http://www.straitstimes.com/Money/St...ry_790290.html

Big drop in first-quarter secondary home sales

Published on Apr 19, 2012


SECONDARY home sales in the first quarter of this year were well down from that of last year, according to a quarterly report by DTZ Research.

These sales of existing properties, as distinct from the primary market for new homes, slowed to about 500 units a month in January and February, significantly lower than the monthly average of about 1,400 units last year.

New home sales in January and February were far stronger, at an average of 2,143 units, well up from last year's monthly average sales of 1,364 units.

The report did note, however, that this strong showing was driven mainly by a few popular projects. It also stated that resale prices of non-landed private homes kept sliding in the first quarter, with luxury and freehold condominiums in the prime districts of 9, 10 and 11 faring the worst.

Possible reasons for weakening resale prices included government cooling measures, notably the additional buyer's stamp duty (ABSD) of 10 per cent for foreigners, higher prices and competition from newly completed projects.

A higher proportion of local buyers is expected to dominate the market as foreigners take time to adjust to the ABSD, which 'will have a greater dampening effect on sales volume and (property) prices in prime areas'.

DTZ Research also noted that collective sale sites continued to hit the market despite the ABSD measures.

Six collective sales were concluded in the first quarter of this year. Two collective sales were launched this week - Harbour View Gardens in Pasir Panjang Road, put on sale on Tuesday, and Green Lodge in Toh Tuck Road, which was launched yesterday.

The tenders will close on May 16 and May 15 respectively.

The report also mentioned that demand for office space slowed down in the first quarter as office occupiers remained wary of market uncertainties, taking up space only on a need-to basis.

Nevertheless, pockets of new demand were noted 'from companies venturing into the growing South-east Asian markets' and looking to set up offices here.

On the industrial front, DTZ said that rents had held firm for the third consecutive quarter, but were nevertheless expected to fall due to slower demand.

'Besides an expected slowdown in economic growth (this year), the industrial sector is now faced with another dampener as landlords become wary of renting industrial units out for unauthorised uses,' it said, citing a recent blog post by Minister for National Development Khaw Boon Wan about the use of industrial spaces.

The report added that retail rents in Orchard and Scotts Road are expected to ease, due to new supply coming from the conversion of offices to retail space at Atrium@Orchard later this year and redevelopment of the former Yen San Building by next year.

'However, the sector could prove to be more resilient if there is a pickup in economic activity... and tourist arrivals grow more strongly than expected.'

GAN YU JIA