New private homes “popular for investment purposes”

Mass-market new private residential units are proving to be more popular among Singaporeans.

And many are buying them for investment purposes rather than to stay in, says an analyst.

From January to May this year, the number of new private residential units sold in Singapore was 8,247 – about twice the number of resale private residential units sold.

For new private residential units outside the central region, their median price is S$930,000.

For resale units, it is about S$1.2 million.

The price difference of about 22 per cent is mainly due to the varying sizes.

Analysts have observed that the median size for new units is 882 square feet.

For resale units, it is more than 1,200 square feet.

But analysts also caution that mortgage rates may increase.

OrangeTee’s head of research & consultancy, Christine Li, said: “Even though resale homes are slightly cheaper on the dollar per square foot basis, the quantum is usually larger than the new homes. If you compare the median prices, it’s about 22 per cent higher, in terms of the quantum. So it actually affects the affordability of the buyers.

“Instead of staying in those homes, they are probably buying for investment purposes…you can tell from the quantum they pay and the size of the units they go for. It’s usually two-bedders, and the quantum is usually around $1 million or $1.2 million.”

Analysts also cautioned that rising mortgage rates could pose risks and that potential buyers need to bear this in mind.

Source : Channel NewsAsia – 25 Aug 2013

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