Jul 22, 2011

The number of private homes sold in the subsales market climbed 10.6 percent to 712 units in the second quarter, according to Savills Singapore.

However, the pace of increase in the second quarter was slower than the 27 percent jump reflected in the 4,562 new private homes sold by developers.

“With speculators weeded out from the market after the higher seller's stamp duty (SSD) rates introduced in January, more genuine home buyers now have direct access to choice units from developers in the primary market,” said Alan Cheong, Research Head at Savills.

“So the supply chain has become more efficient with the 'middlemen' or speculators cut out.”

He said that “the full impact of the January 2011 anti-speculation measures will need time to work their way through the system since the SSD would affect only those who bought a private home from Jan 14 and sell it within four years of purchase.”

SSD rates of 16 percent, 12 percent, eight percent and four percent were introduced for those who sell their properties in the first, second, third and fourth year of purchase respectively.

A few years earlier, those who had acquired private homes (which are still under construction) would have found it worthwhile to divest them, considering the recovery in property values after the global economic crisis. This would likely contribute to a steady stream of subsale activity.

“This will especially be the case for projects which are close to or have just been completed since buying interest in such developments is typically higher among those who would like to purchase a property that they can move into or rent out immediately,” said Ong Choon Fah, COO and Head of Consulting and Research for Southeast Asia at DTZ.

Figures from subsales and resales, which rose 17.5 percent to 4,144 units in Q2, were based on caveats lodged (excluding en bloc sales), while sales of new homes were based on developers' submissions to the Urban Redevelopment Authority’s (URA) surveys.

Info courtesy-