market could be that its prices have fallen more than new sale prices, said Mr Alan Cheong, Savills Singapore research head. -- ST FILE PHOTO
BUYING interest is returning to the secondary market - the selling of existing homes - but volumes are still well below levels seen before cooling measures started to bite.
The number of non-landed resale deals jumped 20.7 per cent year on year to 1,411 in the first four months of this year, according to an analysis of caveats by R'ST Research.
The increase was across all regions, and came in tandem with falling prices. But non-landed resale volumes are still 36 per cent below the 2,203 transactions in the same period in 2013.
"Buyers are coming to terms with the market. After the Total Debt Servicing Ratio was introduced in mid-2013, many people held back, expecting prices to drop...
They may now have decided that the market is stabilising and this is the opportune time before interest rates rise," said Mr Desmond Sim, CBRE research head for Singapore and South- east Asia.
Both new sale and resale volumes seem to have stabilised over the past six months, and should stay stable barring drastic changes such as shifts in Government measures, he added.
The best performer was the central region, with the number of non-landed resale transactions in January to April jumping 24.2 per cent to 776.
Within that region, districts 9 and 10 comprising Orchard and Tanglin stood out, with volumes up 34.8 per cent to 240.
"Buyers generally saw it as a good opportunity to snap up discounted high-end properties, but they are not willing to accede to high asking prices by sellers," said Mr Ong Kah Seng, R'ST Research director.
Resale volumes rose 18.8 per cent to 247 deals in the East, were up 17.6 per cent to 127 in the North-east, higher by 17.8 per cent to 53 for the North, and increased 13.7 per cent to 208 for the West, he noted.
Across districts, volumes rose the most in District 15 in terms of unit sales, up by 48 units or 34.8 per cent year on year to 186 in the four months.
The district comprises Katong and Tanjong Rhu. "Prices in the district have found their support level," said Mr Navin Bafna, a PropNex associate team director.
About 95 per cent of buyers in the area aim to live there, he said. Mr Ong noted that prices have dipped 3 to 5 per cent in Districts 10 and 15 over the past year, but most of the falls were last year.
"We do not see much dip in prices any more, as owners have cut prices to a level that better matches buyers' expectations and affordability."
Volumes were also up by 21 units or 37.5 per cent to 77 units in District 5, which includes Buona Vista and West Coast, and up 20 units or 23 per cent to 107 units in District 23, comprising Bukit Batok and Choa Chu Kang.
District 5 is well-established as an upmarket, partial city fringe area, and District 23's popularity may be fuelled by the upcoming completion of the MRT's Downtown Line 2 - due to start operating in the first quarter of next year, said Mr Ong.
Generally, other reasons for the uptick in interest in the resale market could be that its prices have fallen more than new sale prices, said Mr Alan Cheong, Savills Singapore research head.
Resale units tend to be larger and offer immediate occupancy or rental income.
Given the scaling back of the Government Land Sales programme since 2013, the resale market is set to largely dominate sales from here on, he said.
The Straits Times/ Singapore Published on Saturday, 6 June 2015
By Rennie Whang firstname.lastname@example.org
Non-landed resale market shows signs of reviving