Resale Private homes on the rise

[cashrich]

Comments welcome. Lets be friendly.

By Channel NewsAsia, Updated: 04/09/2010
Resale private homes on the rise

Resale private homes on the rise
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Condominiums in Singapore



SINGAPORE : Resale private properties are getting more popular with home buyers.

According to the latest data from the Urban Redevelopment Authority (URA), one in two private homes sold this year is a resale unit, up from 30 per cent in 1997.

While the sale of new private homes remained strong in the first 7 months of the year, analysts said resale private properties are also changing hands at a faster rate.

Private resale units now make up 50 per cent of total private home sales, compared to 30 per cent 13 years ago.

"The resale (private property) market likely to continue ease upwards, we’ve seen that happening over the last few quarters, starting from Q3 of 2009. Median price for resale (property) has been easing up, averaging about 3—5 per cent per quarter. I think the trend will likely continue, (but) the rate of increase has slowed down a little," said Dr Chua Yang Liang, head of Research and Consultancy at Jones Lang Lasalle.

Analysts said new prime districts have emerged in the non—landed private resale market, displacing popular areas like Orchard Road, Bukit Timah and Thomson.
In the second quarter this year, median prices of private resale homes in the new Marina downtown and Tanjong Pagar of districts 1 and 2 respectively out—stripped those in the traditional prime districts.

Dr Chua said: "You’re looking at the remaking of Singapore story that has taken a new form now. District 1 downtown area, and these projects (at) the Marina, The Sail... have actually moved prices. Downtown living has caught on for the last few years, gathered momentum now, and it’s likely to continue.

"What’s prime in Singapore now is more diverse, it’s a sign of a maturing real estate market," he added.
Industry players said the recent property cooling measures will affect the sales of new private homes and resale units.

But some analysts believe resale properties offer better value if buyers are priced out by newer projects.
Other experts said there’s also an upside potential of adding value to an old unit through renovations.

"If you buy a single storey, 20—year—old landed property, there’s a potential for you to adapt, reuse, and refurbish it into a two—storey development. Through the value—add process, you will be able to gain much higher capital appreciation, versus a project under construction," said Donald Han, Regional MD of Cushman and Wakefield. — CNA /ls

[mantrix]

Good news for those with plenty of props for resale (like Devilplate)

Not sure what the percentage is for MM units though?

[rattydrama]

It means that the new releases by developer will be priced lower. So for sure there will be a price correction.

Welcome to those who are cash rich now.

[Regulators]

this is bad news :doh:

[devilplate]

Good news for those with plenty of props for resale (like Devilplate)

Not sure what the percentage is for MM units though?

errr...not sure whether is it gd news anot....bcoz not selling any at the moment wor....i give no chance to hungry water ghosts now....:p

[devilplate]

this is bad news :doh:

care to elaborate?

[devilplate]

It means that the new releases by developer will be priced lower. So for sure there will be a price correction.

Welcome to those who are cash rich now.

hmmm....take NV residences for instance: for 7xxsqft 2bedder...how much u tink the prices shd be before and after these cooling measures?

[pengful]

It means that the new releases by developer will be priced lower. So for sure there will be a price correction.

Welcome to those who are cash rich now.

Developers will not drop prices so quickly. They will test the market and there will still be some who are not affected by the measures who may grab. No reasons for them to cut prices immediately.

[devilplate]

Developers will not drop prices so quickly. They will test the market and there will still be some who are not affected by the measures who may grab. No reasons for them to cut prices immediately.

yes...until really bo pian.....

developers only start to cut price few mths after lehman bro saga....they hold their prices throughout 2008

shd focus on resale or subsale firesales(but dun tink can find any double digit discount) happy hunting:)

[Xan]

Dun think resale or subsale firesale will happen after the cooling measures. Why? Because as long as economy is good, many people still got holding power. Those who are waiting for property to crash might be disappointed once again.

[august]

It means that the new releases by developer will be priced lower. So for sure there will be a price correction.

Welcome to those who are cash rich now.

not necessary, all depends on how much developer paid for the land.

no developer will sell at loss, worst come to worst they will hold... or if they sell at discount will give u inferior specs or finishing. During financial crisis, the govt steps in to help them lol

[ronyyk76]

Dun think resale or subsale firesale will happen after the cooling measures. Why? Because as long as economy is good, many people still got holding power. Those who are waiting for property to crash might be disappointed once again.

