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25 March 2013

25th March, Monday




Private home resales take a hit amid curbs

Source: The Straits Times

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 12 March, 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.

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.

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.

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.

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

Another analyst 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.


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