Speculation in private home market dips to lowest level in 11 years

Speculation in the private property market is at its lowest in years, as the number of sub-sale transactions for private homes in the first three months of the year fell to its lowest level in nearly 11 years, signalling the market’s continued slowdown.

There were 88 sub-sale transactions in the first quarter of this year, compared with 132 units transacted in the previous quarter, data released by the Urban Redevelopment Authority (URA) showed on Friday (April 22).

Sub-sale transactions refer to those done before a property is awarded its Temporary Occupation Permit, and is seen as an indicator of speculative activity.

Properties in the prime Core Central Region appeared to be the hardest hit, with no sub-sale transactions recorded in the first quarter.

The first quarter also saw 1,340 resale transactions, accounting for 47.1 per cent of all sale transactions, compared with the 1,464 units transacted in the previous quarter.

Developers also launched fewer uncompleted private residential units (excluding executive condominiums) for sale in the first quarter — 953 units compared with 1,333 units in the previous quarter, and 1,189 units a year ago.

They also sold fewer units, from 1,603 units sold in the previous quarter to 1,419 private residential units (excluding ECs). In all, prices fell 0.7 per cent in the first quarter of the year.

Commenting on the “dramatic drop in sub-sales” since the first quarter of 2005, Mr Nicholas Mak, head of research and consultancy at SLP International Property Consultants, said this illustrated “the effectiveness of the cooling measures”.

But reasons behind the lower launch and sales volume in the first quarter could include the Chinese New Year holiday, which could have created “a greater dampening effect”, he added.

Mr Ong Teck Hui, national director for research and consultancy at property firm JLL, noted that launches were at its lowest volume since the fourth quarter of 2008, during the global financial crisis. Developers could have also been holding back on releasing units because of to “market uncertainties”, he said.

But he did not expect the “sluggishness” to persist, “as the market has regained more confidence and some developers have lined up their projects for launching in 2Q16”, he added.

Buyers, meanwhile, could be “biding their time for prices to drop sufficiently, and exploring their options thoroughly before buying a home”, said Mr Lewis Ng, PropertyGuru Singapore’s managing director, noting that the firm was still receiving enquires about properties.

Meanwhile, figures released by the Housing and Development Board (HDB) on Friday showed that resale activity picked up from a year ago, at 4,449 transactions in the first quarter of the year, up about 7.6 per cent from 4,135 the same time last year.

In addition, more people are subletting, with the number of applications approved for subletting of HDB flats increasing by 5.8 per cent from 10,618 cases in the fourth quarter of last year, to 11,239 cases in the first quarter.

In line with advanced figures released earlier this month, HDB resale prices fell 0.1 per cent from the previous quarter.

The HDB also said it will offer about 4,000 BTO flats and about 5,000 balance flats in the upcoming May sales exercise.

Source : Today – 22 Apr 2016

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