Singapore Property sub-sales at 8-year low

[LiuDeHua]

Singapore sub-sales at 8-year low

Mar 4, 2014 - PropertyGuru.com.sg

Speculation has all but disappeared from the Singapore property market, with the number of sub-sales recorded during January 2014 hitting an eight-year low.

Data from Urban Redevelopment Authority (URA) analysed by PropertyGuru yesterday revealed just 37 sub-sale transactions were recorded in January 2014 – the lowest monthly total since February 2006.

 

The current lack of speculation and “flipping” is in stark contrast to July 2007 when some 928 sub-sale transactions happened during that month alone.

 

Donald Tan, Managing Director of Chesterton Singapore, told PropertyGuru: “Sub-sale rates are nearing an all-time low after successive government cooling measures.

 

“The introduction of Sellers Stamp Duty (SSD) and two rounds of Additional Buyers Stamp Duty ABSD) effectively increased a short-term speculator’s transaction costs by as much as 34 percent (15 percent ABSD assuming a foreigner plus 16 percent SSD assuming he sells within one year holding period, and a further 3 percent of usual stamp duties and legal fees).

 

“In the last two years price increases have been a paltry 2 percent to 3 percent per annum, and such capital gains are easily eroded by ABSD and SSD transaction costs. Those who had bought are holding assets for the long haul; short-term sellers will be lucky if they can make a decent gain in the market today.

 

“There is anecdotal evidence that those who sub-sold recently are looking to get out of the market, presumably in need of cash, and hence may sell in today’s market making losses.”

 

Tan added that based on URA data there were only 147 sub-sale transactions in the last three months of 2013, the lowest since Q1 2006. He also noted that sub-sale rates (as a percentage of total resale transaction) was 3.8 percent, well below the 18 percent in 2011 or 28 percent back in 2006.

 

Evan Chung, Vice President, Resale Division for real estate agency DTZ, also noted the effect that successive cooling measures have had on the Singapore property sub-sale market.

 

He told PropertyGuru: “While all the cooling measures have had their desired effect on the broader market, what has affected the residential sub-sales market most directly are firstly the withdrawal of the Deferred Payment Scheme (DPS) in Oct 2007, secondly the removal of the Interest Absorption Scheme and Interest-Only Housing Loans in Sep 2009, and lastly and most of all, the three rounds of Seller Stamp Duties and LTV reductions.

 

“With the lack of easy financing and the increase in taxes that erode the profit of buyers who purchase units and flip them, sub-sales activities have dwindled and these have served to achieve the objectives of the authorities to reduce speculation in the local market.

 

Chung noted an increase in speculation in the industrial sector from the start of 2010 until SSD was introduced for industrial properties in January 2013.

 

He said: “As you can guess, interest then shifted to commercial properties, however as commercial properties generally have a higher quantum the market is smaller for speculators.”

 

Chung predicts sub-sale activity to be greatly subdued as prices cool further.

 

He said: “Those who have bought off-plan prior to the four-year SSD that was implemented in January 2011 would likely be the ones still transacting in the sub-sale market, since they are mostly receiving their keys this year.

 

“Their target market would most likely be buyers looking for new but ready-to-move-in units. Furthermore, if the project is in a good and in-demand location they could still likely lock-in some capitals gains without incurring any SSD.”

In January 2014 the most popular development for sub-sales was The Interlace, which saw 10 transactions at a mean average price of $1,267 per sq ft, according to URA data.

 

A sub-sale is defined by URA as: “The sale of a unit by one who has signed an agreement to purchase the unit from a developer or a subsequent purchaser before the issuance of the Certificate of Statutory Completion and the Subsidiary Strata Certificates of Title, or the Certificates of Title for all the units in the development.”

 

[Wyfitms]

for every speculator deterred, another 2 "long term" investor is born

 

To me, all these resale, subsale low figures have no or little bearing on prices..

 

A real drop will only appear if you see a 6 month or longer sustained period of less than 300 new sales per month

 

and coupled with slight increase in SG unemployment rate

cannot let devlopers feel the heat slowly, cos they will not react until much later

 

u have to burn them in oil until their skin turn crispy then u will see a real 20% discount

[Porker]

for every speculator deterred, another 2 "long term" investor is born

 

To me, all these resale, subsale low figures have no or little bearing on prices..

 

A real drop will only appear if you see a 6 month or longer sustained period of less than 300 new sales per month

 

and coupled with slight increase in SG unemployment rate

cannot let devlopers feel the heat slowly, cos they will not react until much later

 

u have to burn them in oil until their skin turn crispy then u will see a real 20% discount

 

Unrelated news but I read Blackrock hired a new real estate leader. I'm not sure if Jack Chandler is still around.

 

[Wyfitms]

 

Unrelated news but I read Blackrock hired a new real estate leader. I'm not sure if Jack Chandler is still around.

 

 

won't be surprised if you hear him joining another firm soon. musical chair.. LOL

[Mcscot]

The perfect storm has been brewing without the "missing ingredient" and now it maybe on the horizon!

 

Too many units being built.

Fewer FT's entering the economy.

interest rates will likely rise and finally...

 

... Ukraine falling to bits!

