PROPERTY firms and agents are tapping other avenues to remain in business now that Singapore's once-booming resale market - for HDB flats and private homes - has taken a big hit from the Government's cooling measures.
Fresh estimates from agency bosses show the number of resale deals in both markets for the first quarter dropping significantly compared to sales done last year.
But the slowdown in these markets has fuelled activity in others. Sales are soaring at launches of mass-market condominiums. Buyers snapped up a record 3,138 new private homes last month, including executive condo units.
To get a slice of the action, property agencies such as PropNex and ERA are increasingly looking for direct deals with property developers to market new launches, which also offer their agents an alternative revenue stream.
Agents are also counting on the buoyant commercial and industrial sector, which is not affected by the recent cooling measures. Many of them have diversified into selling such units to make up for lost income from the dampened interest in the residential sector.
Some have also gone into subletting HDB flats to those - many of them foreigners - who would rather rent than buy now.
The Government, in its latest round of cooling measures last December, slapped a 10 per cent additional buyer's stamp duty on all foreigners buying homes, effectively killing a significant source of demand in the private property market, especially for high-end homes.
The Housing Board has also offered a record number of more than 50,000 flats in two years, and raised the monthly household income ceiling to $10,000 to allow more to bid for new flats instead of turning to the resale market.
Data from property agencies OrangeTee and ERA Realty put the number of HDB resale deals at 4,000 to 4,500 for January to mid-March.
This is almost 30 per cent lower than the 6,228 deals in the first three months of last year, and 24 per cent less than the 5,921 in the fourth quarter of last year.
OrangeTee's research and consultancy head Tan Kok Keong said the large number of new flats and recent moves by the HDB to set aside a larger number of flats for second-time buyers have reduced demand in the HDB resale market.
As a result, the cash premium paid above a flat's valuation, known as COV or cash-over-valuation, has also dipped.
ERA and PropNex said, based on their transactions this month, that the median COV across all flat types and towns was about $25,000 - lower than the $35,000 in the fourth quarter of last year.
ERA key executive officer Eugene Lim said, however, that the drop in COV has lured some buyers back into the market, with more units being sold this month compared to January.
Over in the private property market, ERA has spotted a 30 per cent dip in resale transactions for the first three months to date, compared to the fourth quarter last year.
'There's a mismatch of expectations between buyers, who expect prices to come down and hence make low offers, and sellers who have no urgency to cut prices,' said Mr Lim.
PropNex chief executive Mohamed Ismail pointed out that buyers may also opt for new units because they need to fork out only the initial downpayment - 20 per cent of the purchase price, or higher if the buyer already has an existing home loan.
The buyer can take the next two to three years to shop around for a loan while the project is being completed. Buying a resale unit means having to take a hefty loan immediately.
Sales in the commercial and industrial sector have heated up. Mr Ku Swee Yong, chief executive of International Property Advisor, said such investments are attractive as interest rates are still low and these units do not come with the tight restrictions imposed on homes...
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Martin Koh/ Sherry Tang
Martin Koh/ Sherry Tang