Secondary home sales down in September

Private home transactions in the secondary market slowed down significantly in September over the previous month following the August 30 announcement of property cooling measures.

Based on the analysis of URA Realis caveats data as of October 19, the number of subsales slid nearly 52 percent month-on-month in September, while resales of private homes declined 42 percent over the same period.

The sales volume will likely increase over the next few weeks, as more caveats are lodged for last month’s transactions. Market watchers, however, suggest the initial figures shown in analysis from Credo Real Estate indicate an activity slowdown in the secondary market for private homes after the government announced the recent measures.

The figures earlier released by URA showed that the number of private homes sold by property developers slipped 28 percent month-on-month to 911 units in September. Analysts, however, warned against comparing this slowdown with declines for secondary market transactions since URA primary market sales numbers are taken from monthly surveys of property developers, while data on the number of resales and subsales are collected from caveats lodged.

However, Ong Choon Fah, executive director of DTZ, said the data is a “good reflection” of what is happening in the market. “Chances of successful sales in the secondary market these days are lower as people do not have that much control. It’s not as organised, whereas in the primary market, a developer will first test the market to ensure there’s a reasonable chance of good response before launching the project. It’s a more managed process,” she said.

Another reason why secondary market sellers were less successful than property developers in September is that “by and large, owners are trying to hold on to their prices, which is why we’re seeing a standoff in the secondary market”.

“Whereas developers, if they want to launch, have to ensure there’ll be sales activity. In recent weeks, we’ve seen them releasing new projects at the lower end of their original price expectations,” said Mrs. Ong.

Based on Credo’s caveats analysis, the number of caveats lodged for private home subsales dropped to 150 in September from 311 in August. The volume of resale caveats also slid from 1,927 in August to 1,113 in September.

Source : PropertyGuru – 21 Oct 2010

Join The Discussion

Compare listings