Resale private homes on the rise

Resale private properties are getting more popular with home buyers.

According to the latest data from the Urban Redevelopment Authority (URA), one in two private homes sold this year is a resale unit, up from 30 per cent in 1997.

While the sale of new private homes remained strong in the first 7 months of the year, analysts said resale private properties are also changing hands at a faster rate.

Private resale units now make up 50 per cent of total private home sales, compared to 30 per cent 13 years ago.

“The resale (private property) market likely to continue ease upwards, we’ve seen that happening over the last few quarters, starting from Q3 of 2009. Median price for resale (property) has been easing up, averaging about 3-5 per cent per quarter. I think the trend will likely continue, (but) the rate of increase has slowed down a little,” said Dr Chua Yang Liang, head of Research and Consultancy at Jones Lang Lasalle.

Analysts said new prime districts have emerged in the non-landed private resale market, displacing popular areas like Orchard Road, Bukit Timah and Thomson.

In the second quarter this year, median prices of private resale homes in the new Marina downtown and Tanjong Pagar of districts 1 and 2 respectively out-stripped those in the traditional prime districts.

Dr Chua said: “You’re looking at the remaking of Singapore story that has taken a new form now. District 1 downtown area, and these projects (at) the Marina, The Sail… have actually moved prices. Downtown living has caught on for the last few years, gathered momentum now, and it’s likely to continue.

“What’s prime in Singapore now is more diverse, it’s a sign of a maturing real estate market,” he added.

Industry players said the recent property cooling measures will affect the sales of new private homes and resale units.

But some analysts believe resale properties offer better value if buyers are priced out by newer projects.

Other experts said there’s also an upside potential of adding value to an old unit through renovations.

“If you buy a single storey, 20-year-old landed property, there’s a potential for you to adapt, reuse, and refurbish it into a two-storey development. Through the value-add process, you will be able to gain much higher capital appreciation, versus a project under construction,” said Donald Han, Regional MD of Cushman and Wakefield.

Source : Channel NewsAsia – 4 Sep 2010

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