News Update - 13 April 2012

RESIDENTIAL MARKET


Taxman collects $110m from ABSD

The taxman collected about $110 million in additional buyer's stamp duty between Dec 8 last year - when ABSD took effect - and March 31 this year.

The sum includes $66.2 million in ABSD from foreigners who bought 369 private homes over the near four-month period.

A caveats analysis shows that the number of caveats lodged for private home purchases by foreign buyers has fallen from 436, 391 and 530 in October, November and December respectively last year to 56, 137 and 78 in January, February and March this year. Foreign buyers' share of total transactions has also dwindled from 20 per cent, 17 per cent and 23 per cent in October, November and December 2011 to 7 per cent each in January and February and 4 per cent in March. The March figures are preliminary, with more caveats expected to stream in over the next few weeks.

Source: Business Times – 13 April 2012

Few buyers for new units, data shows

NEW high-end homes are proving hard to shift, but the resale market is in far better shape.

There were 192 non-landed resale caveats lodged in the first quarter, yet developers managed to sell only 30 new units.

This ratio is the most lopsided in at least eight years.

An analysis of caveats lodged with the Urban Redevelopment Authority also shows that total transactions in general have been falling for the past three quarters, due to general market uncertainty and cooling measures.

Some experts said the sales gap is high simply because there have been few launches of new high-end projects and there is a larger stock of secondary units for sale, so transactions will be higher as well.

Lower prices in the high-end resale market could be enticing more investors into that segment instead, experts added.

The resale segment could also be picking up more because foreigners are buying homes for immediate occupation rather than waiting two to three years for a new one to be built, said experts.

Analyst mentioned that high-end resale prices are likely to continue weakening in the short-term. This is because many homes were launched when the deferred payment scheme (DPS) was still being offered. This allowed the buyer to make a down payment of 20 per cent of the purchase price and then defer repayments until the apartment was completed. Resales become necessary for investors who do not wish to hold on to their units to rent.

Since rentals are still decent enough to cover very low borrowings costs, the incentive to sell is still not very strong and investors may hold it vacant for some time.

Still, the greater supply as more high-end condos get built will lead to increased competition and gradually declining prices. The price decline will stabilise once most completed properties entering the market are no longer on the DPS.

Source: The Straits Times – 13 April 2012

Two freehold GCBs sold - one for $60.6m, the other for $31m

Two Good Class Bungalows (GCBs) have been transacted recently - one at Ridout Road, which is said to have fetched about $60.6 million, or $1,490 per square foot (psf), on a land area of 40,679 sq ft, and another at Binjai Park, which has sold for $31 million, or $1,550 psf. Both bungalows are freehold.

In absolute price quantum, the $60.6 million for the Ridout property, which is near Holland Road, is the highest fetched for a GCB since December 2010, when 3 Leedon Park changed hands at $61.4 million.

Outside the GCB areas, a detached house at Duchess Road was recently sold for $16.41 million or about $1,600 psf on its 999-year-leasehold site's land area of 10,254 sq ft. It is near the future Tan Kah Kee MRT Station. The 21/2-storey bungalow, which has a swimming pool, is about 25 years old and said to be in good condition. The deal was brokered by Coldwell Banker Realtors.

The site is zoned for residential use with a 1.4 plot ratio (ratio of maximum gross floor area to land area), which means it can be potentially redeveloped into a five-storey apartment block. However, the new owner is likely to keep it as a bungalow given its nice, quiet location off a cul de sac, say market watchers.

Source: Business Times – 13 April 2012