Private home resales take a hit in Q1 amid property curbs

BUYERS may be snapping up new private homes despite cooling measures but the resale market looks like it will end the first quarter with a whimper.

There were 1,544 resale homes sold this year to March 12, according to caveats lodged with the Urban Redevelopment Authority.

Sales could hit an estimated 2,300 for the full quarter once all caveats for this month are lodged, but this would still be well down from the 3,647 completed homes sold in the last quarter of last year.

Sales in the January-to-March period last year reached 2,377 - that was the immediate quarter after the additional buyer's stamp duty (ABSD) was first introduced - while there were 3,761 resale homes sold in the first quarter of 2011.

This indicates that the market this year could have taken a hit from January's cooling measures, which included tighter loan limits and higher stamp duties.

However, the new-sale market has remained robust with homes flying off the shelves.

Just this month alone, more than 1,400 new homes have been sold across just six new launches, including those for D'Nest, Urban Vista and Sennett Residence.

This works out to at least 4,100 new homes shifted since the start of the year.

Experts say that resale volumes have fallen as owners are now less willing to part with their investment homes in light of the revised ABSD.

Since Jan 12, Singaporeans purchasing their second homes must pay an ABSD of 7 per cent. There was no ABSD for such purchases earlier.

While developers are dangling discounts and other incentives to alleviate the duty's sting, owners of completed homes are less reactive to the measures and have not adjusted prices yet, they note.

HSR Property Group special adviser Donald Han said there has been a mindset change in the secondary market where home owners are choosing to hold on to their assets instead.

"If they sell, they would have to pay the ABSD if they buy something else back. This acts as higher entry cost to enter the market again," he noted.

"There is also no panic to offload these homes at huge discounts and so people are choosing to hold on to them instead."

Savills Singapore research head Alan Cheong added that aggressive marketing behind new launches has helped to draw interest to newer projects.

In addition, more buyers are parents helping their children get a leg up on the property ladder. This segment prefers new properties rather than older resale units, he noted.

"But resale prices are likely to hold firm. Interest rates are low and sentiments are still positive. People have cash and are unlikely to be dumping their assets in the market," added Mr Cheong.

PropNex Realty chief executive Mohamed Ismail said resale volumes have fallen about 35 per cent since the January measures. "Developers are more price sensitive and have given discounts but home owners have not adjusted their asking prices yet," he said.