Do not forget that property is not the only investment when economy becomes good. In any cases, if the property becomes less attractive when compare to others investment, it is natural to these smart investors to invest in others.

Property is just one "religion" of investment, and there a lot of others which can offer same or better blessing....These investors are normally richer and also people with less patience.

Maybe you can call them speculators. The investment becomes hot only because they had placed their money there....:2cents:

[nobrainer32007]

ya, try structured deposits or minibonds.:banghead:

soon people will chase after properties in land scarce singapore.

think.


Do not forget that property is not the only investment when economy becomes good. In any cases, if the property becomes less attractive when compare to others investment, it is natural to these smart investors to invest in others.

Property is just one "religion" of investment, and there a lot of others which can offer same or better blessing....These investors are normally richer and also people with less patience.

Maybe you can call them speculators. The investment becomes hot only because they had placed their money there....:2cents:

[rattydrama]

I feel that this does not mean that developer will sell at a lost. It merely suggests that developer will cut profits to move their units due to market sediments. The most important thing is to be attractive enough to secure buyers and continue to move /push the selling market as much as possible. Be it speculators, PRs, new immigrants, foreigners and not necessary Singaporeans alone. Private Condo property is meant for everyone so it is pretty sensitive to prices.

I have these few points in mind.

1. With these new measurements affecting the marginal buyers, it would easily suggest that 5% reduction is in their mind after 1st quarter, so maybe we shall see this in Dec or Jan 2011.

2. Some panic investors/sellers will now sell at marginal profits – replacement costs considered. (as the caveats are still high over the last few transactions and the price run up for 6 quarter in the roll – high change got profits). After it has been sold, adopt a wait and see attitude. If very lucky, they can take chance of this market sediments to fish out better deals with better locations and facing, no bay window, big planter boxes etc… . And it would probably worth taking the risk. This will drive down the psf prices. So, again, the only direction is down after the first quarter.

3. On buyer’s perspective, they are now adopting a wait and see attitudes – (of cause they are some first timer who cannot wait.- it happens all the time be it bullish or bearish market) So again price down.

4. Developer will reduce price to test the market after 1st Q – so visit more VVIP to find out.

5. It is the sediments and cash flow that counts.

6. When market is good, LH, FH, not near MRT all will sell sell and sell cos the market is moving and property can be easily disposed off. However, when market is not good, developer will release good location plot, FH, slightly lesser psf in order to move the market.

7. So it is still worthwhile to sell now (provided you can get a buyer) and buy back later if you have too many properties now.

cheers


Developers will not drop prices so quickly. They will test the market and there will still be some who are not affected by the measures who may grab. No reasons for them to cut prices immediately.

[rattydrama]

Dear Bro Devilpate,

Not familiar with this location, but I reckon this place is mostly for self stay so the price will not be sky high before the new measurement. If not wrong the developer in the past took quite a while to fully sold some projects here.

This time round, developer use the infamous tactic to reduce the size to move the market – very smart but way too small, not livable for family. Not sure investor/home buyer will bite?? If don’t, investor must be careful as there is very limited upside if one decides to dispose off the property.

I feel that the developer did not reduce to price but rather put up some good facing units for sale first at their asking price. Also some lousy facing ones at a reduced price.

Balance unwanted units/difficult to move units (patio units) – sell at bargain price once profits target met.







hmmm....take NV residences for instance: for 7xxsqft 2bedder...how much u tink the prices shd be before and after these cooling measures?

[OLY99]

It means that the new releases by developer will be priced lower. So for sure there will be a price correction.

Welcome to those who are cash rich now.

are you sure developer will sell low? why? if they bought land at high price, they cant sell low even if they want to. i think the new launch will continue to launch high. developer can either delay launch, wait n see, or launch at "normal" high price. if scala can sell >$1000psf, it make no sense for developer to suddenly launch at $700psf for mass.

[rattydrama]

not so much. You mis-understood me.


are you sure developer will sell low? why? if they bought land at high price, they cant sell low even if they want to. i think the new launch will continue to launch high. developer can either delay launch, wait n see, or launch at "normal" high price. if scala can sell >$1000psf, it make no sense for developer to suddenly launch at $700psf for mass.

