View Full Version : Fall in resale prices of homes in Dec
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Fall in resale prices of homes in Dec
But too soon to be certain of downward trend, say experts
Published on Jan 31, 2012
By Cheryl Lim
MORE signs are emerging of a slowdown in the residential property sector, this time with a fall in resale prices of homes sold last month - though experts say it is too soon to be certain of a trend.
This was the first drop since September last year, according to the new Singapore Residential Price Index (SRPI) flash figures released yesterday.
The index showed prices overall falling 0.8 per cent - their biggest dip since July last year - after a modest increase of 1.4 per cent in November.
Prices of central and non-central homes were down 0.4 per cent and 1 per cent respectively. However, shoebox units - homes sized below 506 sq ft - achieved a price increase of 3.4 per cent.
The SRPI is compiled by the National University of Singapore's Institute of Real Estate Studies and measures a basket of completed private apartments and condominiums, excluding executive condos.
Last week, fourth-quarter data from the Urban Redevelopment Authority showed the first slide in prices for a housing segment since the second quarter of 2009, with prices of semi-detached homes having dipped 0.6 per cent.
The Government has been cranking up anti- speculative measures to cool the red-hot property market, most recently last month, when it introduced an additional buyer's stamp duty.
Mr Colin Tan, head of research at Chesterton Suntec International, said it is too soon to tell if these drops are a sign the market is slowing down, and the index would need to display another month of price falls before any significant conclusion could be made.
'We did expect some knee-jerk reaction in the market to the measures. There have been other occasions when the index has come down,' he said.
Other experts attributed the fall in prices to a shift in demand. Dr Chua Yang Liang, head of research at Jones Lang LaSalle, said: 'It has also got to do with the 'wait-and-see' effect. Many buyers and sellers want to see how the market responds before plunging in to their next property purchase.'
But he said it boils down to a question of affordability. In recent months,high-end homes have been met with waning interest owing to global economic uncertainty, and the same might now apply to mass-market homes, he said.
Even though the index for small units bucked the trend this month, analysts note that last month's smaller number of transactions coupled with the recent volatility in the small-unit index could account for the significant resale price rise in shoebox units.
But property consultants say it is hard to predict if the overall downward price trend will persist throughout the next few months.
Judging by what is happening in the new sales segment, Dr Chua is not expecting to see any major downside for the resale sector. He anticipates prices will remain stable or soften further.
Mr Nicholas Mak, SLP International executive director of research and consultancy, said any future resale price changes will depend on microeconomic factors, the dynamics of the property market. 'The supply of completed homes will also play a part. Buyers may have more choices, and we may see the market gradually turning into a buyers' market.'
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Secondary market for private homes heading for doldrums
by Colin Tan
04:46 AM Feb 03, 2012
The secondary market for private homes is shrinking. Of that, there is no doubt. The trend has been clear since the second half of 2010, but what is unnerving is the rate at which demand is shrinking.
Official figures show that the number of resale and sub-sale deals have fallen by more than a quarter last year compared to 2010. Their market share of total sales has also fallen to about 57 per cent from 61 per cent in 2010.
Many property watchers have pointed to the revised seller's stamp duty (SSD) imposed in January last year as the primary cause of the decline. They say it may have channelled more purchases towards units offered at project launches. Likewise, they say, the situation is going to get worse following the introduction of the additional buyer's stamp duty (ABSD) in December last year.
With the ABSD, foreigners have to pay a duty of 10 per cent on top of the existing buyer's stamp duty of about 3 per cent. Permanent residents who buy a second and subsequent residential property will pay 3 per cent more in stamp duty. Singaporeans who already have two residential properties will have to pay the extra 3 per cent on their third and subsequent home purchases.
With respect to the SSD, those buying a private home on or after Jan 14 last year have to pay a duty of 16 per cent, 12 per cent, 8 per cent and 4 per cent if they sell the property within the first, second, third and fourth year of purchase, respectively.
Analysts say the majority of investors prefer to buy uncompleted properties at project launches as they can minimise their capital exposure with progress payments. Also, by the time the property is completed in about three to four years, they would be hit only by a relatively small 4 per cent SSD, if at all.
