The recovery in sales of private homes experienced by developers has reached already the secondary market. This flow is heightened by falling prices. Caveats have been occupied for over 1,063 private homes in resale markets for Q1 this year, up by 11.7 percent from the last quarter. There were 384 caveats lodged in subsale market this Q1, reflecting an increase of 44.4 percent from the figure in Q4 of 2008, according to a caveats analysis from Savills, which the Realis system of Urban Redevelopment Authority had obtained. Subsales and resales refer to the transactions in the secondary market. Subsales include projects, which are required to acquire Certificate of Statutory Completion (CSC), while resales refer to projects that already have CSC. This certification can be obtained from 3 to 12 months after a certain project had received a Temporary Occupation Permit (TOP).
As for the popular projects, the average subsale and resale prices in Q1 were generally much lower than the prices in the last quarter and in the same period in the previous year. The most popular project in subsale, City Square Residences, sold 41 units in Q1 this year, with price averaging at $804 per square foot, down by 5 percent of the average subsale price of $845 in Q4 of 2008, and 15 percent below the average subsale price of $947 in Q1 of 2008.
Almost all of the popular projects this year have their prices declining by one to 14 percent from the previous quarter. Clementiwoods Condo was one exception, where eight deals were made at an average price of $664 psf, five percent higher than the previous quarter. However, this was down by seven percent in the same period last year. Compared to Q1 in the previous year, average prices of 12 top-selling projects in subsale this Q1 of the year fell between 4 and 36 percent. In the resale market, the 11 newest developments saw declines on quarter-on-quarter prices ranging from 4 percent to 19 percent. The Lakeshore is the most popular project in resale, with 27 units sold while the Costa del Sol, the next popular resale project had 11 units sold.
Priya Sengupta, head of research in Savills Singapore, noted that the most popular projects in resale this first quarter were all in the mid-tier and mass sectors. “Amid the economic uncertainties, affordability remains a key consideration for home buyers/investors; 100 of the 113 deals in the 11 most popular resale projects in Q1 were at below $1 million,” Ms. Sengupta said.
High-end projects have limited resale activity. “This could be attributed to the price disparity between sellers and buyers as the latter expect further downward price adjustment in the near future, as well as the stricter home loan criteria in terms of loan-to-value ratio, especially for investors,” she added.
Mid-tier and mass projects are also expected to have more transactions in subsale than in high-ends projects. Most of the activity in subsale covered projects that have already received TOP or those that are about to receive it.