[mogyi]

Good news for those with plenty of props for resale (like Devilplate)

Not sure what the percentage is for MM units though?

Yup, i am also wondering what's the effect on MM units on these new ruling. Tho some are located in prime area with as high as 1800 psf, the quantum is still small in comparision.

[devilplate]

seriously, pls focus on resale/subsale to hunt for gd deals...y waste time on developers?:D

[Regulators]

this will delay my buying plans coz i had expected for mkt correct soon...


care to elaborate?

[Wild Falcon]

If you have above $300k, you can buy corporate investment grade bonds u know. SG property is NOT the only place to invest. With upside almost capped ny policies and sigificant downside risk, other options should be explored. Those minibonds are only for investors with only a few k and still want to invest in "bonds".


ya, try structured deposits or minibonds.:banghead:

soon people will chase after properties in land scarce singapore.

think.

[Wild Falcon]

If some developer launch at <700PSF for mass, I'm sure the "caspain effect" will happen again which will bring another round of "huat ah" and another round of measure :(


are you sure developer will sell low? why? if they bought land at high price, they cant sell low even if they want to. i think the new launch will continue to launch high. developer can either delay launch, wait n see, or launch at "normal" high price. if scala can sell >$1000psf, it make no sense for developer to suddenly launch at $700psf for mass.

[devilplate]

If you have above $300k, you can buy corporate investment grade bonds u know. SG property is NOT the only place to invest. With upside almost capped ny policies and sigificant downside risk, other options should be explored. Those minibonds are only for investors with only a few k and still want to invest in "bonds".

u serious in corporate bonds???:scared-3:

any other better lobangs?

i can only tink of SGS bonds....lol safest:p

[devilplate]

If some developer launch at <700PSF for mass, I'm sure the "caspain effect" will happen again which will bring another round of "huat ah" and another round of measure :(

for instance NV residences: 750psf will do the trick oredi.....dun have to cut till below 700psf:p

[hyenergix]

The developers are also enjoying low interest rates from the banks. If the rates are increased next year, then the smaller developers may just want to firesale like what happened in 2008.

[devilplate]

The developers are also enjoying low interest rates from the banks. If the rates are increased next year, then the smaller developers may just want to firesale like what happened in 2008.

fyi: 2008 interest rates keep dropping.....

developers only start to cut prices in 2009 after lehman burst while interest rates at record low.....(wharf residences also cut price....big developer)

not so simple my fren.....

[DC33_2008]

Not bad returns from such bonds. Need to do some homework. Local corporate bonds are rather safe with Temasek backing. Higher risk ones are those investment based on Indices but returns are higher at 7%.
u serious in corporate bonds???:scared-3:

any other better lobangs?

i can only tink of SGS bonds....lol safest:p

[hyenergix]

How to buy the Singapore government bonds eh?

[devilplate]

How to buy the Singapore government bonds eh?

http://www.fundsupermart.com/main/sgs/SGShome.tpl

[devilplate]

Not bad returns from such bonds. Need to do some homework. Local corporate bonds are rather safe with Temasek backing. Higher risk ones are those investment based on Indices but returns are higher at 7%.

buy thru banks?

my banker keep asking me to invest in high risk bonds....some offer 8-12%

those 'safer' bonds as u mentioned....wats the yield?

[Concours]

This report is biased. No date of report written.

Isn't it very obvious that a big chunk of private buyer are HDB owners who want to speculate?

Since this group is no longer allowed to purchase private without selling off their HDB, it takes away a big chunk of category of buyers.

That leads to reduction in prices since no other category will replace their demand.

Anyway the report is naughty without giving any statistics or evidence.

Best that can be said is that its an opinion piece. Just mentioned 'price going up'. Its doing a disservice to the readers.

[hyenergix]

fyi: 2008 interest rates keep dropping.....

developers only start to cut prices in 2009 after lehman burst while interest rates at record low.....(wharf residences also cut price....big developer)

not so simple my fren.....

I actually found some properties sold at discount around end 2008, but didn't buy else could have made some bucks. I missed the boat then :( Maybe the boat is back again with these new property measures and another 1 million+ FT coming after the election.