Yet others say the higher number of project launches and wider range of properties offered may have diverted buyers' attention away from the secondary market.
Both are valid arguments.
But most investors have a preference for either uncompleted or completed properties. Only a small proportion invests in both.
Also, the sales at project launches did not show any significant increase. Rather, sales in the primary market have held firm while those in the secondary market have plunged.
So, if not the revised SSD, what could have caused the slump?
While we may disagree on the extent, most of us would agree that the majority of buyers at project launches today are predominantly investors. The majority of upgraders or owner-occupiers would have been priced out of the primary market by now.
If they are still looking to buy private homes, they would most probably be viewing the completed ones. However, the falling sales seem to suggest that this group of buyers may also be fast disappearing from the secondary market.
Besides the imposition of the SSD, what else was new last year that could have triggered the decline in sales?
Last year was the first full year that executive condominiums (ECs) made their presence felt again in the non-HDB housing market. There were more than 2.7 times the number of ECs sold last year than in 2010.
For the first time in a very long time, a third alternative had emerged for upgraders and owner occupiers - apart from just choosing between units offered at project launches and those in the secondary market. If we include ECs in the analysis, it is obvious where the demand has shifted to.
The raising of the monthly income ceiling to purchase new ECs from S$10,000 to S$12,000 on Aug 15 last year may have accelerated the swing in demand to ECs.
The recent announcement that the number of EC sites to be sold in the first half of this year would be raised to six, with five on the Government's Confirmed List, also does not bode well for the secondary market for private homes.
Sites expected to yield 3,500 EC units will be made available in 1H2012, including five on the Confirmed List that will yield 3,000 EC units. This Confirmed List quantum is comparable to the 3,000 EC units from five sites sold for the whole of last year.
Some may question the sharp increase in supply of ECs and ask whether there is enough demand to sustain sales. My own feeling is that with this swing in demand, there will be more than enough demand to absorb the increased supply.
I fear investors may find it increasingly difficult to dispose of their completed properties from this year onwards unless prices at launches resume their climb, which may alter the dynamics between the different markets yet again.
But what are the chances of this happening?
Colin Tan is head of research and consultancy at Chesterton Suntec International.
Talked to a colleague today, he is staying in Nuovo, not sitting on a paper profit of 400K. He has decided to sell it and rent for the moment thinking that price will soften. I think should be a good decision cos 400K profit is really alot. So even of price dun drop also ok, already earn like siao.
how much is he paying for rental and where, just out of curiousity.
ikan bilis
03-02-12, 22:01
Talked to a colleague today, he is staying in Nuovo, not sitting on a paper profit of 400K. He has decided to sell it and rent for the moment thinking that price will soften. I think should be a good decision cos 400K profit is really alot. So even of price dun drop also ok, already earn like siao.
if investment property, can always sell or buy as wished...
but selling own-occupied property ??... that's property "shorting"... you need to cover back later....
like that for "shorting" to be profitable, property price has to drop by how much per year ??... :cool:
Talked to a colleague today, he is staying in Nuovo, not sitting on a paper profit of 400K. He has decided to sell it and rent for the moment thinking that price will soften. I think should be a good decision cos 400K profit is really alot. So even of price dun drop also ok, already earn like siao.
Given that the resale market is now in doldrums, your friend may find it difficult to sell at current market price without giving a good discount. If he waits any further, prices could soften further and achieving his desire profit may prove challenging.
Given that the resale market is now in doldrums, your friend may find it difficult to sell at current market price without giving a good discount. If he waits any further, prices could soften further and achieving his desire profit may prove challenging.
hopefully he didn't have to pay too much for rental because he would have to take 2 hits. discount and sale and high rental.
Actually no point selling at a discount and end up paying rental right? Nobody will know what is the price trend going forward. Worse still, sell already end up later buy at a premium at lousy location, facing, low floor, and still subjected to 60% LTV, subject to ABSD, 4 years SSD, high interest rate (because new loan and interest would have gone up and can't lock-in at low rate as of now) etc! Never sell your only property that covers your head! :tsk-tsk:
What is he thinking? Get the cheapest place to rent, which is a HDB flat at least a 4-room HDB, now need to pay $2500 pm in Bishan? Worth it? :beats-me-man:
Given that the resale market is now in doldrums, your friend may find it difficult to sell at current market price without giving a good discount. If he waits any further, prices could soften further and achieving his desire profit may prove challenging.
