S'pore's Private Property Resale Market Offer Discounts Of Up To 50%

[Misc100 2]

S'pore's private property resale market offer discounts of up to 50%

By Ng Baoying, Channel NewsAsia | Posted: 12 June 2009 1951 hrs

S'pore's private property resale market offer discounts of up to 50%

SINGAPORE: If you're looking to buy a private high-end property, market watchers said the resale market appears to be offering better deals right now.

They said discounts of up to 50 per cent can be found in the resale market for Singapore private properties, compared to developer launches where prices may only be lowered by about 20 per cent.

Property market sentiment appears to be recovering, with developers launching new units to test the market.

Some have even dangled incentives like discounts and other perks, which effectively amount to deferred payment schemes. However, analysts said buyers may find better deals elsewhere.

Karamjit Singh, managing director, Credo Real Estate, said: "At this stage, buyers are probably much better off scouring the resale market, especially among those projects originally sold well before the peak of the market, sometime in 2006 or early 2007.

"This would still give the sellers who bought originally from developers some margin to make. And there's probably something left behind on the table for the new buyer to make from the upside."

For example, a unit at Ardmore 2 in the Orchard area was transacted for as low as S$1,600 per square foot in the past month. This same unit would have fetched more than S$3,000 per square foot during the market's peak in 2007.

About five units at Tate Residences were sold below S$2,000 per square foot. At the market's peak, prices hit as high as S$3,500 per square foot.

Credo Real Estate said prices for high-end properties have settled to around S$2,000 per square foot today.

Such deals in the high-end segment are attracting foreign investors back into the market. They had left earlier due to the credit crunch and poor market sentiment.

But developers are not likely to drop prices by more than 20 per cent for new properties due to concerns for valuations.

Donald Han, managing director, Cushman & Wakefield, said: "Valuations tend to take note of last transacted. If you sold some project for S$3,000, S$4,000 per square foot, let's say, at end-2007, and now you sell at S$2,500 per square foot, it creates a fair amount of disruption in market valuations. So the tendency is to hold back and wait for better market timing before launching."

Overall, market watchers project that some 6,000 units will be sold in the primary market this year if the economic conditions stabilise. - CNA/vm

[joon 0]

Property market warning

Analysts point to over-supply and weak rental demand

By Joyce Teo

THE optimism in Singapore's property market is unsustainable, given an impending over-supply of new flats, weak rental demand and the fact that the country remains in a recession.

That is the pessimistic view of two research houses, which concluded that the price recovery is highly fragile.

Citigroup said the market is not at the start of a cyclical upswing and that the spike in home prices cannot last. 'We caution against over-optimism, because fundamentally the market is not ready for a sustained price recovery,' analyst Wendy Koh wrote in a report on Thursday.

In the same report, she downgraded Allgreen to 'sell', putting the developer in the same 'sell' basket as City Developments, CapitaLand and Keppel Land. Citi also downgraded Wing Tai to 'hold'.

While there has been strong resale demand, the call for new homes is patchy and rental demand remains weak, Ms Koh said.

Resale prices of some projects have risen and some developers are reducing discounts for new projects but Nomura Singapore believes these seemingly positive factors are misleading.

It maintained that the demand for new homes was boosted by price discounting and the interest absorption scheme.

'A rapid deterioration in rents amid higher supply and weaker demand has undermined yield expectations,' it said.

Nomura also pointed to the damaging effect of rising unsold inventory and forced sales by defaulting or distressed buyers who bought on deferred payment.

These properties form a source of 'hidden' inventory that will place further pressure on asking prices.

Read the full story in Satuday's edition of The Straits Times

[icer 0]

I was already going to get my property as I sensed that prices are going up. But given the recent analysis of the over supply and weakened rental demand and also the record low no. of jobs available in the market and falling retail sales revenue, I have decided to hold on and wait.

At the most, I can still go for resale properties.

[joon 0]

Good news is I dont think you will miss the boat.

If you read today's Straits Times, you will know where the irony is.

(A) "A Merry May for home sales. Figure at near\record level, with prime areas doing particularly well"

(B) "Dismal Q1 job market ... the worst since Sars ... net loss of 6,2000 far worse than the 1,000 estimated end Apr by Ministry of Manpower"

Interestingly (A) is featured prominently on front page and (B) is 3rd page.

[Phantom 1]

Then again it always depends on the editor and at the same time whether the article is paid for.

[icer 0]

Yah, with all the bad news and the rising H1N1 cases, I am not sure who are the ones snapping up units at the recent launches. It's quite weird to have the property prices going the opposite way as the whole economy.

Given the huge supply of properties in the coming months, the prices won't go up that much right?

[LinDa 0]

Yah, with all the bad news and the rising H1N1 cases, I am not sure who are the ones snapping up units at the recent launches. It's quite weird to have the property prices going the opposite way as the whole economy.

Given the huge supply of properties in the coming months, the prices won't go up that much right?

i hear people in the pte ppty construction business saying prices will not sustain and more likely to go down. i wonder whats causing all the buying of new homes lately.

[icer 0]

It was reported that prices of private homes fell by more than 5% in Q2.

[santav 0]

It was reported that prices of private homes fell by more than 5% in Q2.

it's reported that prices have come down but i still see launches selling at above $700psf for leasehold condos in outlying areas.......

[Tweetie74 0]

Exactly lor, sigh wonder when will the psf drop to be more realistic.

Me want to upgrade but missed the boat , just dun feel like paying more

[icer 0]

Me too!

Now I am stuck. If I don't buy now and the prices keep going up, I am doomed. But if I buy now and the prices start falling, then my heart pain.

How?

Exactly lor, sigh wonder when will the psf drop to be more realistic.

Me want to upgrade but missed the boat , just dun feel like paying more

[therat 18]

Me too!

Now I am stuck. If I don't buy now and the prices keep going up, I am doomed. But if I buy now and the prices start falling, then my heart pain.

How?

if u had such worry, the best don't buy

[Phantom 1]

HDB Upgraders supporting the market. Check with your agent. They'll most likely tell you the same thing..

[horseman 0]

This is my 2cents worth. First, buying property is not like buying consumer product where the products are homogeneous, there are ready alternatives and the products (and alternatives) are available when you want to buy them. Second, we cannot time the market. At best, we can just have a rough sense of where the market is heading. Third, the herd mentality is unexplainably strong in S'pore, which I do not understand. But when the herd runs, the prices head north irrationally.

This being so, my principles are:

- difficult to achieve perfect or near perfect we buy at rock bottom or sell at the peak. If we can buy at lower quadrant or sell at upper quadrant, we should more or less be satisfied

- say if you know that prices are already at rock bottom, you may not be able to find the property you want

- conversely if you are selling and are prepared to let go your property when prices are at the peak, can you find a buyer?

- if you are buying, stay slightly ahead of the herd and don't catch the down draft

My sense is that the consecutive months of record new home sales, HDB resale holding steady, plus the upward adjustment of the GDP forecast (still negative growth, but smaller contraction) suggest that the market will continue the upswing until it pauses or corrects. Those set on buying a property this cycle can wait for this correction. When and how deep this correction is, is open to anybody's guess.

This is my general sensing for what it is worth. Caveat emptor.

[icer 0]

If that is the case, the prices of HDB should fall right? But it's not!!

HDB Upgraders supporting the market. Check with your agent. They'll most likely tell you the same thing..