New private home discounts not cause of dip in resale prices: analyst

Prices of new private home launches usually set the benchmark for resale properties in the area. But it seems that discounts offered by developers of major properties in the city since the fourth quarter of last year may not have spoilt the market yet.

Buyers who bought units at D’Leedon near Farrer Road and Interlace at Alexandra Road in the fourth quarter last year could have enjoyed discounts of up to 15 per cent.

But analysts believe these recent deal sweeteners were not the main culprits behind the slight dip in resale prices in the city or core central region, in January.

According to figures compiled from the Singapore Real Estate Exchange, January’s resale private property prices in the city dipped 2.9 per cent on-month to an average of S$1,878 per square foot.

The seventh round of cooling measures were cited for dampening buying sentiment after experts observed a slight recovery in the beginning of the fourth quarter of 2012.

From January 12, foreign buyers, which make up a third of buyers of homes in the city, will have to pay 15 per cent in additional buyers’ stamp duty (ABSD).

It is five percentage points more than what was initially imposed in December 2011.

Steven Tan, managing director at OrangeTee said: “I don’t think the decline of prices in the CCR is due to the recent discount given by some of the developers. I think it is due to the effect of the latest cooling measures. As you know the segment depends on foreign investors and local investors. So this is the area that the cooling measures will affect the most.”

Experts added that properties in the city are varied, and cater to different types of buyers.

Alan Cheong, research head at Savills Singapore said: “So those who buy prime (units) in Ardmore Park – they are probably of a different market from that in D’Leedon. I don’t think they are overlapping. Perhaps the older apartments – freehold apartments – those going out for S$1,400, S$1,500, may be interfered with by D’Leedon.”

Some analysts said buyers eyeing a resale unit in the city could use discounts offered by new private homes as a bargaining chip.

In the meantime, with units still available in projects such as D’Leedon and Interlace, there’re plenty of choices for bargain hunters looking to buy a home in the city.

Source : Channel NewsAsia – 13 Feb 2013

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