Monday, April 2, 2012

Singapore Property News Update April 2012

Private residential property sales to foreigners dived 78 per cent

10 percent Additional Buyer's Stamp Duty (ABSD), introduced in December 2011 to reduce the damaging inflow of printed money in China and West to Singapore, is taking its toll on property sales to foreigners. Private home purchases by foreigners plummeted 78 per cent in the first quarter as the effects of the 10 per cent additional buyer's stamp duty hit hard:

"Most foreigners have retreated hastily from the market, buying just 293 homes in the first three months of the year, an analysis of caveats by Dennis Wee Group (DWG) found. This is 78 per cent down from the 1,358 homes bought by foreigners in the fourth quarter."

Source : Home sales to foreigners dive 78 per cent

Record new private residential property sales in Q1 2012

Ultra-low interest rates, printed liquidity last pumped by European Central Bank in December 2012 and high supply of new units led new private home sales in Singapore to a high of 3,032 units in March, just three percent short of the record 3,138 homes sold in the previous month. Excluding executive condos (ECs), the sales volume reached 2,393.

Source : March another good month for private home sales

Why February private residential property sales surged?

Just 2 months after a new cooling measure was introduced, Singapore residential private property sales surged to  a record 3138 units. According to Ryan Ong, editor of, this was mainly because of a one time ultra low home loan rate offer from DBS:

'DBS was on a blitz in February. They were offering home loan rates as low as 0.65%, which may be the lowest we’ll see all year. 
For foreigners, the low rates were a godsend. They were reeling from the additional buyers stamp duty (ABSD) of 10%, and many had switched to renting. But the low interest rates somewhat compensated for this; along with the rise in rental prices, it enticed some foreigners to buy, stamp duty or no. 
If you’re looking to get those low rates though, you’re too late. DBS is no longer loaning money like a rogue trader with a plane ticket, so we may see a return to normality in the coming months.'"
Source : Why Singapore Home Sales Surged in February?
We are not in a very happy part of housing cycle, Tharman admits
Replying a question on the impact of high property prices on middle and low income Singaporeans, Deputy Prime Minister Tharman Shanmugaratham said despite earlier being "behind the curve in the supply of housing", the Government was now taking active measures to cool the property market through significant increase of units in the public Built-To-Order and private markets.
Source : We're not in happy part of housing cycle, Tharman admits

Resale prices and COV's may fall

“The litmus test for the HDB resale market will come three to four years down the road when these BTO flats and ECs are completed and there is a real urgency for these home buyers to sell their existing HDB flats within six months”,  says a research report released by DWG. The report estimates the cash-over-valuation

(COV) for Housing and Development Board (HDB) resale flats to soften to between S$15,000 and S$20,000, while a 5 per cent drop in the prices of resale flats "as the market comes to terms with the “new operating environment”.

The report noted that there are more housing options for homebuyers now, thanks to the ramp-up in the construction of Build-toOrder (BTO) flats, as well as the opening up of BTO and Executive Condominium (EC) queues for second-timers. DWG said its median COV for resale  flats was S$27,000 in the first quarter of this year, down from S$35,000 in the fourth  quarter of last year, as “the bargaining chips
tilted more in favour of buyers”.
Source : Resale flat COV prices may fall, says property firm report

3.3 subscriptions per flat in latest BTO launch
"More than 26,000 people had subscribed for the nearly 8,000 units being offered in the Housing Board's latest sale of flats when applications closed on Tuesday. This translates into a subscription rate of 3.3:

"The most popular BTO flats were in three blocks in Clementi located next to Trivelis, a Design, Build and Sell Scheme project. DBSS projects are Housing Board flats built by private developers and are typically pricier. 
Buyers also flocked to mature estates for balance flats. The 49 flats up for sale at the Pinnacle@Duxton, for instance, saw more than 27 applications per unit."

Private Residential Property Prices fell in Q1 2012
Singapore private residential property prices fell slightly, 0.1%, in the first quarter of 2012 compared to the last quarter of 2011. Although this is the first drop in the URA index for more than 3 years, the price fall was driven by the private properties in the central and near central area. Private residential properties decreased by 0.9% in Core Central Region and 0.7% in Rest of Central Region but prices in Outside Central Region however increased by 1.2%. Increase in this region is accelerated to double its value of 0.6% increase in the previous quarter.
Source : Singapore private property prices fell first time in 3 years

HDB Resale prices are still increasing but growth rate is slowing
HDB has released its flash estimate of the first quarter 2012 Resale Price Index (RPI) and it is a record  191.6, an increase of 0.6% over 4th Quarter 2011. Previous quarter saw a 1.7% increase.

According to the property analysts The Straits Times has spoken to, HDB resale market have hit a price ceiling due to the Housing Board injection of record number of new HDB flats and some policy changes channeling demand from resale market to primary market such as building large number of new flats, building some in mature estates and increasing the quote for second timers.

Source : Flash Estimate Of 1st Quarter 2012 Resale Price Index

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