New home sales account for 46% market share

Singapore’s property sector is changing, with new home sales by developers taking up an increasing share of the private housing market.

According to caveats lodged with the Urban Redevelopment Authority (URA), primary market sales and those of executive condos (ECs) accounted for 46 percent of all property deals last year, the highest level since 2003.

The remaining 54 percent were made up of secondary market transactions, comprising both subsale and resale homes, totalling 17,405 units.

Subsales are sales prior to completion of the units, and are basically projects that have yet to receive the Certificate of Statutory Completion (CSC), while resales refer to sales of existing residential properties with CSC.

Property experts said secondary sales have gradually ceded its market share, as the government has rolled out a large supply of land in recent years to curb rising home prices.

The recovery of the collective sales market in 2010 also brought more property launches and a host of choices for buyers, resulting in many consumers flocking to this sector.

The secondary market accounted for 71 percent of the property market in 2008, as property developers held back on new launches. Since then, its proportion has been decreasing to stand at 61 percent in 2010.

Ong Teck Hui, Head of Research and Consultancy at Credo Real Estate, said the cooling measures have also changed the landscape of the market. For example, the seller’s stamp duty of up to 16 percent could have driven some property investors to look for new home acquisitions instead, as they can reduce their capital exposure due to progress payments.

Source : Today – 25 Jan 2012

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