Originally Posted by Montaigne
Talked to a colleague today, he is staying in Nuovo, not sitting on a paper profit of 400K. He has decided to sell it and rent for the moment thinking that price will soften. I think should be a good decision cos 400K profit is really alot. So even of price dun drop also ok, already earn like siao.
Huh? Wtf. High interest rate?
Tht states keeping low interest until 2014
Telling others nt 2 sell
Like stock in n out make $$$ or keep blue chip 2 fight inflation?
Why every1 thinks prices will fall?
If govt relaxes CM? N tightens foreigns Ltv
Why every1 thinks prices will fall?
If govt relaxes CM? N tightens foreigns Ltv
Long term all measures will be removed when dark cloud gone. LKY already pro FT liao - http://www.channelnewsasia.com/stories/singaporelocalnews/view/1180821/1/.html, imagine telling those FT, we welcome you but you need to pay 10% more stamp duty to call us your home!
Actually no point selling at a discount and end up paying rental right? Nobody will know what is the price trend going forward. Worse still, sell already end up later buy at a premium at lousy location, facing, low floor, and still subjected to 60% LTV, subject to ABSD, 4 years SSD, high interest rate (because new loan and interest would have gone up and can't lock-in at low rate as of now) etc! Never sell your only property that covers your head! :tsk-tsk:
What is he thinking? Get the cheapest place to rent, which is a HDB flat at least a 4-room HDB, now need to pay $2500 pm in Bishan? Worth it? :beats-me-man:
a 3room flat now rents from $2k and up.
Cheong cheong ah
Every1 reverse ? We go
ikan bilis
03-02-12, 22:48
when you sell some owner occupied property, you might not get all your "paper profit" in full....
=> some bed time story for you guys now....
- seller of my condo bought from new launch 10yrs ago
- they have some capital appreciation of ~$150K, after holding/staying for 10yrs
- i think they sold condo because they wanted to cash out some $$
- after full transaction over, the total amount of cash they received was about S$16K (5% option fee included)...
- all the other profit gone to cpf, agents commission, legal fee and etc...
- i know the exact amount they received, bcoz my lawyer kiasu and issued individual cheques to legal firm, bank, cpf, agent, and seller. I got the whole list of cheque payee names and amounts in lawyer's memo...
then also,
- seller initially wanted to downgrade to EA
- but at one stage they had difficulties finding a near mrt EA. That's after my option excercised.
- seller told me they might want to buy a 4bdr condo.
- i did not know how to tell seller: "the 4bdr condo that they sold me was the most junk-and-cheapest near-mrt-4bdr on whole sgp island"....
- finally they got a hdb ea in jurong west. paying S$60K cov...
- i do not know if seller is able to witdraw from cpf, do not know their age...
- hope everything work out fine for them....
- the condo went up another $120k after 1 yr now....
:scared-3: :scared-3:
ok,.... now can go :sleep: :sleep: liow....
when you sell some owner occupied property, you might not get all your "paper profit" in full....
=> some bed time story for you guys now....
- seller of my condo bought from new launch 10yrs ago
- they have some capital appreciation of ~$150K, after holding/staying for 10yrs
- i think they sold condo because they wanted to cash out some $$
- after full transaction over, the total amount of cash they received was about S$16K (5% option fee included)...
..........
- the condo went up another $120k after 1 yr now....
:scared-3: :scared-3:
is the story for yourself too? ;)
condo went up another $120k from your purchase price, if sell it, get only $16k (if excluding SSD). really :scared-3::scared-3:
is the story for yourself too? ;)
condo went up another $120k from your purchase price, if sell it, get only $16k (if excluding SSD). really :scared-3::scared-3:He said the previous owner got $16k cash... he now sitting on $120k appreciation. :D
how much is he paying for rental and where, just out of curiousity.
