Sunday, July 29, 2012

Rise in private, HDB resale transactions

Straits Times: Sat, Jul 28

MORE buyers have snapped up resale Housing Board flats and condo units in the second quarter even as prices have reached record highs.

Experts said this marks a reversal in the resale market that had seen a downward trend in transaction volume in previous quarters.

They added that reasons ranged from pent-up demand, to lower cash premiums asked by sellers of HDB flats.

On the private-property front, the 3,487 resale transactions in the second quarter, up from 2,206 in the first, represented a rise of close to 60per cent.

HDB resale deals rose 19 per cent to 7,011 from 5,892.

PropNex chief executive Mohamed Ismail said the wait- and-see attitude adopted by buyers due to the Government's cooling measures - including the additional buyers stamp duty - seems to have dissipated.

'It appears that the strength of property demand has outweighed concerns over the slowing economy, the worrying global economic situation and the dampening effect of multiple rounds of government measures,' he said.

ERA Realty key executive officer Eugene Lim noted that buyers who are not going for expensive, new, top-end condo units in the suburban areas are instead turning to the core central area and 'finding good bargains'.

Citing an example, he said an 800sqft apartment at the 99-year-leasehold Watertown in Punggol recently sold for $1.1 million. By comparison, a similar-sized apartment at the freehold Levelz in Farrer Road went for about $1.2 million.

There were 701 transactions in the city centre in the second quarter, compared to 376 in the first.

Private non-landed home prices in the city centre and city fringe inched up 0.6 per cent and 0.4 per cent respectively, reversing a dip of 0.6 per cent in both segments in the previous quarter.

In suburban areas, it rose 0.5 per cent, down from a 1.1 per cent gain.

Overall, private homes increased by 0.4 per cent, compared to a decrease of 0.1 per cent in the previous quarter.

HDB resale flat prices inched up 1.3 per cent - a quicker pace than the 0.6 per cent in the first quarter. On the greater number of HDB resale deals, Mr Lee Sze Teck of Dennis Wee Group linked this to the steep plunge in COVs this year.

COVs are cash premiums paid above a flat's valuation. Based on data from various agencies, the estimated overall COV median is $26,000 so far this year, compared to about $34,000 in the fourth quarter of last year.

'Buyers could have also returned to the resale market after failing to land their ideal home in the new flat launches this year,' he added. The HDB has said it is on track to offer 25,000 new flats this year.

Mr Lim said those opting to buy resale flats also do not need to wait three years for new flats to be built. 'And if they are second-timers, it might be more worth their while to pay the COV than the resale levy,' he added.

The resale levy that a buyer going for his second subsidised flat must pay ranges from $15,000 to $50,000.

It was this which made 39-year-old researcher Damien Seng go for a resale unit. 'Moving immediately to a new place is more practical than trying my luck with new flat launches,' he said.

Despite the flurry of resale activity, experts are predicting that growth will be gradual for both the HDB and private segments, in part due to the big supply of new homes in the pipeline.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

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