[Porker]

 

won't be surprised if you hear him joining another firm soon. musical chair.. LOL

 

I did not subscribe to that channel where the news came from but let's wait for the full report. Simon Treacy is in for a hard time if Jack is indeed removed.

[Throttle2]

for every speculator deterred, another 2 "long term" investor is born

 

To me, all these resale, subsale low figures have no or little bearing on prices..

 

A real drop will only appear if you see a 6 month or longer sustained period of less than 300 new sales per month

 

and coupled with slight increase in SG unemployment rate

 

cannot let devlopers feel the heat slowly, cos they will not react until much later

 

u have to burn them in oil until their skin turn crispy then u will see a real 20% discount

No or little bearing on prices?

Where have you been hibernating?

If roaring sales drive prices up, what do you think no sales does?

 

Wake up to reality, dont be a "property agent"

 

Muayhahahahahahaha

[Wt_know]

see the price range?

 

Edited March 4, 2014 by Wt_know

[Throttle2]

see the price range?

 

I not good with numbers leh, but i see a lot of arrows pointing down......

 

Heee heee heee

[Meanmachine]

No or little bearing on prices?

Where have you been hibernating?

If roaring sales drive prices up, what do you think no sales does?

 

Wake up to reality, dont be a "property agent"

 

Muayhahahahahahaha

 

 

Dun ever see this career no up, and dun ever laugh at any, one day nobody will clear your rubbish & shit, we 'll c who has the last laugh, LOl !!

[Thaiyotakamli]

many people might not realize this

 

 

the thing is when no demand price goes down.

 

 

but the demand so high its just that the ABSD makes demand less. but once price drop more than 10% many would jump in to buy already

[Pmet]

many people might not realize this

 

 

the thing is when no demand price goes down.

 

 

but the demand so high its just that the ABSD makes demand less. but once price drop more than 10% many would jump in to buy already

 

True, that's why ALL CMs should not and cannot be removed as of yet. At least until an external event affects the local property market here. Developers please suck thumb.

Edited March 4, 2014 by Pmet

[Sabian]

see the price range?

 

 

Why the RCR psf so high one???

[Throttle2]

 

 

Dun ever see this career no up, and dun ever laugh at any, one day nobody will clear your rubbish & shit, we 'll c who has the last laugh, LOl !!

I never ever see any profession no up.

 

I just say dont be a property agent and keep thinking that property market is up up up and any one point in time.

[Throttle2]

many people might not realize this

 

 

the thing is when no demand price goes down.

 

 

but the demand so high its just that the ABSD makes demand less. but once price drop more than 10% many would jump in to buy already

Fact is that it has already dropped 10% , but where are the droves of buyers?

In the bigger scheme of things, after all that has happened, whats 10%?

Only idiots would wait for a 10% move if they are real buyers.

[Wyfitms]

No or little bearing on prices?

Where have you been hibernating?

If roaring sales drive prices up, what do you think no sales does?

 

Wake up to reality, dont be a "property agent"

 

Muayhahahahahahaha

 

roaring sales? subsale has died for over a year since end 2012. Resale has died too since end 2011. Both are dead and buried, accounting for just 30% of total transactions.

 

Despite subsale and resale being dead, prices in OCR still managed to jump by 7% in 2013 alone. Why is that so?

 

Don't just take the headlines at face value. The media likes to sensationalize old news.

 

As i have said, the only way to see a real drop in price is low sale figures of new launches sustained over 6 months or more.

 

Look at Rivertrees and Riverbank. Both in crappy location, near to LRT only, More than 500 units sold in their weekend launch alone. Prices not cheap hor.. above $1,000 psf. Next up is 600+ units for sale at Lakeside MRT.

 

So for those hoping for a real drop in price, probably have to wait until 2015 or 2016. Then again, maybe i'm wrong.

I never ever see any profession no up.

 

I just say dont be a property agent and keep thinking that property market is up up up and any one point in time.

 

I did not imply in my post that market is booming.. i just said that there will not be significant drop this year.

 

it can be flat, or move up or down 5%. that's about it

many people might not realize this

 

 

the thing is when no demand price goes down.

 

 

but the demand so high its just that the ABSD makes demand less. but once price drop more than 10% many would jump in to buy already

 

Spot on. Another aspect which many are not privy to is the strong demand for overseas projects, having been pushed out of the SG mkt by CMs.

 

This is unregulated by MND/MAS and will be a ticking time bomb (esp for the mom and pop speculators)

[Wt_know]

MM below $750K will be snapped up in 60seconds

 

Pigeon hole below $1.25M still moving by popular demand

 

yes, i agree with you that $1000-$1200psf for OCR and crappy location is insane

 

 

Look at Rivertrees and Riverbank. Both in crappy location, near to LRT only, More than 500 units sold in their weekend launch alone. Prices not cheap hor.. above $1,000 psf. Next up is 600+ units for sale at Lakeside MRT.

 

Edited March 5, 2014 by Wt_know

[Wyfitms]

MM below $750K will be snapped up in 60seconds

 

Pigeon hole below $1.25M still moving by popular demand

 

yes, i agree with you that $1000-$1200psf for OCR and crappy location is insane

 

 

 

so why still got so many buyers? don't they know that subsale and resale has plunged?

 

That they can get a resale in sengkang for just 800psf?

 

Or they did not read that banks and developers are expecting a drop of up to 20% this year?