More homebuyers returning to private residential resale market

More homebuyers are returning to the private residential resale market as it is seen to offer better value compared to new projects launched by developers.

In fact, the gap in median prices of new and resale transactions has also narrowed.

That’s according to real estate agency Dennis Wee Group (DWG).

In a report, DWG said the caveats lodged in the secondary market climbed about 33 per cent in the second quarter in 2012, against the previous quarter.

In particular, the central region saw the largest increase in resale transactions at 37.4 per cent, followed by the North Region at 32.7 per cent and the West Region at 30.9 per cent.

Citing examples, DWG said the record selling prices for new 99-year leasehold projects in Bishan and West Coast are comparable to freehold non-landed residential developments in the resale market, such as Twin Regency and The Regency in Tiong Bahru.

The real estate agency said the revival in interest in the resale market has boosted prices of private homes in the second quarter.

DWG’s report showed that the gap in median prices of new and resale transactions has narrowed from 17 per cent in 1Q 2012 to 13 per cent in 2Q 2012.

The median prices of private residential units in the resale market rose 4.6 per cent to S$1,026 psf in 2Q 2012 from S$981 psf in 1Q 2012.

Meanwhile, the median prices of new projects on an islandwide basis were flat in 2Q 2012 at S$1,160 psf.

DWG also notes that the median size of units sold in the new sale market rose to 947 sq ft in 2Q 2012 from 807 sq ft in 1Q 2012 as a result of lower sales of small units.

It said this is probably due to recent comments by the government that they are monitoring the shoebox apartment segment which could have put off buyers from purchasing small format homes.

DWG said the number of transactions by foreigners rose in 2Q 2012 as the buyers have accepted the Additional Buyer’s Stamp Duty as a tax and are selectively picking up properties in Singapore.

445 private residential units were sold to foreigners in 2Q, up 26.8 per cent on-quarter.

Moving forward, DWG said developers are likely to launch more projects before the lunar seventh month which runs from August 17 to September 15.

Source : Channel NewsAsia – 18 Jul 2012

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