Still waiting for buyers la, so still staying in nuovo.
ikan bilis
04-02-12, 07:41
is the story for yourself too? ;)
condo went up another $120k from your purchase price, if sell it, get only $16k (if excluding SSD). really :scared-3::scared-3:
no-lah, mine 3% SSD... now left 2% liow... and i use cash... no cpf...
previous owner already hold for 10yrs, went through 2003/4 crisis... if they wait for another year, they make another $120K (and cash proceed would be ~140K)....
He said the previous owner got $16k cash... he now sitting on $120k appreciation. :D
previous owner make ~150K, but most gone back into cpf, received only 16K cash... you do not get much ca$h out if using cpf to pay mortgage over a long period... profit might look big but "what you get in cash is not what you see"....
~~~~~~~~~~~~~~~~~~~
another 1...
when renting out my hdb, one aunty viewer told me
- she blur blur sold her woodlands 5rm hdb... she only thought of and realised no place to stay after sold the hdb...
- complained kena sweet talked by agent and sold the hdb... agent told her "good price now and will crash later"...
- and when renting the hdb, she now needs to pay rent by cash. Previously mortgage was paid with cpf.
- what i told the aunty: "you better go get a hdb back, your $$ cash profit is not going to last long...."
so, => don;t ever anyhow sell or "short" the only property you are staying in...
:scared-3::scared-3:
no-lah, mine 3% SSD... now left 2% liow... and i use cash... no cpf...
previous owner already hold for 10yrs, went through 2003/4 crisis... if they wait for another year, they make another $120K (and cash proceed would be ~140K)....
previous owner make ~150K, but most gone back into cpf, received only 16K cash... you do not get much ca$h out if using cpf to pay mortgage over a long period... profit might look big but "what you get in cash is not what you see"....
~~~~~~~~~~~~~~~~~~~
another 1...
when renting out my hdb, one aunty viewer told me
- she blur blur sold her woodlands 5rm hdb... she only thought of and realised no place to stay after sold the hdb...
- complained kena sweet talked by agent and sold the hdb... agent told her "good price now and will crash later"...
- and when renting the hdb, she now needs to pay rent by cash. Previously mortgage was paid with cpf.
- what i told the aunty: "you better go get a hdb back, your $$ cash profit is not going to last long...."
so, => don;t ever anyhow sell or "short" the only property you are staying in...
:scared-3::scared-3:
Hi there....
Need your guidance here.... If I buy a pc but sign an indemnity to sell my HDB within 6 mths from top cos I had used my Cpf funds, then can I refuse to sell my HDB later if my cpf has the minimum sum required? Thanks in advance!
ikan bilis
04-02-12, 08:05
Hi there....
Need your guidance here.... If I buy a pc but sign an indemnity to sell my HDB within 6 mths from top cos I had used my Cpf funds, then can I refuse to sell my HDB later if my cpf has the minimum sum required? Thanks in advance!
sorry, never heard of got such "indemnity" thing before... cpf providing that?.. you need to check with cpf if they could void that "indemnity" later...
(Btw: 50% of minimum sum=~65K is not a lot, your SA should cover most part)
Talked to a colleague today, he is staying in Nuovo, not sitting on a paper profit of 400K. He has decided to sell it and rent for the moment thinking that price will soften. I think should be a good decision cos 400K profit is really alot. So even of price dun drop also ok, already earn like siao.
Actually 400k is not a lot.
I used to stay there.
I think my Nuovo neighbour also did that in late 2009. Sold for around 300k profit and went to rent.
I think he rented for 1-2 years before getting cold feet and bought a HDB....
Nuovo did not rise much from 2009 to now. IF your neighbour has sold earlier and bought a bigger place in 2009, I think his paper profit will be much higher.
sorry, never heard of got such "indemnity" thing before... cpf providing that?.. you need to check with cpf if they could void that "indemnity" later...
(Btw: 50% of minimum sum=~65K is not a lot, your SA should cover most part)
Thanks so much! Yup, my SA do covers abt more than 50% of it but still not full... I had called CPF board before I commit earlier, was told ok to hold HDB flat if I already have minimum sum in CPF when PC TOP then no need to sell HDB. But not sure if exactly that CPF officer knew what I was asking... :) fingers crossed....
Thanks anyway!
Still waiting for buyers la, so still staying in nuovo.
3 bedder or 4 bedder?
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